Registration of Securities of a Small-Business Issuer — Form 10-SB
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10SB12G Form 10-Sb Pursuant to 12(G) 21 95K
2: EX-3.(I).1 Articles of Incorporation 3 11K
3: EX-3.(II).1 By-Laws 11 39K
4: EX-3.(III).1 Amendment to By-Laws 3 11K
5: EX-3.(IV) Corporate Charter 1 6K
6: EX-3.(V) Certificate of Good Standing 1 7K
7: EX-27 Financial Data Schedule 1 7K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
SMART WORLD UNITED, INC.
----------------------------------------------
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
NEVADA N/A
------------------------------- ------------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
16 JULIA STREET
THORNHILL, ONTARIO, L3T 4R9
---------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
ISSUER'S TELEPHONE NUMBER: (905) 731-0189
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 TO BE REGISTERED
------------------- ------------------------------
NONE NONE
SECURITIES TO BE REGISTERED UNDER SECTION 12(g) OF THE ACT:
COMMON STOCK, $.001 PAR VALUE PER SHARE
---------------------------------------
(TITLE OF CLASS)
COPIES OF COMMUNICATIONS SENT TO:
MARVIN N. WINICK
16 JULIA STREET
THORNHILL, ONTARIO L3T 4R9
TEL: (905) 731-0189 - FAX: (905) 764-3049
INDEX
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PART I
ITEM 1. DESCRIPTION OF BUSINESS 3
ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATIONS 9
ITEM 3. DESCRIPTION OF PROPERTY 10
ITEM 4. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS & MANAGEMENT 11
ITEM 5. DIRECTORS, EXECUTIVES, OFFICERS,
PROMOTERS & CONTROL PERSONS 12
ITEM 6. EXECUTIVE COMPENSATION 13
ITEM 7. CERTAIN RELATIONSHIPS & RELATED
TRANSACTIONS 14
ITEM 8. DESCRIPTION OF SECURITIES 14
PART II
ITEM 1. MARKET FOR COMMON EQUITY &
OTHER SHAREHOLDER MATTERS 15
ITEM 2. LEGAL PROCEEDINGS 16
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS 17
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES 17
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS 17
PART F/S 19
PART III 19
SIGNATURES 20
PART I
ITEM 1. DESCRIPTION OF BUSINESS
BUSINESS DEVELOPMENT
Smart World United, Inc. (the "Company") was organized on May 26,2000,
under the laws of the State of Nevada, having the stated purpose of engaging in
any lawful activities. The Company was formed with the contemplated purpose to
develop interactive toys which can access the content of a proposed website for
the purpose of downloading information to these toys. It is the intention of the
Company to launch a wide line of toys that will provide entertainment and
educational content for children to enjoy. The Company is in the preliminary
stages of developing a comprehensive plan to implement its purpose.
The Company having just been incorporated has not engaged in any
business activities to date. The Company has issued a total of 9,900,000 shares
to the founders of the Company and others who have made contributions to the
development of the company to this stage who are as follows: Sheik Mohamed
Zaakir, 4,400,000 shares of common stock, David Bond, 4,400,000 shares of common
stock, Ron Brigham, 1,000,000 shares of common stock, Jared Howard Clarke 25,000
shares of common stock, Bohdan G. Charyna, 25,000 shares of common stock, and
Thomas K. Tsubota 50,000 shares of common stock.
The Company's mission is to capitalize on the opportunity that has
resulted from the convergence of two pervasive trends, the enormous expansion in
the use of the Internet order to market its unique products relating to
children's toys and their interaction of such toys with the Internet. The
Company is considered a development stage company and, due to its status as a
"shell" corporation, its principal business purpose is to develop its internet
business or locate and consummate a merger or acquisition with a private entity
that would complement its mission statement above. Because of the Company's
current status of having limited assets and no recent operating history, in the
event the Company does successfully acquire or merge with an operating business
opportunity, it is likely that the Company's present shareholders will
experience substantial dilution and there will be a probable change in control
of the Company.
The Company is voluntarily filing its registration statement on Form
10-SB in order to make information concerning itself more readily available to
the public. Management believes that being a reporting company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), could provide
a prospective merger or acquisition candidate with additional information
concerning the Company. In addition, management believes that this might make
the Company more attractive to an operating business as a potential business
combination candidate and will allow the Company a better opportunity to raise
capital to meet its business objectives. As a result of filing its registration
statement, the Company is obligated to file with the Commission certain interim
and periodic reports including an annual report containing audited financial
statements. The Company intends to continue to voluntarily file these periodic
reports under the Exchange Act even if its obligation to file such reports is
suspended under applicable provisions of the Exchange Act.
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Any target acquisition or merger candidate of the Company will become
subject to the same reporting requirements as the Company upon consummation of
any such business combination. Thus, in the event that the Company successfully
completes an acquisition or merger with another operating business, the
resulting combined business must provide audited financial statements for at
least the two most recent fiscal years, or in the event that the combined
operating business has been in business less than two years, audited financial
statements will be required from the period of inception of the target
acquisition or merger candidate.
The Company's principal executive offices are located at 16 Julia
Street, Thornhill, Ontario Canada L3T 4R9 and its telephone number is (905)
731-0189.
BUSINESS OF ISSUER
The Company has no recent operating history and no representation is
made, nor is any intended, that the Company will be able to carry on future
business activities successfully. There can be no assurance that the Company
will have the ability to acquire or merge with an operating business, business
opportunity or property that will be of material value to the Company or be
successful in establishing its internet payment solution business.
Management plans to investigate, research and, if justified,
potentially acquire or merge with one or more businesses or business
opportunities to complement the business of providing companies with an internet
payment solution. The Company currently has no firm commitment or arrangement,
written or oral, to participate in any business opportunity and management
cannot predict the nature of any potential business opportunity it may
ultimately consider. Management will have broad discretion in its search for and
negotiations with any potential business or business opportunity.
SOURCES OF BUSINESS OPPORTUNITIES
The Company intends to use various sources in its search for potential
business opportunities including its officer and director, consultants, special
advisors, securities broker-dealers, venture capitalists, member of the
financial community and others who may present management with unsolicited
proposals. Because of the Company's limited capital, it may not be able to
retain on a fee basis professional firms specializing in business acquisitions
and reorganizations. The Company will most likely have to rely on outside
sources, not otherwise associated with the Company, that will accept their
compensation only after the Company has finalized a successful acquisition or
merger. The Company will rely upon the expertise and contacts of such persons,
will use notices in written publications and personal contacts to find merger
and acquisition candidates, the exact number of such contacts dependent upon the
skill and industriousness of the participants and the conditions of the
marketplace. None of the participants in the process will have any past business
relationship with management. To date the Company has not engaged nor entered
into any definitive agreements nor understandings regarding retention of any
consultant to assist the Company in its search for business opportunities, nor
is management presently in a position to actively seek or retain any prospective
consultants for these purposes.
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The Company does not intend to restrict its search to any specific kind
of industry or business. The Company may investigate and ultimately acquire a
venture that is in its preliminary or development stage, is already in
operation, or in various stages of its corporate existence and development.
Management cannot predict at this time the status or nature of any venture in
which the Company may participate. A potential venture might need additional
capital or merely desire to have its shares publicly traded. The most likely
scenario for a possible business arrangement would involve the acquisition of,
or merger with, an operating business that does not need additional capital, but
which merely desires to establish a public trading market for its shares.
Management believes that the Company could provide a potential public vehicle
for a private entity interested in becoming a publicly held corporation without
the time and expense typically associated with an initial public offering.
At present the Company intends to establish an Internet website to provided a
means to market products and information to consumers. However, there is no
certainty that the Company will be successful in its endeavors unless it is able
to raise capital. Therefore in addition to this opportunity the Company will
also evaluate other opportunities that may be able to complement its prospective
business operations.
EVALUATION
Once the Company has identified a particular entity as a potential
acquisition or merger candidate, management will seek to determine whether
acquisition or merger is warranted or whether further investigation is
necessary. Such determination will generally be based on management's knowledge
and experience, (limited solely to working history - See "Item 5. Directors,
Executive Officers, etc.") or with the assistance of outside advisors and
consultants evaluating the preliminary information available to them. Management
may elect to engage outside independent consultants to perform preliminary
analysis of potential business opportunities. However, because of the Company's
limited capital it may not have the necessary funds for a complete and
exhaustive investigation of any particular opportunity. Management will not
devote full time to finding a merger candidate, will continue to engage in
outside unrelated activities, and anticipates devoting no more than an average
of five (5) hours weekly to such undertaking.
In evaluating such potential business opportunities, the Company will
consider, to the extent relevant to the specific opportunity, several factors
including potential benefits to the Company and its shareholders; working
capital, financial requirements and availability of additional financing;
history of operation, if any; nature of present and expected competition;
quality and experience of management; need for further research, development or
exploration; potential for growth and expansion; potential for profits; and
other factors deemed relevant to the specific opportunity.
Because the Company has not located or identified any specific business
opportunity as of the date hereof, there are certain unidentified risks that
cannot be adequately expressed prior to the identification of a specific
business opportunity. There can be no assurance following consummation of any
acquisition or merger that the business venture will develop into a going
concern or, if the business is already operating, that it will continue to
operate successfully. Many
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of the potential business opportunities available to the Company may involve new
and untested products, processes or market strategies which may not ultimately
prove successful.
FORM OF POTENTIAL ACQUISITION OR MERGER
Presently the Company cannot predict the manner in which it might
participate in a prospective business opportunity. Each separate potential
opportunity will be reviewed and, upon the basis of that review, a suitable
legal structure or method of participation will be chosen. The particular manner
in which the Company participates in a specific business opportunity will depend
upon the nature of that opportunity, the respective needs and desires of the
Company and management of the opportunity, and the relative negotiating strength
of the parties involved. Actual participation in a business venture may take the
form of an asset purchase, lease, joint venture, license, partnership, stock
purchase, reorganization, merger or consolidation. The Company may act directly
or indirectly through an interest in a partnership, corporation, or other form
of organization, however, the Company does not intend to participate in
opportunities through the purchase of minority stock positions.
Because of the Company's current status in that it has been newly
formed, and its concomitant lack of assets and relevant operating history, it is
likely that any potential merger or acquisition with another operating business
will require substantial dilution to the Company's existing shareholders
interests. There will probably be a change in control of the Company, with the
incoming owners of the targeted merger or acquisition candidate taking over
control of the Company. Management has not established any guidelines as to the
amount of control it will offer to prospective business opportunity candidates,
since this issue will depend to a large degree on the economic strength and
desirability of each candidate, and the corresponding relative bargaining power
of the parties. However, management will endeavor to negotiate the best possible
terms for the benefit of the Company's shareholders as the case arises.
Management may actively negotiate or otherwise consent to the purchase of any
portion of their common stock as a condition to, or in connection with, a
proposed merger or acquisition. In such an event, existing shareholders may not
be afforded an opportunity to approve or consent to any particular stock buy-out
transaction. However the terms of the sale of shares held by present management
of the Company will be extended equally to all other current shareholders.
Management does not have any plans to borrow funds to compensate any
persons, consultants, or promoters in conjunction with its efforts to find and
acquire or merge with another business opportunity. Management does not have any
plans to borrow funds to pay compensation to any prospective business
opportunity, or shareholders, management, creditors, or other potential parties
to the acquisition or merger. In either case, it is unlikely that the Company
would be able to borrow significant funds for such purposes from any
conventional lending sources. In all probability, a public sale of the Company's
securities would also be unfeasible, and management does not contemplate any
form of new public offering at this time. In the event that the Company does
need to raise capital, it would most likely have to rely on the private sale of
its securities. Such a private sale would be limited to persons exempt under the
Commissions's Regulation D or other rule, or provision for exemption, if any
applies. However, no private sales are contemplated by the Company's management
at this time. If a private sale of the Company's securities is deemed
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appropriate in the future, management will endeavor to acquire funds on the best
terms available to the Company. However, there can be no assurance that the
Company will be able to obtain funding when and if needed, or that such funding,
if available, can be obtained on terms reasonable or acceptable to the Company.
The Company does not anticipate using Regulation S promulgated under the
Securities Act of 1933 to raise any funds any time within the next year, subject
only to its potential applicability after consummation of a merger or
acquisition.
In the event of a successful acquisition or merger, a finder's fee, in
the form of cash or securities of the Company, may be paid to persons
instrumental in facilitating the transaction. The Company has not established
any criteria or limits for the determination of a finder's fee, although most
likely an appropriate finder's fee will be negotiated between the parties,
including the potential business opportunity candidate, based upon economic
considerations and reasonable value as estimated and mutually agreed upon at
that time. A finder's fee would only be payable upon completion of the proposed
acquisition or merger in the normal case, and management does not contemplate
any other arrangement at this time. Current management has not in the past used
any particular consultants, advisors or finders. Management has not actively
undertaken a search for, nor retention of, any finder's fee arrangement with any
person. It is possible that a potential merger or acquisition candidate would
have its own finder's fee arrangement, or other similar business brokerage or
investment banking arrangement, whereupon the terms may be governed by a
pre-existing contract; in such case, the Company may be limited in its ability
to affect the terms of compensation, but most likely the terms would be
disclosed and subject to approval pursuant to submission of the proposed
transaction to a vote of the Company's shareholders. Management cannot predict
any other terms of a finder's fee arrangement at this time. If such a fee
arrangement was proposed, independent management and directors would negotiate
the best terms available to the Company so as not to compromise the fiduciary
duties of the representative in the proposed transaction, and the Company would
require that the proposed arrangement would be submitted to the shareholders for
prior ratification in an appropriate manner.
Management does not contemplate that the Company would acquire or merge
with a business entity in which any officer or director of the Company has an
interest. Any such related party transaction, however remote, would be submitted
for approval by an independent quorum of the Board of Directors and the proposed
transaction would be submitted to the shareholders for prior ratification in an
appropriate manner. The Company's management has not had any contact,
discussions, or other understandings regarding any particular business
opportunity at this time, regardless of any potential conflict of interest
issues. Accordingly, the potential conflict of interest is merely a remote
theoretical possibility at this time.
POSSIBLE BLANK CHECK COMPANY STATUS
While the Company may be deemed a "shell" company at this time, it does
not constitute a "blank check" company under pertinent securities law standards.
Accordingly, the Company is not subject to securities regulations imposed upon
companies deemed to be "blank check companies." If the Company were to file a
registration statement under Securities Act of 1933 and, at such time, priced
its shares at less than $5.00 per share and continued to have no specific
business plan, it would then be classified as a blank check company.
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If in the future the Company were to become a blank check company,
adverse consequences could attach to the Company. Such consequences can include,
but are not limited to, time delays of the registration process, significant
expenses to be incurred in such an offering, loss of voting control to public
shareholders and the additional steps required to comply with various federal
and state laws enacted for the protection of investors, including so-called
"lock-up" agreements pending consummation of a merger or acquisition that would
take it out of blank check company status.
Many states have statutes, rules and regulations limiting the sale of
securities of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a market to develop
in the companies securities or to undertake any offering of the Company's
securities, either debt or equity, until such time as the Company has
successfully implemented its business plan described herein. In the event the
Company undertakes the filing of a registration statement under circumstances
that classifies it as a blank check company the provisions of Rule 419 and other
applicable provisions will be complied with.
RIGHTS OF SHAREHOLDERS
The Company does intend to provide its shareholders with complete
disclosure documentation including audited finance statements concerning a
target company and its business prior to any mergers or acquisitions.
COMPETITION
The state of the art condition of our competitors in the industry today
is such that our nearest competitors are manufacturing and selling stuffed
animals that have three to five permanent voice message or a short song or story
which plays for between five seconds to sixty seconds. These very short
messages, stories or songs are permanent in the toy and cannot be replaced by
new messages, stories or songs. The child will play with this kind of toy until
he or she is bored with the repetitive message or song, then they will discard
it. The only way for a child to be able to listen to a new story or song is for
the parent to buy another stuffed animal with a different set of sounds. This
adds up to be quite expensive and can only offer limited educational value. In
fact, the parent spends $20 to $90 per stuffed toy with limited entertainment or
educational value. To get the same amount of content that our single StoryBear
can offer in a yea, a parent would have to spend thousands of dollars buying
hundreds of different stuffed toys with the 3 to 5 permanently stored messages
or songs in each one.
The Company at present being a startup company, due to the Company's
limited funds, it may be difficult to successfully compete with these other
companies.
EMPLOYEES
As of the date hereof, the Company does not have any employees and has
no plans for retaining employees until such time as the Company's business
warrants the expense, or until the Company successfully acquires or merges with
an operating business. The Company may find it necessary to periodically hire
part-time clerical help on an as-needed basis.
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FACILITIES
The Company is currently using at no cost to the Company, as its
principal place of business the offices (provided at no cost), located in
Thornhill, Ontario. Although the Company has no written agreement and pays no
rent for the use of this facility, it is contemplated that at such future time
as an acquisition or merger transaction may be completed, and as the Company
raises capital, that the Company will secure commercial office space from which
it will conduct its business. Until such an acquisition or merger, the Company
lacks any basis for determining the kinds of office space or other facilities
necessary for its future business. The Company has no current plans to secure
such commercial office space. It is also possible that a merger or acquisition
candidate would have adequate existing facilities upon completion of such a
transaction, and the Company's principal offices may be transferred to such
existing facilities.
INDUSTRY SEGMENTS
The Company will be targeting companies in the internet sector involved
directly or indirectly with the toy industry. The Company is presently a
development stage company seeking a potential acquisition of or merger with a
yet to be identified business opportunity. Reference is made to the statements
of income included herein in response to part F/S of this Form 10-SB for a
report of the Company's operating history since inception.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company is considered a development stage company with limited
assets or capital, and with no operations or income since being organized May
26, 2000. The costs and expenses associated with the preparation and filing of
this registration statement and other operations of the Company have been paid
for by a shareholder, specifically Mr. Sheik Zaakir (see Item 4, Security
Ownership of Certain Beneficial Owners and Management. Mr. Zaakir is the one of
the founding shareholders). Mr. Zaakir has agreed to pay future costs associated
with filing future reports under Exchange Act of 1934 if the Company is unable
to do so. It is anticipated that the Company will require only nominal capital
to maintain the corporate viability of the Company and any additional needed
funds will most likely be provided by the Company's existing shareholders or its
officers and directors in the immediate future. Current shareholders have not
agreed upon the terms and conditions of future financing and such undertaking
will be subject to future negotiations, except for the express commitment of Mr.
Clarke to fund required 34 Act filings. Repayment of any such funding will also
be subject to such negotiations. However, unless the Company is able to
facilitate an acquisition of or merger with an operating business or is able to
obtain significant outside financing, to start its business objectives, there is
substantial doubt about its ability to continue as a going concern.
In the opinion of management, inflation has not and will not have a
material effect on the operations of the Company until such time as the Company
successfully completes an acquisition or merger or starts its business
objectives. At that time, management will evaluate the possible effects of
inflation on the Company as it relates to its business and operations following
a successful acquisition or merger and as the operations of the Company
continue.
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Management plans may but do not currently provide for experts to
secure a successful acquisition or merger partner or commences to develop its
owns business objectives that it will be able to continue as a going concern. In
the event such efforts are unsuccessful, contingent plans have been arranged to
provide that the current Director of the Company to fund the required future
filings under the 34 Act, and existing shareholders have expressed an interest
in additional funding if necessary to continue the Company as a going concern.
PLAN OF OPERATION
During the next twelve months, the Company will actively seek out and
investigate possible business opportunities with the intent to acquire or merge
with one or more business ventures. Additionally the Company will continue to
develop its business objectives to create an Internet website interactive with
specialized toys. The Company will endeavor to raise sufficient capital, the
amount of which has not been determined to date, to meet its requirements once
they are quantified. In its search for business opportunities, management will
follow the procedures outlined in Item 1 above. Because the Company has limited
funds, it may be necessary for the officers and/or directors to either advance
funds to the Company or to accrue expenses until such time as a successful
business consolidation can be made or to the point that the Company is able to
establish itself in connection with its business objectives. The Company will
not be a position that the target company must repay funds advanced by its
officers and directors. Management intends to hold expenses to a minimum and to
obtain services on a contingency basis when possible. Further, the Company's
directors will defer any compensation until such time as an acquisition or
merger can be accomplished and will strive to have the business opportunity
provide their remuneration. However, if the Company engages outside advisors or
consultants in its search for business opportunities, it may be necessary for
the Company to attempt to raise additional funds. As of the date hereof, the
Company has not made any arrangements or definitive agreements to use outside
advisors or consultants or to raise any capital. In the event the Company does
need to raise capital most likely the only method available to the Company would
be the private sale of its securities. Because of the nature of the Company as a
development stage company, it is unlikely that it could make a public sale of
securities or be able to borrow any significant sum from either a commercial or
private lender. There can be no assurance that the Company will able to obtain
additional funding when and if needed, or that such funding, if available, can
be obtained on terms acceptable to the Company.
The Company does not intend to use any employees, with the possible
exception of part-time clerical assistance on an as-needed basis. Outside
advisors or consultants will be used only if they can be obtained for minimal
cost or on a deferred payment basis. Management is convinced that it will be
able to operate in this manner and to continue its search for business
opportunities during the next twelve months.
ITEM 3. DESCRIPTION OF PROPERTY
The information required by this Item 3 is not applicable to this Form
10-SB due to the fact that the Company does not own or control any material
property. There are no preliminary agreements or understandings with respect to
office facilities in the future.
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ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, to the best knowledge of
the Company as of June 30, 2000, with respect to each person known by the
Company to own beneficially more than 5% of the Company's outstanding common
stock, each director of the Company and all directors and officers of the
Company as a group.
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Name of Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of Class
------------------ -------------------- ----------------
Jared H. Clarke 25,000 .25%
154 Island Road
Scarborough, Ontario
Thomas K. Tsubota 50,000 .50%
120 Brookside Place
Marina, California
93933
Sheik Mohamed Zaakir 4,400,000 44.4%
109 Frederick Street
Toronto, Ontario
M5A 4H1
David Bond
St. John, Antigua 4,400,000 44.4%
Ron Brigham 1,000,000 10.1%
1120 Brevick Place
Mississauga, Ontario
L4W 3Y5
Bohdan G. Charyna 25,000 .25%
88 Bloor St. East #2611
Toronto, Ontario
M4W 3E9
All Executive Officers and Directors
as a Group 4.500,000 45.5%
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ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The director and executive officer of the Company and his respective
age is as follows:
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Name Age Position
---- --- --------
Howard Clarke 56 Director, and President
Thomas Tsubota 64 Director and Vice-President
Bohdan Charyna 46 Director and Vice President
Sheik Mohamed Zaakir 37 Secretary
All directors hold office until the next annual meeting of stockholders
and until their successors have been duly elected and qualified. There are no
agreements with respect to the election of directors. The Company has not
compensated its directors for service on the Board of Directors or any committee
thereof. As of the date hereof, no director has accrued any expenses or
compensation. Officers are appointed annually by the Board of Directors and each
executive officer serves at the discretion of the Board of Directors. The
Company does not have any standing committees at this time.
No director, or officer, or promoter of the Company has, within the
past five years, filed any bankruptcy petition, been convicted in or been the
subject of any pending criminal proceedings, or is any such person the subject
or any order, judgment or decree involving the violation of any state or federal
securities laws.
The business experience of the persons listed above during the past
five years are as follows:
JARED H. CLARKE
Mr. Clarke has over 20 years experience in business management and accounting.
He has used this knowledge to successfully participate in several business
ventures. Notably, he has previously owned a partnership in a successful
insurance brokerage firm in Canada. His lengthy experience in business
management has enabled him to gain tremendous knowledge in corporate finance and
management.
THOMAS TSUBOTA
Mr. Tsubota, has many years of banking experience. Recently, he was Assistant
Vice President for Union Bank of California managing the Financial Services
Group for the bank. Before that he was Assistant Vice President for Sumitomo
Bank of California for 19 years. He is very active in his community volunteering
a great amount of his free time to such activities.
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BOHDAN CHARYNA
Mr. Charyna is an independent Corporate Financial Consultant. He is responsible
for providing financial strategy, development and implementation of equity
financing for emerging growth and small capitalization companies.
Mr. Charyna has over 12 years of financial industry work including banking,
investor relations and private placements with high profile contacts in all the
key North American financial centres as well as in Europe and the Pacific Rim.
Before becoming a financial consultant, Mr.Charyna worked for the Royal Bank of
Canada where he was a manager and inspector working with Fortune 500 accounts
and high net-worth individuals.
SHEIK MOHAMED ZAAKIR
Mr. Zakir has worked extensively in technology for many years. In the 1989, he
owned and operated three computer software training centers in Toronto, Canada ,
where he was president of the company. In 1993 he founded Telenet, where he
developed an application to replace the paper telephone books with a touch
screen device called "Telefinder". The device would be installed in the home for
lifetime use and would provide white pages information at the touch of a finger
in real time. Mr. Zaakir sold this technology to another company.
In 1998 Mr. Zaakir began working on innovative technological applications for
the internet. He has founded New Vision Capital for the purpose of developing
his technologies for the internet. Mr. Zaakir has received two letters from IBM
Canada, expressing their interest to work with him on two of his internet
technological applications.
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors and persons who own more
than 10% of a registered class of the Company's equity securities, to file with
the Securities and Exchange Commission (hereinafter referred to as the
"Commission") initial statements of beneficial ownership, reports of changes in
ownership and annual reports concerning their ownership, of Common Stock and
other equity securities of the Company on Forms 3, 4, and 5, respectively.
Executive officers, directors and greater than 10% shareholders are required by
Commission regulations to furnish the Company with copies of all Section 16(a)
reports they file. The directors and officers will file as required under
Section 16(a) filing requirements applicable to them once this filing is done.
ITEM 6. EXECUTIVE COMPENSATION
The Company has not had a bonus, profit sharing, or deferred
compensation plan for the benefit of its employees, officers or directors. The
Company has not paid any salaries or other compensation to its officers,
directors or employees since incorporation. Further, the Company has not entered
into an employment agreement with any of its officers, directors or any other
persons
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and no such agreements are anticipated in the immediate future. It is intended
that the Company's director will defer any compensation until such time as an
acquisition or merger can be accomplished or the company can establish its
business objectives and will strive to have the business opportunity and the
business objectives provide their remuneration. As of the date hereof, no person
has accrued any compensation from the Company.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On May 27, 2000 9,900,000 shares were issued to the founders in their
respective percentages outlined above
In addition Mr. Tsubota has paid for the cost and expenses associated
with the filing of this Form 10-SB and other operations of the Company.
At the current time, the Company has no provision to issue any
additional securities to management, promoters or their respective affiliates or
associates. At such time as the Board of Directors adopts an employee stock
option or pension plan, any issuance would be in accordance with the terms
thereof and proper approval. Although the Company has a very large amount of
authorized but unissued Common Stock and Preferred Stock which may be issued
without further shareholder approval or notice, the Company intends to reserve
such stock for the Rule 505 offerings for acquisitions and continuing the
business objectives of the Company..
Mr. Thomas Tsubota may be deemed to be a "promoter" of the Company as
that term is defined under the Rules and Regulations promulgated under the Act.
ITEM 8. DESCRIPTION OF SECURITIES
COMMON STOCK
The Company is authorized to issue 50,000,000 shares of common stock,
par value $.001, of which 9,900,000 shares are issued and outstanding as of the
date hereof. All shares of common stock have equal rights and privileges with
respect to voting, liquidation and dividend rights. Each share of Common Stock
entitles the holder thereof to (i) one non-cumulative vote for each share held
of record on all matters submitted to a vote of the stockholders; (ii) to
participate equally and to receive any and all such dividends as may be declared
by the Board of Directors out of funds legally available therefor; and (iii) to
participate pro rata in any distribution of assets available for distribution
upon liquidation of the Company. Stockholders of the Company have no pre-emptive
rights to acquire additional shares of Common Stock or any other securities. The
Common Stock is not subject to redemption and carries no subscription or
conversion rights. All outstanding shares of common stock are fully paid and
non-assessable.
PREFERRED STOCK
Shares of Preferred Stock may be issued from time to time in one or
more series as may be determined by the Board of Directors. The Company is
authorized to issue 5,000,000 shares of
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preferred stock, at a par value of $ .001. The voting powers and preferences,
the relative rights of each such series and the qualifications, limitations and
restrictions thereof shall be established by the Board of Directors, except that
no holder of Preferred Stock shall have preemptive rights. At the present time
no terms, conditions, limitations or preferences have been established. The
Company has no shares of Preferred Stock outstanding, and the Board of Directors
has no plan to issue any shares of Preferred Stock for the foreseeable future
unless the issuance thereof shall be in the best interests of the Company.
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND OTHER SHAREHOLDER MATTERS.
No shares of the Company's common stock have previously been registered
with the Securities and Exchange Commission (the "Commission") or any state
securities agency or authority. The Company intends to make application to the
NASD for the Company's shares to be quoted on the OTC Bulletin Board. The
application to the NASD will be made during the Commission comment period for
this Form 10-SB or immediately thereafter. The Company's application to the NASD
will consist of current corporate information, financial statements and other
documents as required by Rule 15c211 of the Securities Exchange Act of 1934, as
amended. Inclusion on the OTC Bulletin Board permits price quotation for the
Company's shares to be published by such service.
The Company is not aware of any existing trading market for its common
stock. The Company's common stock has never traded in a public market. There are
no plans, proposals, arrangements or understandings with any person(s) with
regard to the development of a trading market in any of the Company's
securities.
If and when the Company's common stock is traded in the
over-the-counter market, most likely the shares will be subject to the
provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of
1934, as amended (the Exchange Act"), commonly referred to as the "penny stock"
rule. Section 15(g) sets forth certain requirements for transactions in penny
stocks and Rule 15g9(d)(1) incorporates the definition of penny stock as that
used in Rule 3a51-1 of the Exchange Act.
The Commission generally defines penny stock to be any equity security
that has a market price less than $5.00 per share, subject to certain
exceptions. Rule 3a51-1 provides that any equity security is considered to be a
penny stock unless that security is: registered and traded on a national
securities exchange meeting specified criteria set by the Commission; authorized
for quotation on The NASDAQ Stock Market; issued by a registered investment
company; excluded from the definition on the basis of price (at least $5.00 per
share) or the issuer's net tangible assets; or exempted from the definition by
the Commission. If the Company's shares are deemed to be a penny stock, trading
in the shares will be subject to additional sales practice requirements on
broker-dealers who sell penny stocks to persons other than established customers
and accredited investors, generally persons with assets in excess of $1,000,000
or annual income exceeding $200,000, or $300,000 together with their spouse.
-15-
For transactions covered by these rules, broker-dealers must make a
special suitability determination for the purchase of such securities and must
have received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the first transaction, of a
risk disclosure document relating to the penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, and current quotations for the securities. Finally,
the monthly statements must be sent disclosing recent price information for the
penny stocks held in the account and information on the limited market in penny
stocks. Consequently, these rules may restrict the ability of broker dealers to
trade and/or maintain a market in the Company's common stock and may affect the
ability of shareholders to sell their shares.
As of June 30, 2000, there were 6 holders of record of the Company's
common stock.
As of the date hereof, the Company has issued and outstanding 9,900,000
shares of common stock all of which are subject to restriction pursuant to the
terms of Rule 144 ("Rule 144") of the Securities Act of 1933, as amended (the
"Act").
DIVIDEND POLICY
The Company has not declared or paid cash dividends or made
distributions in the past, and the Company does not anticipate that it will pay
cash dividends or make distributions in the foreseeable future. The Company
currently intends to retain and reinvest future earnings, if any, to finance its
operations.
PUBLIC QUOTATION OF STOCK
The Company has not as of this date, but intends to request in the
immediate future a broker-dealer who has not been identified at this time, to
act as a market maker for the Company's securities. Thus far the Company has not
requested a market maker to submit the Company's Form 10-SB to the National
Association of Securities Dealers and to serve as a market maker for the
Company's Common Stock. The Company anticipates that other market makers may be
requested to participate at a later date. The Company will not use consultants
to obtain market makers. There have been no preliminary discussions between the
Company, or anyone acting on its behalf, and any market maker regarding the
future trading market for the Company. It is anticipated that the market maker
will be contacted prior to an acquisition or merger and only by management of
the Company.
ITEM 2. LEGAL PROCEEDINGS
The Company is currently not a party to any pending legal proceedings
and no such action by, or to the best of its knowledge, against the Company has
been threatened. The Company has been inactive since inception through the date
of this Form 10-SB.
-16-
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 3 is not applicable to this Form 10-SB.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
There have no recent sales of unregistered securities.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article XI of the Company's Amended Articles of Incorporation contains
provisions providing for the indemnification of directors and officers of the
Company as follows:
(a) The corporation shall indemnify any person who was or is a party,
or is threatened to be made a party, of any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than 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 otherwise 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 such action, suit or proceeding, if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, has no reasonable cause to believe his conduct is unlawful. The
termination of any action, suit or proceeding, by judgment, order, settlement,
conviction upon a plea of nolo contendere or its equivalent, shall not of itself
create a presumption that the person did not act in good faith in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had
reasonable cause to believe the action was unlawful.
(b) The corporation shall 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 attorneys' fees), actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit, if he acted in
good faith and in a manner he reasonably believed to be in, or not, opposed to,
the best interests of the corporation, except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the corporation, unless, and only to the extent that, the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability, but in view of all circumstances of the
case, such person is fairly and reasonably entitled to indemnification for such
expenses which such court deems proper.
-17-
(c) To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections (a) and (b) of this Article,
or in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorney's fees) actually and reasonably incurred by
him in connection therewith.
(d) Any indemnification under Section (a) or (b) of this Article
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the officer,
director and employee or agent is proper in the circumstances, because he has
met the applicable standard of conduct set forth in Section (a) or (b) of this
Article. Such determination shall be made (i) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (ii) if such quorum is not obtainable or, even if
obtainable, a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (iii) by the affirmative vote of the holders of
a majority of the shares of stock entitled to vote and represented at a meeting
called for purpose.
(e) Expenses (including attorneys' fees) incurred in defending a civil
or criminal action, suit or proceeding may be paid by the corporation in advance
of the final disposition or such action, suit or proceeding, as authorized in
Section (d) of this Article, upon receipt of an understanding by or on behalf of
the director, officer, employee or agent to repay such amount, unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this Article.
(f) The Board of Directors may exercise the corporation's power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee, or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under this Article.
(g) The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under these Amended Articles of Incorporation, the Bylaws, agreements,
vote of the shareholders or disinterested directors, or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office and shall continue as to person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the heirs
and personal representative of such a person.
TRANSFER AGENT
The Company is serving as its own transfer agent until it becomes
eligible for quotation with NASD.
-18-
PART F/S
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's financial statements for the years ended has been
examined to the extent indicated in their reports by Michael Johnson & Company,
independent certified accountants, and have been prepared in accordance with
generally accepted accounting principles and pursuant to Regulation S-B as
promulgated by the Securities and Exchange Commission and are included herein,
on Page F-1 hereof in response to Part F/S of this Form 10-SB.
PART III
Item 1. Index to Exhibits
The following exhibits are filed with this Registration Statement:
[Download Table]
Exhibit No. Exhibit Name
3(i).1 Articles of Incorporation filed May 26, 2000
3(ii).1 By-laws
3(iii).1 Amendment to by-laws.
3(iv) Corporate Charter
3(v) Certificate of Good Standing
27 Financial Data Schedule
Item 2. Description of Exhibits
See Item 1 above.
Signatures
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
there unto duly authorized.
Smart World United, Inc.
(Registrant)
Date: September 21, 2000 BY: /s/ Sheik Mohamed Zaakir
-------------------------------------
Sheik Mohamed Zaakir, Secretary
-19-
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
[Download Table]
Date Signature Title
September 21, 2000 BY: /s/ Sheik Mohamed Zaakir Secretary
-------------------------------------------
Sheik Mohamed Zaakir
-20-
EXHIBIT INDEX
[Download Table]
Exhibit No. Exhibit Name
----------- ------------
3(i).1 Articles of Incorporation filed May 26, 2000
3(ii).1 By-laws
3(iii).1 Amendment to by-laws.
3(iv) Corporate Charter
3(v) Certificate of Good Standing
27 Financial Data Schedule
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘10SB12G’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 9/21/00 | | 19 | | 20 | | | None on these Dates |
| | 6/30/00 | | 11 | | 16 |
| | 5/26/00 | | 9 | | 21 |
| List all Filings |
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