-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GWbUkoxrS+oqt0nXlAw4wfeAz+2dPZVhGyx21C28RSKiYlpfbB34vsnyxY3OdivG 56rxXDZEvnBUxbWEFDWofw== /in/edgar/work/20000720/0001012709-00-000623/0001012709-00-000623.txt : 20000920 0001012709-00-000623.hdr.sgml : 20000920 ACCESSION NUMBER: 0001012709-00-000623 CONFORMED SUBMISSION TYPE: 8-K12G3/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000309 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000720 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW MILLENNIUM MEDIA INTERNATIONAL INC CENTRAL INDEX KEY: 0001108967 STANDARD INDUSTRIAL CLASSIFICATION: [7310 ] STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K12G3/A SEC ACT: SEC FILE NUMBER: 000-29923 FILM NUMBER: 676236 BUSINESS ADDRESS: STREET 1: 101 PHILIPPE PARKWAY STREET 2: SUITE 300 CITY: SAFETY HARBOR STATE: FL ZIP: 34695 BUSINESS PHONE: 7277976664 8-K12G3/A 1 0001.txt NEW MILLENNIUM MEDIA INTERNATIONAL,INC. - 8-K12G3A FORM 8-K12G3A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT March 9, 2000 Date of Report (Date of Earliest Event Reported) NEW MILLENNIUM MEDIA INTERNATIONAL, INC. (Exact Name of Registrant as Specified in its Charter) NEW MILLENNIUM MEDIA INTERNATIONAL INC. Suite 300 101 Philippe Pkwy. Safety Harbor, Florida 34695 (Address of principal executive offices) (727) 797-6664 (727) 797-7770 Fax Registrant's telephone number and telefax SCOVEL CORPORATION 128 April Rd. Port Moody, British Columbia Canada V3H-3M5 (Former name and former address) Colorado 0-29195 84-1463284 (State or other (Commission (I.R.S. Employer jurisdiction of File Number) Identification No.) incorporation) ITEM 1. CHANGES IN CONTROL OF REGISTRANT (a) Pursuant to an Agreement and Plan of Merger (the "Merger Agreement") dated as of March 9, 2000 between Scovel Corporation, a Delaware corporation ("Scovel"), and New Millennium Media International, Inc., a Colorado corporation ("New Millennium"), New Millenium acquired all of the issued and outstanding shares of Scovel from Gerald Ghini as owner of all the outstanding shares of common stock of Scovel in exchange for 500,000 shares of restricted common stock of New Millenium in a transaction in which New Millennium will be the surviving company. New Millennium will issue the 500,000 New Millennium restricted shares to Gerald Ghini. The Merger Agreement was adopted by the unanimous consent of the Board of Directors of Scovel and approved by the unanimous consent of the shareholders of Scovel on March 9, 2000. The Merger Agreement was adopted by the unanimous consent of the Board of Directors of New Millennium on March 9, 2000. The transaction is intended to qualify as a reorganization within the meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended ("IRC"). Prior to the merger, Scovel had 5,000,000 shares of common stock outstanding which shares will be exchanged for 500,000 shares of restricted common stock of New Millennium. By virtue of the merger, New Millennium will acquire 100% of the issued and outstanding common stock of Scovel. The officers of New Millennium will continue as officers of the successor issuer. See "Management" below. The officers, directors and by-laws of New Millennium will continue without change as the officers, directors and by- laws of the successor issuer. A copy of the Merger Agreement was filed as an exhibit to the original Form 8-K and is incorporated in its entirety therein. The foregoing description is modified by such reference. (b) The following table contains information regarding the shareholdings of New Millennium's current directors and executive officers and those persons or entities who beneficially own more than 5% of its common stock (giving effect to the exercise of the warrants held by each such person or entity): Name and Address Amount and Nature Percent of Common of Beneficial of Beneficial stock owned Owner(1) Ownership - ---------------- ----------------- ----------------- John Thatch 2,500,000 10% President/CEO and Director Gerald Parker (2) -0- 0% Chairman Andy Badolato (2) -0- 0% Director & Vice President of Finance Tony Gomes (2) -0- 0% Director & Vice President Of Corporate Marketing Investment Management 9,632,080 38% of America, Inc.(2) Troy Lowrie 2,250,000 9% (Resigned)(3) Less than 5% Officers and Directors 12,132,080 48% as a Group (4 persons) (1) Based upon 24,500,000 outstanding shares of common stock (subsequent to the effectiveness of the merger and the issuance of 500,000 shares to Gerald Ghini). (2) Parker, Badolato and Gomes are officers, directors and majority shareholders in Investment Management of America, Inc. (3) Mr. Troy Lowrie was the past president and director of PMC which was merged into New Millennium. The Directors named above will serve until the next annual meeting of the shareholders of the Company in the year 2001. Directors will be elected for one-year terms at each annual shareholder's meeting. Officers hold their positions at the appointment of the Board of Directors. ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS Pursuant to the Merger Agreement, New Millenium acquired all of the issued and outstanding shares of Scovel from Gerald Ghini as owner of all the outstanding shares of common stock of Scovel in exchange for 500,000 shares of restricted common stock of New Millenium in a transaction in which New Millennium will be the surviving company. New Millennium will issue the 500,000 New Millennium restricted shares to Gerald Ghini. In evaluating New Millennium as a candidate for the proposed merger, Scovel used criteria such as the value of the assets of New Millennium and its subsidiaries, the anticipated operations and acquisitions, material contracts, business name and reputation, quality of management, and current and anticipated operations. Scovel determined that the consideration for the merger was reasonable. No material relationship exists between the selling shareholders of Scovel or any of its affiliates, any director or officer, or any associate of any such director or officer of Scoval and New Millennium. The consideration exchanged pursuant to the Merger Agreement was negotiated between Scovel and New Millennium in an arm's-length transaction. History New Millennium Media International, Inc. is a Colorado corporation organized on April 21, 1998. New Millennium's principal place of business is located at Suite 300 101 Philippe Pkwy., Safety Harbor, Florida 34695. New Millennium is the successor to Progressive Mailer Corp. ("PMC"), a corporation organized in Florida on February 5, l997. In February, l998, PMC's sole officer and director resigned and sold all of her share ownership in PMC, which represented 95% of the issued and outstanding shares of PMC, to Troy Lowrie and Mr. Lowrie was elected the President and Director of PMC. In connection with the transaction, the principal offices of PMC were relocated to Denver, Colorado. Effective April 30, l998, PMC was merged into New Millennium in order to effect a change in domicile of PMC from Florida to Colorado and the separate existence of PMC terminated pursuant to the merger agreement. In connection with the merger, each share of PMC outstanding on April 30, l998 was exchanged for a like number of shares of New Millennium. On November 3, l997, PMC received clearance from the NASD to have its common stock listed on the OTC Electronic Bulletin Board pursuant to PMC's application submitted to the NASD pursuant to NASD Rule 6740 and Rule 15c2-11 under the Securities Exchange Act of l934. The current trading symbol on the OTC Electronic Bulletin Board for New Millennium's common stock is NMMI. In March 1997 and April 1998, PMC conducted offerings of its common stock pursuant to the exemption from registration afforded by Rule 504 of Regulation D promulgated under the Securities Act of l933, as amended. As a result of these offerings, there are presently 2,055,000 unrestricted shares of common stock of New Millennium issued and outstanding. Effective, April 14, l998 PMC entered into an Asset Purchase Agreement with Lufam Technologies, Inc, a California corporation, in exchange for the issuance of shares of PMC's common stock to Lufam. Pursuant to the terms of the Asset Purchase Agreement, PMC acquired the exclusive rights to the IllumiSign EyeCatcher display system, a special advertising display machine. New Millennium intends to market and sell these machines. Business New Millennium Media International The outdoor advertising business reported earnings of 2.330 billion in 1998, an increase of 9.1% over the previous year. The first quarter of 1999 revenues were up 7.5% over the same period in 1998, according to the Outdoor Advertising Association of America, Inc. This continued growth reflects the popularity and effectiveness of outdoor and indoor advertising from both existing and new advertisers. New Millennium Media International, Inc. intends to capitalize on the demand for display advertising in two ways. New Millennium will install LED outdoor displays in high traffic areas, and form joint ventures with strategic partners to place a large number of indoor "patented" Eye Catcher boards. New Millennium intends to provide the most highly visible sites throughout the world and superior service within the industry. The Out of Home advertising industry has continually grown year after year and shows no signs of waning. The new millennium will demand the highest digital quality and the most cost efficient LED advertising boards available. We believe New Millennium already has the product available and subject to available financing we are ready to introduce the product. New Millennium (OTC Electronic Bulletin Board trading symbol: "NMMI") has a unique opportunity to become an industry leader in the indoor and outdoor advertising industry. We intend to change the way the industry markets and generates ad revenues by setting a whole new standard of doing business. New Millennium has the exclusive U.S. rights to an indoor advertising board called the Illumisign EyeCatcher Display. This is a "patented" product, which ranges in size from 11"x17" to 48"x72". These signs can display up to 24 advertisements on a rotating basis. Each rotation runs two minutes. Illumisigns can generate revenues up to $5,000 a month per display. New Millennium has another product from a manufacturer of LED boards. New Millennium has teamed up with E-Vision, a U.S. based company who's affiliates manufactures one of the highest quality LED displays in the world. E-Vision will sell us the LED boards at manufacturer's cost and will be a limited partner in the revenues that the boards produce. This allows New Millennium to purchase the highest quality product at a greatly reduced cost. This business arrangement should also enable us to deploy approximately 2 1/2 times the number of boards that we would otherwise have. We also have teamed up with E Ventures Group, a large dotcom advertising and Media company. This enables us to sell advertisements on a national level that will benefit us in placing boards throughout the U.S. E-Vision has the capability to distribute any size board including boards for Sport Events. These LED boards can run any commercial format on any sized board. This gives New Millennium a strong competitive advantage over other display boards for which the advertisement must be reformatted. Formatting often takes weeks. E-Vision LED displays will run any format on any size board with consistent color quality and clarity. Color quality and clarity are very important to a national advertiser who wants its colors and logos the same on all boards. E-Vision will assist New Millennium with training and support from the first board and will provide New Millennium with ongoing assistance in all aspects of programming, technical and software support. As a manufacturing partner, E-Vision and its affiliates will supply New Millennium, free of charge software upgrades as they become available. New Millennium also has an agreement for the U.S. distribution rights from Multiadd, an English based company. Multiadd manufactures a patented indoor IllumiSign, which is called the "Eyecatcher" board. This board is steel incased, front lighted, and displays poster type ads. The "Eyecatcher" is capable of displaying up to 24 advertisements from size 11"x17" to 48"x72." Each advertisement has the ability to rotate in cycles of 3 seconds to 24 hours. This is a significant advantage over other indoor boards, as the competitive boards only display one to three poster ads at a time. Capital Requirements New Millennium, with minimal overhead and revenues needs to raise the following capital to fulfill its business plan. Working capitol $ 500,000 Purchase of LED Displays $ 3,000,000 Purchase of "Eyecatcher" Displays $ 500,000 TOTAL CAPITAL $ 4,000,000 We have teamed up with a select group of strategic partners that will enable New Millennium to achieve its goals. We have a commitment from Investment Management of America, Inc., a leading venture capital firm based in Clearwater, Florida. IMA provides funding and business development services and support for companies like New Millennium. Its principals have founded companies such as Inktomi, Milcom, Consortio, LiquidGolf.com, ByeByeNow.com, PublicAccess.com and several others. Management John "JT" Thatch Age 37 John "JT" Thatch serves as Director, Chief Executive Officer and President of New Millennium Media Inc. He brings to the company over 15 years of entrepreneurial experience. He has successfully founded, operated and managed his own businesses, and limited partnerships. He brings experience in the areas of management, retail sales and financing. J.T. has ties in the business community and brings leadership and integrity to New Millennium. His experience and enthusiasm will provide us with the ability to expand our growth within the outdoor/indoor advertising arena. Gerald Parker Age 55 Gerald Parker serves as Chairman of the Board. He has founded several companies, and was one of the five original founders of Inktomi Corporation (Nasdaq NMS trading symbol: "INKT"). Gerry also serves as the President of Investment Management of America (IMA). IMA is a leading venture capital firm that provides funding and business strategies to growing companies. He has been instrumental in raising over $300 million of venture capital for companies. These companies have a combined market valuation of over $7.5 billion. Mr. Parker's experience will bring knowledge and stability to enable us to achieve our goals set forward in this business plan. Andrew Badolato Age 39 Andrew Badolato serves as a Director and Vice President of Corporate Finance. He has successfully managed the mergers of several public companies as CEO and founder of Investment Management of America (IMA). Mr. Badolato is an NASD registered representative and a registered principal. He holds series 7, 24 and 63 license classifications, which currently are in inactive status. Anthony Gomes Age 37 Anthony Gomes serves as a Director and Vice President of Corporate Marketing. Mr. Gomes has over 12 years of corporate marketing experience with fortune 100 companies. He was the Director of Marketing at Tropicana and managed the $1.6 billion Dole juice, twister beverage and Tropicana Orange Juice accounts. His vision turned around the Twister Juice franchise where sales increased 40% with profits increasing 112%. Prior to Tropicana Mr. Gomes was the Brand Manager of Gatorade and was instrumental in signing Michael Jordan as their national spokesman. Tony will be very instrumental in our national marketing strategies. DESCRIPTION OF SECURITIES New Millennium has an authorized capitalization of 25,000,000 shares of common stock, $.001 par value per share of which 23,079,000 shares are issued and outstanding and 10,000,000 shares of preferred stock, $.001 par value per share, of which no shares have been designated or issued. CURRENT TRADING MARKET FOR NEW MILLENNIUM'S SECURITIES. New Millennium's common stock was traded on the OTC Electronic Bulletin Board operated by the NASD under the symbol NMMI. New Millennium did not file a registration statement with the Securities and Exchange Commission and has not been a reporting company under the Securities Exchange Act of 1934. The Nasdaq Stock Market has implemented a change in its rules requiring all companies trading securities on the OTC Electronic Bulletin Board to be registered as a reporting company. New Millennium was required to become a reporting company by the close of business on February 25, 2000. New Millennium has effected the merger with Scovel and has become a successor issuer thereto in order to comply with the reporting company requirements implemented by the OTC Electronic Bulletin Board. PENNY STOCK REGULATION. New Millennium's common stock may be deemed a penny stock. Penny stocks generally are equity securities with a price of less than $5.00 per share other than securities registered on certain national securities exchanges or quoted on the Nasdaq Stock Market, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. New Millennium's securities may be subject to "penny stock rules" that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with their spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the "penny stock rules" require the delivery, prior to the transaction, of a disclosure schedule prescribed by the Commission relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information on the limited market in penny stocks. Consequently, the "penny stock rules" may restrict the ability of broker-dealers to sell New Millennium's securities. The foregoing required penny stock restrictions will not apply to New Millennium's securities if such securities maintain a market price of $5.00 or greater. ITEM 3. BANKRUPTCY OR RECEIVERSHIP No court or governmental agency has assumed jurisdiction over any substantial part of the company's business or assets. ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT New Millennium retains its certifying accountants. ITEM 5. OTHER EVENTS SUCCESSOR ISSUER ELECTION. Upon effectiveness of the Merger, pursuant to Rule 12g-3(a) of the General Rules and Regulations of the Securities and Exchange Commission, New Millennium became the successor issuer to Scovel for reporting purposes under the Securities Exchange Act of 1934 and elects to report under the Act effective February 28, 2000. ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS The President and sole director of Scovel Management Inc., Gerald Ghini, resigned such offices as a result of the merger with New Millennium. The officers and directors of New Millennium will continue as the officers and directors of the successor issuer. ITEM 7. FINANCIAL STATEMENTS The audited financial statements for the years ending December 31, 1999 and 1998 and reviewed financial statements for the quarter ending March 31, 2000 are filed herewith. ITEM 8. CHANGE IN FISCAL YEAR New Millennium has a December 31 year end. Exchange Act of 1934. New Millennium was required to become a reporting company by the close of business on February 25, 2000. New Millennium has effected the merger with Scovel and has become a successor issuer thereto in order to comply with the reporting company requirements implemented by the OTC Electronic Bulletin Board administered by the NASD. REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Board of Directors and Shareholders New Millennium Media International, Inc. (formerly Progressive Mailer Corp.) Safety Harbor, Florida We have reviewed the condensed balance sheets of New Millennium Media International, Inc. (formerly Progressive Mailer Corp.) (a development stage company) as of December 31, 1999 and March 31, 2000 and the related statements of operations and cash flows for the quarters ended March 31, 1999 and March 31, 2000. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial statements consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opnion. Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with generally accepted accounting principals. We have previously audited, conducted in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1998 and 1999, and the related statements of operations, stockholders' deficit and cash flows for the years then ended (not presented herein), and in our report dated June 1, 2000, we expressed a qualified report because of going concern uncertainty on those consolidated financial statements. In our opinion the information set forth in the accompanying condensed balance sheet as of December 31, 1999, is fairly stated in all material respects in relation to the condensed balance sheet from which is has been derived. Richard J. Fuller, CPA, PA Clearwater, Florida June 22, 2000 NEW MILLENNIUM MEDIA INTERNATIONAL, INC. (FORMERLY PROGRESSIVE MAILER CORP.) (A DEVELOPMENT STAGE COMPANY) CONDENSED BALANCE SHEET
December 31, March 31, 1999 2000 (Unaudited) ASSETS Current Assets: Cash $ 2,063 $ 285,081 Inventories 548,862 567,612 ----------- ----------- Total Current Assets 550,925 852,693 ----------- ----------- Furniture and Equipment-Net 3,964 7,216 ----------- ----------- Other Assets Prepaid expenses-net 417 5,271 Goodwill, net of accumulated amortization of $22,587 and $28,234, respectively 655,007 649,860 Total Other Assets 655,424 655,131 ----------- ----------- $ 1,210,313 $ 1,515,040 ----------- ----------- LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Notes payable - related $ 1,596,012 $ 1,611,012 Accounts payable 85,235 38,837 Accrued expenses payable 129,289 145,289 ----------- ----------- Total Current Liabilities 1,810,536 1,795,138 ----------- ----------- Long-term Liabilities -- -- Stockholders' Deficit Common stock, par value $.001; shares authorized, 25,000,000 shares issued and outstanding, 24,099,881 and 23,079,462 respectively 24,100 23,080 Preferred stock, par value $.001; shares authorized, 10,000,000 no shares issued and outstanding 0 0 Additional paid in capital 448,991 452,511 Common stock subscribed (1,382,000 shares) -- 441,500 Deficit accumulated during the development stage (1,073,314) (1,197,189) ----------- ----------- Total Stockholders' Deficit (600,223) (280,098) ----------- ----------- $ 1,210,313 $ 1,515,040 =========== ===========
NEW MILLENNIUM MEDIA INTERNATIONAL, INC. (FORMERLY PROGRESSIVE MAILER CORP.) (A DEVELOPMENT STAGE COMPANY) CONDENSED STATEMENT OF OPERATIONS (Unaudited) For the For the From Inception quarter ended quarter ended through 3/31/99 3/31/00 3/31/00 ------- ------- ------- Income $ 6,911 $ -- $ 59,808 Costs and Expenses: General and administrative $ 109,106 $ 101,877 $ 1,086,504 Interest expense 23,190 16,000 139,921 Depreciation and amortization 330 5,998 30,572 ----------- ----------- ----------- Total costs and expenses 132,626 123,875 1,256,997 ----------- ----------- ----------- Loss from Operations (125,715) (123,875) (1,197,189) Net Loss $ (125,715) $ (123,875) $(1,197,189) ----------- ----------- ----------- Basic Loss Per Common Share $ (0.009) $ (0.005) $ (0.052) ----------- ----------- ----------- NEW MILLENNIUM MEDIA INTERNATIONAL, INC. (FORMERLY PROGRESSIVE MAILER CORP.) (A DEVELOPMENT STAGE COMPANY) CONDENSED STATEMENT OF CASH FLOWS (Unaudited)
For the For the From Inception Quarter Ended Quarter Ended through 3/31/99 3/31/00 3/31/00 Cash Flows from Operating Activities: Net loss $ (125,715) $ (123,875) $(1,197,189) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 330 5,998 30,772 Common stock issued for services 775 -- 24,838 Increase in inventories (481,916) (18,750) (567,612) Increase in prepaid expenses -- (5,000) (5,000) Increase (decrease) in accounts payable and accrued expenses 532,943 (30,398) 184,126 Total adjustments 52,132 (48,150) (332,876) ----------- ----------- ----------- Net Cash Used in Operating Activities (73,583) (172,025) (1,530,065) ----------- ----------- ----------- Cash Flows from Investing Activities Purchase of goodwill -- (500) (678,094) Purchase of fixed assets -- (3,457) (14,916) ----------- ----------- ----------- Net Cash Used in Investing Activities -- (3,957) (693,010) ----------- ----------- ----------- Cash Flows from Financing Activities Proceeds from notes payable - Related 70,000 15,000 1,611,012 Proceeds from common stock transactions -- 444,000 897,144 ----------- ----------- ----------- Net Cash provided by Financing Activities 70,000 459,000 2,508,156 ----------- ----------- ----------- Increase in cash and cash equivalents $ (3,583) $ 283,018 $ 285,081 Cash and cash equivalents at beginning of period $ 6,811 $ 2,063 $ -0- ----------- ----------- ----------- Cash and cash equivalents at end of period $ 3,228 $ 285,081 $ 285,081 ----------- ----------- ----------- Supplemental disclosure of cash flow information: Cash paid during the year for interest 0 0 0 Cash paid during the year for income taxes 0 0 0
NEW MILLENNIUM MEDIA INTERNATIONAL, INC. (FORMERLY PROGRESSIVE MAILER CORP.) (A DEVELOPMENT STAGE COMPANY) NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Unaudited) 1. Organization and Basis of Presentation - ------------------------------------------- New Millennium Media International, Inc. (formerly Progressive Mailer Corp.) (NMMI or the Company) is in the business of marketing advertising space in special advertising display machines. The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information in accordance with rules and regulations of the Securities and Exchange Commission, in particular, Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the Company's Annual Report (Form 10-KSB) for the years ended December 31, 1998 and 1999. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the quarter ended March 31, 2000 are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. 2. Development Stage Enterprise - --------------------------------- The Company is a development stage enterprise, as defined in Financial Accounting Standards Board Statement No. 7(SFAS No. 7). The Company is devoting substantially all of its efforts in securing and establishing a new business, and has engaged in limited activities in the advertising business, but no significant revenues have been generated to date. 3. Going Concern Uncertainty - ------------------------------ The Company has incurred recurring operating losses and negative cash flows and has negative working capital. The Company has financed itself primarily through the sale of its stock and related party borrowings. These conditions raise substantial doubt about the Company's ability to continue as a going concern. There can be no assurance that the Company will be success in implementing its plans, or if such plans are implemented, that the Company will be successful. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amount and classification of liabilities that might result from the outcome of this uncertainty. 4. Subsequent Events - ---------------------- On April 12, 2000, the Company entered into an agreement with Investment Management of America, Inc. (a major stockholder and financial consultant) to exchange 3,000,000 shares of Common Stock for 3,000,000 shares of Series A Convertible Preferred Stock of the 5,000,000 shares created under resolution of the Board of Directors of the 10,000,000 Preferred Stock. In addition, the Company plans to increase the number of Common Stock authorized to 75,000,000 at a special Meeting of Stockholders on July 17, 2000. Further, the Company is securing an agreement with a financial institution to provide an equity line of $25,000,000. Proforma financial information is presented for the current interim period and corresponding prior interim period for the Scovel Corporation merger on March 9, 2000. REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Board of Directors and Shareholders New Millennium Media International, Inc. (formerly Progressive Mailer Corp.) Safety Harbor, Florida We have reviewed the pro forma adjustments reflecting the event described in Note 1 and the application of those adjustments to the historical amounts in the accompanying statement of operations for the quarter ended March 31, 2000 of New Millennium Media International, Inc. (formerly Progressive Mailer Corp.) (a development stage company). The historical financial statements are derived from the March 31, 2000 historical financial statements of New Millennium Media International, Inc., which were reviewed by us, and the audited financial statements of December 31, 1999, which were audited by us. We have previously audited, conducted in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1998 and 1999 and the related statements of operations, stockholders' deficit and cash flows for the years then ended (not presented herein), and in our report dated June 1, 2000, we expressed a qualified report because of a going concern uncertainty on those financial statements. Our review of the March 31, 2000 historical financial statements was conducted in accordance with standards established by the American Institute of Certified Public Accountants. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's assumptions, the pro forma adjustments, and the application of those adjustments to historical information. Accordingly, we do not express such an opinion. The objective of this pro forma financial information is to show what the significant effect is on the historical information might have been had the event described in Note 1 had occurred at an earlier date. However, the pro forma financial statements are not necessarily indicative of the results of operations or related effects on financial position that would have been attained had the above mentioned event actually occurred earlier. Based on our review, nothing came to our attention that caused us to believe that management's assumptions do not provide a reasonable bases for presenting the significant effects directly attributable to the above mentioned event described in Note 1, that the related pro forma adjustments do not give appropriate effect to those assumptions, or that the pro forma column does not reflect the proper application of those adjustments to the historical financial statement amounts in the statement of operations for the quarter ended March 31, 2000. Richard J. Fuller, CPA, PA Clearwater, Florida June 22, 2000 NEW MILLENNIUM MEDIA INTERNATIONAL, INC. (FORMERLY PROGRESSIVE MAILER CORP.) (A DEVELOPMENT STAGE COMPANY) PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1999
Pro Forma From Inception New Millennium Scovel Pro Forma through Historical Corporation Adjustments ProForma March 31, 1999 Income $ 6,911 $ $ $ 6,911 $ 17,566 Costs and Expenses: General and administrative $ 109,106 $ $ 33 $ 109,139 $ 866,855 Interest expense 23,190 23,190 53,746 Depreciation and amortization 330 330 1,832 --------- --------- --------- --------- --------- Total costs and expenses 132,626 -- 33 132,659 922,433 --------- --------- --------- --------- --------- Loss from Operations (125,715) -- (33) (125,748) (904,867) Net Loss $(125,715) $ -- $ (33) $(125,748) $(904,867) --------- --------- --------- --------- --------- Basic and Diluted Loss Per Common Share $ (0.009) $ (0.009) $ (0.14) --------- --------- ---------
NEW MILLENNIUM MEDIA INTERNATIONAL, INC. (FORMERLY PROGRESSIVE MAILER CORP.) (A DEVELOPMENT STAGE COMPANY) PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 2000
Pro Forma From Inception New Millennium Scovel Pro Forma through Historical Corporation Adjustments Pro Forma March 31, 2000 Income $ $ $ $ $ 59,808 Costs and Expenses: General and administrative $ 101,877 $ $ 33 $ 101,910 $ 1,086,537 Interest expense 16,000 16,000 139,921 Depreciation and amortization 5,998 5,998 30,572 ----------- ----------- ----------- ----------- ----------- Total costs and expenses 123,875 -- 33 123,908 1,257,030 ----------- ----------- ----------- ----------- ----------- Loss from Operations (123,875) -- (33) (123,908) (1,197,222) Net Loss $ (123,875) $ -- $ (33) $ (123,908) $(1,197,222) ----------- ----------- ----------- ----------- ----------- Basic and Diluted Loss Per Common Share $ (0.005) $ (0.005) $ (0.052) ----------- ----------- -----------
NEW MILLENNIUM MEDIA INTERNATIONAL, INC. (FORMERLY PROGRESSIVE MAILER CORP.) (A DEVELOPMENT STAGE COMPANY) NOTE TO THE PRO FORMA CONDENSED STATEMENT OF OPERATIONS (Unaudited) For the quarter ended March 31, 2000 1. Basis of Presentation - -------------------------- On March 9, 2000, the Company acquired 100% of the issued and outstanding common stock of Scovel Corporation in exchange for 500,000 shares of the Company. As part of the merger, the Company is considered a successor issuer in order to comply with reporting requirements implemented by the NASDAQ stock market. This statement is based on the transaction having taken place on January 4, 2000, the date of Scovel Management, Inc.'s incorporation and utilizes the reviewed historical financial statements. The resulting pro forma statement reflects the effect on historical financial statements. NEW MILLENNIUM MEDIA INTERNATIONAL, INC. (FORMERLY PROGRESSIVE MAILER CORP.) (A DEVELOPMENT STAGE COMPANY) FINANCIAL STATEMENTS DECEMBER 31, 1998 and 1999 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Board of Directors and Shareholders New Millennium Media International, Inc. (formerly Progressive Mailer Corp.) Safety Harbor, Florida We have audited the balance sheets of New Millennium Media International, Inc. (formerly Progressive Mailer Corp.) (a development stage company) as of December 31, 1998 and 1999, and the related statements of operations, stockholders' deficit and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Progressive Mailer Corp. as of December 31, 1997, were audited by other auditors whose report dated July 16, 1998, expressed an unqualified opinion on those statements. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The Company is a development stage enterprise, as defined in Financial Accounting Standards Board No. 7. The Company is devoting all of its present efforts in securing and establishing a new business, and its planned principal operations have not commenced, and, accordingly, minimal revenue has been derived during the organizational period. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of New Millennium Media International, Inc. (formerly Progressive Mailer Corp.) at December 31, 1998 and 1999 and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred losses for the years ended December 31, 1998 and 1999. This condition raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 5. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Richard J. Fuller, CPA, PA Clearwater, Florida June 1, 2000 NEW MILLENNIUM MEDIA INTERNATIONAL, INC. (FORMERLY PROGRESSIVE MAILER CORP.) (A DEVELOPMENT STAGE COMPANY) BALANCE SHEET December 31, 1998 and December 31, 1999
1998 1999 ----------- ----------- ASSETS Current Assets: Cash $ 6,811 $ 2,063 Inventories 481,916 548,862 ----------- ----------- Total Current Assets 488,727 550,925 Furniture and Equipment Office furniture and equipment 7,210 4,249 Less accumulated depreciation (1,319) (285) ----------- ----------- Furniture and Equipment-Net 5,891 3,964 ----------- ----------- Other Assets Organizational costs, net of accumulated amortization of $383 and $583 617 417 Goodwill, net of accumulated amortization of $22,587 0 655,007 ----------- ----------- Total Other Assets 617 655,424 ----------- ----------- $ 495,235 $ 1,210,313 =========== =========== LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Notes payable - related $ 638,952 $ 1,596,012 Accounts payable 42,119 85,235 Accrued expenses payable 33,068 129,289 ----------- ----------- Total Current Liabilities 714,139 1,810,536 ----------- ----------- Long-term Liabilities 0 0 Stockholders' Deficit Common stock, par value $.001; shares authorized, 25,000,000 shares issued and outstanding, 5,310,000 and 24,099,881 respectively, 1998 and 1999 5,310 24,100 Preferred stock, par value $.001; shares authorized, 10,000,000 no shares issued and outstanding 0 0 Additional paid in capital 403,115 448,991 Deficit accumulated during the development stage (627,329) (1,073,314) ----------- ----------- Total Stockholders' Deficit (218,904) (600,223) ----------- ----------- $ 495,235 $ 1,210,313 =========== ===========
NEW MILLENNIUM MEDIA INTERNATIONAL, INC. (FORMERLY PROGRESSIVE MAILER CORP.) (A DEVELOPMENT STAGE COMPANY) STATEMENT OF OPERATIONS For the For the From Inception Year Ended Year Ended through 12/31/98 12/31/99 12/31/99 ----------- ----------- ----------- Income $ 10,632 $ 49,176 $ 59,808 Costs and Expenses: General and administrative $ 586,998 $ 376,707 $ 984,627 Interest expense 28,539 95,382 123,921 Depreciation and amortization 1,319 23,072 24,574 ----------- ----------- ----------- Total costs and expenses 616,856 495,161 1,133,122 ----------- ----------- ----------- Loss from Operations (606,224) (445,985) (1,073,314) Net Loss $ (606,224) $ (445,985) $(1,073,314) =========== =========== =========== Basic and Diluted Loss Per Common Share $ (0.15) $ (0.03) $ (0.08) =========== =========== =========== NEW MILLENNIUM MEDIA INTERNATIONAL, INC. (FORMERLY PROGRESSIVE MAILER CORP.) (A DEVELOPMENT STAGE COMPANY) STATEMENT OF STOCKHOLDERS' DEFICIT For the Period from January 1, 1998 through December 31, 1999
Deficit Accumulated Additional during the Total Common Stock Paid - in development stockholders' Shares Amount Capital period equity ------------ ------------ ------------ ------------ ------------ Balance January 1, 1998 2,015,000 $ 2,015 $ 19,907 $ (21,105) $ 817 Shares issued for cash Pursuant to a private placement at $.05 per share 1,725,000 1,725 84,525 86,250 Shares issued to a shareholder as compensation for providing a $60,000 unsecured loan 775,000 775 0 775 Shares issued for cash Pursuant to a private placement at $.05 per share 795,000 795 116,045 116,840 Shares issued to purchase all of the assets of Lufam Technologies, Inc. (Purchase made in 1998 and stock issued in 1999) 0 0 182,638 182,638 Net loss for the period ended December 31, 1998 (606,224) (606,224) ------------ ------------ ------------ ------------ ------------ Balance, December 31, 1998 5,310,000 5,310 403,115 (627,329) (218,904) ------------ ------------ ------------ ------------ ------------ Shares issued to purchase all of the assets of Lufam Technologies, Inc. (Purchase made in 1998 and stock issued in 1999) 1,710,000 1,710 0 1,710 Shares issued to purchase all of Unergi, Inc. 16,566,667 16,567 0 16,567 Shares issued for cash 2,223,214 513 45,876 46,389 Net loss for the period ended December 31, 1999 (445,985) (445,985) ------------ ------------ ------------ ------------ ------------ Balance, December 31, 1999 25,809,881 $ 24,100 $ 48,991 $ (1,073,314) $ (600,223) ============ ============ ============ ============ ============
NEW MILLENNIUM MEDIA INTERNATIONAL, INC. (FORMERLY PROGRESSIVE MAILER CORP.) (A DEVELOPMENT STAGE COMPANY) STATEMENT OF CASH FLOWS
For the For the From Inception Year Ended Year Ended through 12/31/98 12/31/99 12/31/99 -------- -------- -------- Cash Flows from Operating Activities: Net loss $ (606,224) $ (445,985) $(1,073,314) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,519 23,072 24,774 Common stock issued for services 775 5,891 24,838 Increase in inventories (481,916) (66,946) (548,862) Increase in accounts payable 42,119 43,116 85,235 Increase in accrued expenses 33,068 96,221 129,289 ----------- ----------- ----------- Total adjustments (404,435) 101,354 (284,726) ----------- ----------- ----------- Net Cash Used in Operating Activities (1,010,659) (344,631) (1,358,040) ----------- ----------- ----------- Cash Flows from Investing Activities Purchase of goodwill 0 (677,594) (677,594) Purchase of fixed assets (7,210) (4,249) (11,459) ----------- ----------- ----------- Net Cash Used in Operating Activities (7,210) (681,843) (689,053) ----------- ----------- ----------- Cash Flows from Financing Activities Proceeds from notes payable - Related 638,952 957,060 1,596,012 Proceeds from common stock issued 385,728 64,666 453,144 ----------- ----------- ----------- Net Cash provided by Financing Activities 1,024,680 1,021,726 2,049,156 ----------- ----------- ----------- Increase in cash and cash equivalents $ 6,811 $ (4,748) $ 2,063 Cash and cash equivalents at beginning of period $ 0 $ 6,811 $ 0 ----------- ----------- ----------- Cash and cash equivalents at end of period $ 6,811 $ 2,063 $ 2,063 =========== =========== =========== Supplemental disclosure of cash flow information: Cash paid during the year for interest 0 0 0 Cash paid during the year for income taxes 0 0 0
NEW MILLENNIUM MEDIA INTERNATIONAL, INC. (FORMERLY PROGRESSIVE MAILER CORP.) (A DEVELOPMENT STAGE COMPANY) NOTES TO THE FINANCIAL STATEMENTS December 31, 1998 and 1999 1. Organization and summary of significant accounting policies - ---------------------------------------------------------------- New Millennium Media International, Inc. (formerly Progressive Mailer Corp.) (NMMI or the Company) was incorporated under the laws of the State of Florida on February 5, 1997. On April 30, 1998, as part of a plan or reorganization, the Company became New Millennium Media International, Inc., a Colorado company. On April 14, 1998, all the assets of Lufam Technologies, Inc. were acquired in exchange for 1,710,000 shares of the Company's $.001 par value common stock. On August 31, 1999, pursuant to an Agreement and Plan of merger, the Company acquired all the issued and outstanding stock of Unergi, Inc. in exchange for 16,566,667 shares of the Company's $.001 par value common stock. The Company is in the business of marketing advertising space in special advertising display machines. Development Stage Enterprise - ---------------------------- The Company is a development stage enterprise, as defined in Financial Accounting Standards Board Statement No. 7(SFAS No. 7). The Company is devoting substantially all of its efforts in securing and establishing a new business, and has engaged in limited activities in the advertising business, but no significant revenues have been generated to date. Basis of presentation - --------------------- The financial statements have been prepared using the accrual method of accounting. Revenues are recognized when earned and expenses when incurred. Fixed assets are stated at cost. Depreciation and amortization using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. The financial statements have been prepared on a going concern basis that contemplates the realization of assets and liquidation of liabilities in the ordinary course of business. As shown in the accompanying financial statements, the Company has incurred significant losses and at December 31, 1998 and 1999, the Company has a stockholders' deficit of $627,329 and $1,073,314 respectively. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. Use of estimates - ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Going Concern Uncertainty - ------------------------- The Company has incurred recurring operating losses and negative cash flows and has negative working capital. The Company has financed itself primarily through the sale of its stock and related party borrowings. These conditions raise substantial doubt about the Company's ability to continue as a going concern. As noted in Note 5, the Company has initiated several actions to generate working capital for expected advertising growth. There can be no assurance that the Company will be success in implementing its plans, or if such plans are implemented, that the Company will be successful. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amount and classification of liabilities that might result from the outcome of this uncertainty. Comprehensive Income - -------------------- Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income," establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, SFAS No. 130 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. The Company does not have any assets requiring disclosure of comprehensive income. Segments of Business Reporting - ------------------------------ Statement of Financial Accounting Standards (SFAS) No. 131, establishes standards for the way that public companies report information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial statements issued to the public. It also establishes standards for disclosures regarding products and services, geographic areas and major customer. SFAS 131 defines operating segments as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company has evaluated this SFAS and does not believe it is applicable at this time. Intangible assets - ----------------- Organization costs are amortized using the straight-line method over their estimated useful lives of five years and are stated at cost less accumulated amortization. The Company reviews for the impairment of long-lived assets and certain identifiable intangibles annually. No such impairment losses have been identified by the Company for the years presented. Under the purchase method of accounting, tangible and identifiable intangible assets acquired and liabilities assumed are recorded at their estimated fair values. The excess of the purchase price, including estimated fees and expenses related to the merger, over the net assets acquired is classified as goodwill by the Company. The estimated fair values and useful lives of assets acquired and liabilities assumed are based on a preliminary valuation and are subject to final valuation adjustments which may cause some of the intangibles to be amortized over a shorter life than the goodwill amortization period of 15 years Inventories - ----------- Inventories consist primarily of advertising machines acquired substantially from one vendor. These machines are intended to generate income from revenue for placement of these machines at various locations and are carried at the lower of cost (first-in, first-out) or market. Once the machines are placed in service, depreciation is to be recognized. No depreciation has been recognized for the years ended 1998 and 1999 because no significant rental activity has yet occurred. Furniture and equipment - ----------------------- Furniture and equipment is stated at cost and depreciated using the straight-line method, over the estimated useful lives of five to seven years. Advertising Costs - ----------------- The Company expenses the cost of advertising as incurred. Income Taxes - ------------ The Company accounts for income taxes under Statement of Financial Accounting Standards No. 109 (SFAS No. 109). Under SFAS No. 109, deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities and are measured using currently enacted tax rates. SFAS No. 109 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Basic and Diluted Loss Per Common Share - --------------------------------------- Basic loss per common share is based on the weighted average number of shares outstanding during the period. The computation of diluted loss per common share is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued. Diluted loss per common share is the same as basic loss per common share. Cash Equivalents - ---------------- For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Fair Value of Financial Instruments - ----------------------------------- All financial instruments are held for purposes other than trading. The following methods and assumptions were used to estimate the fair value of each financial instrument for which it is practicable to estimate that value: For cash, cash equivalents and notes payable, the carrying amount is assumed to approximate fair value due to the short-term maturities of these instruments. Concentrations of Credit Risk - ----------------------------- Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality financial institutions. At times during the year, the balance at any one financial institution may exceed FDIC limits. Also, the Company relies principally on one vendor to supply inventory. Because the vendor is the major manufacturer of this inventory, and located in the United Kingdom, abrupt changes in economic conditions including scheduling and shipping disruptions could cause a delay or have an adverse affect on management's ability to meet rental commitments. 2. Notes Payable - Related - ---------------------------- The Company issued notes to related parties. These notes are due on demand. 1998 1999 ---- ---- Note due stockholder former officer at 10% interest $ 638,952 $ 641,152 secured by inventories Notes due stockholders, non-interest bearing -- 954,860 ---------- ---------- $ 638,952 $1,596,012 3. Acquisition - ---------------- On August 31, 1999 the Company acquired all the outstanding stock of Unergi, Inc. The acquisition was accounted for as a purchase. Consideration for the purchase was the issuance of 16,566,667 shares of $.001 par value stock of the Company. The purchase price exceeded the fair value of the net assets acquired by $677,594 which has been recorded as goodwill. The unaudited pro forma consolidated balance sheet at December 31, 1998 and the unaudited pro forma consolidated statements of operations for December 31, 1998 and 1999 have been presented as if the business combinations of New Millennium Media International, Inc. and Unergi, Inc. had been made at the beginning of the periods presented. The unaudited pro forma results have been prepared for comparative purposes only and do no purport to be indicative of the results of operations which would have actually resulted had the combinations been in effect on January 1, 1998, or of future results of operations. PRO FORMA COMBINED BALANCE SHEET December 31, 1998
New Millennium Pro Forma Historical Unergi, Inc. Adjustments Pro Forma ------------------------------------------------ ASSETS Current Assets: Cash $ 6,811 $ 1,691 $ 8,502 Inventories 481,916 481,916 Stock Subscription Receivable 800 (800) 0 Employee Advance 1,000 (1,000) 0 Total Current Assets 488,727 3,491 (1,800) 490,418 ------------------------------------------------ Furniture and Equipment Office furniture and equipment 7,210 7,210 Less accumulated depreciation (1,319) (1,319) Furniture and Equipment-Net 5,891 5,891 ------------------------------------------------ Other Assets Organizational costs, net of accumulated amortization of $383 617 617 ------------------------------------------------ Total Other Assets 617 617 ------------------------------------------------ $ 495,235 $ 3,491 $ 496,926 ================================================ LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Notes payable - related $ 638,952 $ 115,000 $ $ 753,952 Accounts payable 42,119 0 42,119 Accrued expenses payable 33,068 39,281 72,349 ------------------------------------------------ Total Current Liabilities 714,139 154,281 868,420 ------------------------------------------------ Long-term Liabilities 0 0 Stockholders' Deficit Common stock, par value $.001; shares authorized, 25,000,000 shares issued and outstanding, 5,310,000 5,310 1,000 (1,000) 5,310 Preferred stock, par value $.001; shares authorized, 10,000,000 no shares issued and outstanding 0 0 Additional paid in capital 403,115 403,115 Deficit accumulated during the development stage (627,329) (151,790) (800) (779,919) ------------------------------------------------ Total Stockholders' Deficit (218,904) (150,790) (1,800) (371,494) ------------------------------------------------ $ 495,235 $ 3,491 $ (1,800) $ 496,926 ================================================
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1998
Pro Forma From Inception New Millennium Pro Forma through Historical Unergi, Inc. Adjustments Pro Forma 12/31/98 ------------------------------------------------------------- Income $ 10,632 $ 23 $ $ 10,655 $ 10,655 Costs and Expenses: General and administrative $ 586,998 $ 149,796 $ (800) $ 735,994 $ 757,716 Interest expense 28,539 2,017 30,556 30,556 Depreciation and amortization 1,319 0 1,319 1,502 ------------------------------------------------------------- Total costs and expenses 616,856 151,813 (800) 767,869 789,774 ------------------------------------------------------------- Loss from Operations (606,224) (151,790) (800) (758,814) (779,119) Net Loss $(606,224) $(151,790) $ (800) $(758,814) $(779,119) ============================================================= Basic and Diluted Loss Per Common Share $ (0.15) $ (0.18) (0.19) =============================================================
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999
Pro Forma From Inception New Millennium Pro Forma through Historical Unergi, Inc. Adjustments Pro Forma 12/31/99 ---------------------------------------------------------------------- Income $ 49,176 $ 2 $ $ 49,178 59,833 Costs and Expenses: General and administrative $ 376,707 $ 140,596 $ $ 517,303 1,275,019 Interest expense 95,382 0 95,382 125,938 Depreciation and amortization 23,072 0 23,072 24,574 ---------------------------------------------------------------------- Total costs and expenses 495,161 140,596 635,757 1,425,531 ---------------------------------------------------------------------- Loss from Operations (445,985) (140,594) (586,579) (1,365,698) Net Loss $ (445,985) $ (140,594) $ $ (586,579) (1,365,698) ====================================================================== Basic and Diluted Loss Per Common Share $ (0.03) $ (0.05) $ (0.11) ======================================================================
4. Income Taxes - ----------------- The Company has available net operating loss carryforwards of $870,000 which expire through 2014. After consideration of all the evidence, both positive and negative, management has determined that a full valuation allowance is necessary to reduce the deferred tax assets to the amount that will more likely than not be realized. Accordingly, components of the Company's net deferred income taxes are as follows: 1998 1999 ---- ---- Deferred tax assets: Net operating loss carryforwards $ 570,000 $ 870,000 Valuation allowance for deferred tax asset (570,000) (870,000) --------- --------- $ -- $ -- 5. Subsequent Events - ---------------------- On March 9, 2000, the Company acquired 100% of the issued and outstanding common stock of Scovel Corporation in exchange for 500,000 shares of the Company. As part of the merger, the Company is considered a successor issuer in order to comply with reporting requirements implemented by the NASDAQ stock market. Further, the Company is securing an agreement with a financial institution to provide an equity line of $25,000,000. Management's intention is, in part, to provide the necessary capital needed for the expected growth in the advertising business. Also, subsequent to year-end, the Company entered into a two year operating lease, effective April 1, 2000, for its corporate offices with rent expense of $16,094 and $16,899 annually. The lease has a renewal option and requires the Company to pay certain common area costs. On April 12, 2000, the Company entered into an agreement with Investment Management of America, Inc. (a major stockholder and financial consultant) to exchange 3,000,000 shares of Common Stock for 3,000,000 shares of Series A Convertible Preferred Stock. In connection with this agreement, the Company passed a resolution creating a Series A Convertible Preferred Stock as to 5,000,000 shares of its Preferred Stock. In addition, the Company entered into a three year employment agreement with its President, as amended June 1, 2000, providing for compensation of $140,000 in the first year and $120,000 in the subsequent two years. The President is to receive 10 percent of all issued and outstanding Company common stock plus stock options which shall be determined by the Board of Directors. Index to Exhibits 2.1 Agreement and Plan of Merger dated as of March 9, 2000 between Scovel Corporation, a Delaware corporation ("Scovel"), and New Millennium Media International, Inc., a Colorado corporation ("New Millennium")* 3.1 Articles of Incorporation of New Millennium Media International, Inc. 3.2 By-Laws of New Millennium Media International, Inc. 17.1 Resignation Letter of Gerald Ghini 27.1. Financial Data Schedule * - Filed with 8-K filing on March 9, 2000 (SEC File No. 0-29195) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K12G3A to be signed on its behalf by the undersigned hereunto duly authorized. NEW MILLENNIUM MEDIA INTERNATIONAL INC. BY: /s/ John Thatch ---------------------------- John Thatch President and Chief Executive Officer Dated: July 20, 2000 EX-3.1 2 0002.txt ARTICLES OF INCORPORATION ARTICLES OF INCORPORATION OF NEW MILLENNIUM MEDIA INTERNATIONAL. INC. KNOW ALL MEN BY THESE PRESENTS: That the undersigned incorporator, being a natural person of the age of eighteen (18) years or more, and desiring to form a corporation under the laws of the State of Colorado, does hereby sign, verily and deliver in duplicate to the Secretary of State of the State of Colorado these ARTICLES OF INCORPORATION. 19981073965 ARTCLE I $ 50.00 SECRETARY OF STATE NAME 04-21-1998 11:48:07 The name of the corporation shall be New Millennium International, Inc. ARTICLE II CAPITAL The aggregate number of shares which the corporation shall have authority to issue is thirty-five million (35,000,000) shares of which a portion shall be common stock and a portion shall be preferred stock, all as described below. A. COMMON STOCK. The aggregate number of common shares which the corporation shall have the authority to issue is twenty-five million (25,000,000), each with $.001 par value, which shares shall be designated "Common Stock." Subject to all the rights of the Preferred Stock as expressly provided herein, by law or by the Board of Directors pursuant to this Article, the Common Stock of the corporation shall possess all such rights and privileges as are afforded to capital stock by applicable law in the absense of any express grant of rights or privileges in these Articles of Incorporation, including, but not limited to, the following rights and privileges: (i) dividends may be declared and paid or set apart for payment on the Common Stock out of any assets or funds of the corporation legally available for the payment of dividends; (ii) the holders of Common Stock shall have unlimited voting rights, including the right to vote for the election of directors and on all other matters requiring stockholder action. Bach holder of Common Stock shall have one vote for each share of Common Stock standing in his name on the books of the corporation and entitled to vote, except that in the election of directors each holder of Common Stock shall have as many votes for each share of Common Stock held by him as there are directors to be elected and for whose election the holder of Common Stock has a right to vote. Cumulative voting shall not be permitted in the election Of directors or otherwise. (iii) on the voluntary or involuntary liquidation, dissolution or winding up of the corporation, and after paying or aduquately providing for the payment of all of its obligations and amounts payable in liquidation, dissolution or winding up, and subject to the rights of the holders of Preferred Stock, if any, the net assets of the corporation shall be distributed pro rata to the holders of the Common Stock. B. PREFERRED STOCK. The aggregate number of preferred shares which this corporation shall have the authority to issue is ten million (10,000,000) shares, each with $.001 par value, which shares shall be designated "Preferred Stock." Shares of Preferred Stock may be issued from time to time in one or more series as determined by the Board of Directors. The Board of Directors is hereby authorized, by resolution or resolutions, to provide from time to time, out of the unissued shares of Preferred Stock not then allocated to any series of Preferred Stock, for a series of the Preferred Stock. Each such series shall have distinctive serial designations. Before any shares of any such series of Preferred Stock are issued, the Board of Directors shall fix and determine, and is hereby expressly empowered to fix and determine, by resolution or resolutions, the voting powers, full or limited, or no voting powers, and the designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations and restrictions thereof as provided by Colorado law. Before issuing any shares of a class or series, the corporation shall deliver to the secretary of state for filing articles of amendment to these articles of incorporation that set forth information required by Colorado law, including but not limited to, the designations, preferences, limitations, and relative rights of the class or series of shares. C. VOTING. Unless otherwise ordered by a court of competent jurisdiction, at all meetings of shareholders one-third of the shares of a voting group entitled to vote at such meeting, represented in person or by proxy, shall constitute a quorum of that voting group. ARTICLE II PREEMPTIVE RIGHTS A shareholder of the corporation shall not be entitled to a preemptive right to purchase, subscribe for, or otherwise acquire any unissued shares of stock of the corporation, or any options or warrants to purchase, subscribe for or otherwise acquire any such unissued shares, or any -2- shares, bonds, notes, debentures, or other securities convertible into or carrying options or warrants to purchase, subscribe for or otherwise acquire any such unissued shares. ARTICLE IV CUMULATIVE VOTING The shareholders shall not be entitled to use cumulative voting in the election of directors. ARTICLE V REGISTERED OFFICE AND AGENT The initial registered office of the corporation shall be at 1601 West Evans, Denver, Colorado 80223, and the name of the initial registered agent at such address is Troy H. Lowrie. Either the registered office or the registered agent may be changed in the manner provided by law. ARTICLE VI PRINCIPAL OFFICE The address of the initial principal office of the corporation in this state is 1601 West Evans, Denver, Colorado 80223. ARTICLE VII INITIAL BOARD OF DIRECTORS The initial board of directors of the corporation shall consist of one (1) director, and the name and address of the person who shall serve as a director until the first annual meeting of shareholders or until his successor is elected and qualified is as follows: Name Address ---- ------- Troy H. Lowrie 1601 West Evans Denver, Colorado 80223 -3- The number of directors shall be fixed in accordance with the bylaws, or if the bylaws fail to fix such number, then by resolution adopted from time to time by the board of directors, provided that the number of directors shall not be less than one (1). ARTICLE VIII INDEMNIFICATION I. As used in this Article VHI, any word or words that are defined in Sections 7-109- 101 et seq. of the Colorado Business Corporation Act, as amended from time to time (the "Indemnification Sections"), shall have the same meaning as provided in the Indemnification Sections. 2. The Corporation shall indemnify and advance expenses to a director or officer in connection with a proceeding to the fullest extent permitted or required by and in accordance with the Indemnification Sections. 3. The Corporation may, as determined by the Board of Directors of the Corporation in a specific instance or by resolution of general application, indemnify and advance expenses to an employee, fiduciary or agent in connection with a proceeding to the extent permitted or required by and in accordance with the Indemnification Sections. 4. This Article VIH shall not be deemed exclusive of any other rights to which those indemnified may be entitled under these Articles of Incorporation, any Bylaw, agreement, vote of shareholders or disinterested directors or otherwise. The rights provided under this Article shall continue as to a person who has ceased to be in the position which entitled him to such indemnification and shall inure to the benefit of the heirs, estate or personal representative of such a person. This Article shall not be deemed to preclude the Corporation from indemnifying other persons from similar or other expenses and liabilities as the Board of Directors of the Corporation may determine in a specific instance or by resolution of general application. ARTICLE IX DIRECTORS' CONFLICTING INTERESTS TRANSACTIONS --------------------------------------------- 1. CONFLICTING INTEREST TRANSACTION. As used in this section, "conflicting interest transaction" means any of the following: (a) A loan or other assistance by the corporation to a director of the corporation or to an entity in which a director of the corporation is a director or officer or has a financial interest; -4- (b) A guaranty by the corporation of an obligation of a director of the corporation or of an obligation of an entity in which a director of the corporation is a director or officer or has a financial interest; or (c) A contract or transaction between the corporation and a director of the corporation or between the corporation and an entity in which a director of the corporation is a director or officer or has a financial interest. "Conflicting interest transaction" shall not include any transactions which are deemed not to be conflicting interest transactions under the Colorado Business Corporation Act, as amended. 2. EFFECT OF CONFLICTING INTEREST TRANSACTION. No conflicting interest transaction shall be void or void able or be enjoined, set aside, or give rise to an award of damages or other sanctions in a proceeding by a shareholder or by or in the right of the corporation, solely because the conflicting interest transaction involves a director of the corporation or an entity in which a director of the corporation is a director or officer or has a financial interest or solely because the director is present at or participates in the meeting of the corporation's board of directors or of the committee of the board of directors which authorizes, approves, or ratifies the conflicting interest transaction or solely because the director's vote is counted for such purpose if: (a) The material facts as to the director's relationship or interest and as to the conflicting interest transaction are disclosed or are known to the board of directors of the committee, and the board of directors or committee in good faith authorizes, approves, or ratifies the conflicting interest transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors are less than a quorum; or (b) The material facts as to the director's relationship or interest and as to the conflicting interest transaction are disclosed or are known to the shareholders entitled to vote thereon, and the conflicting interest transaction is specifically authorized, approved, or ratified in good faith by a vote of the shareholders; or (c) The conflicting interest transaction is fair as to the corporation. 3. COMMON OR INTERESTED DIRECTORS. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorizes, approves, or ratifies the conflicting interest transaction. 4. NOTICE TO SHAREHOLDERS. The board of directors of the corporation or a committee thereof shall not authorize a loan, by the corporation to a director of the corporation or to an entity in which a director of the corporation is a director or officer or has a financial interest, or a guaranty, by the corporation of an obligation of a director of the corporation or of an obligation of an entity in which a director of the corporation is a director or officer or has a financial interest, as provided in paragraph (a) of section (2) of this Article until at least ten (10) days after written -5- notice of the proposed authorization of the loan or guaranty has been given to the shareholders who would be entitled to vote thereon if the issue of the loan or guaranty were submitted to a vote of the shareholders. ARTICLE X DISTRIBUTIONS TO SHAREHOLDERS The corporation may pay distributions on its shares without considering the amount that would be needed if the corporation were to be dissolved at the time of the distribution to satisfy the preferential rights upon dissolution to shareholders whose preferential rights are superior to those receiving the distributions. ARTICLE XI DIRECTOR LIABILITY To the fullest extent permitted by the Colorado Business Corporation Act as the same exists or may hereafter be amended, a director of the corporation shall not be liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director. ARTICLE XII INCORPORATOR The name and address of the incorporator is as follows: Kathy L. Waterman 1775 Sherman Street, Suite 1001 Denver, Colorado 80203 IN WITNESS WHEREOF, the above named incorporator signed these ARTICLES OF INCORPORATION on 21st day of April, 1998. /s/ Kathy L. Waterman ------------------------------- Kathy L. Waterman -6- CONSENT OF REGISTERED AGENT I hereby consent to my appointment as initial Registered Agent of the Corporation in the foregoing Articles of Incorporation /s/ Troy H Lowrie ------------------------------- Troy H Lowrie, Registered Agent -7- EX-3.2 3 0003.txt BYLAWS OF NEW MILLENNIUM MEDIA INTERNATIONAL, INC. BYLAWS OF NEW MILLENNIUM MEDIA INTERNATIONAL, INC. INDEX TO BYLAWS OF NEW MILLENNIUM MEDIA INTERNATIONAL, INC. ARTICLE I - OFFICES ...................................................... 1 Section 1.1 PRINCIPAL OFFICE ...................................... 1 Section 1.2 REGISTERED OFFICE ..................................... 1 ARTICLE II - SHAREHOLDERS ................................................ 1 Section 2.1 ANNUAL MEETING ........................................ 1 Section 2.2 SPECIAL MEETING ....................................... 1 Section 2.3 COURT ORDERED MEETINGS ................................ 1 Section 2.4 PLACE OF MEETINGS ..................................... 2 Section 2.5 NOTICE OF MEETINGS .................................... 2 Section 2.6 MEETING OF ALL SHAREHOLDERS ........................... 3 Section 2.7 CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE ........................................ 3 Section 2.8 VOTING LISTS .......................................... 3 Section 2.9 QUORUM ................................................ 4 Section 2.10 MANNER OF ACTING ...................................... 4 Section 2.11 PROXIES ............................................... 5 Section 2.12 VOTING OF SHARES ...................................... 5 Section 2.13 VOTING OF SHARES BY CERTAIN SHAREHOLDERS .............. 6 Section 2.14 ACTION OF SHAREHOLDERS WITHOUT A MEETING .............. 7 Section 2.15 VOTING BY BALLOT ...................................... 8 Section 2.16 NO CUMULATIVE VOTING .................................. 8 Section 2.17 WAIVER OF NOTICE ...................................... 8 Section 2.18 PARTICIPATION BY ELECTRONIC MEANS ..................... 8 ARTICLE III - BOARD OF DIRECTORS Section 3.1 GENERAL POWERS ........................................ 8 Section 3.2 PERFORMANCE OF DUTIES ................................. 8 Section 3.3 NUMBER, TENURE AND QUALIFICATIONS ..................... 9 Section 3.4 REGULAR MEETINGS ...................................... 9 Section 3.5 SPECIAL MEETINGS ...................................... 9 Section 3.6 NOTICE ................................................ 9 Section 3.7 QUORUM ................................................ 10 Section 3.8 MANNER OF ACTING ...................................... 10 Section 3.9 INFORMAL ACTION BY DIRECTORS OR COMMITTEE MEMBERS ............................................ 10 Section 3.10 PARTICIPATION BY ELECTRONIC MEANS ..................... 10 Section 3.11 VACANCIES ............................................. 11 Section 3.12 RESIGNATION ........................................... 11 Section 3.13 REMOVAL ............................................... 11 Section 3.14 COMMITTEES ........................................... 11 Section 3.15 COMPENSATION ......................................... 11 Section 3.16 PRESUMPTION OF ASSENT ................................. 12 ARTICLE IV - OFFICERS ..................................................... 12 Section 4.1 NUMBER ................................................ 12 Section 4.2 ELECTION AND TERM OF OFFICE .......................... 12 Section 4.3 REMOVAL ............................................... 12 Section 4.4 VACANCIES ............................................. 13 Section 4.5 PRESIDENT ............................................ 13 Section 4.6 VICE PRESIDENT ........................................ 13 Section 4.7 SECRETARY ............................................. 13 Section 4.8 TREASURER ............................................. 14 Section 4.9 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS ......................................... 14 Section 4.10 BONDS ................................................. 14 Section 4.11 SALARIES ............................................. 14 ARTICLE V - CONTRACTS, LOANS, CHECKS AND DEPOSITS ......................... 15 Section 5.1 CONTRACTS ............................................ 15 Section 5.2 LOANS ................................................. 15 Section 5.3 CHECKS, DRAFTS, ETC.................................... 15 Section 5.4 DEPOSITS ............................................. 15 ARTICLE VI - SHARES, CERTIFICATES FOR SHARES AND TRANSFER OF SHARES ....................................................... 15 Section 6.1 REGULATION ............................................ 15 Section 6.2 SHARES WITHOUT CERTIFICATES .......................... 15 Section 6.3 CERTIFICATES FOR SHARES ............................... 16 Section 6.4 CANCELLATION OF CERTIFICATES ......................... 16 Section 6.5 CONSIDERATION FOR SHARES .............................. 16 Section 6.6 LOST, STOLEN OR DESTROYED CERTIFICATES ................ 16 Section 6.7 TRANSFER OF SHARES .................................... 17 ARTICLE VII - FISCAL YEAR ................................................. 17 ARTICLE VIII - DISTRIBUTIONS .............................................. 17 ARTICLE IX - CORPORATE SEAL ............................................... 18 ARTICLE X - AMENDMENTS .................................................... 18 ARTICLE XI - EXECUTIVE COMMITTEE .......................................... 18 Section 11.1 APPOINTMENT .......................................... 18 Section 11.2 AUTHORITY ............................................. 18 Section 11.3 TENURE AND QUALIFICATIONS ............................. 18 Section 11.4 MEETINGS .............................................. 19 Section 11.5 QUORUM ................................................ 19 Section 11.6 INFORMAL ACTION BY EXECUTIVE COMMITTEE ................ 19 Section 11.7 VACANCIES ............................................. 19 Section 11,8 RESIGNATIONS AND REMOVAL .............................. 19 Section 11.9 PROCEDURE ............................................ 19 ARTICLE XII - EMERGENCY BYLAWS ............................................. 20 BYLAWS OF NEW MILLENNIUM MEDIA INTERNATIONAL. INC. ARTICLE I OFFICES SECTION 1.1 PRINCIPAL OFFICE. The principal office of the corporation in die State of Colorado shall be located in the City and County of Denver. The corporation may have such other offices, either within or outside of the State of Colorado as the Board of Directors may designate, or as the business of the corporation may require from time to time. SECTION 1.2 REGISTERED OFFICE. The registered office of the corporation, required by die Colorado Business Corporation Act to be maintained in the State of Colorado, may be, but need not be, identical with the principal office in the State of Colorado, and the address of the registered office may be changed from time to time by the Board of Directors. ARTICLE II SHAREHOLDERS SECTION 2.1 ANNUAL MEETING. The annual meeting of the shareholders shall be held at such time on such day as shall be fixed by the Board of Directors, commencing with the year 1999, for the purpose of electing directors and for the transaction of such other business as may come before the meeting, If the day fixed for the annual meeting shall be a legal holiday in the State of Colorado, such meeting shall be held on the next succeeding business day. If the election of directors shall not be held on the day designated herein for any annual meeting of the shareholders, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as may be convenient. SECTION 2.2 SPECIAL MEETING. Special meetings of the shareholders, for any purpose or purposes, unless: otherwise prescribed by statute, may be called by the President or by the Board of Directors, and shall be called by the President upon the receipt of one or more written demands for a special meeting, slating the purpose or purposes for which it is to be held, signed and dated by the holders of shares representing at least ten percent of all the votes entitled to be cast on any issue proposed to be considered at the meeting. SECTION 2.3 COURT ORDERED MEETINGS. A shareholder may apply to the district court in the county in Colorado where the corporation's principal office is located or, if the corporation has no principal office in Colorado, to the district court of the county in which the corporation's registered office is located to seek an order that a shareholder meeting be held (i) if an annual meeting was not held within six months after the close of the corporation's most recently ended fiscal year or fifteen months after its last annual meeting, whichever is earlier, or (ii) if a shareholder participated in a proper call of or demand for a special meeting and notice of the special meeting was not given within thirty days after the date of the call or the date of the last of the demands necessary to require the calling of the meeting was received by the corporation pursuant to the Colorado Business Corporation Act, or the special meeting was not held in accordance with the notice. SECTION 2.4 PLACE OF MEETING. The Board of Directors may designate any place, either within or outside of the State of Colorado, as the place of meeting for any annual meeting or for any special meeting called by the Board of Directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal office of the corporation in the State of Colorado. SECTION 2.5 NOTICE OF MEETING. Written notice static the place, day and hour of the meeting of shareholders shall be delivered not less than ten nor more than sixty days before the date of the meeting, except that (i) if the number of authorized shares is to be increased, at least thirty days' notice shall be given, or (ii) any other longer notice period is required by the Colorado Business Corporation Act. Notice of a special meeting shall include a description of the purpose or purposes of the meeting. Notice of an annual meeting need not include a description of the purpose or purposes of the meeting except the purpose or purposes shall be stated with respect to (i) an amendment to the Articles of Incorporation of the corporation, (ii) a merger or share exchange in which the corporation is a party and, with respect to a share exchange, in which the corporation's shares will be acquired, (iii) a sale, lease, exchange or other disposition, other than in the usual and regular course of business, of all or substantially all of the property of the corporation or of another entity which this corporation controls, in each case with or without the goodwill, (iv) a dissolution of the corporation, or (v) any other purpose for which a statement of purpose is required by the Colorado Business Corporation Act. Notice shall be given personally or by mail, private carrier, telegraph, teletype, electronically transmitted facsimile or other form of wire or wireless communication, by or at the direction of the President, or the Secretary, or the officer or other persons calling the meeting, to each shareholder entitled to voce at such meeting. If mailed and in a comprehensible form, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at his or her address as it appears on the stock transfer books of the corporation, with postage thereon prepaid. If notice is given other than by mail, and provided such notice is in a comprehensible form, the notice is given and effective on the date received by the shareholder. If three successive letters mailed to tile last-known address of any shareholder c record are returned as undeliverable, no further notices to such shareholder shall be necessary until another address for such shareholder is made known to the corporation. -2- When a meeting is adjourned to another date, time or place, notice need not be given of the new date, time or place if the new date, time or place of such meeting is announced before adjournment at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which may have been transacted at the original meeting, If the adjournment is for more than 120 days, or if a new record date is fixed for the adjourned meeting, a new notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting as of the new record date. SECTION 2.6 MEETING OF ALL SHAREHOLDERS. If all of the shareholders shall meet at any time and place, either within or outside of the State of Colorado, and consent in writing to the holding of a meeting at such time and place, such meeting shall be valid without call or notice, and at such meeting any shareholder action may be taken, SECTION 2.7 CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DAIE. For the purpose of determining shareholders entitled to (i) notice of or to vote at any meeting of shareholders or any adjournment thereof, (ii) to receive distributions or share dividends, (iii) demand a special meeting, or (iv) in order to make a determination of shareholders for any other proper purpose, the Board of Directors of the corporation may provide that the share transfer books shall be closed for a stated period but not to exceed, in any case, seventy days, If the share transfer books shall be closed for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, such books shall be closed for at least ten days immediately preceding such meeting. In lieu of closing the share transfer books, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than seventy days and, in case of a meeting of shareholders, not less than ten days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. If the share transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a distribution, the date on which notice of the meeting is mailed or the date on which die resolution of the Board of Directors declaring such distribution is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof, unless the meeting is adjourned to a date more than ono hundred twenty days after the date fixed for the original meeting, in which case the Board of Directors shall make a new determination as provided in this section. SECTION 2.8 VOTING LISTS. The officer or agent having charge of the stock transfer books for shares of the corporation shall make, at the earlier of ten days before such meeting of shareholders or two business days after notice of the meeting, a complete list of the shareholders entitled to vote at each meeting of shareholders or any adjournment thereof. The list shall be arranged by voting groups and within each voting group by class or series of shares, shall be arranged in alphabetical order, within each class or series, and shall show the address of and -3- the number of shares of each class or series held by each shareholder. For the period beginning the earlier of ten days prior to such meeting or two business days after notice of the meeting is given and continuing through the meeting and any adjournment thereof, this list shall be kept on file at the principal office of title corporation, or at a place (which shall be identified in the notice) in the city where the meeting will be held, Such list shall be available for inspection on written demand by any shareholder (including for the purpose of this Section any holder of voting trust certificates) or his or her agent or attorney during regular business hours and during the period available for inspection. The original stock transfer books shall be prima facie evidence as to the shareholders entitled to examine such list or to vote at any meeting of shareholders. Any shareholder, his or her agent or attorney, may copy the list during regular business hours and during the period it is available for inspection, provided (i) the shareholder has been a shareholder for at least three months immediately preceding the demand or is a shareholder of at least five percent of all of the outstanding shares of any class of shares as of the date of the demand, (ii) the demand is made in good faith and for a purpose reasonably related to the demanding shareholder's interest as a shareholder, (iii) the shareholder describes with reasonable particularity the purpose and the list the shareholder desires to inspect, (iv) the list is directly connected with the described purpose; and (v) the shareholder pays a reasonable charge covering the cost of labor and material for such copies. SECTION 2.9 QUORUM. One-third of the votes entitled to be cast on the matter by a voting group, represented in person or by proxy, constitutes a quorum of that voting group for the action on the matter. If no specific voting group is designated in the Articles of Incorporation or under the Colorado Business Corporation Act for a particular matter, all outstanding shares of the corporation entitled to vote, represented m person or by proxy, shall constitute a voting group. In the absence of a quorum at any such meeting, a majority of the shares so represented may adjourn the meeting from time to time for a period not to exceed one hundred twenty days without further notice. However, if the adjournment is for more than one hundred twenty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. The shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal during such meeting of that number of shareholders whose absence would cause there to be less than a quorum. SECTION 2.10 MANNER OF ACTING. If a quorum is present, an action is approved if the votes cast within the voting group favoring the action exceeds the votes cast against the action, and the action so approved shall be the act of the shareholders, unless the vote -4- of a greater proportion or number or voting by groups or classes is otherwise required by the Colorado Business Corporation Act or by the Articles of Incorporation or these Bylaws. SECTION 2.11 PROXIES. At all meetings of shareholders, a shareholder may vote by proxy by signing an appointment form or similar writing, either personally or by his or her duly authorized attorney-in-fact. A shareholder may also appoint a proxy by transmitting or authorizing the transmission of a telegram, teletype, or other electronic transmission providing a written statement of the appointment to the proxy, a proxy solicitor, proxy support service organization, or other person duly authorized by the proxy to receive appointments as agent for the proxy, or to the corporation. The transmitted appointment shall set forth or be transmitted with written evidence from which it can be determined that the shareholder transmitted or authorized the transmission of the appointment. The proxy appointment form or similar writing shall be filed with the Secretary of die corporation before or at the time of the meeting. The appointment of a proxy is effective when received by the corporation and is valid for eleven months unless a different period is expressly provided in the appointment form or similar writing. Any complete copy, including an electronically transmitted facsimile, of an Appointment of a proxy may be substituted for or used in lieu of the original appointment for any Purpose for which the original appointment could be used. Revocation of a proxy does not affect the right of the corporation to accept the proxy's authority unless (i) the corporation had notice that the appointment was coupled with an interest and notice that such interest is extinguished is received by the Secretary or other officer or agent authorized to tabulate votes before the proxy exercises his or her authority under the appointment, or (ii) other notice of the revocation of the appointment is received by the Secretary or other officer or agent authorized to tabulate votes before the proxy exercises his or her authority under the appointment. Other notice of revocation may, in the discretion of the corporation, be deemed to include the appearance at a shareholders' meeting of the shareholder who granted the proxy and his or her voting in person on any matter subject to a vote at such meeting. The death or incapacity of the shareholder appointing a proxy does not affect die right of the corporation to accept the proxy's authority unless notice of the death or incapacity is received by the Secretary or other officer or agent authorized to tabulate votes before the proxy exercises his or her authority under the appointment. The corporation shall not be required to recognize an appointment made irrevocably if it has received a writing revoking the appointment signed by the shareholder (including a shareholder who is a successor to the shareholder who granted the proxy) either personally or by his or her attorney-in-fact, notwithstanding that the revocation may be a breach of an obligation of the shareholder to another person not to revoke the appointment. -5- SECTION 2.12 VOTING OF SHARES Unless otherwise provided by these Bylaws or the Articles of Incorporation, each outstanding share entitled to vote shall be entitled to one vote upon each matter submitted to a vote at a meeting of shareholders, and each fractional share shall be entitled to a corresponding fractional vote on each such matter. Only shares are entitled to vote. SECTION 2.13 VOTING OF SHARES BY CERTAIN SHAREHOLDER. If the name on a vote, consent, waiver, proxy appointment, or proxy appointment revocation corresponds to the name of a shareholder, the corporation, if acting in good faith, is entitled to accept the vote, consent, waiver, proxy appointment or proxy appointment revocation and give it effect as the act of the shareholder. If the name signed on a vote, consent, waiver, proxy appointment or proxy appointment revocation does not correspond to the name of a shareholder, the corporation, if acting in good faith, is nevertheless entitled to accept the vote, consent, waiver, proxy appointment or proxy appointment revocation and to give it effect as the act of the shareholder if; (i) the shareholder is an entity and the name signed purports to be that of an officer or agent of the entity; (ii) the name signed purports to be that of an administrator, executor, guardian or conservator representing the shareholder and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, consent, waiver, proxy appointment or proxy appointment revocation; (iii) the name signed purports to be that of a receiver or trustee in bankruptcy of the shareholder and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, consent, waiver, proxy appointment or proxy appointment revocation, (iv) the name signed purports to be that of a pledgee, beneficial owner or attorney in-fact of the shareholder and, if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the shareholder has been presented with respect to the vote, consent, waiver, proxy appointment or proxy appointment revocation; (v) two or more persons are the shareholder as co-tenants or fiduciaries and the name signed purports to be the name of at least one of die co-tenants or fiduciaries, and the person signing appears to be acting on behalf of all the co-tenants or fiduciaries; or -6- (vi) the acceptance of the voted, consent, waiver, proxy appointment or proxy appointment revocation is otherwise proper under rules established by the corporation that are not inconsistent with tins Section 2.14. The corporation is entitled to reject a vote, consent, waiver, proxy appointment or proxy appointment revocation if the Secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the shareholder. Neither the corporation nor any of its directors, officers, employees or agents who accepts or rejects a vote, consent, waiver, proxy appointment or proxy appointment revocation in good faith and in accordance with the standards of this Section is liable in damages for The consequences of the acceptance or rejection. Redeemable shares are not entitled to be voted after notice of redemption is mailed to the holders and a sum sufficient to redeem the shares has been deposited with a bank, trust company or other financial institution under an irrevocable Obligation to pay the holders of the redemption price on surrender of the shares. SECTION 2.14 ACTION BY SHAREHOLDERS WITHOUT A MEETING. Unless the Articles of Incorporation or these Bylaws provide otherwise, any action required or permitted to be taken at a meeting of shareholders may be taken without a meeting if the action is evidenced by one or more written consents describing the action taken, signed by each shareholder entitled to vote and delivered to the Secretary of the corporation for inclusion in the minutes or for filing with the corporate records. Action taken by consent is effective as of the date the written consent is received by the corporation unless the writings specify a different effective date, in which case such specified date ,shall be the effective date for such action, If any shareholder revokes his or her consent as provided for herein prior to what otherwise would be the effective date, the action proposed in the consent shall be invalid. Any such writing may be received by the corporation by electronically transmitted facsimile or other form of wire or wireless communication providing the corporation with a complete copy thereof, including a copy of the signature thereto. The shareholder so transmitting such a writing shall furnish an original of such writing to the corporation for the permanent record of the corporation, but the failure of the corporation to receive for record such original writing shall not affect the action so taken. In addition, such writings shall be deemed to be received by the corporation if such writings are received by an officer or director of the corporation, or an attorney representing the corporation, wherever such persons may be found, The record date for determining shareholders entitled to take action without a meeting shall be the date the corporation first receives a writing upon which the action is taken. -7- Any shareholder who has signed a writing describing and consenting to action taken pursuant to this Section 2.14 may revoke such consent by a writing signed and dated by the shareholder describing the action and staling that the shareholder's prior consent thereto is revoked, if such writing is received by the corporation prior to the date the last writing necessary to effect the action is received by the corporation. SECTION 2.15 VOTING BY BALLOT. Voting on any question or in any election may be by voice vote unless the presiding officer shall order or any shareholder shall demand that voting be by ballot. SECTION 2.16 NO CUMULATIVE VOTING. No shareholder shall be permitted to cumulate his or her votes in the election for directors or otherwise. SECTION 2.17 WAIVER OF NOTICE. When any notice is required to be given to any shareholder, a waiver thereof in writing signed by the person entitled to such notice, whether before, at, or after die time stated therein, shall be equivalent to the giving of such notice. Such waiver shall be delivered to the corporation for filing with the corporate records. The attendance of a shareholder at any meeting shall constitute a waiver of notice, waiver of objection to defective notice of such meeting, or a waiver of objection to the consideration of a particular matter at the shareholder meeting unless the shareholder, at the beginning of the meeting, objects to the holding of the meeting, the transaction of business at the meeting, or the consideration of a particular matter at the time it is presented at the meeting. SECTION 2.18 PARTICIPATION BY ELECTRONIC MEANS. Any shareholder may participate in any meeting of the shareholders by means of telephone conference or similar communications equipment by which all persons participating in the meeting can hear each other at the same time. Such participation shall constitute presence m person at such meeting. ARTICLE III BOARD OF DIRECTORS SECTION 3.1 GENERAL POWERS. The business and affairs of the corporation shall be managed by its Board of Directors. SECTION 3.2 PERFORMANCE OF DUTIES. A director office corporation shall Perform his or her duties as a director, including his or her dunes as a member of any committee of the board upon which he or she may serve, in good faith, in a manner be or she reasonably believes to be in the best interests of the corporation, and with such care as an ordinarily prudent person in a like position would use under similar circumstances. In performing his or her duties, -8- a director shall be entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, in each case prepared or presented by persons and groups listed in paragraphs (a), (b), and (c) of this Section 3.2; but he or she shall not be considered to be acting in good faith if he or she has knowledge concerning die matter in question that would cause such reliance to be unwarranted. A person who so performs his or her duties shall not have any liability by reason of being or having been a director of the corporation. Those persons and groups on whose information, opinions, reports, and statements a director is entitled to rely upon are: (a) One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented; (b) Counsel, public accountants, or other persons as to matters which the director reasonably believes to be within such persons' professional or expert competence; or (c) A committee of the board upon which he or she does not serve, duly designated m accordance with the provision of the Articles of Incorporation or these Bylaws, as to matters within its designated authority, which committee the director reasonably believes to merit confidence. SECTION 3.3 NUMBER, TENURE AND QUALIFICATIONS. The number of directors of the corporation shall be fixed from time to time by resolution of the Board of Directors, but in no instance shall there be less than one director. Each director shall hold office until the next annual meeting of shareholders or until his or her successor shall have been elected and qualified. Directors need not be residents of the State of Colorado or shareholders of the corporation. SECTION 3.4 REGULAR MEETINGS. A regular meeting of the Board of Directors shall be held without notice other than this bylaw immediately after, and at the same place as, the annual meeting of shareholders. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Colorado, for the holding of additional regular meetings without notice other than such resolution. SECTION 3.5 SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by or at the request of the Chair of the Board, if any, the President or any two directors. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Colorado, as the place for holding any special meeting of the Board of Directors called by them, SECTION 3.6 NOTICE. Written notice of any special meeting of directors shall be given as follows: -9- By mail to each director at his or her business address at least four days prior to the meeting; or By personal delivery, facsimile or telegram at least twenty-four hours prior to the meeting to the business address of each director, or in the event such notice is given on a Saturday, Sunday or holiday, to the residence address of each director. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, so addressed, with postage thereon prepaid. If notice is given by facsimile, such notice shall be deemed to be delivered when a confirmation of the transmission of the facsimile has been received by the sender. If notice is given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. Any director may waive notice of any meeting before or after to time and date of the meeting stated in the notice. The waiver shall be in writing and signed by the director entitled to the notice. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. SECTION 3.7 QUORUM. A majority of the number of directors fixed by or pursuant to Section 3.3 of this Article III, or if no such number is fixed, a majority of the number of directors in office immediately before the meeting begins, shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but if less than such majority is present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. SECTION 3.8 MANNER OF ACTING. Except as otherwise required by the Colordo Business Corporation Act or by the Articles of Incorporation, the act of the majority of the directors present at a meeting at which a quorum is present when a vote is taken shall be the act of the Board of Directors. SECTION 3.9 INFORMAL ACTION BY DIRECTOR OR COMMITTEE MEMBERS. Unless the Articles of Incorporation or these Bylaws provide otherwise, any action required or permitted to be taken at a meeting of the Board of Directors or any committee designated by said board may be taken without a meeting if the action is evidenced by one or more written consents describing the action taken, signed by each director or committee member, and delivered to the Secretary for inclusion in the minutes or for filing with the corporate records, Action taken under this section is effective when all directors or committee members have signed the consent, unless the consent specifies a different effective date. Such consent has the same -10- force and effect as an unanimous vote of the directors or committee members and may be stated as such in any document. SECTION 3.10 PARTICIPATION BY ELECTRONIC MEANS, Any members of the Board of Directors or any committee designated by such Board may participate in a meeting of the Board of Directors or committee by means of telephone conference or similar communications equipment by which all persons participating in the meeting can hear each other at the same time. Such participation shall constitute presence in person at the meeting. SECTION 3.11 VACANCIES. Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the shareholders or the Board of Directors. If the directors remaining in office constitute fewer than a quorum of the board, the directors may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office. If elected by the directors, the director filling the vacancy shall hold office until the next annual shareholders' meeting at which directors are elected. If elected by the shareholders, the director filling the vacancy shall hold office for the unexpired term of his or her predecessor in office; except that, if the director's predecessor was elected by the directors to fill a vacancy, the director elected by the shareholders -shall hold the office for the unexpired term of the last predecessor elected by the shareholders. If the vacant office was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the shareholders, and, if one or more of the remaining directors were elected by the same voting group, only such directors so elected by the same voting group are entitled to vote to fill the vacancy if it is filled by the directors. SECTION 3.12 RESIGNATION. Any director of the corporation may resign at any time by giving written notice to the Secretary of the corporation. The resignation of any director shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and< unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective, When one or more directors shall resign from the board, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall' become effective. SECTION 3.13 REMOVAL. Subject to any limitations contained in the Articles of Incorporation, any director or directors of the corporation may be removed at any time, with or without cause, in the manner provided in the Colorado Business Corporation Act. SECTION 3.14 COMMITTEES. By resolution adopted by a majority of the Board of Directors, the directors may designate two or more directors to constitute a committee, any of -11- which shall have such authority in the management of the corporation as the Board of Directors shall designate and as shall be prescribed by or limited by the Colorado Business Corporation Act and Article XI of these Bylaws. SECTION 3.15 COMPENSATION. By resolution of the Board of Directors and irrespective of any personal interest of any of the directors, each director may be paid his or her expenses, if any, of attendance at each meeting of the Board of Directors, and may be paid a stated salary as director or a fixed sum for attendance at each meeting of the Board of Directors or both. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. SECTION 3.16 PRESUMPTION OF ASSENT. A director of the corporation who is present at a meeting of the Board of Directors or committee of the board at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless (i) the director objects at the beginning of the meeting, or promptly upon his or her arrival, to the holding of the meeting or the transaction of business at the meeting and does not thereafter vote for or assent to any action taken at the meeting, (ii) the director contemporaneously requests that his or her dissent or abstention as to any specific action taken be entered in the minutes of the meeting, or (iii) the director causes written notice of his or her dissent or abstention as to any specific action to be received by the presiding officer or the meeting before its adjournment or by the corporation promptly after the adjournment of the meeting. A director may dissent to a specific action at a meeting, while assenting to others. The right to dissent to a specific action taken at a meeting of the Board of Directors or a committee of the board shall not be available to a director who voted in favor of such action. ARTICLE IV OFFICERS SECTION 4.1 NUMBER. The officers of the corporation shall be a President, t Secretary, and a Treasurer, each of whom must be a natural person who is eighteen years or older and shall be elected by the Board of Directors, Such other officers and assistant officers as ma~ be deemed necessary may be elected or appointed by the Board of Directors. Any two or more offices may be held by the same person. SECTION 4.2 ELECTION AND TERM OF OFFICE. The officers of the corporation to be elected by the Board of Directors shall be elected annually by the Board o Directors at the first meeting of the Board of Directors held after the annual meeting of the shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as practicable. Each officer shall hold office until his or her successor -12- shall have been duly elected and shall have qualified or until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter provided. SECTION 4.3 REMOVAL. Any officer or agent may be removed by the Board of Directors at any time, with or without cause, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights. An officer may resign at any time by giving written notice of the resignation to the Secretary of the corporation. The resignation is effective when the notice is received by the corporation unless the notice specifies a later effective date. SECTION 4.4 VACANCIES. A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term. SECTION 4.5 PRESIDENT. The President shall be the chief executive officer of the corporation and, subject to the control of the Board of Directors, shall in general supervise and control all of the business and affairs of the corporation. He or she shall, when present, and in the absence of a Chair of the Board, preside at all meetings of the shareholders and of the Board of Directors. He or she may sign certificates for shares of the corporation and deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of (he corporation, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time, The President or his or her designees may sell, lease, exchange, or otherwise dispose of any or all of the corporation's property in the usual and regular course of business. SECTION 4.6 VICE PRESIDENT. If elected or appointed by the Board of Directors, the Vice President (or in the event there is more than one Vice President, the Vice Presidents in the order designated at the time of their election, or in the absence of any designation, then in the order of their election) shall, in the absence of the President or in the event of his or her death, inability or refusal to act, perform all duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice President may sign certificates for shares of the corporation; and shall perform such other duties as from time to time may be assigned to him or her by the President or by the Board of Directors. SECTION 4.7 SECRETARY. The Secretary shall (a) prepare and maintain as permanent records the minutes of the proceedings of the shareholders and the Board of Directors, -13- a record of all actions taken by the shareholders or Board of Directors without a meeting, a record of all actions taken by a committee of the Board in place of the Board of Directors on behalf of the corporation, and a record of all waivers of notice and meetings of shareholders and of the Board of Directors or any committee thereof, (b) ensure that all notices are duly given in accordance with the provisions of these Bylaws and as required by law, (c) serve as custodian of the corporate records and of the seal of the corporation and affix the seal to all documents when authorized by the Board of Directors, (d) keep at the corporation's registered office or principal place of business a record containing the names and addresses of all shareholders in a form that permits preparation of a list of shareholders arranged by voting group and by class or series of shares within each voting group, that is alphabetical within each class or series and that shows the address of, and the number of shares of each class or series held by, each shareholder, unless such a record shall be kept at the office of the corporation's transfer agent or registrar, (e) maintain at the corporation's principal office the originals or copies of the corporation's Articles of Incorporation, Bylaws, minutes of all shareholders' meetings and records of all action taken by shareholders without a meeting for the past three years, all written communications within the past three years to shareholders as a group or to the holders of any class or series of shares' as a group, a list of the names and business addresses of the current directors and officers, a copy of the corporation's most recent corporate report filed with the Secretary of State, and financial statements showing in reasonable detail the corporation's assets and liabilities and results of operations for the last three years, (f) have general charge of the stock transfer books of the corporation, unless the corporation has & transfer agent, (g) authenticate records of the corporation, and (h) in general, perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him or her by the president or by the Board of Directors. Assistant Secretaries, if any, shall have the same duties and powers, subject to supervision by the Secretary, The directors or shareholders may respectively designate a person other than the Secretary or Assistant Secretary to keep the minutes of their respective meetings. Any books, records, or minutes of the corporation may be in written form or in any form capable of being converted into written form within a reasonable time. SECTION 4.8 TREASURER. The Treasurer shall: (a) have charge and custody of and be responsible for all funds and securities of the corporation; (b) receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such money s in the name of the corporation in such banks, trust companies or other depositories as shall be selected in accordance with the provisions of Article V of these Bylaws; and (c) in general perform all of the dudes incident to the office of Treasurer and such other duties as from time io time may be assigned to him or her by the President or by the Board of Directors. SECTION 4.9 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The Assistant Secretaries and Assistant Treasurers, in general, shall perform such duties as shall be assigned io them by the Secretary or the Treasurer, respectively, or by the President or the Board of Directors. -14- SECTION 4.10 BONDS, If the Board of Directors by resolution shall so require, any officer or agent of the corporation shall give bond to the corporation in such amount and with such surety as the Board of Directors may deem sufficient, conditioned upon the faithful performance of his or her respective duties and offices. SECTION 4.11 SALARIES. The salaries of the officers shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving such salary by reason of the fact that he or she is also a director of the corporation. ARTICLE V CONTRACTS, LOANS, CHECKS AND DEPOSITS SECTION 5.1 CONTRACTS. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. SECTION 5.2 LOANS. No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances. SECTION 5.3 CHECKS, DRAFTS. ETC. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors. SECTION 5.4 DEPOSITS. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, Trust companies or other depositories as the Board of Directors may select. ARTICLE VI SHARES, CERTIFICATES FOR SHARES AND TRANSFER OF SHARES SECTION 6.1 REGULATION. The Board of Directors may make such rules and regulations as it may deem appropriate concerning the issuance, transfer and registration of certificates for shares of the corporation, including the appointment of transfer agents and registrars, -15- SECTION 6.2 SHARES WITHOUT CERTIFICATIONS. Unless otherwise provided by the Articles of Incorporation or these Bylaws, the Board of Directors may authorize the issuance of any of its classes or series of shares without certificates. Such authorization shall not affect shares already represented by certificates until they are surrendered to the corporation. Within a reasonable time following the issue or transfer of shares without certificates, the corporation shall send the shareholder a complete written statement of the information required on certificates by the Colorado Business Corporation Act. SECTION 6.3 CERTIFICATES FOR SHARES. If shares of the corporation are represented by certificates, the certificates shall be respectively numbered serially for each class of shares, or series thereof, as they are issued, and shall be signed by an officer of the corporation authorized by these Bylaws or a resolution of the Board of Directors; provided that such signatures may be facsimile. Each certificate shall state the name of the corporation, the fact that the corporation is organized or incorporated under the laws of the State of Colorado, the name of the person to whom issued, the date of issue, the class (or series of any class), the number of shares represented thereby, A statement of the designations, preferences, qualifications, limitations, restrictions and special or relative rights of the shares of each class shall be set forth in full or summarized on the face or back of the certificates which the corporation shall issue, or m lieu thereof, the certificate may set forth that such a statement or summary will be furnished to any shareholder upon request without charge. Bach certificate shall be otherwise in such fomi as may be prescribed by the Board of Directors and as shall conform to the rules of any stock exchange on which the shares may be listed. The corporation shall not issue certificates representing fractional shares and shall not be obligated to make any transfers creating a fractional interest in a share of stock. The corporation may, but shall not .be obligated to, issue scrip in lieu of any fractional shares, such scrip to have terms and conditions specified by the Board of Directors. SECTION 6.4 CANCELLATION OF CERTIFICATES. All certificates surrendered to the corporation for transfer shall be cancelled and no new certificates shall be issued in lieu thereof until the former certificate for a like number of shares shall have been surrendered and cancelled, except as herein provided with respect to lost, stolen or destroyed certificates. SECTION 6.5 CONSIDERATION FOR SHARES. Certificated or uncertificated shares shall not be issued until the shares represented thereby are fully paid. The Board of Directors may authorize the issuance of shares for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed or other securities of the corporation. Future services shall not constitute payment or partial payment for shares of the corporation. The promissory note of a subscriber or an affiliate of a subscriber shall not constitute payment or partial payment for shares of the corporation unless -16- the note is negotiable, recourse and is secured by collateral, other than the shares being purchased, having a fair market value of at least equal to the principal amount of the note. SECTION 6.6 LOST. STOLEN OR DESTROYED CERTIFICATES. Any shareholder claiming that his or her certificate for shares is lost. stolen or destroyed may make an affidavit or affirmation of that fact and lodge the same with the Secretary of the corporation, accompanied by a signed application for a new certificate. Thereupon, and upon the giving of a satisfactory bond of indemnity to the corporation not exceeding an amount double the value of the shares as represented by such certificate (the necessity for such bond and the amount required to be determined by the President and Treasurer of the corporation), a new certificate may be issued of the same tenor and representing the same number, class and series of shares as were represented by the certificate alleged to be lost, stolen or destroyed. SECTION 6.7 TRANSFER OF SHARES. Subject to the terms of any shareholder agreement relating to the transfer of shares or other transfer restrictions contained in the Articles of Incorporation or authorized therein, shares of the corporation shall be transferable on the books of the corporation by the holder thereof in person or by his or her duly authorized attorney, upon the surrender and cancellation of a certificate or certificates for a like number of shares. Upon presentation and surrender of a certificate for shares properly endorsed and payment of all taxes therefor, the transferee shall be entitled to a new certificate or certificates in lieu thereof. As against the corporation, a transfer of shares can be made only on the books of the corporation and in the manner hereinabove provided, and the corporation shall be entitled to trear the holder of record of any share as the owner thereof and shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, except as expressly provided by the Colorado Business Corporation Act. ARTICLE VII FISCAL YEAR The fiscal year of the corporation shall end on the last day of December in each calendar year. -17- ARTICLE VIII DISTRIBUTIONS The Board of Directors may from time to time declare, and the corporation may pay, distributions on its outstanding shares in the manner and upon the terms and conditions provided by the Colorado Business Corporation Act and its Articles of Incorporation. ARTICLE IX CORPORATE SEAL The Board of Directors may authorize the use of a corporate seal which shall be circular in form and shall have inscribed thereon the name of the corporation and the state of incorporation and me words "CORPORATE SEAL." ARTICLE X AMENDMENTS These Bylaws may be altered, amended or repealed and new Bylaws may be adopted by a majority of the directors present at any meeting of the Board of Directors of the corporation at which a quorum is present when a vote is taken. ARTICLE XI EXECUTIVE COMMITTEE SECTION 11.1 APPOINTMENT. The Board of Directors by resolution adopted by a majority of all directors in office, may designate two or more of its members to constitute an Executive Committee. The designation of such Committee and the delegation thereto of authority shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed by law. SECTION 11.2 AUTHORITY. The Executive Committee, when the Board of Directors is not in session shall have and may exercise all of the authority of the Board of Directors except to the extent, if any, that such authority shall be limited by the resolution appointing the Executive Committee and except also that die Executive Committee shall not have the authority of the Board of Directors in reference to authorizing distributions, filling vacancies -18- on the Board of Directors, authorizing reacquisition of stores, authorizing and determining rights for shares, amending the Articles of Incorporation, adopting a plan of merger or share exchange, recommending to the shareholders the sale, lease or other disposition of all or substantially all of the property and assets of the corporation otherwise than in the usual and regular course of its business, recommending to the shareholder? a voluntary dissolution of the corporation or a revocation thereof, or amending the Bylaws of the corporation. SECTION 11.3 TENURE AND QUALIFICATIONS. Each member of the Executive Committee shall hold office until the next regular annual meeting of the Board of Directors following his or her designation and until his or her successor is designated as a member of the Executive Committee and is elected and qualified. SECTION 11.4 MEETING. Regular meetings of the Executive Committee may be held without notice at such time and places as the Executive Committee may fix from time to time by resolution. Special meetings of the Executive Committee may be called by any member thereof upon not less than one day's notice staling the place, date and hour of the meeting, which notice may be written or oral. Any member of the Executive Committee may waive notice of any meeting and no notice of any meeting need be given to any member thereof who attends in person, The notice of a meeting of the Executive Committee need not state the business proposed to be transacted at the meeting. SECTION 11.5 QUORUM. A majority of the members of the Executive Committee shall constitute a quorum for the transaction of business at any meeting thereof, and action of the Executive Committee must be authorized by the affirmative vote of a majority of the members present ai a meeting; at which a quorum is present when a vote is taken. SECTION 11.6 INFORMAL ACTTON BY EXECUTIVE COMMITTEE. Any action required or permitted to be taken by the Executive Committee at a meeting may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the members of the Executive Committee entitled to vote with respect to the subject matter thereof. SECTION 11.7 VACANCIES. Any vacancy in the Executive Committee may be filled by a resolution adopted by a majority of all directors in office. SECTION 11.8 RESIGNATIONS AND REMOVAL. Any member of the Executive Committee may be removed at any time with or without cause by resolution adopted by a majority of all directors in office. Any member of the Executive Committee may resign from the Executive Committee at any time by giving written notice to the President or Secretary of the corporation, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. -19- SECTION 11.9 PROCEDURE. The Executive Committee shall elect a presiding officer from its members and may fix its own rules of procedure which shall not be inconsistent with these Bylaws. It shall keep regular minutes of its proceedings and report the same to the Board of Directors for its information at the meeting thereof held next after the proceedings shall have been taken. ARTICLE XII EMERGENCY BYLAWS The Emergency Bylaws provided in this Article XH shall be operative during any emergency in the conduct of the business of the corporation resulting from a catastrophic event causing a quorum of directors to be not readily obtained as a result thereof, notwithstanding any different provision in the preceding articles of the Bylaws or in the Articles of Incorporation of the corporation or in the Colorado Business Corporation Act, To the extent not inconsistent with the provisions of this Article, the Bylaws provided in the preceding articles shall remain in effect during such emergency and upon its termination the Emergency Bylaws shall cease to be operative. During any such emergency; (a) A meeting of the Board of Directors may be called by any officer or director of the corporation. Notice of the time and place of the meeting shall be given by the person calling the meeting to such of the directors as it may be feasible to reach by any available means of communication. Such notice shall be given at such time in advance of the meeting as circumstances permit in the judgment of the person calling the meeting. (b) At any such meeting of the Board of Directors, a quorum shall consist of the number of directors in attendance at such meeting. (c) The Board of Directors, either before or during any such emergency, may, effective in the emergency, change the principal office or designate several alternative principal offices or regional offices, or authorize the officers so to do. (d) The Board of Directors, either before or during any such emergency, may provide, and from time to time modify, lines of succession in the event that during such an emergency any or all officers or agents of the corporation shall for any reason be rendered incapable of discharging their duties. (e) No officer, director or employee acting in accordance with these Emergency Bylaws shall be liable except for willful misconduct. -20- (f) These Emergency Bylaws shall be subject co repeal or change by further action of the Board of Directors or by action of the shareholders, but no such repeal or change shall modify the provisions of the next preceding paragraph with regard to action taken prior to the time of such repeal or change. Any amendment of these Emergency Bylaws may make any further or different provision that may be practical and necessary for the circumstances of the emergency. CERTIFICATE ----------- I hereby certify that the foregoing Bylaws, consisting of twenty-one (21) pages, including this page, constitute the Bylaws of New Millennium Media International, Inc., adopted by the Board of Directors of the corporation as of April 21 1998. /s/ Troy H. Lowrie ---------------------------------------- Troy H. Lowrie, President, Secretary and Tresurer -21- EX-17.1 4 0004.txt LETTER OF RESIGATION EXHIBIT 17.1 March 9, 2000 New Millennium Media International, Inc. 101 Philippe Parkway, Suite 305 Safety Harbor, Florida 34695 I, Gerald Ghini, hereby resign as an Officer and Director of Scovel Corporation, effective immediately. /s/ GERALD GHINI ------------------------- GERALD GHINI EX-27 5 0005.txt EXHIBIT 27 - FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-2000 MAR-31-2000 285,081 0 0 0 567,612 852,693 7,216 0 1,515,040 1,795,138 0 0 0 23,080 (303,178) 1,515,040 0 0 0 0 107,875 0 16,000 (123,875) 0 (123,875) 0 0 0 (123,875) (0.005) (0.005)
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