SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Hybrid Fuels, Inc.
(Name of Small Business Issuer in its charter)
Nevada 88 0384399 152512
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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#214-2791 Hwy. 97 N., Kelowna, B.C., Canada V1X 4J8
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: 250-868-0600
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on
which
to be so registered Each class is to be
registered
_____________________________ ______________________________
_____________________________ ______________________________
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Securities to be registered under Section 12(g) of the Act:
Common
(Title of Class)
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Hybrid Fuels, Inc., a developmental stage company ("Hybrid" or "the Company") cautions readers that certain important factors may affect the Company's actual results and could cause such results to differ materially from any forward-looking statements that may be deemed to have been made in this document or that are otherwise made by or on behalf of the Company. This Form 10-SB contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose any statements contained in this Form 10-SB that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "estimate" or "continue" or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within the Company's control. These factors include but are not limited to economic conditions generally and in the industries in which the Company may participate; competition within the Company's chosen industry, including competition from much larger competitors; technological advances and failure by the Company to successfully develop business relationships.
These statements appear in a number of places in this Registration Statement and include statements regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (i) trends affecting the Company's financial condition or results of operations for its limited history; (ii) the Company's business and growth strategies; and, (iii) the Company's financing plans.
Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Factors that could adversely affect actual results and performance include, among others, the Company's limited operating history and inexperience with managing the growth of it's business, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competition.
The accompanying information contained in this Registration Statement, including, without limitation, the information set forth under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business" identifies important additional factors that could materially adversely affect actual results and performance. All of these factors should be carefully considered and evaluated. All forward-looking statements attributable to the Company are expressly qualified in their entirety by the foregoing cautionary statement. Any forward-looking statements in this Registration Statement should be evaluated in light of these important risk factors. The Company is also subject to other risks detailed herein or set forth from time to time in the Company's filings with the Securities and Exchange Commission.
PART I
Item 1. DESCRIPTION OF BUSINESS.
(a) Business Development
The Company was originally incorporated in the state of Florida on February 16, 1960 as Fiberglass Industries Corporation of America. On September 3, 1966, the Company changed its name to Rocket-Atlas Corp. and again changed its name on December 1, 1966 to Rocket Industries, Inc. On January 28, 1994, the Company changed its name to Polo Investment Corp. of Missouri, Inc., on October 7, 1995 the name changed to Medical Advanced Systems, Inc. and on June 3, 1993, the Company changed its name to Polo Equities, Inc. In May 1998, the Company changed its domicile to Nevada and changed to its current name, Hybrid Fuels, Inc. on June 10, 1998. For details on the history of the Company, please refer to the Notes to the Financial Statements included as a part of this Registration Statement.
In May of 1999, in a stock for stock exchange, the Company acquired Hybrid Fuels, U.S.A., Inc. and 330420 B.C. Ltd., (which changed its name to Hybrid Fuels (Canada) Inc. As a part of the acquisition, the Company acquired the technology necessary for the Company's current operations.
Prior to the acquisition of Hybrid Fuels, U.S.A., Inc. and Hybrid Fuels (Canada) Inc., the Company had no significant operations and was seeking a business opportunity.
The Company's Internet address is www.hybridfuels.com.
(b) Business of the Issuer
The Company's goal is to provide technology and methods to industry to reduce the use of fossil fuels, reduce pollution and improve the quality of foods produced. The Company is in the business of providing full-circle hybrid fuel plants to farmers which integrate the production of an ethanol based hybrid fuel with an animal finishing operation. It is the intent of the Company to provide technology which will give farmers the ability to reduce pollution, improve the quality of food produced and develop an additional stream of income in the form of hybrid fuels.
The Company's plants utilize animal waste such as manure and wet straw bedding as a source of energy to produce the ethanol. The grains used in the ethanol process are recycled in the form of a high protein feed for the animals. The ethanol is mixed with a small amount of emulsifier and diesel in the vaporization column to "de-nature" it, so that no pure ethanol is accessible or detectable in the plant. The resulting chemical mixture is purchased by the Company and further mixed to create the hybrid fuel which the Company then sells to end users or distributors. This hybrid fuel extends fossil fuels and reduces pollution.
The farmer benefits by operating an environmentally sound ethanol plant that provides revenue from the sale of the hybrid fuel and the finished animals. The consumer benefits with the ability to purchase hybrid fuel and high quality beef that is hormone and antibiotic free.
History of Product Development
Donald Craig, a majority shareholder of the Company is the person most responsible for the concepts and development of the full-circle ethanol plants. Mr. Craig established and managed beef finishing operations that used confinement barns and fed animals brewers mash (the spent grains that have been used in the production of beer and spirits). In the 1980s after the first round of major gasoline price hikes, he developed a method of re- refining used oil. Using the re-refined oil, he created a dormant oil spray that when mixed with water, was sprayed on apple trees to control coddling moth. As a result, he became very familiar with using surfactants to create an emulsion between oil and water.
In the late 1980s, Mr. Craig began to focus his attention on ways to help reduce the threat of global warming. He perceived that it was possible to create a system that could help farmers earn a decent living in a way that produced ethanol to extend the life of existing fossil fuel supplies and reduce pollution. In the process of creating the hybrid system, Mr. Craig discovered there were numerous benefits to be derived from the use of animal manure in an environmentally positive way. Mr. Craig determined that manure and used bedding straw could be employed in the process to produce ethanol and that the spent grain used in the process contains a very high protein content that makes ideal feed for cattle. These concepts are the basis of the Company's full-circle hybrid fuel plants.
Hybrid Fuels
The economic production of ethanol is one of the primary benefits of the Company's proposed full-circle ethanol plants. In the last few decades, there has been an emphasis on increasing the production of ethanol because it is made from renewable resources such as grains, stover (corn stalks), etc., all of which are referred to as bio-mass. The increased interest in ethanol is a response to concerns about dwindling fossil fuel supplies, OPEC, threats of war in oil rich regions and its effect on the amount of oil imported plus balance of payments concerns arising out of the amount of petroleum that is imported, and engine exhaust emissions which contribute to global warming.
In August 1999, U.S. President Clinton announced a program to triple the use of farm products for energy by the year 2010. At present, bio-mass accounts for three percent of U.S. energy use, mostly in the wood industry and in ethanol distilled from corn as clean fuel additives. In January 2000, President Clinton announced a further $8 billion in funding for this research and development.
Also, on January 16, 2000, the television program 60 Minutes ran a segment on the contamination of water supplies in the US by MTBE, a gasoline additive that is used as an octane enhancer and a pollution reducer. Unfortunately, it is also a potential carcinogen that pollutes water supplies much faster than most other contaminants and is much harder to remediate. It is therefore very important to find a replacement and the Company believes ethanol is an excellent candidate.
The majority of ethanol produced is used in the production of gasohol, in a mixture of about 10 percent anhydrous or dry ethanol with 90 percent gasoline. The energy cost of drying the ethanol is the greatest single cost in producing dry ethanol to be mixed in gasohol. In the past it has typically required approximately as much energy, generally from non-renewable resources, to produce dry ethanol with an equivalent amount of BTUs. As a result, subsidies have been needed to make ethanol production viable.
Gasohol can be used in vehicles without having to alter the engine and will reduce the emissions most responsible for atmospheric warming. While catalytic converters help reduce emissions, especially in hot engines using gasohol, diesel is by far the greatest producer of emissions. In California, diesel engines are approximately eight percent of the total, yet they produce about 65 percent of the emissions. For this reason, the Company has targeted diesel for emission reductions. Another reason for targeting diesel, is that wet ethanol can be used with diesel thus eliminating the expensive ethanol drying process.
After dismantling a test facility in the mid 1990s, it was realized that energy costs could be further reduced if the ethanol did not need to be dried. It has long been known that adding a certain amount of water to diesel improves diesel engine performance and reduces pollutants. The decision was made to mix wet ethanol with an emulsifier and diesel which would have the added benefit of further expanding the life of fossil fuels. The hybrid fuel which was tested consists of 10 percent ethanol, 10 percent vegetable based emulsifier and 80 percent diesel. The Company intends to experiment with other blends to find the optimum mixture.
The March 13,1999 issue of New Scientist magazine reviews the work of retired MIT Professor Keith Johnson and the progress of the French oil company, Elf Aquitane in adding water to diesel. As indicated in the article, one of the issues is the percentage of water to be added to the diesel. As more and more water is added, increasingly more surfactant is necessary to keep the water in suspension. At some point, in the 13 to 15 percent range, the amount of surfactant required makes it un-economical to add more water.
Others have sought to expand the life of fossil fuels by adding soybean oil to diesel. Soy oil is from a renewable source and mixes fairly readily with diesel. Unfortunately, rather than reduce emissions, it actually tends to increase them slightly. It can however, be added in proportions up to about 20 percent and thus expand diesel supplies.
Using wet ethanol and an emulsifier at the ratio tested by the Company, diesel fuel was extended by 20 percent. This hybrid fuel reduced particulate emissions by over 62 percent and nitrogen oxide emissions by over 22 percent without loss of power when tested in an unaltered diesel engine at the British Columbia Institute of Technology. This equals a reduction in particulate emissions 12 percent higher than compared with the water, emulsifier and diesel combination, and a 50 percent higher (from 15% to 22%) reduction of nitrogen oxide emissions compared to using that combination. The inclusion of the wet ethanol makes the hybrid fuel a more potent emission reducer.
Plant Process
Beef operations produce waste such as manure and bedding straw which are expensive to dispose of and cause tremendous groundwater contamination. The Company's technology employs a biofurnace or gasifier. This device burns manure and used bedding straw with a high moisture content leaving no residual waste. The first stage causes smoldering. The smoke and gases are then oxygenated and burn at very high temperatures. The heat is used to heat the grain and water and speed up the fermentation and vaporization process that creates the ethanol. Excess heat can then be used to supply heat to other buildings or as needed. The result is a virtually odor-free disposal of waste that eliminates groundwater contamination and creates an energy resource that supplies the majority of the energy needs of the ethanol plant.
After fermentation, the spent grain is separated from the liquid and both are fed to the cattle. Because the cattle will typically be in close proximity of the plant, the cost of transporting the grain to the animals is eliminated or greatly reduced.
The operation is designed to run in a balanced state, producing 200 gallons of ethanol and the required food for 200 cattle per day.
For an operation producing 200 gallons of ethanol per day, the operator will need about 38,000 bushels of grain per year, which will feed 200 cattle on a continuing rotation basis. Ideally, the cattle are started at around 750 pounds and finished to approximately 1150 pounds. The amount of feed required can be produced on about one section of land or if corn is used, on about half a section of land. The operator will need to supply 2500 to 3000 gallons of water per day. It is anticipated the plants will be located where the operator has reasonably good access to auction or meat packing facilities, which would provide a ready market for the beef.
The operator will supply the feedstock, cattle, water, straw, electricity, surfactants and diesel. The Company will coordinate the acquisition and delivery of materials and will supervise the construction of the plant.
Once the plant begins generating ethanol, the Company will purchase the resulting chemical mixture and transport it to mixing plants for further mixing of the hybrid fuel. The hybrid fuel will then be sold to end users and distributors.
The synergy and balance between the various components of the process yields significant benefits for the whole. Every effort is made to use every resource as beneficially as possible with the view to reducing pollution and generating the greatest economic benefits from all resources. First the feedstock is treated with a proprietary process which upgrades it's feed value. The feedstock is then used to make the ethanol, which removes some of the sugars and carbohydrates, leaving a very high protein mash. By feeding this mash and stillage water to the animals, it is possible to produce approximately one pound of beef for every seven pounds of grain. Conventional beef finishing operations use as much as 16 pounds of grain for every pound of beef. The gasifier effectively eliminates any pollution from the manure and bedding straw, which constitutes a major problem with most beef finishing operations. The beef itself is hormone and antibiotic free, and the hybrid fuel is considerably more effective in reducing particulate and nitrogen oxide emissions from diesel than any other diesel mixture of which the Company is aware.
Enriched Feed for Animal Finishing
Conventional methods of finishing beef use as much as 16 pounds of grain for every pound of beef produced whereas the Company's method makes is possible to produce approximately one pound of beef for every seven pounds of grain. In most conventional beef, pork, poultry and dairy facilities, antibiotics are fed to the animals to prevent them from becoming sick, growth hormones are implanted or fed to force weight gains and toxic chemicals are used to kill flies and to protect the animals from other pests that might interfere with weight gains. When consumers eat the end product, they ingest the antibiotics, hormones and toxic substances which remain in the meat.
The Company's facilities are designed to keep the animals in a warm, dry and clean environment that is relatively free of flies and parasites. As a result, the wholesale use of antibiotics will not be necessary. In addition, the Company's facilities are designed to be operated manually so that trained people are in contact with the animals several times a day. Thus, the operator can detect any illness or disease early, separate any ill animal from the rest of the herd, and treat that animal specifically for the illness rather than giving a general course of antibiotics to all the animals as a precautionary measure.
In test trails, consisting of successive lots of approximately 125 head of very poor range stock, utilizing the enriched feed produced by the process, the finished animals received an extraordinarily high packout grade. Because some of the sugars and carbohydrates have been removed from the grain in the fermentation process, the feed is very high in protein. As a result, the cattle realize very good weight gains averaging just short of four pounds per day which is a significant increase over the average for the industry. In addition, the animals showed no liver damage and none were condemned. This prompted the purchaser to offer a premium of ten cents per pound for all of the beef that could be produced by this method.
Natural Fertilizers
The Company has discussed a strategic alliance with the producer of natural fertilizers, made from pulverizing materials which contain minerals such as nitrogen, phosphorous, and potassium and many trace elements and mixing those in proportions which are created in specific response to particular soil conditions. These fertilizers are very effective in replacing nutrients that are presently missing from our soils as a result of over farming. In addition, they are not petroleum based and therefore have the added advantage of expanding the useful life of existing fossil fuels. The grain that grows in soils that use these fertilizers can be classified as "organic" and contain nutrients that the fertilizer has replaced in the soil. Those nutrients are ingested by the cattle which results in more nutrient rich beef.
Although no specific terms of such strategic alliance have been agreed upon, the Company has discussed receiving compensation from the fertilizer supplier to cover its costs of promoting the use of these natural fertilizer products by its plant operators. Where operators use these natural fertilizers, the Company will use the existence of those nutrients in the food as another way of promoting the value of the end product to the consumer by use of a trade mark or trade name which has not yet been selected.
Plant Financing and Construction
The Company will assist in obtaining financing for operators who will require funding in order to construct a plant and commence operations. To this end, the Company has been discussing a strategic alliance to provide financing for the construction of plants. In Europe and North America, there are a number of funds which are referred to as "Eco" funds and have as their object the financing of projects which have demonstrable environmental benefits. The Company anticipates the plants will meet the investment criteria for the "Eco" funds and final approval will depend upon the operator's qualifications. The Company does not intend to commence any construction until the operator is fully qualified and financing is committed.
The Company is not dependent on a limited number of suppliers as most of the raw materials required for the construction of the plants are readily available in all areas where the Company will initially be operating. The Company has a verbal arrangement with several independent contractors for the manufacture of the columns and the separators. The Company will contract for the supply of raw materials, and independent contractors will manufacture the columns and separators as necessary, on the basis of an agreed-upon amount for each item. These independent contractors work from their own premises and have the capacity to supply all of the items required by the Company for the next 12 to 24 months.
The Company will seek quotes from independent contractors who will supply and install the buildings, the flooring materials, and other "off-the-shelf" items required for each plant. As the Company develops a history of operations and experience with particular sources of supply, the Company may enter into exclusive supply contracts in the future if it is advantageous to the Company and its operators. No such arrangements are being considered or negotiated at this time.
Because the Company will purchase the chemical mixture for further mixing to create the hybrid fuel, the Company will enter contracts with mixing facilities to perform this step of the operation.
The integrated feedlot-fuel facilities will be operated independently from the Company. Each operator will be responsible for maintenance and upkeep of the operation. The Company will provide technical support on a fee basis.
Intellectual Property and Proprietary Information
The Company initially sought patent protection for the emulsifier used in its process. The patent office ruled the patent would only be granted if the specific formula for the emulsifier was included. The Company decided not to proceed with the patent as that would publish the formula and chose instead to maintain the formula as a trade secret. As a consequence, all employees of the Company will be required to sign confidentiality agreements. In addition, the Company realizes it will be necessary to implement security procedures to protect the security of the formula.
The Company intends to establish trademarks and logos which identify the products to the consuming public and to promote all of the meat products as "hormone and antibiotic free" and the hybrid fuel as environmentally friendly. No logos or trademarks have yet been selected.
The Company owns a number of items of intellectual property and proprietary information including the following relating to the ethanol plant process:
1) A process that will upgrade the food value of straw, stover (corn stalks) bagasse (sugar cane), and other low-grade cellulositics to increase their food value to that of good quality of oats. It is not intended to complete the patent protection for this process as the only part that was patentable required the inclusion of a pulse dryer in the process. As the mash that is produced in this process is better used damp or wet, drying is not useful in the Company's application;
2) Use of a highly efficient separating column, which yields 190 proof ethanol in a single pass. This column is very economical to manufacture and use, is efficient and easy to operate.
3) Use of a fermentation process which yields full conversion of grain to ethanol in approximately fourteen hours, compared to up to forty-eight hours for traditional processes. This reduces costs for tankage, labor, building and equipment.
4) The innovative use of multiple heat exchangers which result in significantly reduced energy costs.
5) A uniquely designed separator which efficiently reduces the energy and time costs of separating most of the moisture from the grain after fermentation to a practical feed moisture content.
6) A gasifier that disposes of the manure and bedding straw in an odor-free operation and without any groundwater contamination. The heat from the gasifier after it is used for fermentation and vaporization, can be used to provide heat for other requirements.
7) The formula for a vegetable based emulsifier that permits the blending of ethanol and diesel.
Although not a part of the integrated feedlot-fuel process, in addition to the above technology, the Company owns technology for a feeding system mainly for hydroponic greenhouses for tomatoes which offers a very substantial increase in production yields as a result of its unique design. Some operators may benefit from this technology if they choose to install and operate a greenhouse using some of the excess heat generated by the gasifier.
Governmental Regulation
Each plant will require some form of government permit in order to operate. In the United States, the Bureau of Alcohol Firearms and Tobacco is the appropriate agency and they have verbally indicated to the Company that it would be able to obtain the appropriate permits. In Canada, the appropriate agency is Excise Canada which has taken the position that each plant will require a distillers license because it produces ethanol. This would require the installation in each plant of equipment which would measure the amount of alcohol. Unfortunately that equipment will not work because the ethanol is denatured by the addition of diesel and the emulsifier in the column which means that it is impossible to access or detect any pure ethanol in the process. The Company is therefore seeking an exemption for its operations and has enlisted the assistance of a number of politicians in farming areas to assist in persuading Excise Canada to issue the necessary exemption. As long as Excise Canada continues to insist that each plant must have a distillers license, the Company will commence building plants in the U.S.
Costs and Effects of Governmental Regulation
Governmental regulation will affect the Company most in the areas of compliance with environmental regulations and those regarding the production of alcohol. Each state or province will require the Company to complete and file applications outlining the nature of the business and how the Company will comply with its specific set of regulations. The Company will initially apply in those jurisdictions where the process for obtaining the necessary permits to produce alcohol and to operate in accordance with the environmental regulations, are the easiest and least expensive to comply with. The Company anticipates it will have little difficulty in complying with environmental regulations as the process which the Company uses does not create any pollution. In fact, it solves many of the pollution problems that are associated with beef finishing operations. The Company does not anticipate any significant delays in obtaining the necessary permits for the production of the hybrid fuel in most states of the US.
As previously stated, President Clinton announced programs to significantly increase the production and use of ethanol as a fuel. The Company believes that this initiative creates a more favorable climate for the expansion of the Company's business.
The Company believes that the impact of the cost and effects of the Company's compliance with environmental laws will be minimal as the Company's process is environmentally friendly.
The state of California has mandated the elimination of MTBE by the end of 2002 and a number of water quality boards have mandated that dairy farms in various regions remove the manure piles as they are contaminating groundwater. The Company's process could assist in providing solutions for both of these problems.
Research and Development
Since 1998, the Company has spent less than $50,000 on research and development. The majority of funds were spent on perfecting the formula for the emulsifier. The balance of the funds were spent on testing at the British Columbia Institute of Technology to quantify the effects of the use of the hybrid fuel in an unaltered diesel engine.
Markets and Advertising
The Company's target for the construction of integrated full-circle ethanol facilities is the farming communities. The ideal candidate for a facility is an operation that has sufficient land to produce at least 38,000 bushels of grain or corn. Once a suitable candidate is identified and qualified, the Company will assist in obtaining financing and construction of the plant. Where necessary, the Company will also assist in arranging financing for the purchase of cattle and other necessary supplies for operation of the plant.
The Company intends to advertise its full-circle facilities in trade journals, local newspapers, on radio and television programs, and through seminars and presentations at trade shows. The Company is also in contact with a number of government agencies whose role it is to locate and promote new opportunities for the economic benefit of farmers.
The Company will actively market the hybrid fuel produced by the plants. Initially, all of the hybrid fuel produced will be used for testing. The Company has had preliminary discussions with manufacturers of diesel engines and several companies that operate large fleets of diesel powered equipment who have expressed strong interest in providing testing services at no charge or significantly reduced prices. As of this date, no contracts have been entered into. The Company is investigating the possibility of applying for grants from various government agencies for support in testing the hybrid fuel.
Competition
The production of food and fuel are both highly competitive. Giant companies compete in both markets with significant competitive advantages that make it difficult for smaller operators to survive and prosper. Many competitors of the Company have significantly greater resources and experience than the Company. Additionally, competitors of the Company may have better access to financial and marketing resources superior to those available to the Company. With the resources and name recognition that competitors possess, the Company may face severe adversity entering the markets it is pursuing. There is no assurance the Company will be able to overcome the competitive disadvantages it will face as a small, start up company with limited capital.
The Company is not aware of any competitors who offer farm scale feedlot-fuel plants, although there are several competitors who produce ethanol and other fuels on a very large scale basis.
The Hybrid Fuel Market. Major oil and petroleum companies as well as alternate energy companies will all be competitors of the Company. The Company anticipates that the quality of its hybrid fuel product combined with the significantly reduced environmental impact in both producing and using the hybrid fuel will provide a competitive advantage.
The Company intends to market the hybrid fuel to diesel users encompassing all industries. Initially, the Company will target the transportation industry, specifically the trucking and railway industries. Because the hybrid fuel can be used in an unaltered diesel engine, the Company believes it will be relatively easy to attract users. The hybrid fuel can be used economically where it is available and no modifications or changes need be made to the engines to switch back to regular diesel fuel when the hybrid fuel is not available. The hybrid fuel will be marketed to both end users and fuel distributors.
The Food Market. The production of beef, pork, poultry and dairy products has become focused on giant production factories. In these "factories", antibiotics are used to prevent the animals from becoming sick, growth hormones are implanted or fed to force weight gains and toxic chemicals are used to kill flies and to protect the animals from other pests that might interfere with the productivity of the farm.
When consumers eat the end product, they ingest the antibiotics hormones and toxic substances which remain in the meat. More and more consumers are becoming concerned about the adverse effects on their immune systems of this constant barrage of chemicals, antibiotics and growth hormones. Research has shown direct links between the increasing incidence of a number of diseases such as cancer and respiratory diseases to the consumption of meat, dairy products and other foods which contain antibiotics, hormones and toxic chemicals.
In the plants constructed by the Company, the cattle will be kept in clean, warm, dry facilities without the use of mass antibiotics or growth hormones. The beef will be promoted as being "organic", free of hormones, antibiotics and other toxins. As members of the public become more aware of the dangers of eating meat containing antibiotics, hormones and toxins, the Company anticipates that sales will increase for meat products produced in the feedlot-fuel facilities. The Company anticipates capitalizing on the meat products being "organic" in promoting sales to the public.
Employees
Currently, the President of the Company is the only employee. The Company believes it will not be necessary to hire any full-time staff for several months. The majority of services required by the Company will be obtained by the employment of independent contractors or commissioned salespeople.
(c) Reports to Security Holders
Prior to the filing of this registration statement on Form 10-SB, the Company was not subject to the reporting requirements of Section 12(a) or 15(d) of the Exchange Act. Upon effectiveness of this registration statement, the Company will file annual and quarterly reports with the Securities and Exchange Commission ("SEC"). The public may read and copy any materials filed by the Company with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC- 0330. The Company is an electronic filer and the SEC maintains an Internet site that contains reports and other information regarding the Company which may be viewed at http://www.sec.gov.
Item 2. Management's Discussion And Analysis or Plan of Operation
(a) Plan of Operation
The Company is a developmental stage company and has had no income since the acquisition of the hybrid fuels technology in June 1998. It has not had any income nor is it likely to have any significant cash flow before the end of its current fiscal period ending June 30, 2000. Until such time as the Company sells and constructs an ethanol plant and recognizes revenue, necessary financing will be obtained from loans or the sale of securities. Because the Company is a developmental stage company, it may not have the ability to borrow money from banks and other traditional financial institutions. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern.
The Company is in the process of completing an offering of its common stock pursuant to Regulation D, Rule 504. The Company is offering to sell shares at $0.65 or such other price as the Directors may determine to raise up to $975,000. The Company believes this amount will be sufficient to continue operations until the first facility can be constructed and placed into operation. Should the Company need further funds, it is likely the Company will sell additional shares of its common stock.
The Company will actively pursue a suitable location and operator for its first facility. A suitable location is one that provides ready access to a mixing plant, end users or distributors, ready availability of feedstock and meat packing facilities. Once a suitable location is established, the Company will assist the operator in obtaining the necessary financing to construct the plant. The first plant will act as a demonstration and training facility.
To date, the Company has received applications from more than fifty farmers who are interested in the ethanol plant facilities. The Company is currently developing a screening process to determine the most likely candidates and will then assist the candidates in obtaining the necessary financing for plant construction. It is anticipated that it will take approximately four months from the start of construction until the first plant is operational and generating cash flow.
Revenue, in the form of construction supervision fees will begin to flow to the Company once the first facility is under construction. Construction of the first operation will be supervised by the Company's President, the technology inventor, Donald Craig, plus paid consultants where necessary. The Company anticipates that the supervision fees will be sufficient to cover the cost of all paid consultants.
Additional revenue to be recognized by the Company will be in the form of royalties paid by each commissioned operation. It is anticipated that each operator will pay a royalty in the amount of $4,000 per month after construction and operations begin.
Initially, the Company will purchase the chemical mixture produced by plant operators for use in further mixing and testing the hybrid fuel. Upon completion of testing, the Company intends to sell the resulting mixed fuel to end users or distributors.
The Company has accrued expenses and operating costs in the amount of $33,378. The accrued expenses included deferred salaries. The Company does not currently have any capital commitments for the next twelve months.
Research and Development
During the next twelve months, the Company anticipates expending between $50,000 to $100,000 on research and development and will focus its efforts as follows:
1. Researching efficiencies in plant construction and operation;
2. Long-term use of the hybrid fuel, particularly in extreme temperatures;
3. Research and training methods and production of training and operations manuals. The Company intends to develop training and operations manuals that will focus on providing the necessary information to ensure the plants are operated safely and efficiently, with the greatest concern for the well-being of the animals and the most positive environmental impact.
4. Testing and refinement to obtain the optimum hybrid fuel mixture.
Trends That May Effect the Company's Business
The Company has identified the following four trends as potentially impacting the business of the Company.
1. Trend toward supporting businesses which have a positive environmental impact. The Company seeks to take advantage of this trend by providing technology that will produce a hybrid fuel which reduces diesel engine emissions. In addition, the animal finishing operation will be promoted as having an environmentally positive impact in that, unlike traditional beef finishing operations, it produces no groundwater pollution and virtually no odor.
2. Over the last three decades, there has been a trend toward reducing consumption of meat generally and beef in particular. Continuation of this trend could have an adverse effect on the Company. In January 2000, Successful Farming Online reported the first increase in consumer spending on beef since the early 1970s. This was an increase of 4%. This report further says that consumers will spend more for beef that is guaranteed good quality. This, and a trend toward consuming healthier foods will operate to the advantage of the Company. Management is of the view that even if the overall consumption of beef declines, it will have little or no adverse effect on the Company's business as the integrated feedlot-fuel operations will be producing and marketing beef that is hormone and antibiotic free.
3. Trend towards significantly increased gas prices. Within North America, during the last several months, there is a trend towards significantly increased gas prices, which the majority of commentators seem to believe will continue. One of the responses to this trend has been the announcement by President Clinton of a research program to triple the use of ethanol during the next ten years. In addition, many states, such as California, have or are considering legislation to eliminate the use of MTBE as an octane enhancer and "clean air" additive. Ethanol is the octane enhancer and clean air additive of choice to replace MTBE. Ethanol comes from renewable sources whereas MTBE is usually from fossil fuels. Also, until recently, those opposed to the use of ethanol could legitimately argue that it took approximately the same amount of energy, usually from non-renewable resources, to produce dry ethanol with an equivalent amount of BTUs. As the price of raw petroleum increases, and drying using molecular sieves and other technologies becomes more efficient, the cost of producing dry ethanol will become increasingly competitive. This should work to the advantage of the Company. The efficiency of the Company's technology provides an advantage of being able to produce ethanol relatively inexpensively. The Company enjoys a further advantage as the process mixes wet ethanol and diesel and does not incur the cost of drying the ethanol. There is a risk that there will be no market for the hybrid diesel fuel. However, the ethanol produced by the plants could be used in other products such as windshield washer fluid or sold to be dried and mixed into gasahol.
4. Trend of governments and health regulators to mandate environmental clean-ups and reduce pollution. The United States and Canada recently signed the Kyoto Emission Standards Agreement which requires countries to adhere to the Kyoto Protocol commitments by the year 2010. In California and in other states, local governments are implementing strict environmental clean-up requirements, in particular tighter restrictions on the handling of dairy waste which has been found to contaminate ground water. The Santa Ana Regional Water Quality Control Board, which enforces state and federal water quality standards in the Santa Ana River watershed, recently mandated dairy farmers remove stockpiled manure and established a new 180 day limit for new manure to be cleared from the dairies. The federal Environmental Protection Agency is also involved in enforcing clean water compliance. The Company's technology and fuel-feed lot facilities appear to be potential solutions to this type of governmental regulation.
Item 3. Description of Property
The Company maintains offices at #214-2791 Hwy. 97N, Kelowna, British Columbia, Canada and at No. 302-855 8th Avenue S.W., Calgary, Alberta, Canada, both at no cost to the Company. The office space and operating expenses are currently being supplied by shareholders of the Company until such time as the Company generates sufficient revenue to pay going rent.
In addition, the President of the Company maintains an office in his home at 740 Westpoint Court, Kelowna, British Columbia, Canada at no cost to the Company.
Item 4. Security Ownership of Certain Beneficial Owners and Management; Changes in Control
The following table sets forth as of January 18, 2000, the name and the number of shares of the Registrant's Common Stock, par value $.001 per share, held of record or beneficially by each person who held of record, or was known by the Registrant to own beneficially, more than 5% of the 15,072,650 issued and outstanding shares of the Registrant's Common Stock, and the name and shareholdings of each director and of all officers and directors as a group.
Title of Name and Address of Amount and Nature of
Class Beneficial Owner Beneficial Ownership Percentage
of Class
Common Donald Craig 7,483,600 49.65%
214-2791 Hwy. 97N
Kelowna, BC V1X 4JB
Common Clay Larson (1) 1,200,000 7.96%
740 Westpoint Crt.
Kelowna, BC V1W 2Z4
___________________________________________________________________________
Common Total Officers and Directors
as a Group (1 Person) 1,200,000 7.96%
___________________________________________________________________________
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(1) Officer and/or director.
There are no contracts or other arrangements that could result in a change of control of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The following table sets forth as of January 18, 2000, the name, age, and position of each executive officer and director and the term of office of each director of the Corporation.
Name Age Position Director or Officer
Since
Clay Larson 58 President, Secretary, June 28, 1999
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Treasurer and Sole Director
All officers hold their positions at the will of the Board of Directors. All directors hold their positions for one year or until their successors are elected and qualified.
Set forth below is certain biographical information regarding each of the Company's executive officers and directors:
Clay Larson, President, Secretary, Treasurer and Sole Director. Prior to becoming President, Mr. Larson was a practicing lawyer for 25 years, leaving the profession in February 1997. Prior to leaving, he was the senior and managing partner in the law firm, responsible for all administrative and business matters including personnel, finances, budgeting, premises, equipment and business development. After leaving practice in 1997, he acted as a consultant for a recreational vehicle marketing company with sales of 22 million dollars a year. He was responsible for matters involving relationships with government agencies, financial institutions, and client services and advised on matters involving personnel, acquisition and expansion of premises, acquisition and installation of computer equipment and operating systems. He left that position to become President and Director of the Company at the request of Donald Craig, the holder of the majority of the issued and outstanding shares of the Company. Mr. Larson will serve as director of the Company until the next annual general meeting or until his successor is appointed. Mr. Larson has no other directorships in any reporting companies.
To the knowledge of management, during the past five years, no present or former directors, executive officer or person nominated to become a director or an executive officer of the Company:
(1) filed a petition under the federal bankruptcy laws or any state insolvency law, nor had a receiver, fiscal agent or similar officer appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
(2) was convicted in a criminal proceeding or named subject of a pending criminal proceeding (excluding traffic violations or other minor offenses);
(3) was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting, the following activities:
(i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or as an affiliate person, director or employee of any investment company, or engaging in or continuing any conduct or practice in connection with such activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;
(4) was the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any federal or state authority barring, suspending, or otherwise limiting for more than 60 days the right of such person to engage in any activity described above under this Item, or to be associated with persons engaged in any such activity.
(5) was found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any federal or state securities law, and the judgment in such civil action or finding by the Securities and Exchange Commission has not been subsequently reversed, suspended, or vacated
(6) was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal Commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated.
Significant Employees and Consultants
Sir Donald Craig, Technology Inventor. Mr. Craig is the individual who is most responsible for the development of the concepts and invention of much of the equipment or improvements to the equipment and is expected to play an important role in building plants and refining the system. Mr. Craig is 80 years old, in excellent health, currently works part time five days a week and will be employed on an as required basis. He has agreed to donate his time without remuneration until the first plant is built and operating. Thereafter, he will provide consulting services at mutually agreeable prices, on an as needed basis. The Company will pay Mr. Craig's Company related expenses until the first plant is operating.
Mr. Craig has earned three Engineering degrees and two Doctorates and has been appointed as Knight of the Royal Order for his development of the hybrid system. After graduating with a degree in agriculture, Mr. Craig was responsible for the establishment of a beef finishing operation which may have been the first to use confinement barns and which fed brewers mash and stillage water to beef animals. In the early 1980s, after years of involvement in the forest industry, he developed a plan for re-refining oil which he used to create a dormant oil spray. He developed surfactants that permitted an emulsion of water and oil. He then became interested in developing a small-scale separator column that could economically and efficiently extract ethanol from biomass. His concept was to develop a farm scale ethanol production facility combined with an animal finishing operation which would use the spent grains and stillage water. In the early 1990s, he developed a plant and tested his theories under actual operating conditions. The results of the cattle finishing operation were promising. Starting with a poor grade of range stock, the cattle gained an average of 3.94 pounds per day and achieved an extraordinarily high packout grade when shipped to market. They did not require the general use of antibiotics and growth hormones, all of the animals were free of liver damage and none were condemned. As a result, the purchaser of the first lot offered a premium of 10 cents per pound, FOB the farm for all beef that could be produced using this system.
That plant demonstrated that it was not economical to dry the ethanol at such a small-scale plant. Mr. Craig therefore turned his attention to creating an emulsifier that would permit wet ethanol to be mixed with diesel fuel and tested that hybrid fuel at the British Columbia Institute of Technology using an unaltered diesel engine. In addition, he improved the separator column and designed a spinner-separator which is used to separate the spent grain solids from the liquid. He also designed a feeding system for hydroponic greenhouses which he used for tomatoes that generated extraordinarily high yields. Since then he has made improvements to the system by the utilization of a gasifier to burn the manure and bedding straw, and use the resulting heat to heat the feedstock and water to speed up fermentation and vaporization. In addition, the excess heat can be used to heat a greenhouse which could offer the operator another potential source of income.
Item 6. Executive Compensation.
At the present time, the Company does not have any compensation agreements or plans with the officer and director of the Company. The Company does intend to enter such an agreement in the future with annual compensation not to exceed $100,000 before the next annual meeting of shareholders. At that time, a compensation committee will be established and salaries reviewed. Mr. Larson, the Company's sole officer and director, began accruing salary in the amount of $6,000 per month as of July 1, 1999, which is being deferred until such time as the Company has adequate funds to pay compensation.
The Company intends to appoint not less than two nor more than five new directors who will be remunerated in accordance with their responsibilities with the Company. To date, no directors have been identified. At such time as new directors and/or officers are appointed, the Company will adopt a compensation plan which will likely include stock options and performance incentives tied to gross sales, increase in sales, gross revenues, increase in gross revenues and profitability.
The following table sets forth certain summary information concerning the compensation paid or accrued for each of the Registrant's last three completed fiscal years to the Registrant's or its principal subsidiaries chief executive officers and each of its other executive officers that received compensation in excess of $100,000 during such period (as determined at June 30, 1999, the end of the Registrant's last completed fiscal year).
SUMMARY COMPENSATION TABLE
Annual compensation Long term compensation
Other Restricted Securities LTIP All
Annual stock underlying payouts other
Name & Year Salary Bonus Compen- awards options/SARs ($) Compen-
Principal ($) ($) sation($) ($) (#) sation
Position
Clay Larson 2000 72,000 -0- -0- -0- -0- -0- -0-
President, 1999 36,000 -0- -0- -0- -0- -0- -0-
Secretary,
Treasurer
Iris McCammon1999 -0- -0- -0- -0- -0- -0-112,935.91(1)
President 1998 -0- -0- -0- -0- -0- -0- 41,267.91(1)
Ronald Bothers 1999-0- -0- -0- -0- -0- -0- -0-
Secretary 1998-0- -0- -0- -0- -0- -0- -0-
Treasurer
Justeene 1997 -0- -0- -0- -0- -0- -0- -0-
Blankenship,
President
Danni Uyeda 1997 -0- -0- -0- -0- -0- -0- -0-
Secretary
Shane Duffin 1997 -0- -0- -0- -0- -0- -0- -0-
Treasurer
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(1) The amounts shown under other compensation for Iris McCammon are the subject of an investigation by the Company as these amounts were improperly paid. See details under "Legal Proceedings."
Mr. Larson's salary is deferred until such time as the Company has sufficient funds.
Compensation of Directors
There are no arrangements pursuant to which any director of the Company was compensated for any service provided as a director. The directors may be paid their expenses of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as a director, although no such payment has been authorized or approved, nor is any contemplated.
Employment Contracts and Termination of Employment and Change in Control Arrangement
There are no employment contracts between the Company and any of its officers or directors. The Company intends to establish a compensation plan for its officers and directors following the effective date of this registration statement. Such compensation plan will likely include stock options and performance incentives tied to gross sales, increase in sales, gross revenues, increase in gross revenues and profitability.
There are no compensatory plans or arrangements, including payments to be received from the Company, with respect to any person named in Cash Compensation set out above which would in any way result in payments to any such person's employment with the company or its subsidiaries, or any change in control of the Company, or a change in the person's responsibilities following a change in control of the Company.
Item 7. Certain Relationships and Related Transactions.
The Company utilizes office space provided at no cost by the officers, directors and shareholders of the Company.
The Company is not expected to have any significant dealings with affiliates. Presently, other than as described above, none of the officers and directors have any transactions which they contemplate entering into with the Company.
Item 8. Description of the Securities.
The following statements relating to the capital stock set forth the material terms of the Company's securities; however, reference is made to the more detailed provisions of, and such statements are qualified in their entirety by reference to, the Articles of Incorporation and the By-laws, copies of which are filed as exhibits to this registration statement.
Common Stock. The authorized capital stock of the Company consists of 50,000,000 shares of common stock with a par value of $.001 per share. As of January 18, 2000, there were 245 shareholders holding 15,072,650 shares of common stock.
Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock do not have cumulative voting rights. Holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the Board of Directors in its discretion from funds legally available there for. In the event of a liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share pro rata all assets remaining after payment in full of all liabilities. All of the outstanding shares of common stock are fully paid and non-assessable. Holders of common stock have no preemptive rights to purchase the Company's common stock. There are no conversion or redemption rights or sinking fund provisions with respect to the common stock.
The Company has appointed Standard Registrar & Transfer Company, Inc., 12528 S. 1840 E., Draper, Utah 84020, 801-571-8844, as the transfer agent and registrar for the Company's securities.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and Other Shareholder Matters.
The Company's common stock is traded in the National Quotation Bureau "Pink Sheets" under the symbol "HBID." The following table sets forth the high and low closing bid prices for the periods indicated, as reported by the National Quotation Bureau.
CLOSING BID CLOSING ASK
High Low High Low
1998
1st Quarter 1.125 .0625 3.00 3.00
2nd Quarter 4.25 .25 5.75 2.00
3rd Quarter 4.6875 .875 5.00 1.75
4th Quarter 1.625 .375 2.00 .625
1999
1st Quarter 2.00 8.75 3.00 1.25
2nd Quarter 1.50 .875 2.625 1.125
3rd Quarter 1.75 .375 2.125 .625
4th Quarter .625 .125 1.00 .25
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These quotations are inter-dealer prices without retail markup, markdown or commissions, and may not necessarily represent actual transactions.
As of January 18, 2000 there were 245 shareholders of record of the Company's common stock.
The Company has never paid cash dividends. The Board of Directors of the Company currently anticipates that it will retain all available funds for use in the operation of the business and does not anticipate paying any cash dividends in the foreseeable future.
Item 2. Legal Proceedings.
No legal proceedings are threatened or pending against the Company or any of its officers or directors. Further none of the Company's officers or directors or affiliates of the Company are parties against the Company or have any material interests in actions that are adverse to the Company's interests.
Although the Company is not involved in any legal proceedings, several issues may eventually lead to the Company instituting legal action to recover improperly issued shares of the Company and to recover unauthorized payments.
On August 4, 1998, the Company's then president issued 1,000,000 shares of common stock to individuals without consideration and without proper board approval. The Company takes the position that these shares were not validly issued and the Company's transfer agent has canceled the shares upon direction of the Company.
On March 23, 1999, the Company's then board of directors issued 900,000 shares of common stock to individuals without consideration and without proper board approval. The Company takes the position that these shares were not validly issued and the Company's transfer agent has canceled the shares upon direction of the Company.
Although it has not been necessary for the Company to pursue any legal action regarding the improper issuance of shares, the Company will, should it become necessary, pursue any and all legal remedies in order to have the shares returned or any profits from sales of the shares disgorged to the Company.
In addition to the improper issuance of shares, unauthorized payments in the amount of $154,203.82 were made from Company funds by past officers of the Company. The Company has requested a full accounting from the past president. All amounts that were unauthorized by the board of directors or amounts that are not properly documented with invoices and receipts have been accounted for as disputed compensation to the previous President. Actions of the previous administration have been reported to the Securities and Exchange Commission. At such time as Company resources permit, the Company will seek legal advice to determine whether or not it is possible to recover all such disputed and unauthorized amounts from the previous administration.
In late 1998 and early 1999, the previous administration sold common stock of the Company to 34 subscribers on the basis of an offering memorandum that contained a significant number of inaccuracies. Because the current administration has concerns regarding possible mis-statements, omissions and misleading statements, it proposes to extend a rescission offer to the 34 subscribers. Although no action has been taken against the Company nor have any complaints been received, the Company believes that by offering a rescission, any potential liability can be mitigated.
Item 3. Changes in and Disagreements with Accountants.
a. On December 2, 1999, the Company engaged James E. Slayton, CPA as its independent accountant. The decision to engage James E. Slayton, CPA as the Company's independent accountant was recommended and approved by the Company's President and Director.
b. In a report dated May 20, 1998, Orton & Company, Certified Public Accountants, reported on the Company's financial statements as of April 30, 1998 and June 30, 1997 and the related statements of operations, stockholders' equity (deficit), and cash flows for the period from July 1, 1997 through April 30, 1998 and for the year ended June 30, 1997. Such report did not contain an adverse opinion or disclaimer of opinion, nor was such report qualified or modified as to uncertainty, audit scope, or accounting principles. Orton & Company, Certified Public Accounts, understands that they were terminated as the Company's independent accountants effective mid 1998. Thereafter, the Company engaged James E. Slayton, CPA as its independent accountants on December 2, 1999.
c. During the Company's two fiscal years ended June 30, 1998 and 1997, and the subsequent interim period preceding the decision to engage independent accountants, there were no "reportable events" (hereinafter defined) requiring disclosure pursuant to Item 304 of Regulation S-B.
Orton & Company, Certified Public Accountants, has provided the Company with a letter pursuant to Rule 304 of Regulation S-B.
Item 4. Recent Sales of Unregistered Securities.
a. Date, title and amount of securities sold
Date Title Amount May 29, 1998 Common Stock 12,000,000 shares August 4, 1998 Common Stock 1,000,000 shares September 10,1998 Common Stock 2,400 shares November 24, 1998 Common Stock 21,200 shares March 23, 1999 Common Stock 900,000 shares September 7, 1999 Common Stock 5,000 shares October 8, 1999 Common Stock 15,000 shares January 3, 2000 Common Stock 89,350 shares |
b. All of the above transactions were issued in private transactions to individuals with no underwriters involved.
c. The May 29, 1998 issuance was an exchange of shares whereby the Company acquired Hybrid Fuels, U.S.A., Inc. and Hybrid Fuels (Canada) Inc.
The August 4, 1998 issuance is contested by the Company as the shares were issued without consideration. The Board of Directors passed a resolution and the transfer agent canceled the shares.
The September 10, 1998 issuance was for cash of $3,600.00 upon which no commissions were paid.
The November 24, 1998 issuance was for cash of $10,000.00 upon which no commissions were paid.
The March 23, 1999 issuance is contested by the Company as the shares were issued without consideration. The Board of Directors passed a resolution and the transfer agent canceled the shares.
The September 7, 1999 issuance was made in consideration of a shareholder not exercising their right of rescission.
The October 8, 1999 issuance was made in consideration of a shareholder not exercising their right of rescission.
The January 3, 2000 issuance was made in consideration of shareholders not exercising their right of rescission.
d. The Company relied upon Section 4(2) of the Securities Act of 1933 to effect the issuance of all shares. All shares were either exchanged or issued in an isolated private transaction not involving any public solicitation or offering.
Item 5. Indemnification of Directors and Officers.
The statutes, charter provisions, bylaws, contracts or other arrangements under which controlling persons, directors or officers of the registrant are insured or indemnified in any manner against any liability which they may incur in such capacity are as follows:
The registrant's Articles of Incorporation limit liability of its Officers and Directors to the full extent permitted by the Nevada Business Corporation Act.
(a) Section 78.751 of the Nevada Business Corporation Act provides that each corporation shall have the following powers:
1. A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suitor proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contenders or its equivalent, does not, of itself create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and that, with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction, determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
3. To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections 1 and 2, or in defense of any claim, issue or matter therein, he must be indemnified by the corporation against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with the defense.
4. Any indemnification under subsections 1 and 2, unless ordered by a court or advanced pursuant to subsection 5, must be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination must be made: (a) By the stockholders; (b) By the board of directors by majority vote of a quorum consisting of directors who were not parties to the act, suit or proceeding; (c) If a majority vote of a quorum consisting of directors who were not parties to the act, suit or proceeding so orders, by independent legal counsel, in a written opinion; or (d) If a quorum consisting of directors who were not parties to the act, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion.
5. The certificate or articles of incorporation, the bylaws or an agreement made by the corporation may provide that the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the corporation. The provisions of this subsection do not affect any rights to advancement of expenses to which corporate personnel other than directors or officers may be entitled under any contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in or ordered by a court pursuant to this section: (a) Does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the certificate or articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for either an action in his official capacity or an action in another capacity while holding his office, except that indemnification, unless ordered by a court pursuant to subsection 2 or for the advancement of expenses made pursuant to subsection 5, may not be made to or on behalf of any director or officer if a final adjudication establishes that his acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action. (b) Continues for a person who has ceased to be a director, officer, employee or agent and inures to the benefit of the heirs, executors and administrators of such a person.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, IT IS THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.
PART F/S
Hybrid Fuels, Inc
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED
FINANCIAL STATEMENTS
June 30, 1998
June 30, 1999
and
November 30, 1999
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS'
REPORT.................................................................. 1
BALANCE SHEET.......................................................... 2-3
STATEMENT OF
OPERATIONS............................................................... 4
STATEMENT OF STOCKHOLDERS'
EQUITY.............................................................. ... 5-6
STATEMENT OF CASH
FLOWS................................................................... 7
NOTES TO FINANCIAL
STATEMENTS.............................................................. 8
James E. Slayton, CPA
3867 West Market Street
Suite 208
Akron, Ohio 44333
INDEPENDENT AUDITORS' REPORT
Board of Directors December 18, 1999
Hybrid Fuels, Inc. (The Company)
Las Vegas, Nevada 89104
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I have audited the Consolidated Balance Sheet of Hybrid Fuels, Inc. (A Development Stage Company), as of June 30, 1998, June 30, 1999 and November 30, 1999, and the related Consolidated Statements of Operations, Stockholders' Equity and Cash Flows for years ending June 30, 1998, June 30, 1999, the five months ended November 30, 1999 and the period February 16, 1960 (Date of Inception) to the period ended November 30, 1999. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis evidence supporting the amounts and disclosures in the financial statement presentation. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hybrid Fuels, Inc., ( A Development Stage Company), at June 30, 1998, June 30, 1999 and November 30, 1999, and the results of its operations and cash flows for the years June 30, 1998, June 30, 1999 and the five months ended November 30, 1999, and the period February 16, 1960 (Date of Inception) to November 30, 1999, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, The Company has had limited operations and has not established a long term source of revenue. The Company has had operating losses for the operating periods reported. This raises substantial doubt about its ability to continue as a going concern. Management's plan in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ James E. Slayton, CPA Ohio License ID# 04-1-15582 |
Hybrid Fuels, Inc.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
AS AT
ASSETS
November 30 June 30 June 30
1999 1999 1998
----------- -------- ---------
CURRENT ASSETS
Cash 0.00 1,073.00 50,554.00
Prepaid Expenses 0.00 0.00 0.00
----------- -------- ---------
Total Current Assets 0.00 1,073.00 50,554.00
PROPERTY AND EQUIPMENT
Property and Equipment (net of
depreciation) 987.00 1,102.00 1,378.00
----------- -------- ---------
Total Property and Equipment 987.00 1,102.00 1,378.00
OTHER ASSETS
Other Assets 0.00 0.00 0.00
----------- -------- ---------
Total Other Assets 0.00 0.00 0.00
----------- -------- ---------
TOTAL ASSETS $987.00 $2,175.00 $51,932.00
=========== ======== =========
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See accompanying notes to financial statements
Hybrid Fuels, Inc.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
AS AT
November 30 June 30 June 30
1999 1999 1998
----------- ------- -------
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accounts Payable $33,378.00 $ 0.00 $ 0.00
--------- ------- -------
Total Current Liabilities 33,378.00 0.00 0.00
OTHER LIABILITIES
Other Liabilities 0.00 0.00 0.00
--------- ------- -------
Total Liabilities 33,378.00 0.00 0.00
EQUITY
Common Stock, $0.001 par value,
authorized 50,000,000 shares;
issued and outstanding at June 30,
1998, 15,000,000 common shares;
issued and outstanding at June 30,
1999, 16,723,600 common shares;
issued and outstanding at November
30, 1999, 16,743,600 common shares 16,744.00 16,724.00 15,000.00
Additional Paid in Capital 15,756.00 15,776.00 3,900.00
Donated Capital 4,357.00 4,357.00 4,357.00
Retained Earnings (Deficit
accumulated during development
stage) (426,473.00) (391,907.00) (120,394.00)
Advances from shareholders 357,225.00 357,225.00 149,069.00
---------- ---------- ----------
Total Stockholders' Equity (32,391.00) 2,175.00 51,932.00
TOTAL LIABILITIES & OWNER'S
EQUITY $987.00 $2,175.00 $51,932.00
========== ========= ==========
|
See accompanying notes to financial statements
Hybrid Fuels, Inc.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
FOR PERIODS
February 16,
1960 July 1,
(Date of 1999
Inception) to
November 30 November 30 June 30 June30
1999 1999 1999 1998
----------- ----------- --------- ---------
REVENUE
Services 0.00 0.00 0.00 0.00
COSTS AND EXPENSES
Selling, General and
Administrative 426,059.00 34,451.00 271,237.00 97,114.00
Depreciation Expense 414.00 115.00 276.00 23.00
---------- --------- ---------- ---------
Total Costs and Expenses 426,473.00 34,566.00 271,513.00 97,137.00
---------- --------- ---------- ---------
Net Income or (Loss) (426,473.00)(34,566.00) (271,513.00)(97,137.00)
========== ========== ========== ==========
Weighted average
number of common
shares outstanding 16,739,600 16,739,600 16,166,133 15,000,000
Net Loss Per Share ($0.03) $0.00 ($0.02) ($0.01)
|
See accompanying notes to financial statements
Hybrid Fuels, Inc.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR PERIOD
February 16, 1960 (Date of Inception) to June 30, 1998
and Period ended November 30, 1999
Deficit
Accumulated
Additional During Total
Common paid-in Contri- develop- Stock-
Stock buted ment holders'
Shares Amount Capital Capital stage Equity
-----------------------------------------------------------
Issuance of common
stock at inception
for cash 3,000,000 3,000 3,900 6,900
Net loss February
26, 1960
(Inception) to
June 30, 1989 (6,900) (6,900)
-----------------------------------------------------------
Balance as at
June 30, 1989 3,000,000 3,000 3,900 0 (6,900) 0
Net loss for the
year ended
June 30, 1990 0 0
-----------------------------------------------------------
Balance as at
June 30, 1990 3,000,000 3,000 3,900 0 (6,900) 0
Net loss for the
year ended
June 30, 1991 0 0
-----------------------------------------------------------
Balance as at
June 30, 1991 3,000,000 3,000 3,900 0 (6,900) 0
Net loss for the
year ended
June 30, 1992 0 0
-----------------------------------------------------------
Balance as at
June 30, 1992 3,000,000 3,000 3,900 0 (6,900) 0
Issuance of common
stock for services
rendered, at $.001
per share 12,000,000 12,000 0 12,000
Net loss for the
year ended
June 30, 1993 (12,000) (12,000)
-----------------------------------------------------------
Balance as at
June 30, 1993 15,000,000 15,000 3,900 0 (18,900) 0
Net loss for the
year ended
June 30, 1994 0 0
-----------------------------------------------------------
Balance as at
June 30, 1994 15,000,000 15,000 3,900 0 (18,900) 0
Net loss for the
year ended
June 30, 1995 0 0
-----------------------------------------------------------
Balance as at
June 30, 1995 15,000,000 15,000 3,900 0 (18,900) 0
Net loss for the
year ended
June 30, 1996 (898) (898)
-----------------------------------------------------------
Balance as at
June 30, 1996 15,000,000 15,000 3,900 0 (19,798) (898)
Capital
contributed by
shareholder 4,357 4,357
Net loss for the
year ended
June 30, 1997 (3,459) (3,459)
-----------------------------------------------------------
Balance as at
June 30, 1997 15,000,000 15,000 3,900 4,357 (23,257) 0
Net loss for the
year ended
June 30, 1998 (97,137) (97,137)
-----------------------------------------------------------
Balance as at
June 30, 1998 15,000,000 15,000 3,900 4,357 (120,394) (97,137)
Issued by Board
of Directors
August 4, 1998 1,000,000 1,000 (1,000) 0
Issued for cash
September 19, 1998 2,400 3 3,597 3,600
Issued for cash
November 24, 1998 21,200 21 9,979 10,000
Issued by Board
of Directors
March 23, 1999 900,000 900 (900) 0
Net loss for the
year ended
June 30, 1999 (271,513) (271,513)
-----------------------------------------------------------
Balance as at
June 30, 1999 16,923,600 16,924 15,576 4,357 (391,907) (355,050)
Issued by Board
of Directors 5,000 5 (5) 0
Issued by Board
of Directors 15,000 15 (15) 0
Net loss for the
period ended
November 30, 1999 (34,566) (34,566)
-----------------------------------------------------------
Balance as at
November 30,
1999 16,943,600 $16,944 $15,556 $4,357 $(426,473) $(389,616)
============================================================
|
See accompanying notes to financial statements
Hybrid Fuels, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR PERIOD
February 16,
1960 July 1,
(Date of 1999
Inception) to
November 30 November 30 June 30 June30
1999 1999 1999 1998
----------- ----------- --------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net (loss) from operations (426,450.00)(34,566.00)(271,513.00)(97,114.00)
Adjustments to reconcile
net income to net cash
provided
Services rendered for stock 12,000.00 0.00 0.00
Depreciation Expense 414.00 115.00 276.00 23.00
Amortization of Organization
Costs 1,416,667.00 416,667.00 1,000,000.00 0.00
Increase in accounts payable 33,378.00 33,378.00
------------ ---------- ------------ ---------
Net cash flow provided by
operating activities (380,658.00) (1,073.00)(271,237.00)(97,091.00)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of fixed assets 1,401.00 0.00 0.00 1,401.00
------------ ---------- ----------- ----------
Net cash used by investing
activities 1,401.00 0.00 0.00 1,401.00
CASH FLOWS FROM FINANCING
ACTIVITIES
Issuance of Capital Stock 20,500.00 0.00 13,600.00 0.00
Contributed Capital 4,357.00
Cash advances from
shareholders 357,202.00 208,156.00 149,046.00
------------ ---------- ----------- ----------
Net cash provided by
financing activities 382,059.00 0.00 221,756.00 149,046.00
Net increase (decrease)
In cash 0.00 (1,073.00) (49,481.00) 50,554.00
Balance beginning of period 0.00 1,073.00 50,554.00 0.00
Balance as at end of period 0.00 0.00 1,073.00 50,554.00
|
See accompanying notes to financial statements
Hybrid Fuels, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized February 16, 1960 (Date of Inception) under the laws of the State of Florida, as Fiberglass Industries Corp. of America, (The Company) has had limited operations and in accordance with SFAS #7, the Company is considered a development stage company. The Company was authorized to issue 500,000 shares of its $.10 par value common stock. The authorized capital was increased to 1,500,000 shares of $.10 par value common stock in October of 1964. In August 1966, the Company changed its name to Rocket Industries, Inc. and increased its capital to 3,000,000 of $.05 par value common stock. In November of 1966, the Company changed its name to Rocket-Atlas Corp. In January 1984, the Company changed its name to Polo Investment Corp of Missouri Inc. and increased its capital to 30,000,000 shares of $.05 par value common stock. In June 1993, the Company changed its name to Polo Equities, Inc. and changed its authorized capital to 50,000,000 shares of $.001 par value common stock. The Company has no authorization to issue preferred stock. The Company is authorized to issue 50,000,000 shares of its $.001 par value common stock.
On February 16, 1960, the Company received $6,900.00 and subsequently issued 3,000,000 Shares of its $.001 Par value common stock.
In fiscal year ending 1993, the Company issued 12,000,000 shares of its $.001 Par value common stock for services rendered in the amount of $12,000.00.
On June 23, 1997, shareholders contributed $4,357.00 to pay corporate expenses.
In May of 1998, the Company caused a Nevada corporation to be incorporated under the name of Polo Equities, Inc., authorized to issued 50,000,000 shares of $.001 par value common stock, and merged with that Corporation, for the purpose of changing its domicile to Nevada, in accordance with Articles of Merger adopted May 28, 1998 and filed with the State of Nevada on June 10, 1998.
On May 29, 1998 , the Company changed its name to Hybrid Fuels, Inc.
On May 29, 1998 , the Company acquired Hybrid Fuels, U.S.A. Inc., and 330420 B.C. LTD., which changed its name to Hybrid Fuels Canada as wholly- owned subsidiaries in a stock for stock exchange. The transaction is accounted for on the pooling of interest accounting method. The shares issued in 1993 were returned to the Company and 12,000,000 shares of treasury stock were issued to the Hybrid Fuels Canada which distributed them to the holder of a note in the amount of $20,000,000.00. This note was subsequently canceled as part of the acquisition agreement
On August 4, 1998, the Company's board of directors issued 1,000,000 shares of its common stock to individuals without consideration. The Company is seeking the return or cancellation of these shares as it is believed they were improperly issued.
On September 10, 1998, the Company issued 2,400 Shares of its $.001 Par value common stock for cash of $3,600.00.
On November 24, 1998, the Company issued 21,200 Shares of its $.001 Par value common stock for cash of $10,000.00.
On March 23, 1999, the Company's board of directors issued 900,000 shares of its common stock to individuals without consideration. The Company is attempting to have the remaining 900,000 shares canceled or returned to the Company.
On September 7, 1999, the Company's board of directors issued 5,000 shares of its common stock to a shareholder for not exercising the shareholder's right of recission.
On October 8, 1999, the Company's board of directors issued 15,000 shares of its common stock to a shareholder for not exercising the shareholder's right of recission.
There have been no other issues of common or preferred stock.
The Statement of Stockholder's equity and Notes to Financial Statements reflects changes in par value retroactively.
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES
Accounting polices and procedures have not been determined except as follows:
1. The Company uses the accrual method of accounting.
2. Organization costs are expensed as incurred.
3. Basic earnings per share is computed using the weighted average number of shares of common stock outstanding.
4. The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid.
5. The Company has experienced losses during its operating periods. The Company will review its need for a provision for federal income tax after each operating quarter. The Company has net operating losses in the amount of $1,843,140.00. These losses will begin to expire in the tax year 2004. The Company has deemed it less than likely that the losses will be utilized, therefore the Company did not record a deferred tax benefit. The Company's marginal tax rate is zero. The Company's actual tax rate was zero.
6. The preparation of financial statements in conformity with generally accepted accounting principles requires that management make estimates and assumptions which affect the reported amounts of assets and liabilities as at the date of the financial statements and revenues and expenses for the period reported. Actual results may differ from these estimates.
7. The cost of equipment is depreciated over the estimated useful life of the equipment utilizing the straight line method of deprecation. There was depreciation recorded for these periods in the amount of $414.00
8. The Company has adopted June 30 as its fiscal year end.
9. As a result of the agreement concluded with the stock issue of May 29, 1999, acquired technology. A present value analysis of the acquired technologies illustrates a present value of $20,000,000.00. Management chose to report the value at the fair value of the stock exchanged, which was zero at the time of the transaction. received. The Company assumed a note payable in the amount of $20,000,000, which was later canceled as per the terms of the agreement.
10. All exchanges of stock for services rendered were recorded at the
fair value of the services.
11. The Company's Statement of Cash Flows is reported utilizing
cash(currency on hand and demand deposits) and cash equivalents( short-term,
highly liquid investments).
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has no current source of revenue. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. It is management's plan to seek additional capital through loans, private placements, or public offering of securities.
NOTE 4 - RELATED PARTY TRANSACTION
The Company does not own or lease any real property. Office services are incidental and are being provided by officers and board members at no costs. The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.
NOTE 5 - ASSET PURCHASE AGREEMENT
In May of 1998, the Company signed an agreement Hybrid Fuels U.S.A., Inc. which included acquired technology (including but not limited to patents, copyrights, formulas, trademarks and trade secrets) which is being carried at a fair value of zero.
NOTE 6 - WARRANTS AND OPTIONS
The Company does not have any warrants or options.
NOTE 7 - YEAR 2000 ISSUE
The Year 2000 issue arises because many computerized systems use two digits rather than four to identify a year. Date-sensitive systems may recognize the year 2000 as 1900 or some other date, resulting in errors when information using year 2000 dates is processed. In addition, similar problems may arise in systems which use certain dates in 1999 to represent something other than a date. The effects of the Year 2000 issue may be experienced before, on, or after January 1, 2000 and if not addressed, the impact on operations and financial reporting may range from minor errors to significant systems failure which could affect an entity's ability to conduct normal business operations. It is not possible to be certain that all aspects of the Year 2000 issue affecting the entity, including those related to the efforts of customers, suppliers, or other third parties will be fully resolved.
NOTE 8- BOARD OF DIRECTORS ISSUES
The current board of directors views current stock issuances authorized by a previous board of directors as being improper. In addition, the current board of directors feels that the board did not properly account for funds received by the Company and disbursed by the Company. The board of directors is attempting to have the stock issuances canceled and receive a proper accounting of funds or restitution.
James E. Slayton, CPA
3867 West Market Street
Suite 208
Akron, Ohio 44333
To Whom It May Concern:
The firm of James E. Slayton, Certified Public Accountant consents to the inclusion of my report of November 30, 1999, on the Financial Statements of Hybrid Fuels, Inc.. from the inception date of February 16, 1960 through November 30, 1999, in any filings that are necessary now or in the near future to be filed with the U. S. Securities and Exchange Commission.
Professionally,
/s/ James E. Slayton, CPA Ohio License ID # 04-1-15582 |
PART III
Item 1. Index and Description of Exhibits.
Exhibit
Number Title of Document Location
3.(i).1 Articles of Incorporation - Florida See Attached
3.(i).2 Amendments to Articles of Incorporation - Florida See Attached
3.(i).3 Articles of Incorporation - Nevada See Attached
3.(i).4 Amendments to Articles of Incorporation - Nevada See Attached
99 Articles of Merger Between Florida and Nevada See Attached
3.(ii) Bylaws See Attached
2 Acquisition Agreement - Polo Equities, Inc
and Hybrid Fuels, Inc. See Attached
27 Financial Data Schedule See Attached
|
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant caused this registration statement to be signed on its behalf, thereunto duly authorized.
Hybrid Fuels, Inc.
Date:2/4/00 By:_______/s/_______________
Clay Larson
President and Sole Director
|
ARTICLES OF INCORPORATION
OF
FIBER GLASS INDUSTRIES CORP. OF AMERICA
We, the undersigned, hereby associate ourselves together for the purpose
of becoming a corporation under the laws of the State of Florida, providing
for the formation of a corporation for profit, with the powers, rights,
privileges and immunities hereinafter mentioned, and we make, subscribe and
acknowledge, and file with the Secretary of State of Florida, these Articles
of Incorporation, and to that end we do by these Articles set forth:
ARTICLE I
The name of this corporation shall be FIBER GLASS INDUSTRIES CORP. OF
AMERICA.
ARTICLE II
The general nature of the business, objects and purpose proposed to be
carried on and transacted, are to do any and all things allowed and permitted
to be done by corporations under the Statutes of the State of Florida, and to
do any and all things hereinafter mentioned as fully and to the same extent as
natural persons might or could do, to-wit:
(a)To engage in any commercial, industrial and agricultural enterprise
calculated or designed to be profitable to this corporation and in
conformity with the laws of the State of Florida.
To generally engage in, do, and perform, any enterprise, act or vocation that a natural person might or could do or perform;
To engage in the manufacture, sale, purchase, importing and exporting of
merchandise and personal property of all manner and description, to act
as agents for the purchase, sale and handling of goods, wares, and
merchandise of any and all types and description for the account of the
corporation or as factors, agent, procurer, or otherwise for or on
behalf of another.
(b)To buy, sell, trade, manufacture, deal in and with goods, wares and
merchandise of every kind and nature, and to carry on such business as
wholesalers, retailers, importers and exporters; to acquire all such
merchandise, supplies, materials and other articles as shall be
necessary or incidental to such business
(c)To buy, sell, trade, manufacture, deal in and with fiber glass products
of every kind, character and nature and to carry on such business as
wholesalers, retailers, importers, exporters and manufacturers and to
acquire all such merchandise, supplies, materials and other articles
necessary or incidental to such business.
(d)To purchase, acquire, apply for, secure, hold, or own any and all
copyrights, trademarks, trade names and distinctive marks; and to
license, lease, or authorize the use thereof by other persons, firms, or
corporations.
(e)To buy sell, trade, manufacture, deal in, and deal with goods, wares and
merchandise of every kind and nature, and to carry on such business as
wholesalers, retailers, importers and exporters; to acquire all such
merchandise, supplies, materials, and other articles as shall be
necessary or incidental to such business; to hold, acquire, mortgage,
lease, and convey real and personal property in any part of the wold, so
far as necessary or expedient in conducting the business of the
corporation; and to have any and all powers above set forth as fully as
natural persons, whether as principals, agents, trustees, or otherwise.
(f)To purchase or otherwise acquire letters patent, concessions, licenses,
inventions, rights, and privileges, subject to royalty or otherwise, and
whether exclusive, non-exclusive, or limited, or any part interest in
such letters patent, concessions, licenses, inventions, rights and
privileges, whether in the United States or in any other part of the
world.
To sell, let or grant any patent rights, concessions, licenses,
inventions, rights or privileges belonging to the company, or which it
may acquire, or any interest in the same.
To register any patent or patents for any invention or inventions, or
obtain exclusive or other privileges in respect of the same, in any part
of the world, and to apply for, exercise, use, or otherwise deal with or
turn to account any patent rights, concessions, monopolies, or other
rights or privileges, either in the United States or in any other part
of the world.
(g)To manufacture, buy, sell, deal in, and to engage in, conduct and carry
on the business of manufacturing, buying, selling and dealing in goods,
wares, and merchandise of every class and description.
(h)To buy, sell, exchange and invest in real properties, improved and
unimproved, and buildings of every class and description; to improve,
manage, operate, sell, buy, mortgage, lease or otherwise acquire or
dispose of any property real or personal, and take mortgages and
assignment of mortgages upon the same; to make and obtain loans upon
real estate, improved or unimproved, and upon personal property, giving
or taking evidences of indebtedness and securing the payment thereof by
mortgage, trust deed, pledge or otherwise; to enter into contracts to
buy or sell any property, real or personal; to buy and sell mortgages,
trust deeds, contracts and evidences of indebtedness; to purchase or
otherwise acquire, for the purpose of holding or disposing of the same,
real or personal property of every kind and description, including the
good will, stock, rights, and property of any person, firm, association
or corporation, paying for the same in cash, stock, or bonds of this
corporation; to draw, make, accept, indorse, discount, execute and issue
promissory notes, bills of exchange, warrants, bonds, debentures, and
other negotiable instruments or transferable instruments, or obligations
of the corporation, from time to time, for any of the objects or
purposes of the corporation; to carry on all or any of its operations
without restriction or limit as to amount; to purchase, acquire, hold,
own, mortgage, sell, convey or otherwise dispose of real or personal
property, of every class and description in any state, district,
territory, colony or foreign country subject to the laws of such state,
territory or foreign country.
(i)To borrow money and contract debts when necessary for the transaction of
the business or for the exercise of its corporate rights, privileges, or
franchises or for any other lawful purpose of its incorporation; to
issue bonds, promissory notes, bills of exchange, debenture and other
obligations and evidence of indebtedness, payable at a specified event
or events whether secured by mortgage, pledge or otherwise, or
unsecured, for money borrowed or in payment for property purchased or
acquired or for any other lawful objects.
(j)To guaranty, hold, or purchase, sell assign, pledge, mortgage or
otherwise dispose of the shares of capital stock or any bonds,
securities, or evidence of indebtedness created by, any other
corporation or corporations of this State, or any other States or
Government, and while the owner of such stock to exercise all the
rights, powers and privileges of ownership, including the right to vote
thereon.
k The purposes specified herein shall be construed both as purposes and
powers and shall in no wise be limited or restricted by reference to, or
inference from, the terms of any other clause in this or any other
Article, but the purposes and powers specified in each of the clauses
herein shall be regarded as independent purposes and powers, and the
enumeration of specific purposes and powers shall not be construed to
limit or restrict in any manner the meaning of the general terms or the
general powers of the corporation under the laws of the State of
Florida; nor shall the expression of the one thing be deemed to exclude
another, although it be of like nature not expressed.
(l)To do all and everything necessary and proper for the accomplishment of
the objects enumerated in these Articles of Incorporation or any
amendment thereof or necessary or incidental to the protection or
benefit of the corporation, and in general to carry on any lawful
business necessary or incidental to the attainment similar in nature to
the objects set forth herein.
ARTICLE III
The maximum number of shares of stock which the corporation is
authorized to issue and have outstanding at any time is five hundred
thousand shares (500,000) shares of common stock, which shall have a par
value of $0.10 per share.
ARTICLE IV
The amount of capital with which this corporation will begin
business is not less than the sum of SIX THOUSAND NINE HUNDRED and
20/100 DOLLARS ($6,900.20).
ARTICLE V
The existence of this corporation shall be perpetual unless sooner
dissolved according to law.
ARTICLE VI
The principal place of business of this corporation is to be
located at 730 N. W. 59th Street, Miami, Dade County, Florida.
ARTICLE VII
The number of Directors of this corporation shall be not less than
three (3) nor more than eight (8).
ARTICLE VIII
The names and post office addresses of the first Board of
Directors are as follows:
JOHN C. SCOTT, Sr. 736 N.W. 59th Street, Miami, Florida JOHN C. SCOTT, Jr. 736 N.W. 59th Street, Miami, Florida BETTY J. MILLER 410 Navarre Street, Coral Gables, Florida |
Who shall hold office for the first year of the corporation, or until their successors are elected and have qualified.
ARTICLE IX
The names and post office addresses of each subscriber of the
Articles of Incorporation, the Officers, the amounts they are investing
in the business, and a statement of the number of shares of stock which
he or she agrees to take, are as follows:
JOHN C. SCOTT, Sr. 736 NW 59th Street 69,000 shares President-Treasurer Miami, FL $6,900.00 JOHN C. SCOTT, Jr. 736 NW 59th Street 1 share Vice-President Miami, FL $0.10 BETTY J. MILLER 410 Navarre Street 1 share Secretary Coral Gables, FL $0.10 |
ARTICLE X
The Directors of the corporation, in addition to the powers conferred by
the laws of the State of Florida, shall have the power to make, alter, and
repeal the By-laws, and to set apart, out of the funds of the corporation
available for dividends, a reserve or reserves for any proper purpose, and to
alter, or abolish such reserve.
a) The corporation shall have the first lien on the shares of its
members' stock and upon all dividends due them for any
indebtedness by such members to the corporation.
b) The private property of the stockholders shall not be subject
to the payment of the corporate debts to any extent whatsoever.
c) The corporation shall have full power and lawful authority to
accept property, real, personal, or mixed, labor and services,
in payment for shares of its capital stock, in lieu of cash, at
a just valuation, to be fixed by its Board of Directors.
d) The shares of the capital stock of the corporation, when
certificates thereof shall be issued, shall be fully paid and
non-assessable.
e) Shares of capital stock of the corporation shall be transferred
only on the books of the corporation by the holder thereof in
person, or by his attorney, upon the surrender and
cancellation of a certificate or certificates for a like
number of shares.
f) The number of directors of the corporation shall be fixed and
may be altered from time to time as may be provided in the
Bylaws. In the case of any increase in the number of
directors, the additional directors my be elected by the
directors, or by the stockholders at an annual or special
meeting, as shall be provided in the By-laws.
g) At all elections of the Directors of this corporation each
stockholder shall be entitled to as many votes as shall be
equal to the number of his shares of stock, multiplied by the
number of Directors to be elected, and he may cast all of such
votes for a single Director, or may distribute them among the
number to be voted for, or any two or more of them, as he may
see fit.
h) The Directors shall also have power, with the consent in
writing of a majority of the holders of the voting stock issued
and outstanding, or upon the affirmative vote of the holders of
a majority of the stock issued and outstanding having voting
power, to sell, lease, or exchange all of its property and
assets, including its good will and its corporate franchises,
upon such terms and conditions as the Board of Directors deem
expedient and for the best interests of the corporation.
i) The Directors shall also have power to determine the use and
disposition of any surplus or net profits over and above the
capital stock paid in, and in their discretion may use and
apply any such surplus or accumulated profits in purchasing or
acquiring the bonds or other obligations or shares of capital
stock of the corporation, to such extent and in such manner and
upon such terms as the Directors shall deem expedient; but
shares of such capital stock so purchased and/or acquired may
be resold, unless such shares shall have been retired for the
purpose of decreasing the corporation's capital stock as
provided by law.
j) In addition to the powers and authorities hereinbefore or by
statute expressly conferred upon them, the Directors are hereby
empowered to exercise all such powers and do all such acts and
things as may be exercised or done by the corporation, subject,
nevertheless, to the provisions of the Statutes of Florida, of
this certificate, and to any By-laws from time to time made by
the stockholders; provided, however, that no By-laws so made
shall invalidate any prior act of the Directors which would
have been valid if such By-law had not been made.
k) The Directors in their discretion may submit any contract or
act for approval or ratification at any annual meeting of the
stockholders, or at any meeting of the stockholders called for
the purpose of considering any such act or contract, and any
contract or act that shall be approved or be ratified by the
vote of the holders of a majority of the capital stock of the
company which is represented in person or by proxy at such
meeting (provided that a lawful quorum of stockholders be there
represented in person or by proxy) shall be as valid and as
binding upon the corporation and upon all the stockholders, as
though it had been approved or ratified by every stockholders
of the corporation, whether or not the contract or act would
otherwise be open to legal attack because of Directors'
interest, or for any other reason.
IN WITNESS WHEREOF, we have hereunto subscribed our names and affixed our seals at Miami, Dade County, Clorida, this 24th day of February, A.D. 1960.
________/s/______________
John C. Scott, Sr. (seal)
________/s/______________
John C. Scott, Jr. (seal)
________/s/______________
Betty J. Miller (seal)
STATE OF FLORIDA:
ss:
COUNTY of DADE:
|
I HEREBY CERTIFY that on this day personally appeared before me, an officer duly authorized to take oaths and acknowledgments under the laws of the State of Florida, JOHN C. SCOTT, Sr., JOHN C. SCOTT, Jr. and BETTY J. MILLER, to me well known to be the persons described in and who executed the foregoing Articles of Incorporation of FIBER GLASS INDUSTRIES CORP. of AMERICA, and they acknowledged that they executed the same freely and voluntarily and for the purpose therein expressed.
WITNESS my hand an official seal at Miami, Dade County, Florida, this 24th day of February, A.D. 1960.
________/s/______________
Notary Public, State of
Florida at Large
|
My Commission Expires: _________
STATEMENT OF AMENDMENT OF CERTIFICATE
AND ARTICLES OF INCORPORATION OF FIBER
GLASS INDUSTRIES CORP. OF AMERICA
We the undersigned being all of the directors and stockholders of FIBER GLASS INDUSTRIES CORP. of AMERICA, a Florida corporation, by this written statement, manifest our intent that a certain amendment of the Articles and Certificate of Incorporation as hereinafter set forth, be made, that is to say:
"Be It Resolved: That Section (g) of Article X, of the Articles of Incorporation of FIBER
GLASS INDUSTRIES CORP. of AMERICA, be amended to read as follows:
'(g) At all elections of the directors of this Corporation, the directors shall be chosen by a parity of the votes cast at such election.'"
IN WITNESS WHEREOF, we have hereunto affixed our hands and the corporate seal
of the above corporation, at Miami, Dade County, Florida, this 18th day of May, 1960.
________/s/______________
John C. Scott, Sr.
________/s/______________
John C. Scott, Jr.
________/s/______________
Betty J. Miller
SWORN TO and subscribed before me this 18th day of May, 1960.
________/s/______________
Notary Public
My Commission Expires: Nov. 22, 1960
|
STATEMENT OF AMENDMENT OF CERTIFICATE AND ARTICLES OF
INCORPORATION OF FIBER GLASS INDUSTRIES CORP. OF AMERICA
We the undersigned being all of the directors and stockholders of FIBER GLASS INDUSTRIES CORP. OF AMERICA, a Florida corporation, by this written statement, manifest our intent that a certain amendment of the Articles and Certificate of Incorporation as hereinafter set forth, be made, that is to say:
Be It Resolved: That Section (d) of Article X, of the Articles of Incorporation of FIBER GLASS INDUSTRIES CORP. OF AMERICA, be amended to read as follows:
"The shares of the capital stock of the corporation, when certificates thereof shall be issued, shall be fully paid and nonassessable, and no holder of stock of the corporation shall be entitled as such, as a matter of right, to purchase or subscribe for any stock of any class which the corporation may issue or sell, whether or not exchangeable for any stock of the corporation of any class or classes and whether out of unissued shares authorized by the certificate of incorporation of the corporation as originally filed or by any amendment thereof or out of shares of stock of the corporation acquired by it after the issue thereof, nor shall he be entitled to any right of subscription to any thereof; nor shall any holder of any shares of the capital stock of the corporation be entitled as such, as a matter of right, to purchase or subscribe for any obligation which the corporation may issue or sell that shall be convertible into or exchangeable for any shares of the stock of the corporation of any class or classes, or to which shall be attached or appurtenant any warrant or warrants or other instrument or instruments that shall confer upon the holder or holders of such obligation the right to subscribe for or purchase from the corporation any shares of its capital stock of any class or classes."
In WITNESS WHEREOF, we have hereunto affixed our hands and the corporate seal
of the above corporation, at Miami, a Dade County, Florida, this 15th day of
July, 1960.
________/s/______________
John C. Scott, Sr.
________/s/______________
John C. Scott, Jr.
________/s/______________
Betty J. Miller
SWORN TO and subscribed before me this 3rd day of August, 1960.
________/s/______________
Notary Public
|
CERTIFICATE OF CORPORATE AMENDMENT
I HEREBY CERTIFY that the following is a true and correct copy of an Amendment to the Corporate Charter of Fiber Glass Industries Corp. of America, which resolution was duly passed at a meeting of the stockholders held on June 22, 1964 and subsequently approved at a Board of Directors meeting held June 22, 1964.
RESOLVED that Article III of the Articles of Incorporation of FIBERGLASS INDUSTRIES CORP. OF AMERICA be and the same are hereby amended so as to change the authorized number of shares of capital stock which the corporation shall be allowed to have outstanding at any time from 500,000 shares Common Stock, par value of $0.10 per share, to 1,500,000 shares, par value $0.10 per share.
Given under my hand and the seal of the corporation affixed hereto this 29th day of September, 1964 at Hialeah, Dade County, Florida.
________/s/______________ J.T. Hogeland |
FIBER GLASS INDUSTRIES CORP. OF AMERICA, a Florida corporation, under its corporate seal and the hand of the President, WILLIAM S. BARKETT, SR., and its Secretary, WILLIAM S. BARKETT JR., hereby certify that:
I
The Board of Directors of FIBER GLASS INDUSTRIES CORP. OF AMERICA, in response to a Call and Waiver of Notice, held a Meeting on July 30, 1965, at 8:00 p.m., at 5100 N. W. 79 Avenue, Miami, Florida, all of its Directors being present, at which meeting a Resolution was approved and adopted amending ARTICLE ONE of the Certificate of Incorporation as follows:
"ARTICLE I"
"The name of this corporation shall be ROCKET-ATLAS CORPORATION."
II
That at a meeting of the Stockholders of said corporation, in response to a Written Notice, on August 12, 1965, at 2:00 p.m., at 310 Ainsley Building, Miami, Florida, all of the Stockholders being present, the aforesaid Resolution of Amendment to the Certificate of Incorporation was unanimously approved and adopted.
IN WITNESS WHEREOF, the corporation has caused this First Certificate of Amendment to Certificate of Incorporation to be signed in this name be its President, attested to by its Secretary, and its Corporate Seal to be hereunto affixed, this 31st day of August, 1966.
FIBER GLASS INDUSTRIES CORP. OF AMERICA, to be known
as ROCKET-ATLAS CORPORATION
By ________/s/______________
WILLIAM S. BARKETT, SR.
President
________/s/______________
WILLIAM S. BARKETT, JR.
Secretary
|
STATE OF FLORIDA )
) SS.
COUNTY OF DADE )
On this day, personally appeared before me, the undersigned authority, WILLIAM S. BARKETT, SR. and WILLIAM S. BARKETT, JR., President and Secretary respectively of FIBER GLASS INDUSTRIES CORP. OF AMERICA, a Florida corporation, and they acknowledged that they executed the foregoing First Amendment to the Certificate of Incorporation changing the corporate name to ROCKET-ATLAS CORPORATION, as such Officers and for and in behalf of said corporation, after having been duly authorized to do so.
WITNESS my hand and seal at Miami, Florida, this 31st day of
August, 1966.
________/s/______________
Notary Public, State of Florida at Large
My Commission Expires: Jan. 11, 1970
|
FIFTH CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
AND AMENDMENTS THERETO
OF
ROCKET-ATLAS CORPORATION
FORMERLY KNOWN AS
FIBER GLASS INDUSTRIES CORP. OF AMERICA
ROCKET-ATLAS CORPORATION, a Florida corporation, under its corporate seal and the hands of its President, WILLIAM S. BARKETT, SR., and its Secretary, WILLIAM S. BARKETT, JR., hereby certify as follows:
I
That the Board of Directors of ROCKET-ATLAS CORPORATION, in response to a Call and Waiver of Notice, held a meeting on July 28, 1966, beginning at 7:00 o'clock P.M., at 5100 N. W. 79th Avenue, Miami, Florida, at which all of the Directors were present; that a Resolution was approved and adopted amending Article I and Article III of the Certificate of Incorporation and Amendments thereto to read as follows:
Article I
Name
The name of this corporation shall be ROCKET INDUSTRIES, INC.
Article III
Authorized Capital Stock
The authorized capital stock of this corporation shall be Three Million (3,000,000) shares, with the par value of five cents ($0.05) per share, for an aggregate value of One Hundred Fifty Thousand Dollars ($150,000.00).
a) All shares shave have equal voting rights and privileges.
b) The authorized shares of stock as issued by this corporation shall
not have pre-emptive rights.
c) All shares of stock shall be non-cumulative as to voting rights.
d) All shares of stock shall be fully paid and non-assessable when
issued.
II
That, in response to a written notice thereof, duly mailed, to all
the stockholders of record in compliance with the by-laws of said
corporation appertaining thereto, a Special Meeting of Stockholders of
ROCKET-ATLAS CORPORATION was held on August 29, 1966, beginning at 4:00
o'clock in the afternoon, at the principal offices of the company, 5100
N. W. 79th Avenue, Miami, Florida, at which meeting a substantial
majority of the outstanding shares of stock, all of which is entitled to
vote, were present. The aforesaid Resolution adopted by the Directors
on July 28, 1966, amending Article I and Article III of t he Certificate
of Incorporation and Amendments Thereto, changing the name of the
corporation and amending the authorized capital stock, respectively, was
unanimously adopted and approved by all stockholders present.
IN WITNESS WHEREOF, the said corporation has caused this Amendment
to the Certificate of Incorporation and Amendments thereto to be
executed for it and in its name by its President and attested to by its
Secretary, both of whom have dull power, instructions, and authority to
do so, and its corporate seal to be hereunto affixed, on this 21st day
of November, 1966.
ROCKET-ATLAS CORPORATION
(Hereinafter to be known as ROCKET
INDUSTRIES CORPORATION)
By ________/s/______________
WILLIAM S. BARKETT, SR., President
Attest:
________/s/______________
WILLIAM S. BARKETT, JR., Secretary
STATE OF FLORIDA)
COUNTY OF DADE) SS
|
On this day personally appeared before me, the undersigned authority, WILLIAM S. BARKETT, SR., and WILLIAM S. BARKETT, JR., President and Secretary, respectively, of ROCKET-ATLAS CORPORATION, hereafter to be known as ROCKET INDUSTRIES CORPORATION, a Florida corporation, and they acknowledged that they executed the foregoing Fifth Amendment to the Certificate of Incorporation and Amendments Thereto, as such officers for and in behalf of said corporation, after having been duly authorized to do so.
WITNESS my hand and official seal at Miami, Florida, this 21st day
of November, 1966.
________/s/______________
Notary Public, State of Florida at Large
My Commission Expires: Jan. 11, 1970
AMENDMENT OF ARTICLES OF ROCKET INDUSTRIES, INC. a FLORIDA CORPORATION
January 27, 1984
|
The name of the Corporation is Rocket Industries, Inc. The shareholders at the meeting of January 27, 1984, did pursuant to the Articles of Incorporation and bylaws vote to change the Articles as follows:
1. The name to: Polo Investment Corp. of Missouri, Inc.
2. At the same meeting, the shareholders voted to increase the number of shares from 3,000,000 to 30,000,000 with no change in the authorized capital of the company.
Signed: /s/
George H. (Buck) Krieger
President & Chairman of the Board
/s/
Connie B. Jeffers
Secretary-Treasurer
|
Attested:
/s/
Helen Krieger
|
ARTICLES OF AMENDMENT OF
POLO INVESTMENT CORP. OF MISSOURI, INC.
ARTICLE I of the Articles of Incorporation of POLO INVESTMENT CORP. OF MISSOURI, INC., is hereby amended to read:
ARTICLE I
The name of this corporation shall be:
MEDICAL ADVANCED SYSTEMS, INC.
All other paragraphs and articles of the Articles of Incorporation shall remain unchanged.
The foregoing amendment was adopted by the shareholders on the 2nd day of August 1985, and was signed and attested to by the President and Secretary.
/s/
PRESIDENT
/s/
SECRETARY
|
STATE OF FLORIDA
COUNTY OF PALM BEACH
The foregoing instrument was acknowledged before me this 13th day of September, 1985, by the above persons known to me to be the President and Secretary of POLO INVESTMENT CORP. OF MISSOURI, INC.
/s/
Notary Public, State of Florida at Large
My Commission Expires: ________________
|
ARTICLE OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
MEDICAL ADVANCED SYSTEMS, INC.
A FLORIDA CORPORATION
Pursuant to the provisions of the corporation's laws of the State of Florida, the undersigned corporation hereby adopts the following Articles of Amendment to its Articles of Incorporation.
FIRST: The name of the corporation is Medical Advanced Systems, Inc.
SECOND: The following amendments to the Articles of Incorporation were duly adopted by the shareholders of the corporation:
ARTICLE I
The name of the corporation is POLO EQUITIES, INC.
ARTICLE III
The corporation shall be authorized to issue Fifty Million (50,000,000) shares of its capital stock, which shall be designated as common voting stock, with a par value of One-Tenth cent ($.01) per share. Such shares shall be non-assessable and shall have no preemptive rights. Shareholders shall not be allowed to cumulate their votes.
THIRD: The foregoing amendments to the Articles of Incorporation were duly adopted by the shareholders at a special meeting therefor, upon notice duly given to the shareholders, on the 14th day of May, 1993, in the manner prescribed by the laws of the State of Florida.
FOURTH: The number of shares of the corporation issued and outstanding, and the number of shares voting at such shareholder meeting in favor of the foregoing amendments, were 3,000,000, and the number voting against was none.
The undersigned hereby certify that they have executed the foregoing Certificate Amending the Articles of Incorporation, this 14th day of May, 1993.
President: /S/ Secretary: /S/ Page Two Amendment of Articles Polo Equities, Inc. fka Medical Advanced Systems, Inc. |
STATE OF UTAH )
)ss.
COUNTY OF SALT LAKE )
|
On the 14th day of May, 1993, personally appeared before me the above signed persons, known to me to be the president and secretary, and the above-named persons whose names are subscribed to the foregoing Certificate Amending Articles of Incorporation for the said corporation, and acknowledge to me under oath that they executed the same.
/s/
Notary Public
|
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
POLO EQUITIES, INC.
Previously known as
MEDICAL ADVANCED SYSTEMS, INC.
a Florida corporation
Pursuant to the provisions of the Business Corporations Law of the State of Florida, the undersigned corporation hereby adopts and files the following Articles of Amendment to its Articles of Incorporation in lieu of those filed with the office of the Secretary of State of Florida on June 3, 1993.
FIRST: Article I of the Amendments to the Articles of Incorporation filed on June 3, 1993 is hereby repealed in its entirety and the following Article I is substituted therefore as if it had been part of the June 3, 1993 amendments.
ARTICLE I
NAME
The name of the corporation is Polo Equities, Inc.
SECOND: Article III of the Amendments to the Articles of Incorporation filed on June 3, 1993 is hereby repealed in its entirety and the following Article III is substituted therefore as if it had been part of the June 3, 1993 amendments.
ARTICLE III
The corporation shall be authorized to issue Fifty Million (50,000,000) common shares of common stock with a par value of One Mil ($.001) per share. Such shares shall be non- assessable, shall have no preemptive rights, shall not be subject to the cumulative voting, and shall have equal rights of distribution of all other common shares.
THIRD: The foregoing amendments to the Articles of Incorporation were first adopted by the shareholders of the corporation at a special meeting thereof which was held on May 14, 1993. The aforesaid amendments were readopted by the shareholders of the corporation at a meeting of stockholders, called and held pursuant to the laws of the State of Florida, on September 23, 1996.
FOURTH: At the time of the stockholders' meeting held on May 14, 1993 there were 3,000,000 common shares of the corporation outstanding. 3,000,000 shares were voted in favor of the resolution and no shares were voted against. At the time of the meeting of stockholders on September 23, 1996 there were 15,000,000 common shares of the corporation outstanding. 13,525,000 shares were present at the meeting in person or by proxy for purposes of establishing the presence of a proxy. 12,000,000 abstained from voting. 1,525,000 shares were voted in favor of the amendments. No shares were voted against.
FIFTH: The foregoing vote was sufficient to adopt the foregoing amendments under the Articles and Bylaws of the corporation and the laws of the State of Florida.
Dated this 21st day of February, 1997.
/s/
Justeene Blankenship, President
/s/
Dannette Uyeda, Secretary
Subscribed and sworn to before me this 21st day of February, 1997.
/s/
Notary Public
|
ARTICLES OF INCORPORATION
OF
POLO EQUITIES, INC.
The undersigned, a natural person being more than eighteen years of age, acting as incorporator of a corporation pursuant to the provisions of the General Corporation Laws of the State of Nevada, does hereby adopt the following Articles of Incorporation for such corporation:
Article I Name
The name of the corporation is Polo Equities, Inc.
Article II Duration
The duration of the corporation is perpetual.
Article III Purposes
The purposes for which this corporation is organized are:
Section 1. To engage in any lawful business or activity which may be conducted under the laws of the State of Nevada or any other state or nation wherein this corporation shall be authorized to transact business.
Section 2. To purchase or otherwise acquire, own, mortgage, sell, manufacture, assign and transfer or otherwise dispose of, invest, trade, deal in and with real and personal property, of every kind, class, and description.
Section 3. To issue promissory notes, bonds, debentures, and other evidences of indebtedness in the furtherance of any of the stated purposes of the corporation.
Section 4. To enter into or execute contracts of any kind and character, sealed or unsealed, with individuals, firms, associations, corporations (private, public or municipal), political subdivisions of the United States or with the Government of the United States.
Section 5. To acquire and develop any interest in patents, trademarks and copyrights connected with the business of the corporation.
Section 6. To borrow money, without limitation, and give a lien on any of its property as security for any borrowing.
Section 7. To acquire by purchase, exchange or otherwise, all, or any part of, or any interest in, the properties, assets, business and good will of any one or more persons, firms, associations, or corporations either within or out of the State of Nevada heretofore or hereafter engaged in any business for which a corporation may now or hereafter be organized under the laws of the State of Nevada; pay for the same in cash, property or the corporation's own or other securities; hold, operate, reorganize, liquidate, sell or in any manner dispose of the whole or any part thereof; and in connection therewith, assume or guaranty performance of any liabilities, obligations or contracts of such persons, firms, associations or corporations, and to conduct the whole or any part of any business thus acquired.
Section 8. To purchase, receive, take, acquire or otherwise acquire, own and hold, sell, lend, exchange, reissue, transfer or otherwise dispose of, pledge, use, cancel, and otherwise deal in and with the corporation's shares and its other securities from time to time to the extent, in the manner and upon terms determined by the Board of Directors; provided that the corporation shall not use its funds or property for the purchase of its own shares of capital stock when its capital is impaired or when the purchase would cause any impairment of the corporation's capital, except to the extent permitted by law.
Section 9. To reorganize, as an incorporator, or cause to be organized under the laws of any State of the United States of America, or of any commonwealth, territory, agency or instrumentality of the United States of America, or any foreign country, a corporation or corporations for the purpose of conducting and promoting any business or purpose for which corporations may be organized, and to dissolve, wind up, liquidate, merge or consolidate any such corporation or corporations or to cause the same to be dissolved, wound up, liquidated, merged or consolidated.
Section 10. To do each and everything necessary, suitable or
proper for the accomplishment of any of the purposes or the attainment
of any of the objects herein enumerated, or which shall at any time
appear conductive to or expedient for the protection or benefit of the
corporation.
Article IV
Capitalization
Section 1. The authorized capital of this corporation shall consist of the following stock: Fifty million common shares, par value $.001 per share. Each common share shall have equal rights as to voting and in the event of dissolution and liquidation. There shall be no cumulative voting by shareholders.
Section 2. The shareholders shall have no preemptive rights to acquire any shares of this corporation.
Section 3. The common and preferred stock of the corporation, after the amount of the subscription price has been paid in, shall not be subject to assessment to pay the debts of the corporation.
Article V Principal Office
The address of the registered office of the corporation is International Venture Capital and Advisory, Inc. with the address as Suite 210, 3340 Topaz Ave., City of Las Vegas, County of Clark, zip code 89121, State of Nevada. The corporation shall maintain such other office, either within or out of the State of Nevada, as the Board of Directors may from time to time determine or the business of the corporation may require.
Article VI Directors
The corporation shall be governed by a Board of Directors. There
shall be one (1) or more directors as to serve, from time to time, as
elected by the Shareholders, or by the Board of Directors in the case of
a vacancy. The original Board of Directors shall be comprised of one
(1) person and the name and address of the person who is to serve as
director until the first annual meeting of shareholders and until
successors are elected and shall be:
Iris McCamman
3340 Topaz, Suite 210
Las Vegas, Nevada 89121
Article VII
Indemnification
As the Board of Directors may from time to time provide in the Bylaws or by resolution, the corporation may indemnify its officers, directors, agents and other persons to the full extent permitted by the laws of the State of Nevada.
Article VIII Incorporator
The name and address of the incorporator is:
Nathan Drage
3340 Topaz, Suite 210
Las Vegas, Nevada 89121
Dated this 27th day of May, 1998.
/s/
Nathan Drage
|
NOTARY CERTIFICATE
State of Nevada )
)ss.
County of Clark )
|
On the 27th day of May, 1998, personally appeared before me, a Notary Public, who acknowledged that Nathan Drage executed the foregoing Articles of Incorporation of Polo Equities, Inc.
/s/
Notary Public
My Appointment Expires: 5/13/01
Residing in Nevada
|
CERTIFICATE OF ACCEPTANCE OF APPOINTMENT
BY RESIDENT AGENT
In the matter of Polo Equities, Inc. International Venture Capital and Advisory, Inc. with the address at Suite 210, 3340 Topaz Ave., City of Las Vegas, County of Clark, zip code 89121, State of Nevada, hereby accepts the appointment as Resident Agent of the above-entitled corporation in accordance with NRS 78.090.
FURTHERMORE, the mailing address for the above-registered office is the same as the above address.
In witness whereof, the duly authorized officer has hereunto set his hand this 27th day of May 1998.
International Venture Capital and Advisory, Inc. Resident Agent
By: /s/
Nathan W. Drage, President
__________________________________________________________
|
NRS 78.090 Except during any period of vacancy described in NRS 78.097, every corporation must have a resident agent, who may be either a natural person or a corporation, resident or located in this state. Every resident agent must have a street address, where he maintains an office for the service of process, and may have a separate mailing address such as a post office box, which may be different from the street address. The address of the resident agent may be any bank or banking corporation, or other corporation, located and doing business in this state. The certificate of acceptance must be filed at the time of the initial filing of the corporate papers.
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION
OF
POLO EQUITIES, INC.
Pursuant to the provisions of the Nevada Business Corporations Act, the Undersigned corporation adopts the following amendment to the Articles of Incorporation.
2. The number of shares of the corporation outstanding at the time of adoption was 15,000,000; and the number of shares entitled to vote thereon were the same.
3. The number of shares represented at the meeting was 12,000,000. All shares voted in favor of the amendment. The shares represented a majority of the issued and outstanding shares. There were no shares voting against the amendment.
Effective the 29th day of May, 1998.
/s/
Justeene Blankenship
President and Secretary
|
STATE OF UTAH )
)ss.
COUNTY OF SALT LAKE )
|
On this 8th day of June, Justeene Blankenship personally appeared before me, a Notary Public, and executed the foregoing instrument for the purposes therein contained, by signing on behalf of the above-named corporation as a duly authorized President and Secretary.
In witness hereof, I have hereunto set my hand and official seal.
/s/
Residing at Salt Lake City
|
My commission expires: May 18,2000
ARTICLES OF MERGER
OF
POLO EQUITIES, INC.
(A Florida Corporation)
INTO
POLO EQUITIES, INC.
(A Nevada Corporation)
The undersigned, being sole Director of Polo Equities, Inc. a Florida corporation, and the sole officer and director of Polo Equities, Inc., a Nevada corporation, hereby certify as follows:
1. A merger for the purpose of changing domicile has been approved by the board of directors of Polo Equities, Inc. a Florida corporation, and Polo Equities, Inc. a Nevada corporation.
2. Shareholders owning 12,000,000 of the shares of common stock of Polo Equities, Inc. a Florida corporation, which number of shares is a majority of the 15,000,000 shares outstanding, voted in favor of such merger on May 22, 1998. The sole shareholder of Polo Equities, Inc., a Nevada corporation, voted for such plan of merger on May 22, 1998.
3. A Notice, including a summary of the merger, was mailed to all shareholders of the Nevada corporation on or about May 11, 1998.
4. Polo Equities, Inc. a Nevada corporation, hereby agrees that it will promptly pay to the dissenting shareholders, if any, of Polo Equities, Inc, a Florida corporation, the amount, if any, to which they shall be entitled under the provisions of the Florida Corporation Statutes with respect to the rights of dissenting shareholders.
Effective the 28th day of May, 1998.
POLO EQUITIES, INC. POLO EQUITIES, INC.
A Florida Corporation A Nevada Corporation
By: /s/ By: /s/ Justeene Blankenship Justeene Blankenship President/Secretary President/Secretary |
STATE OF UTAH )
)ss.
COUNTY OF SALT LAKE )
|
On this 8th day of June, 1998, before me, a Notary Public, personally appeared Justeene Blankenship, and executed on this date the foregoing instrument for the purposes therein contained, by signing on behalf of the above-named corporations as a duly authorized director and officer.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
/s/
Notary Public
Residing at Salt Lake City
|
My commission expires: May 18, 2000
BY-LAWS
OF
POLO EQUITIES, INC.
ARTICLE I - OFFICES
The office of the Corporation shall be located in the City and State designated in the Articles of Incorporation. The Corporation may also maintain offices at such other places within or without the United States as the board of directors may, from time to time, determine.
ARTICLE II - MEETING OF SHAREHOLDERS
Section 1 - Annual Meetings:
The annual meeting of the shareholders of the Corporation shall be held within five months after the close of the fiscal year of the Corporation, for the purpose of electing directors, and transacting such other business as may properly come before the meeting.
Section 2 - Special Meetings:
Special meetings of the shareholders may be called at any time by the Board of Directors or by the President, and shall be called by the President or the Secretary at the written request of the holders of ten percent (10%) of the shares then outstanding and entitled to vote thereat, or as otherwise required under the provisions of the Business Corporation Act.
Section 3 - Place of Meetings:
All meetings of shareholders shall be held at the principal office of the Corporation, or at such other places as shall be designated in the notices or waivers of notice of such meetings.
Section 4 - Notice of Meetings:
(a) Except as otherwise provided by Statute, written notice of each meeting of shareholders, whether annual or special, indicating the time when and place where it is to be held, shall be served either personally or by mail, not less than ten or more than fifty days before the meeting, upon each shareholder or record entitled to vote at such meeting, and to any other shareholder to whom the giving of notice may be required by law. Notice of any such meeting shall also state the purpose or purposes for which the meeting is called, and shall indicate that it is being issued by or at the direction of, the person or persons calling the meeting. If, at any meeting, action is proposed to be taken that would, if taken, entitle shareholders to receive payment for their shares pursuant to Statute, the notice of such meeting shall include a statement of that purpose and to that effect. If mailed, such notice shall be directed to each such shareholder at his address, as it appears on the records of the shareholders of the corporation, unless he shall have previously filed with the Secretary of the Corporation a written request that notices intended for him be mailed to some other address, in which case, it shall be mailed to the address designated in such request.
(b) Notice of any meeting need not be given to any person who may become a shareholder of record after the mailing of such notice and prior to the meeting, or to any shareholder who attends such meeting, in person or by proxy, or to any shareholder who, in person or by proxy, submits a signed waiver of notice either before or after such meeting. Notice of any adjourned meeting of shareholders need not be given, unless otherwise required by statute.
Section 5 - Quorum:
(a) Except as otherwise provided herein, or by statute, or in the Certificate of Incorporation (such Certificate and any amendments thereof being hereinafter collectively referred to as the "Certificate of Incorporation"), at all meetings of shareholders of the Corporation, the presence at the commencement of such meetings in person or by proxy of shareholders holding of record a majority of the total number of shares of the Corporation then issued and outstanding and entitled to vote, shall be necessary and sufficient to constitute a quorum for the transaction of the any business. The withdrawal of any shareholder after the commencement of a meeting shall have no effect on the existence of a quorum, after a quorum has been established at such meeting.
(b) Despite the absence of a quorum at any annual or special meeting of shareholders, the shareholders, by a majority of the votes cast by the holders of shares entitled to vote thereon, may adjourn the meeting. At any such adjourned meeting at which a quorum is present, any business may be transacted at the meeting as originally called if a quorum had been present.
Section 6 - Voting:
(a) Except as otherwise provided by statute or by the Certificate of Incorporation, any corporate action, other than the election of directors, to be taken by vote of the shareholders, shall be authorized by a majority of votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon.
(b) Except as otherwise provided by statute or by the Certificate of Incorporation, at each meeting of shareholders, each holder of record of stock of the Corporation entitled to vote thereat, shall be entitled to one vote for each share of stock registered in his name on the books of the Corporation.
(c) Each shareholder entitled to vote or to express consent or dissent without a meeting, may do so by proxy; provided, however, that the instrument authorizing such proxy to act shall have been executed in writing by the shareholder himself, or by his attorney in fact thereunto duly authorized in writing. No proxy shall be valid after the expiration of eleven months from the date of its execution, unless the person executing it shall have specified therein the length of time it is to continue in force. Such instrument shall be exhibited to the Secretary at the meeting and shall be filed with the records of the Corporation.
(d) Any resolution in writing, signed by all of the shareholders entitled to vote thereon, shall be and constitute action by such shareholders to the effect therein expressed, with the same force and effects as if the same had been duly passed by unanimous vote at a duly called meeting of shareholders and such resolution so signed shall be inserted in the Minute Book of the Corporation under its proper date.
ARTICLE III - BOARD OF DIRECTORS
Section 1 - Number, Election and Term of Office:
(a) The number of the Directors of the Corporation shall be three (3),
unless and until otherwise determined by vote of a majority of the entire
Board of Directors. The number of Directors shall not be less than three
(3), unless all of the outstanding shares are owned beneficially and of
record by less than three shareholders, in which event the number of
directors shall not be less than the number of shareholders permitted by
statute.
(b) Except as may otherwise be provided herein or in the Certificate of Incorporation, the members of the Board of Directors of the Corporation, who need not be shareholders, shall be elected by a majority of the votes cast at a meeting of shareholders, by the holders of shares, present in person or by proxy, entitled to vote in the election.
(c) Each director shall hold office until the annual meeting of the shareholders next succeeding his election, and until his successor is elected and qualified, or until his prior death, resignation or removal.
Section 2 - Duties and Powers:
The Board of Directors shall be responsible for the control and management of the affairs, property and interests of the Corporation, and may exercise all powers of the Corporation, except as are in the Certificate of Incorporation or by statute expressly conferred upon or reserved to the shareholders.
Section 3 - Annual and Regular Meetings; Notice:
(a) A regular annual meeting of the Board of Directors shall be held immediately following the annual meeting of the shareholders, at the place of such annual meeting of shareholders.
(b) The Board of Directors, from time to time, may provide by resolution for the holding of other regular meetings of the Board of Directors, and may fix the time and place thereof.
(c) Notice of any regular meeting of the Board of Directors shall not be required to be given and, if given, need not specify the purpose of the meeting; provided, however, that in case the Board of Directors shall fix or change the time or place of any regular meeting, notice of such action shall be given to each director who shall not have been present at the meeting at which such action was taken within the time limited, and in the manner set forth in paragraph (b) Section 4 of this Article III, with respect to special meetings, unless such notice shall be waived in the manner set forth in paragraph (c) of such Section 4.
Section 4 - Special Meetings; Notice:
(a) Special meetings of the Board of Directors shall be held whenever called by the President or by one of the directors, at such time and place as may be specified in the respective notices or waivers of notice thereof.
(b) Except as otherwise required by statute, notice of special meetings shall be mailed directly to each director, addressed to him at his residence or usual place of business, at least two (2) days before the day on which the meeting is to be held, or shall be sent to him at such place by telegram, radio or cable, or sha11 be delivered to him personally or given to him orally, not later than the day before the day on which the meeting is to be held. A notice, or waiver of notice, except as required by Section 8 of this Article III, need not specify the purpose of the meeting.
(c) Notice of any special meeting shall not be required to be given to any director who shall attend such meeting without protesting prior thereto or at its commencement, the lack of notice to him, or who submits a signed waiver of notice, whether before or after the meeting. Notice of any adjourned meeting shall not be required to be given.
Section 5 - Chairman:
At all meetings of the Board of Directors, the Chairman of the Board, if any and if present, shall preside. If there shall be no Chairman, or he shall be absent, then the President shall preside, and in his absence, a Chairman chosen by the directors shall preside.
Section 6 - Quorum and Adjournments:
(a) At all meetings of the Board of Directors, the presence of a majority of the entire Board shall be necessary and sufficient to constitute a quorum for the transaction of business, except as otherwise provided by law, by the Certificate of Incorporation, or by these By-Laws.
(b) A majority of the directors present at the time and place of any regular or special meeting, although less than a quorum, may adjourn the same from time to time without notice, until a quorum shall be present.
Section 7 - Manner of Acting:
(a) At all meetings of the Board of Directors, each director present shall have one vote, irrespective of the number of shares of stock, if any, which he may hold.
(b) Except as otherwise provided by statute, by the Certificate of Incorporation, or by these By-Laws, the action of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors with the same force and effect as if the same had been passed by unanimous vote at a duly called meeting of the Board.
Section 8 - Vacancies:
Any vacancy in the Board of Directors occurring by reason of an increase in the number of directors, or by reason of the resignation, disqualification, removal (unless a vacancy created by the removal of a director by the shareholders shall be filled by the shareholders at the meeting at which the removal was effected) or inability to act of any director, or otherwise, shall be filled for the unexpired portion of the term by a majority vote of the remaining directors, though less than a quorum, at any regular meeting or special meeting of the Board of Directors called for that purpose.
Section 9 - Resignation:
Any director may resign at any time by giving written notice to the Board of Directors, the President or the Secretary of the Corporation. Unless otherwise specified in such written notice such resignation shall take effect upon receipt thereof by the Board of Directors or such officer, and the acceptance of such resignation shall not be necessary to make it effective.
Section 10 - Removal:
Any director may be removed with or without cause at any time by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the outstanding shares of the Corporation at a special meeting of the shareholders called for that purpose, and may be removed for cause by action of the Board.
Section 11 - Salary:
No stated salary shall be paid to directors, as such, for their services, but by resolution of the Board of Directors a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board; provided, however, that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.
Section 12 - Contracts:
(a) No contract or other transaction between this Corporation and any other Corporation shall be impaired, affected or invalidated, nor shall any director be liable in any way by reason of the fact that any one or more of the directors of this Corporation is or are interested in, or is a director or officer, or are directors or officers of such other Corporation, provided that such facts are disclosed or made known to the Board of Directors.
(b) Any director, personally and individually may be a party to or may be interested in any contract or transaction of this Corporation, and no director shall be liable in any way by reason of such interest, provided that the fact of such interest be disclosed or made known to the Board of Directors, and provided that the Board of Directors shall authorize, approve or ratify such contract or transaction by the vote (not counting the vote of any such director) of a majority of a quorum, notwithstanding the presence of any such director at the meeting at which such action is taken. Such director or directors may be counted in determining the presence of a quorum at such meeting. This Section should not be construed to impair or invalidate or in any way affect any contract or other transaction which would otherwise be valid under the law (common, statutory or otherwise) applicable therein.
Section 13 - Committees:
The Board of Directors, by resolution adopted by a majority of the entire Board, may from time to time designate from among its members an executive committee and such other committees, and alternate members thereof, as they may deem desirable, each consisting of three or more members, with such powers and authority (to the extent permitted by law) as may be provided in such resolution. Each such committee shall serve at the pleasure of the Board.
ARTICLE IV - OFFICERS
Section I - Number, Qualifications, Election and Term of Office:
(a) The officers of the Corporation shall consist of a President, a Secretary, a Treasurer, and such other officers, including a Chairman of the Board of Directors, and one or more Vice Presidents, as the Board of Directors may from time to time deem advisable. Any officer other than the Chairman of the Board of Directors may be, but is not required to be, a director of the Corporation. Any two or more offices may be held by the same person.
(b) The officers of the Corporation shall be elected by the Board of Directors at the regular annual meeting of the Board following the annual meeting of shareholders.
(c) Each officer shall hold office until the annual meeting the Board of Directors next succeeding his election, and until his successor shall have been elected and qualified, or until his death, resignation or removal.
Section 2 - Resignation:
Any officer may resign at any time by giving written notice of such resignation to the Board of Directors, or to the President or the Secretary of the Corporation. Unless otherwise specified in such written notice, such resignation shall take effect upon receipt thereof by the Board of Directors or by such officer, the acceptance of such resignation shall not be necessary to make it effective.
Section 3 - Removal:
Any officer may be-removed, either with or without cause, and a successor elected by a majority vote of the Board of Directors at any time.
Section 4 - Vacancies:
A vacancy in any office by reason of death, resignation, inability to act, disqualification, or any other cause, may at any time be filled for the unexpired portion of the term by a majority vote of the Board of Directors.
Section 5 - Duties of Officers:
Officers of the Corporation shall, unless otherwise provided by the Board of Directors, each have such powers and duties as generally pertain to their respective offices as well as such powers and duties as may be set forth in these By-Laws, or may from time to time be specifically conferred or imposed by the Board of Directors. The President shall be the chief executive officer of the Corporation.
Section 6 - Sureties and Bonds:
In case the Board of Directors shall so require, any officer, employee or agent of the Corporation shall execute to the Corporation a bond in such sum, and with such surety or sureties as the Board of Directors may direct, conditioned upon the faithful performance of his duties to the Corporation, including responsibility for negligence and for the accounting for all property, funds or securities of the Corporation which may come into his hands.
Section 7 - Shares of Other Corporations:
Whenever the Corporation is the holder of shares of any other Corporation, any right or power of the Corporation as such shareholder (including the attendance, acting and voting at shareholders' meetings and execution of waivers, consents, proxies or other instruments) may be exercised on behalf of the Corporation by the President, any Vice President, or such other person as the Board of Directors may authorize.
ARTICLE V - SHARES OF STOCK
Section 1 - Certificate of Stock:
(a) The certificates representing shares of the Corporation shall be in such form as shall be adopted by the Board of Directors, and shall be numbered and registered in the order issued. They shall bear the holder's name and the number of shares, and shall be signed by (i) the Chairman of the Board or the President or a Vice President, and (ii) the Secretary or Treasurer, or any Assistant Secretary or Assistant Treasurer, and shall bear the corporate seal.
(b) No certificate representing shares shall be issued until the full amount of consideration therefor has been paid, except as otherwise permitted by law.
(c) To the extent permitted by law, the Board of Directors may authorize the issuance of certificates for fractions of a share which shall entitle the holder to exercise voting rights, receive dividends and participate in liquidating distributions, in proportion to the fractional holding; or may authorize the payment in cash of the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined; or it may authorize the issuance, subject to such conditions as, may be permitted by law, of scrip in registered or bearer form over the signature of an officer or agent of the Corporation, exchangeable as therein provided for full shares, but such scrip shall not entitle the holder to any rights of a shareholder, except as therein provided.
Section 2 - Lost or Destroyed Certificates:
The holder of any certificate representing shares of the Corporation shall immediately notify the Corporation of any loss or destruction of the certificate representing the same. The Corporation may issue a new certificate in the place of any certificate theretofore issued by it, alleged to have been lost or destroyed. On production of such evidence of loss or destruction as the Board of Directors may, in its discretion, require the owner of the lost or destroyed certificate, or his legal representatives, to give the Corporation a bond in such sum as the Board may direct, and with such surety or sureties as may be satisfactory to the Board, to indemnify the Corporation against any claims, loss, liability or damage it may suffer on account of the issuance of the new certificate. A new certificate may be issued without requiring any such evidence or bond when, in the judgement of the Board of Directors, it is proper so to do.
Section 3 - Transfers of Shares:
(a) Transfers of shares of the Corporation shall be made on the share records of the Corporation only by the holder of record thereof, in person or by his duly authorized attorney, upon surrender for cancellation of the certificate or certificates representing such shares, with an assignment or power of transfer endorsed thereon or delivered therewith, duly executed, with such proof of the authenticity of the signature and of authority to transfer and of payment of transfer taxes as the Corporation or its agents may require.
(b) The Corporation shall be entitled to treat the holder of record of any share or shares as the absolute owner thereof for all purposes and, accordingly, shall not be bound to recognize any legal, equitable or other claim to, or interest whether or not it shall have express or other notice thereof, except as otherwise expressly provided by law.
Section 4 - Record Date:
In lieu or closing the share records of the Corporation, the Board of Directors may fix, in advance, a date not exceeding fifty days, nor less than ten days, as the record date for the determination of shareholders entitled to receive notice of, or to vote at, any meeting of shareholders, or to consent to any proposal without a meeting of shareholders, or to consent to any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividends, or allotment of any rights, or for the purpose of any other action. If no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which the meeting is held; the record date for determining shareholders for any other purpose shall be at the close of business on the day on which the resolution of the directors relating thereto is adopted. When a determination of shareholders of record entitled to notice of or to vote at any meeting of shareholders has been made as provided for herein, such determination shall apply to any adjournment thereof, unless the directors fix a new record date for the adjourned meeting.
ARTICLE VI - DIVIDENDS
Subject to applicable law, dividends may be declared and paid out of any
funds available therefor, as often, in such amounts, and at such time or
times as the Board of Directors may determine.
ARTICLE VII - FISCAL YEAR
The fiscal year of the Corporation shall be fixed by the Board of Directors from time to time, subject to applicable law.
ARTICLE VIII - AMENDMENTS
Section 1 - By Shareholders:
All by-laws of the Corporation shall be subject to alteration or repeal, and new by-laws may be made, by the affirmative vote of shareholders holding of record in the aggregate at least a majority of the outstanding shares entitled to vote in the election of directors at any annual or special meeting of shareholders, provided that the notice or waiver of notice of such meeting shall have summarized or set forth in full therein, the proposed amendment.
Section 2 - By Directors:
The Board of Directors shall have power to make, adopt, alter, amend and repeal, from time to time, by-laws of the Corporation; provided, however, that the shareholders entitled to vote with respect thereto as in this Article IX above-provided may alter, amend or repeal by-laws made by the Board of Directors, except that the Board of Directors shall have no power to change the quorum for meetings of shareholders or of the Board of Directors, or to change any provisions of the by-laws with respect to the removal of directors or the filling of vacancies in the Board resulting from the removal by the shareholders. If any by-law regulating an impending election of directors is adopted, amended or repealed by the Board of Directors, there shall be set forth in the notice of the next meeting of shareholders for the election of directors, the by-1aw so adopted, amended or repealed, together with a concise statement of the changes made.
ARTICLE X - INDEMNITY
(a) Any person made a party to any action, suit or proceeding, by reason of the fact that he, his testator or intestate representative is or was a director, officer or employee of the Corporation, or of any Corporation in which he served as such at the request of the Corporation, shall be indemnified by the Corporation against the reasonable expenses, including attorney's fees, actually and necessarily incurred by him in connection with the defense of such action, suit or proceedings, or in connection with any appeal therein, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding, or in connection with any appeal therein that such officer, director or employee is liable for negligence or misconduct in the performance of his duties.
(b) The foregoing right of indemnification shall not be deemed exclusive of any other rights to which any officer or director or employee maybe entitled apart from the provisions of this section.
(c) The amount of indemnity to which any officer or any director may be entitled shall be fixed by the Board of Directors except that in any case where there is no disinterested majority of the Board available, the amount shall be fixed by arbitration pursuant to the then existing rules of the American Arbitration Association.
ACQUISITION AGREEMENT
This Agreement, entered into this__ day of April, 1998, by, between and among Polo Equities, Inc., a corporation organized under the laws of the State of Florida (hereinafter the "Purchaser"), and the Shareholders ("the Shareholders") of Hybrid Fuels Canada, Inc., a corporation formed under the province of Alberta and Hybrid Fuels U.S.A., Inc., a Nevada corporation (hereinafter collectively referred to as "the Company").
Witnesseth:
WHEREAS, Purchaser wishes to acquire, and Shareholders are willing to sell, all of the outstanding stock of the Company in exchange for common stock of the Purchaser;
NOW, THEREFORE, in consideration of the mutual terms and covenants set forth herein, Purchaser and Shareholders approve and adopt this Acquisition Agreement and mutually covenant and agree with each other as follows:
ARTICLE I
Shares to be Transferred and Shares to be Issued
1. a. On the closing date the Shareholders shall transfer to Purchaser certificates for the number of shares of the common stock of the Company described in Schedule "A", attached hereto and incorporated herein, which in the aggregate shall represent all of the issued and outstanding shares of stock of the Company. Such certificates shall be duly endorsed in blank by Shareholders or accompanied by duly executed stock powers in blank with signatures guaranteed. Alternatively, the shareholders may assign their rights to the shares if the shares have not been physically issued in the form of stock certificates.
b. In exchange for the transfer of the common stock of the Company pursuant to subsection 1.a. hereof, Purchaser shall on the closing date and contemporaneously with such transfer of the common stock of the Company to it by the Shareholders, or rights thereto, issue and deliver to the Shareholders the number of shares of common stock of the Purchaser specified on Schedule "B" hereof, which shares shall total twelve million (12,000,000).
2. The parties intend that this acquisition and exchange of shares is to be an exchange/transaction pursuant to Section 368(a)(1)(c) of the Internal Revenue Code of the United States.
ARTICLE II
Representations and Warranties of the Company and the Shareholders
3.01 Capitalization
Except for this Agreement, there are no outstanding options, contracts, calls, commitments, agreements or demands of any character relating to the stock of the Company owned by Shareholders.
3.02 Organization and Authority
(A) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Province of organization, with all requisite corporate power and authority to own, operate and lease its properties and to carry on its business as now being conducted, is duly qualified and in good standing in every jurisdiction in which the property owned, leased or operated by it, or the nature of the business conducted by it, makes such qualification necessary to avoid material liability or material interference in its business operations, and is not subject to any agreement, commitment or understanding which restricts or may restrict the conduct of its business in any jurisdiction or location. The Company is presently qualified to do business in the State of Nevada.
(B) The outstanding shares of the Company are legally and validly issued, fully paid and nonassessable.
(C) The Company does not own five percent (5%)or more of the outstanding stock of any corporation except for Alberta Ltd., which is a wholly-owned subsidiary, and except as listed on the Disclosure Statement.
(D) The minute book of the Company made available to Purchaser contains complete and accurate records of all meetings and other corporate actions of the shareholders and the Board of Directors (and any committee thereof) of the Company.
(E) The Disclosure Statement contains a list of the officers, directors and shareholders of the Company and copies of the articles of incorporation and by-laws currently in effect of the Company.
(F) The execution and delivery of the Agreement does not, and the consummation of the transaction contemplated hereby will not, subject to the approval and adoption by the Shareholders of the Company, violate any provision of the certificate/articles of incorporation or bylaws of the Company, or any provisions thereof, or result in the acceleration of any obligation under, any mortgage, lien, lease, agreement, instrument, court order, arbitration award, judgment or decree to which the Company is a party, or by which it is bound, and will not violate any other restriction of any kind or character to which it is subject.
(G) The authorized capital stock of Hybrid USA is_____ (___________)
shares of common stock, no par value, of which __________shares of such
stock will be issued and outstanding at the time of closing; and the
authorized capital stock of Hybrid Canada is ______(____________) shares
of common stock, no par value, of which ___________shares of such stock
will be issued and outstanding at the time of closing.
3.03 Financials
(A) Audited financial statements (hereafter "financial statements") of the Company as of _____________, have been delivered by the Company to the Purchaser. Said financial statements are true and correct in all material respects and present an accurate and complete disclosure of the financial condition of the Company as of its date and for the periods covered.
(B) All accounts receivable, if any, (net of reserves for doubtful accounts) of the Company shown on the books of account on th statement date and as incurred in the normal course of business since that date, are collectible in the normal course of business.
(C) The Company has good and marketable title to all of its assets, business and properties including, without limitation, all such properties reflected in the balance sheet as of the statement date except as disposed of in the normal course of business, free and clear of any mortgage, lien, pledge, charge, claim or encumbrance, except as shown on said balance sheet as of the statement date and, in the case of real properties except for rights-of-way and easements which do not adversely affect the use of such property.
(D) All currently used property and assets of the Company, or in which it has an interest, or which it has in possession, are in good operating condition and repair subject only to ordinary wear and tear.
3.04 Changes Since the Statement Date. Since the financial statement date, except as disclosed in the Disclosure Statement, there will not have been any material negative change in the financial position or assets of the Company.
3.05 Liabilities. There are no material liabilities of the Company, whether accrued, absolute, contingent or otherwise, which arose or relate to any transaction of the Company, its agents or servants occurring prior to the statement date, which are not disclosed by or reflected in said financial statements, except as disclosed in the Disclosure Statement. There are no such liabilities of the Company which have arisen or relate to any transaction of the Company, its agents or servants, occurring since the statement date, other than normal liabilities incurred in the normal conduct of the business of the Company, and none of which have a material adverse effect on the business or financial condition of the Company, except as disclosed in the Disclosure Statement. As of the date hereof, there are no known circumstances, conditions, happenings, events or arrangements, contractual or otherwise, which may hereafter give rise to liabilities, except in the normal course of business of the Company, except as disclosed in the Disclosure Statement.
3.06 Taxes. All federal , province, county and local income, ad valorem, excise, profits, franchise, occupation, property, sales, use gross receipts and other taxes (including any interest or penalties relating thereto) and assessments which are due and payable have been duly reported, fully paid and discharged as reported by the Company, and there are no unpaid taxes which are, or could become a lien on the properties and assets of the Company, except as provided for in the financial statements of their date, or have been incurred in the normal course of business of the Company since that date. All tax returns of any kind required to be filed have been filed and the taxes paid or accrued.
3.07 Accuracy of All Statements Made by Company. No representation or warranty by the Company and Shareholders in this Agreement, nor any statement, certificate, schedule or exhibit hereto furnished or to be furnished by or on behalf of the Shareholders pursuant to this Agreement, nor any document or certificate delivered to Purchaser pursuant to this Agreement or in connection with action contemplated hereby, contains or shall contain any untrue statement of material fact or omits or shall omit a material fact necessary to make the statement contained therein not misleading.
3.08 Limitation of Subsequent Corporate Actions. It is expressly understood and agreed that the Purchaser, and its affiliates, will take all steps necessary to insure that for a period of eighteen months there shall be no reverse split and the assets transferred into the Purchaser shall remain in place as part of the business operations.
ARTICLE IV
Representations and Warranties of Purchaser
Purchaser represents and warrants as follows:
4.01 Organization and Authority
The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida, with full power and authority to enter into and perform the transactions contemplated by this Agreement, and with all requisite corporate power and authority to own, operate and lease its properties and to carry on its business as now being conducted, is duly qualified and in good standing in every jurisdiction in which the property owned, leased or operated by it, or the nature of the business conducted by it, makes such qualification necessary to avoid material liability or material interference in its business operations, and is not subject to any agreement, commitment or understanding which restricts or may restrict the conduct of its business in any jurisdiction or location. The Purchaser is presently qualified to do business in Florida.
(A) The outstanding shares of the Purchaser are legally and validly issued, fully paid and nonassessable.
(B) The Purchaser does not own five percent(5%) or more of the outstanding stock of any corporation, except as listed on the Disclosure Statement.
(C) The minute book of the Purchaser made available to the Company and Shareholders contains complete and accurate records of all meetings and other corporate actions of the shareholders and the Board of Directors (and any committee thereof) of the Purchaser.
(D) The Disclosure Statement contains a list of the officers, directors and shareholders of the Purchaser and copies of the articles of incorporation and by-laws currently in effect of the Purchaser.
(E) The execution and delivery of this Agreement does not, and the consummation of the transaction contemplated hereby will not violate any provision of the certificate/articles of incorporation or bylaws of the Purchaser, or any provisions thereof, or result in the acceleration of any obligation under, any mortgage, lien, lease, agreement, instrument, court order, arbitration award, judgment or decree to which the Purchaser is a party, or by which it is bound, and will not violate any other restriction of any kind or character to which it is subject.
(F) the authorized capital stock of the Purchaser is fifty million (50,000,000) shares of common stock, $.001 par value, of which fifteen million (15,000,000) shares of such stock will be issued and outstanding at the time of closing (inclusive of the shares issued pursuant to the acquisition).
4.02 Performance of This Agreement. The execution and performance of this Agreement and the issuance of stock contemplated hereby have been authorized by the board of directors of Purchaser.
4.03 Financials
(A) True copies of the financial statements of the Purchaser as of April 15, 1997 have been completed and delivered by the Purchaser to the Company. These statements have been examined and certified by certified public accountants. Said financial statements are true and correct in all material respects and present an accurate and complete disclosure of the financial condition and earnings of the Purchaser for the periods covered, in accordance with generally accepted accounting principles applied on a consistent basis.
(B) All accounts receivable, if any, (net of reserves for doubtful accounts) of the Purchaser shown on financial statement, and as incurred in the normal course of business since that date, are collectible in the normal course of business.
(C) The Purchaser has good and marketable title to all of its assets, business and properties including, without limitation, all such properties reflected in the aforementioned balance sheet, except as disposed of in the normal course of business, free and clear of any mortgage, lien, pledge, charge, claim or encumbrance, except as shown on said balance sheet, and, in the case of real properties, except for rights-of-way and easements which do not adversely affect the use of such property.
4.04 Changes Since Audit Date. Since the date of the financial statements, except as disclosed in writing, there has not been any material change in the financial position or assets of the Purchaser.
4.05 Accuracy of All Statements Made by Purchaser. No representation or warranty by the Purchaser in the Agreement, nor any statement, certificate, schedule or exhibit hereto furnished or to be furnished by the Purchaser pursuant to this Agreement, nor any document or certificate delivered to the Company or the Shareholders pursuant to this Agreement or in connection with actions contemplated hereby, contains or shall contain any untrue statement of material fact or omits or shall omit a material fact necessary to make the statement contained therein not misleading.
4.06 Legality of Shares to be Issued. The shares of preferred stock of Preferred stock of Purchaser to be delivered pursuant to this Agreement, when so delivered, will have been duly and validly authorized and issued by Purchaser and will be fully paid and nonassessable.
4.07 No Covenant as to Tax Consequences. It is expressly understood and agreed that neither Purchaser nor its officers or agents has made any warranty or agreement, expressed or implied, as to the tax consequences of the transactions contemplated by this Agreement or the tax consequences of any action pursuant to or growing out of this Agreement.
ARTICLE V
Covenants of Shareholders
5.01 Access to Information. Purchaser and its authorized representatives shall have full access during normal business hours to all properties, books, records, contracts and documents of the Company, and the Company shall furnish or cause to be furnished to Purchaser and its authorized representative all information with respect to its affairs and business of the Company as Purchaser may reasonably request.
5.02 Actions Prior to Closing. From and after the date of this Agreement and until the closing date, the Company shall not materially alter its business.
ARTICLE VI
Conditions Precedent to Purchaser's Obligations
Each and every obligation of Purchaser to be performed on the closing date shall be subject to the satisfaction of the Purchaser of the following conditions:
6.01 Truth of Representations and Warranties. The representations and warranties made by the Company and Shareholders in this Agreement or given on its behalf hereunder shall be substantially accurate in all material respects on and as of the closing date with the same effect as though such representations and warranties had been made or given on and as of the closing date.
6.02 Compliance with Covenants. Shareholders shall have performed and complied with all obligations under this Agreement which are to be performed or complied with by them prior to or on the closing date, including the delivery of the closing documents specified hereafter.
6.03 Absence of Suit. No action, suit or proceedings before any court or any governmental or regulatory authority shall have been commenced or threatened and, no investigation by any governmental or regulatory authority shall have been commenced, against the Shareholders, the Company or any of the affiliates, associates, officers or directors of any of them, seeking to restrain, prevent or change the transactions, or seeking damages in connection with any of such transactions.
6.04 Receipt of Approvals, Etc. All approvals, consents and/or waivers that are necessary to effect the transactions contemplated hereby shall have been received.
6.05 No Material Adverse Change. As of the closing date there shall not have occurred any material adverse change which materially impairs the ability of the Company to conduct its business or the earning power thereof on the same basis as in the past.
6.06 Accuracy of Financial Statement. Purchaser and its representatives shall be satisfied as to the accuracy of all balance sheets, statements of income and other financial statements of the Company furnished to Purchaser herewith.
6.07 Proceedings and Instruments Satisfactory; Certificates. All proceedings, corporate or otherwise, to be taken in connection with the transactions contemplated by this Agreement shall have occurred and all appropriate documents incident thereto as Purchaser may request shall have been delivered to Purchaser. The Company and the Shareholders shall have delivered certificates in such detail as Purchaser may request as to compliance with the conditions set forth in this Article 6.
ARTICLE VII
Conditions Precedent to Obligations of the Company and Shareholders
Each and every obligation of the Company and shareholders to be performed on the closing date shall be subject to the satisfaction prior thereto of the following conditions:
7.01 Truth of Representations and Warranties. The representations and warranties of Purchaser contained in this Agreement shall be true at and as of the closing date as though such representations and warranties were made at and as of the transfer date.
7.02 Purchaser's Compliance with Covenants. Purchaser shall have performed and complied with its obligations under this Agreement which are to be performed or complied with by it prior to or on the closing date.
7.03 Absence of Suit. No action, suit or proceedings before any court or any governmental or regulatory authority shall have been commenced or threatened and, no investigation by any governmental or regulatory authority shall have been commenced against Purchaser, or any of the affiliates, associates, officers or directors of the Purchaser seeking to restrain, prevent or change the transactions contemplated hereby, or questioning the validity or legality of any such transactions, or seeking damages in connection with any of such transactions.
7.04 Receipt of Approvals, Etc. All approvals, consents and/or waivers that are necessary to effect the transactions contemplated hereby shall have been received.
7.05 No Material Adverse Change. As of the closing date there shall not have occurred any material adverse change which materially impairs the ability of the Purchaser to conduct its business or the earning power thereof on the same basis as in the past.
7.06 Accuracy of Financial Statements. The Company and the Shareholders shall be satisfied as to the accuracy of all balance sheets, statements of income and other financial statements of the Purchaser furnished to the Company herewith.
7.07 Proceedings and Instruments Satisfactory: Certificates. All proceedings, corporate or otherwise, to be taken in connection with the transactions contemplated by this Agreement shall have occurred and all appropriate documents incident thereto as the Company may request shall have been delivered to the Company. The Purchaser shall have delivered certificates in such detail as the Shareholders may request as to compliance with the conditions set forth in this Article 7.
ARTICLE VIII
Indemnification
The Shareholders and the Company shall indemnify Purchaser for any loss, cost, expense or other damage suffered by Purchaser resulting from, arising out of, or incurred with respect to the falsity or the breach of any representation, warranty or covenant made by the Company herein, and any claims arising from the operations of the Company prior to the closing date. Purchaser shall indemnify and hold the Shareholders harmless from and against any loss, cost, expense or other damage (including, without limitation, attorney's fees and expenses) resulting from, arising out of, or incurred with respect to, or alleged to result from, arise out of or have been incurred with respect to, the falsity or the breach of any representation, covenant, warranty or agreement made by Purchaser herein.
ARTICLE IX
Security Act Provisions
9.01 Restrictions on Disposition of Shares. Shareholders covenant and warrant that the shares received are acquired for their own accounts and not with the present view towards the distribution thereof and will not dispose of such shares except (i) pursuant to an effective registration statement under the Securities Act of 1933, as amended, or (ii) in any other transaction which, in the opinion of counsel, acceptable to Purchaser, is exempt from registration under the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder. In order to effectuate the covenants of this sub- section, an appropriate endorsement will be placed upon each of the certificates of preferred stock of the Purchaser at the time of distribution of such shares pursuant to this Agreement, and stop transfer instructions shall be placed with the transfer agent for the securities.
9.02 Notice of Limitation Upon Disposition. Each Shareholder is aware that the shares distributed pursuant to this Agreement will not have been registered pursuant to the Securities Act of 1933, as amended; and, therefore, under current interpretations and applicable rules, the shareholder will probably have to retain such shares for a period of at least one year and at the expiration of such one year period sales may be confined to brokerage transactions of limited amounts requiring certain notification filings with the Securities and Exchange Commission and such disposition may be available only if the Purchaser is current in its filings with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or other public disclosure requirements, and the other limitations imposed thereby on the disposition of shares of the Purchaser. Additionally, "affiliates" owning shares will be subject to additional restrictions limiting sales.
9.03 Limited Public Market for Common Shares. Each Shareholder acknowledge that the common shares being issued pursuant to this agreement currently has a limited public market in which the shares may be liquidated and there is no assurance that such public market will grow and develop.
ARTICLE X
Closing
10.01 Time. The closing of this transaction ("closing") shall be effective April 30, 1998. Such date is referred to in this agreement as the "closing date."
10.02 Documents To Be Delivered by Shareholders. At the closing Shareholders shall deliver to Purchaser the following documents:
(A) Certificates or assignments for all shares of stock of the Company in the manner and form required by sub-section 1.01 hereof.
(B) A certificate signed by the Management of the Company that the representations and warranties made by the Company in this Agreement are true and correct on and as of the closing date with the same effect as though such representations and warranties had been made on or given on and as of the closing date and that Shareholders have performed and complied with all of their obligations under this Agreement which are to be performed or complied with by or prior to or on the closing date.
(C) A copy of the by-laws of the Company certified by its secretary and a copy of the certificate of incorporation of the Company certified by the secretary of state.
(D) Certificates or letters from Shareholders evidencing the taking of the shares in accordance with the provisions of this agreement and their understanding of the restrictions thereunder.
(E) Such other documents of transfer, certificates of authority and other documents as Purchaser may reasonably request.
10.03 Documents To Be Delivered by Purchaser. At the closing Purchaser shall deliver to Shareholders the following documents:
(A) Certificates for the number of shares of preferred stock of purchaser as determined in Article 1 hereof.
(B) A certified copy of the duly adopted resolutions of the board of directors of Purchaser authorizing or ratifying the execution and performance of this Agreement and authorizing or ratifying the acts of its officers and employees in carrying out the terms and provisions thereof.
ARTICLE XI
Termination and Abandonment
This Agreement may be terminated and the transaction provided for by this Agreement may be abandoned without liability on the part of any part to any other, at any time before the closing date, or on the post closing basis as provided previously herein:
(A) By mutual consent of Purchaser and the Shareholders;
(B) By Purchaser if any of the conditions provided for in Article 6 of this Agreement have not been met and have not been waived in writing by Purchaser.
(C) By the Company if any of the conditions provided for in Article 7 of this Agreement have not been met and have not been waived in writing by the Company.
In the event of termination and abandonment by any party as above provided in this Article, written notice shall forthwith be given to the other party, and each party shall pay its own expenses incident to preparation for the consummation of this Agreement and the transactions contemplated hereunder.
ARTICLE XII
Miscellaneous
12.01 Notices. All notices, requests, demands and other communications hereunder shall be deemed to have been duly given, if delivered by hand or mailed, certified or registered mail with postage prepaid:
(A) If the Company or the Shareholders, to _______ at 2450 Palmerston Avenue, West Vancouver, BC V7V 2W3, or to such other person and place as the Company shall furnish to Purchaser in writing; or
(B) If to Purchaser, to Nathan W. Drage at 4505 South Wasatch Blvd., Suite 330, Salt Lake City, Utah 84124, or to such other person and place as Purchaser shall furnish to Company in writing.
12.02 Announcements. Announcements concerning the transactions provided for in this Agreement by either the Company or Purchaser shall be subject to the approval of the other in all essential respects, except that the approval of the Company shall not be required as to any statements and other information which Purchaser may submit to its shareholders.
12.03 Default. Should any party to this Agreement default in any of the covenants, conditions, or promises contained herein, the defaulting party shall pay all costs and expenses, including a reasonable attorney's fee, which may arise or accrue from enforcing this Agreement, or in pursuing any remedy provided hereunder or by the statutes of the State of Utah, United States of America.
12.04 Assignment. This Agreement may not be assigned in whole or in part by the parties hereto without the prior written consent of the other party or parties, which consent shall not be unreasonably withheld.
12.05 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their successors and assigns.
12.06 Holidays. If any obligation or act required to be performed hereunder shall fall due on a Saturday, Sunday or other day which is a legal holiday established by the State of Utah, such obligation or act may be performed on the next succeeding business day with the same effect as if it had been performed upon the day appointed.
12.07 Computation of Time. The time in which any obligation or act provided by this Agreement is to be performed is computed by excluding the first day and including the last, unless the last day is a holiday, in which event such day shall also be excluded.
12.08 Governing Law and Venue. This Agreement shall be governed by and interpreted pursuant to the laws of the State of Utah. Any action to enforce the provisions of this Agreement shall be brought in a court of competent jurisdiction within the State of Utah and in no other place.
12.09 Partial Invalidity. If any term, covenant, condition or provision of this Agreement or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Agreement or application of such term or provision to persons or circumstances other than those as to which it is held to be invalid or unenforceable shall not be affected thereby and each term, covenant, condition or provision of this Agreement shall be valid and shall be enforceable to the fullest extent permitted by law.
12.10 No Other Agreements. This Agreement constitutes the entire Agreement between the parties and there are and will be no oral representations which will be binding upon any of the parties hereto.
12.11 Rights are Cumulative. The rights and remedies granted hereunder shall be in addition to and cumulative of any other rights or remedies provided under the laws of the State of Washington.
12.12 Waiver. No delay or failure in the exercise of any power or right shall operate as a waiver thereof or as an acquiescence in default. No single or partial exercise of any power or right hereunder shall preclude any other or further exercise thereof or the exercise of any other power or right.
12.13 Survival of Covenants, Etc. All covenants, representations, and warranties made herein to any parties or in any statement or document delivered to any party hereto, shall survive the making of this Agreement and shall remain in full force and effect until the obligations of such party hereunder have been fully satisfied.
12.14 Further Action. The parties hereto agree to execute and deliver such additional documents and to take such other and further action as may be required to carry out fully the transaction(s) contemplated herein.
12.15 Amendment. This Agreement or any provision hereof may not be changed, waived, terminated or discharged except by means of a written supplemental instrument signed by the party or parties against whom enforcement of the change, waiver, termination, or discharge is sought.
12.16 Headings. The descriptive headings of the various Sections or parts of this Agreement are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.
12.17 Counterparts. This Agreement may be executed in two or more partially or fully executed counterparts, each of which shall be deemed an original and shall bind the signatory, but all of which together shall constitute but one and the same instrument, provided that Purchaser shall have no obligations hereunder until all Shareholders have become signatories hereto.
IN WITNESS WHEREOF, the parties hereto executed the foregoing Acquisition Agreement as of the day and year above written.
POLO EQUITIES, INC
By________/s/_______________________ Justeene Blankenship, President Attest: |
COMPANY: HYBRID FUELS U.S.A., INC.
By_______/s/__________________________ Iris McCammon, President Attest:__________________________ |
HYBRID FUELS CANADA., INC.
By_________/s/_______________________ Iris McCammon, President Attest:____________________________ |
| ARTICLE 5 |
| PERIOD TYPE | 12 MOS |
| FISCAL YEAR END | JUN 30 1999 |
| PERIOD START | JUL 01 1998 |
| PERIOD END | JUN 30 1999 |
| CASH | 1,073 |
| SECURITIES | 0 |
| RECEIVABLES | 0 |
| ALLOWANCES | 0 |
| INVENTORY | 0 |
| CURRENT ASSETS | 0 |
| PP&E | 1,102 |
| DEPRECIATION | 0 |
| TOTAL ASSETS | 2,175 |
| CURRENT LIABILITIES | 0 |
| BONDS | 0 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| COMMON | 16,724 |
| OTHER SE | (14,549) |
| TOTAL LIABILITY AND EQUITY | 2,175 |
| SALES | 0 |
| TOTAL REVENUES | 0 |
| CGS | 0 |
| TOTAL COSTS | 271,513 |
| OTHER EXPENSES | 0 |
| LOSS PROVISION | 0 |
| INTEREST EXPENSE | 0 |
| INCOME PRETAX | (271,513) |
| INCOME TAX | 0 |
| INCOME CONTINUING | (271,513) |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | (271,513) |
| EPS BASIC | (.02) |
| EPS DILUTED | (.02) |