UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
Commission File Number: 0-27239
GENEMAX CORP.
(Exact name of registrant as specified in its charter)
Nevada 88-0277072
(State of incorporation) (I.R.S. Employer Identification No.)
1681 Chestnut Street, Suite 400
Vancouver, British Columbia
Canada V6J 4M6
(Address of Principal Executive Offices)
(604) 331-0400
(Issuer's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes [ ] No
Number of shares outstanding of the issuer's Common Stock:
CLASS OUTSTANDING AT MARCH 31, 2004
Common Stock, $0.001 par value 20,103,875
i
FORM 10-QSB
INDEX
Part I -- FINANCIAL INFORMATION
Item 1. Financial Statements
Interim Consolidated Balance Sheets, March 31, 2004
and March 31, 2003 (unaudited) 1
Consolidated Statements of Operations
for the three months ended March 31, 2004 and 2003
(unaudited) and for the period from July 27, 1999
(inception) to March 31, 2004 (unaudited) 2
Consolidated Statements of Cash Flows for the three months
ended March 31, 2004 and 2003 (unaudited) and for the
period from July 27, 1999 (inception) to March 31, 2004
(unaudited) 3
Notes to Interim Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 17
Item 3. Controls and Procedures 19
Part II - OTHER INFORMATION
Item 1. Legal Proceedings 21
Item 2. Changes in Securities and Use of Proceeds 21
Item 3. Defaults Upon Senior Securities 22
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 5. Other Information 22
Item 6. Exhibits and Reports on Form 8-K 22
ii
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GENEMAX CORP.
(A DEVELOPMENT STAGE COMPANY)
INTERIM CONSOLIDATED BALANCE SHEETS
March 31, 2004 December 31,
2003
- ---------------------------------------------------------------------------------------------------------------------------
(unaudited)
ASSETS
CURRENT ASSETS
Cash $ 17,758 $ 19,451
Prepaid expenses 11,624 1,033
- ---------------------------------------------------------------------------------------------------------------------------
29,382 20,484
FURNITURE AND EQUIPMENT, (Note 5)
62,654 72,722
net of depreciation of $131,574 (2003 - $121,506)
DEFERRRED FINANCE FEES 61,876 -
- ---------------------------------------------------------------------------------------------------------------------------
$ 153,912 $ 93,206
===========================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 587,293 $ 661,755
Due to related parties (Note 6) 108,366 75,196
- ---------------------------------------------------------------------------------------------------------------------------
695,659 736,951
- ---------------------------------------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (Notes 1, 4 and 6)
STOCKHOLDERS' EQUITY
Capital stock (Note 7)
Common stock, $0.001 par value, 50,000,000 shares authorized
20,093,875 shares issued and outstanding (2003 - 18,808,034) 20,094 18,808
Additional paid-in capital 9,109,623 8,401,949
Common stock purchase warrants 792,085 734,085
Deficit accumulated during the development stage (10,420,739) (9,751,665)
Accumulated other comprehensive income (loss) (42,810) (46,922)
- ---------------------------------------------------------------------------------------------------------------------------
(541,747) (643,745)
- ---------------------------------------------------------------------------------------------------------------------------
$ 153,912 $ 93,206
===========================================================================================================================
The accompanying notes are an integral part of these interim consolidated
financial statements
1
GENEMAX CORP.
(A DEVELOPMENT STAGE COMPANY)
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
July 27, 1999
(inception) to
Three months Ended March 31 March 31, 2004
2004 2003
- ------------------------------------------------------------------------------------------ ----------------------------------
INTEREST INCOME $ - $ - $ 26,571
- ------------------------------------------------------------------------------------------ ----------------------------------
Consulting fees 11,832 56,000 632,692
Consulting fees - stock based (Note 8) 11,875 11,875 2,763,150
Depreciation 10,068 10,682 131,574
License fees 61,240 - 268,483
Management fees 67,862 54,846 782,434
Office and general 93,414 365,757 1,266,041
Professional fees 110,726 85,754 854,634
Research and development 251,600 247,776 2,899,284
Research and development-stock based (Note 7) - - 612,000
Travel 50,457 14,958 193,018
- ------------------------------------------------------------------------------------------ ----------------------------------
669,659 847,648 10,403,310
- ------------------------------------------------------------------------------------------ ----------------------------------
NET LOSS FOR THE PERIOD $ (669,659) $ (847,648) $(10,376,739)
========================================================================================== ==================================
BASIC NET LOSS PER SHARE $ (0.03) $ (0.05)
========================================================================================== =================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 19,428,959 16,245,975
========================================================================================== =================
The accompanying notes are an integral part of these interim consolidated
financial statements
2
GENEMAX CORP.
(A DEVELOPMENT STAGE COMPANY)
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
July 27, 1999
(inception) to
Three months Ended March 31 March 31, 2004
2004 2003
- -----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (669,074) $ (874,648) $(10,376,739)
Adjustments to reconcile net loss to net cash from operating
activities:
- depreciation 10,068 10,682 131,574
- non-cash consulting fees - - 5,750
- non-cash license fees - - 10,500
- stock-based compensation 11,875 11,875 3,375,150
- prepaid expenses (10,591) - (5,624)
- accounts payable 80,623 80,381 684,094
- -----------------------------------------------------------------------------------------------------------------------------
(577,099) (771,710) (6,175,295)
NET CASH USED IN OPERATING ACTIVITIES
- -----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
Purchase of furniture and equipment - (492) (194,228)
Pre reverse acquisition advances from Eduverse (Note 3) - - 250,000
Cash acquired on reverse acquisition of Eduverse (Note 3) - - 173,373
- -----------------------------------------------------------------------------------------------------------------------------
- (492) 229,145
NET CASH FROM (USED IN) INVESTING ACTIVITIES
- -----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds on sale and subscriptions of common stock 550,000 485,000 5,695,360
Deferred finance fees (11,876) (11,876)
Loans payable - - 136,245
Advances from related parties 33,170 26,607 186,989
- -----------------------------------------------------------------------------------------------------------------------------
NET CASH FLOWS FROM FINANCING ACTIVITIES 571,294 513,607 6,006,718
- -----------------------------------------------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES 4,112 (8,615) (42,810)
- -----------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH (1,693) (267,210) 17,758
CASH, BEGINNING OF PERIOD 19,451 642,589 -
- -----------------------------------------------------------------------------------------------------------------------------
CASH, END OF PERIOD $ 17,758 $ 375,379 $ 17,758
=============================================================================================================================
The accompanying notes are an integral part of these interim consolidated
financial statements
3
NON-CASH TRANSACTIONS:
Refer to Note 7.
4
GENEMAX CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
On May 9, 2002, GeneMax Corp. ("GMC" or "the Company"), a Nevada
corporation entered into a letter of intent to acquire 100% of the issued and
outstanding common shares of GeneMax Pharmaceuticals Inc. (a development stage
company) ("GPI"), in exchange for a total of 11,431,965 restricted shares of
common stock of GMC. During July and August 2002, the Company completed the
transaction pursuant to a definitive Share Exchange Agreement and issued
11,231,965 restricted shares of common stock to the GPI stockholders and 200,000
shares of common stock as a finders' fee.
GPI is a private Delaware company incorporated on July 27, 1999 which
has a wholly-owned subsidiary, GeneMax Pharmaceuticals Canada Inc. ("GPC"), a
private British Columbia company incorporated May 12, 2000. GPI is a development
stage company which was formed for the purpose of building a biotechnology
business specializing in the discovery and development of immunotherapeutics
aimed at the treatment and eradication of cancer, and therapies for infectious
diseases, autoimmune disorders and transplant tissue rejection.
During 2000 GPI and the University of British Columbia ("UBC") entered
into a world-wide license agreement providing GPI the exclusive license rights
to certain patented and unpatented technologies originally invented and
developed by UBC. Also during 2000, GPI and UBC entered into a Collaborative
Research Agreement ("CRA") appointing UBC to carry out further development of
the licensed technology and providing GPI the option to acquire the rights to
commercialize any additional technologies developed within the CRA in
consideration for certain funding commitments (See Note 4). The lead product
resulting from these licenses is a cancer immunotherapy vaccine, on which the
Company has been completing pre-clinical work in anticipation of clinical
trials. Specifically, the Company has moved the technology through issuance of a
U.S. patent, tested various viral vectors needed to deliver the gene that forms
the basis for the vaccine, licensed a preferred viral vector and contracted out
production of clinical grade vaccine (See Note 4). The Company plans to continue
development of the lead product vaccine through clinical trials. The other
technologies licensed include assays, which the Company plans to use for
generation of a pipeline of immune-modulation products. The assay technology
acquired has received patent protection.
The consolidated financial statements have been prepared on the basis of a going
concern which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company has a working capital
deficiency of $666,277, a capital deficiency of $541,747 and has incurred
significant losses since inception and further losses are anticipated in the
development of its products raising substantial doubt as to the Company's
5
ability to continue as a going concern. The ability of the Company to continue
as a going concern is dependent on raising additional capital to fund ongoing
research and development and ultimately on generating future profitable
operations. Costs relating to future clinical trials of the Company's cancer
immunotherapy vaccine are imminent as part of normal product development and
advancement. Since internally generated cash flow will not fund development and
commercialization of the Company's products, the Company will require
significant additional financial resources and will be dependant on future
financings to fund its ongoing research and development as well as other working
capital requirements. The Company's future capital requirements will depend on
many factors including the rate and extent of scientific progress in its
research and development programs, the timing, cost and scope involved in its
clinical trials, obtaining regulatory approvals and pursuing further patent
protections and the timing and costs of its commercialization activities. There
can be no assurance that we will be able to raise sufficient additional capital
or eventually positive cash flow from operations to address all of our cash flow
needs. If we were not able to find alternative sources of cash or generate
positive cash flow from operations, our business and shareholders would be
materially and adversely affected.
UNAUDITED INTERIM FINANCIAL STATEMENTS
The accompanying unaudited interim consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and conforms with instructions to Form 10-QSB
of Regulation S-B. They may not include all information and footnotes required
by generally accepted accounting principles for complete financial statements.
However, except as disclosed herein, there has been no material changes in the
information disclosed in the notes to the financial statements for the year
ended December 31, 2003 included in the Company's Annual Report on Form 10-KSB
filed with the Securities and Exchange Commission. The interim unaudited
financial statements should be read in conjunction with those financial
statements included in the Form 10-KSB. In the opinion of Management, all
adjustments considered necessary for a fair presentation, consisting solely of
normal recurring adjustments, have been made. Operating results for the three
months ended March 31, 2004 are not necessarily indicative of the results that
may be expected for the year ending December 31, 2004.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
These consolidated financial statements have been presented in United
States dollars and prepared in accordance with United States Generally Accepted
Accounting Principles ("US GAAP").
PRINCIPLES OF CONSOLIDATION
The financial statements include the accounts of the Company and its
wholly-owned subsidiaries GPI and GPC as described in Notes 1 and 3. All
significant intercompany balances and transactions are eliminated on
consolidation.
6
USE OF ESTIMATES AND ASSUMPTIONS
Preparation of the Company's financial statements in conformity with
United States generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
FURNITURE AND EQUIPMENT
Furniture and equipment are stated at cost. Depreciation is computed at
the following rates over the estimated useful lives of the assets: Office
furniture and equipment - 36 months straight-line; Laboratory equipment - 60
months straight-line.
DEFERRED FINANCE FEES
The Company defers direct costs incurred in connection with the sale of
common shares which are offset against the proceeds of the financing upon
completion.
RESEARCH AND DEVELOPMENT COSTS
The Company has acquired exclusive development and marketing rights to
certain technologies through a License Agreement and the Collaborative Research
Agreement with UBC. The rights and license acquired are considered rights to
unproven technology which may not have alternate future uses and therefore, have
been expensed as incurred as research and development costs. Also, ongoing costs
incurred in connection with the CRA are considered costs incurred in the
development of unproven technology which may not have alternate future uses and
therefore, have been expensed as incurred as research and development costs.
FAIR VALUE OF FINANCIAL INSTRUMENTS
In accordance with the requirements of SFAS No. 107, the Company has
determined the estimated fair value of financial instruments using available
market information and appropriate valuation methodologies. The fair value of
financial instruments classified as current assets or liabilities including
cash, prepaid expense, loans and accounts payable and due to related parties
approximate carrying value due to the short-term maturity of the instruments.
NET LOSS PER COMMON SHARE
Basic earnings (loss) per share includes no dilution and is computed by
dividing income available to common stockholders by the weighted average number
of common shares outstanding for the period. Dilutive earnings (loss) per share
reflect the potential dilution of securities that could share in the earnings of
the Company. The accompanying presentation is only of basic loss per share as
the potentially dilutive factors are anti-dilutive to basic loss per share.
FOREIGN CURRENCY TRANSLATION
The financial statements are presented in United States dollars. In
accordance with Statement of Financial Accounting Standards No. 52, "Foreign
Currency Translation", foreign denominated monetary assets and liabilities are
7
translated to their United States dollar equivalents using foreign exchange
rates which prevailed at the balance sheet date. Revenue and expenses are
translated at average rates of exchange during the year. Related translation
adjustments are reported as a separate component of stockholders' equity,
whereas gains or losses resulting from foreign currency transactions are
included in results of operations.
INCOME TAXES
The Company follows the liability method of accounting for income
taxes. Under this method, deferred income tax assets and liabilities are
recognized for the estimated tax consequences attributable to differences
between the financial statement carrying values and their respective income tax
basis (temporary differences). The effect on deferred income tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date. At March 31, 2004, a full deferred tax asset
valuation allowance has been provided and no deferred tax asset benefit has been
recorded.
STOCK-BASED COMPENSATION
In December 2002, the Financial Accounting Standards Board issued
Financial Accounting Standard No. 148, "Accounting for Stock-Based Compensation
- - Transition and Disclosure" ("SFAS No. 148"), an amendment of Financial
Accounting Standard No. 123 "Accounting for Stock-Based Compensation" ("SFAS No.
123"). The purpose of SFAS No. 148 is to: (1) provide alternative methods of
transition for an entity that voluntarily changes to the fair value based method
of accounting for stock-based employee compensation, (2) amend the disclosure
provisions to require prominent disclosure about the effects on reported net
income of an entity's accounting policy decisions with respect to stock-based
employee compensation, and (3) to require disclosure of those effects in interim
financial information. The disclosure provisions of SFAS No. 148 were effective
for the Company for the year ended December 31, 2003.
The Company has elected to continue to account for stock-based employee
compensation arrangements in accordance with the provisions of Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees",
("APB No. 25") and comply with the disclosure provisions of SFAS No. 123 as
amended by SFAS No. 148 as described above. In addition, in accordance with SFAS
No. 123 the Company applies the fair value method using the Black-Scholes
option-pricing model in accounting for options granted to consultants. Under APB
No. 25, compensation expense for employees is recognized based on the
difference, if any, on the date of grant between the estimated fair value of the
Company's stock and the amount an employee must pay to acquire the stock.
Compensation expense is recognized immediately for past services and pro-rata
for future services over the option-vesting period.
In accordance with SFAS No. 123, the Company applies the fair value
method using the Black-Scholes option-pricing model in accounting for options
granted to consultants.
The Company accounts for equity instruments issued in exchange for the
receipt of goods or services from other than employees in accordance with SFAS
No. 123 and the conclusions reached by the Emerging Issues Task Force in Issue
No. 96-18, "Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring or in Conjunction with Selling Goods or Services" ("EITF
8
96-18"). Costs are measured at the estimated fair market value of the
consideration received or the estimated fair value of the equity instruments
issued, whichever is more reliably measurable. The value of equity instruments
issued for consideration other than employee services is determined on the
earlier of a performance commitment or completion of performance by the provider
of goods or services as defined by EITF 96-18.
The Company has also adopted the provisions of the Financial Accounting
Standards Board Interpretation No.44, Accounting for Certain Transactions
Involving Stock Compensation - An Interpretation of APB Opinion No. 25 ("FIN
44"), which provides guidance as to certain applications of APB 25. FIN 44 is
generally effective July 1, 2000 with the exception of certain events occurring
after December 15, 1998.
NOTE 3 - REVERSE ACQUISITION
Effective May 9, 2002, the Company entered into a letter of intent to
acquire 100% of the issued shares in the capital of GPI in exchange for
11,231,965 restricted shares of common stock plus 200,000 restricted shares of
common stock for a finder's fee. The Company also agreed to issue an additional
188,154 restricted shares of common stock in settlement of $188,154 of accrued
GPI management, consulting and research and development fees. Effective July 15,
2002, pursuant to a definitive Share Exchange Agreement, the Company commenced
the closing and acquired 5,880,304 shares of GPI from non-British Columbia
shareholders of GPI in exchange for the issuance of 5,880,304 restricted shares
of common stock.
The Company also issued a take-over bid circular to British Columbia
GPI shareholders and acquired a further 4,487,001 shares of GPI in exchange for
4,487,001 restricted shares of common stock effective August 13, 2002. Also
during 2002, the Company completed the acquisition by acquiring the remaining
864,660 shares of GPI in exchange for 864,660 restricted shares of common stock.
Also, 744,494 outstanding GPI common stock purchase warrants were exchanged on a
one for one basis for the Company's common stock purchase warrants with
identical terms and conditions and the Company issued 2,135,000 stock options to
holders of GPI stock options (refer to Note 7). All GPI stock options and common
stock purchase warrants were then cancelled. As a result of this transaction,
the former stockholders of GPI owned 75% of the 15,320,119 total issued and
outstanding shares of the Company as at July 15, 2002.
This acquisition has been accounted for as a recapitalization using
accounting principles applicable to reverse acquisitions with GPI being treated
as the accounting parent (acquirer) and GMC being treated as the accounting
subsidiary (acquiree). The value assigned to the capital stock of consolidated
GMC on acquisition of GPI is equal to the book value of the capital stock of GPI
plus the book value of the net assets of GMC as at the date of the acquisition.
The book value of GMC's capital stock subsequent to the reverse
acquisition is calculated and allocated as follows:
9
GPI capital stock $1,924,725
GMC net assets 493,712
-----------
$2,418,437
===========
Capital stock $ 15,320
Additional paid-in capital 620,600
Share purchase warrants 1,867,517
-----------
2,503,437
GMC subscriptions receivable pre reverse
acquisition (100,000)
GMC subscriptions received pre reverse
acquisition 15,000
-----------
Consolidated Capital accounts post reverse
acquisition $2,418,437
===========
These consolidated financial statements include the results of
operations of GPI since July 27, 1999 (inception) and the results of operations
of GMC since the date of the reverse merger effective July 15, 2002.
For the period from October 13, 1999 (inception) to July 14, 2002 the
weighted average number of common shares outstanding is deemed to be 11,431,965
being the number of shares issued by GMC (including 200,000 common shares issued
as finders' fees) to effect the reverse acquisition of GPI.
NOTE 4 - RESEARCH AGREEMENTS
UNIVERSITY OF BRITISH COLUMBIA ("UBC")
Effective September 14, 1999, GPI entered into an Option Agreement
("Option") whereby UBC granted GPI an option to obtain a world-wide license from
UBC providing GPI the exclusive license rights to certain patented and
unpatented cancer immuno-therapy technologies originally invented and developed
by UBC. The Option was for a term of 180 days and prior to being eligible to
exercise the Option, GPI was to make a reasonable commercial effort to raise
equity funding in an amount not less than CAN$1,000,000 to fund ongoing research
and issue 500,000 founders' common shares to UBC and an additional 3,600,000
founders' common shares to certain principals involved in the UBC research.
Having satisfied all of the conditions on or before March 6, 2000, GPI exercised
the Option and obtained from UBC, the exclusive license rights as described
above for meeting the specific terms of the Option plus a further payment of
$78,743. The License will terminate after 15 years or upon the expiration of the
last patent obtained relating to the licensed technology. The cost of obtaining
10
any patents will be the responsibility of GPI. The technology remains the
property of UBC, however, it may be utilized and improved by GPI. Concurrent
with the execution of the license the head researcher at UBC became a director
of GPI.
GPI and UBC entered into a Collaborative Research Agreement ("CRA")
dated September 1, 2000 appointing UBC to carry out further development of the
licensed technology and providing GPI the option to acquire the rights to
commercialize any additional technologies developed within the CRA in
consideration for certain funding commitments totaling CAN$498,980 to be paid in
four equal installments of CAN$124,725 due upon execution of the CRA, September
30, 2000, January 1, 2001 and March 31, 2001 of which $374,215 was paid. Through
a series of amendments between November 28, 2000 and September 9, 2002, the
funding commitment was increased to a total of CAN$2,973,049 of which
CAN$991,515 was to be paid for the year ended December 31, 2002, CAN$1,135,801
to be paid in 2003 and CAN$471,518 to be paid in 2004. As at March 31, 2004,
CAN$235,759 (December 31, 2003 - CAN$471,5181 is payable in connection with the
CRA and the Company is in default of the Agreement. Pursuant to the terms of the
CRA. In addition, as required by the CRA, GPI has purchased certain laboratory
equipment in connection with the on-going research.
During the first quarter of 2004, the Company entered in to an
exclusive worldwide license agreement with UBC for the use of a novel assay
technology intended to be used to screen and select new drugs that regulate
immune responses. The term of the license is for the longer of 20 years and the
last expiry of a patent obtained in connection with the technology. In
consideration for the license, during 2003 the Company paid to UBC 10,000
restricted shares of common stock with a fair value of $10,000 and must pay an
annual maintenance fee of $500 and all costs required to obtain any patents
related thereto.
CANADIAN NETWORK FOR VACCINES AND IMMUNOTHERAPEUTICS OF CANCER AND
CHRONIC VIRAL DISEASES ("CANVAC")
Effective January 1, 2001 GPI and UBC entered into a one year Network
Affiliate Agreement with CANVAC (the "CANVAC Agreement") whereby CANVAC would
provide a grant to GPI and UBC to further fund the research activities in
connection with the CRA. Under the terms of the CANVAC Agreement, CANVAC would
provide a CAN$85,000 research grant to UBC upon GPI contributing CAN$117,300
towards the UBC research. The amounts paid by GPI do not qualify as amounts paid
under the CRA funding schedule outlined above. During 2001, all amounts required
under the CANVAC agreement were paid to UBC by GPI. During 2002 CANVAC
contributed a further CAN$56,100 to continue funding the research activities
until June 30, 2003. As at March 31, 2004 GPI owes CAN$38,709 to UBC to fund
GPI's obligations under the CANVAC Agreement.
CRUCELL HOLLAND B.V.("CRUCELL") - RESEARCH LICENSE AND OPTION AGREEMENT
Effective August 7, 2003, Crucell and GPI entered into a five year
Research License and Option Agreement whereby Crucell granted to GPI a
non-exclusive worldwide license for the research use of its adenovirus
technology. The Research License and Option Agreement includes an option for a
non-exclusive worldwide commercial license to manufacture, use, offer for sale,
sell and import products using the technology. Under the terms of the agreement,
the Company is required to make initial and ongoing option maintenance payments
11
over the five year term totaling 450,000 Euros. As of December 31, 2003, the
Company had made all payments required totaling $115,490 (100,000 Euros) and a
further $60,864 was incurred during the first quarter of 2004 leaving $60,864
(50,000 Euros) owing as at March 31, 2004. A further (50,000 Euros) will be due
and payable to Crucell pursuant to the Research License and Option Agreement on
August 7, 2004.
NOTE 5 - FURNITURE AND EQUIPMENT
March 31, 2004 December 31,
2003
---------------- -----------------
Office furniture and equipment $ 10,425 $ 10,425
Laboratory equipment 183,803 183,803
---------------- -----------------
194,228 194,228
Less: accumulated depreciation (131,574) (121,506)
---------------- -----------------
$ 62,654 $ 72,722
================ =================
NOTE 6 -RELATED PARTY TRANSACTIONS
Effective December 31, 2003, the Board of Directors of the Company
approved the amendment of an existing consulting agreement and an existing
management services agreement between the Company and two directors of the
Company. Under the terms of the amended agreements, the two directors will be
paid base monthly salaries of CAN$14,167 (CDN) and $12,500 (CDN) respectively
commencing January 1, 2004 for terms ending February 1, 2005 and July 31, 2005.
Also the Board of Directors of the Company agreed to grant to Dr. Wilf
Jefferies, one of the above noted directors and the head researcher at UBC
(refer to Note 4), up to a five year anti-dilution right whereby Dr. Jefferies
will be guaranteed the rights, subject to achieving certain developmental
milestones, allowing him to purchase and own (by way of stock options, and/or
convertible preferred shares or as otherwise determined by the Board of
Directors) not less than 25% of the fully diluted outstanding shares of common
stock of the Company, with such anti-dilution rights, terms and conditions being
subject to applicable regulatory approvals. As at March 31, 2004, Dr. Jefferies
owned or had rights to 18.2% (December 31, 2003 - 19.4%) of the Company's fully
diluted shares of common stock.
Effective December 31, 2003 the Board of Directors of the Company
approved entering into a month to month management consulting agreement with
another director for services for the period for January 1, 2004 to April 15,
2004 for a total of $32,400.
12
The following amounts have been incurred to these related parties:
Three months ended March 31,
2004 2003
----------------- ------------------
Consulting fees $ - $ 22,500
Management fees 57,862 54,846
Research and development 34,513 31,814
----------------- ------------------
$ 92,375 $ 109,160
================= ==================
The Company has total commitments relating to the above management and
consulting agreements for the years ended December 31, 2004 and 2005 of
approximately $263,400 and $94,600 respectively.
During the period ended March 31, 2004 GPI and the Company incurred
$92,375 in fees to these related parties and made repayments of $59,205
resulting in $108,366 owing to these related parties as at March 31, 2004
(December 31, 2003 - $75,196). Amounts due to related parties are unsecured,
non-interest bearing and have no specific terms of repayment.
Refer to Notes 3, 4 and 7.
NOTE 7 - CAPITAL STOCK
The authorized capital of the Company consists of 50,000,000 voting
common shares with $0.001 par value and 5,000,000 non-voting preferred shares
with $.001 par value. Effective December 31, 2003 the Company's board of
directors approved an increase in the authorized capital to 300,000,000 voting
common shares and 50,000,000 non-voting preferred shares subject to shareholder
approval.
During the period the Company issued 52,900 shares of common stock on
the exercise of stock options at $1.00 per share the consideration of which was
the settlement of debt owed to a former director totaling $52,900.
During the period the Company issued 304,370 shares of common stock on
the exercise of stock options at $0.50 per share for proceeds of $152,185, which
was paid by way of offset of amounts originally owed by the Company to certain
consultants of the Company which were assigned by these consultants to certain
option holders. These amounts were originally owing by the Company as a result
of cash advances made to the Company totaling $50,000 and expenses incurred on
behalf of the Company totaling $102,185.
During the period the Company commenced a private placement of units at
$0.70 per unit. Each unit consists of one common share and one share purchase
warrant. Each share purchase warrant entitles the holder to purchase an
additional common share of the Company at a price of $0.70 per share for a
period of two years. The Company issued 857,143 shares of common stock on the
purchase of 857,143 units for total proceeds of $600,000. The Company issued
71,428 shares of common stock as a placement fee in connection with this
financing. The fair value of the warrants was estimated to be $60,000 and was
recorded as separate component of stockholders' equity.
13
STOCK OPTION PLAN
On September 30, 2002 the Board of Directors of the Company approved
the adoption of a new stock option plan (the "Plan") allowing for the granting
of up to 3,500,000 options to directors, officers, employees and consultants of
the Company and its subsidiaries. Options granted under the Plan shall be at
prices and for terms as determined by the Board of Directors with terms not to
exceed 10 years. The Plan further provides that the Board of Directors may grant
to any key personnel of the Company who is eligible to receive options, one or
more Incentive Stock Options at a price not less than fair market value and for
a period not to exceed 10 years from the date of grant. Options and Incentive
Stock Options granted under the Plan may have vesting requirements as determined
by the Board of Directors.
Effective April 16, 2003 the Board of Directors approved an increase in
the number of options available under the Plan from 3,500,000 to 4,500,000. Also
effective July 9, 2003 the Company filed a Form S-8 Registration Statement to
register 500,000 shares in connection with the Plan. Effective December 16,
2003, the Board of Directors approved the further increase in the number of
options available under the Plan from 4,500,000 to 10,000,000, and during the
period filed a further Form S-8 Registration Statement effective January 26,
2004 to register a further 2,250,000 shares in connection with the Plan.
STOCK OPTIONS
The Company accounts for stock-based employee compensation arrangements
in accordance with the provisions of APB No. 25 and complies with the disclosure
provisions of SFAS No. 123 and SFAS No. 148. In accordance with SFAS No. 123 the
Company applies the fair value method using the Black-Scholes option-pricing
model in connection with accounting for options granted to consultants and the
disclosure provision relating to options granted to employees.
In connection with the reverse acquisition of GPI, the Company granted
a total of 2,135,000 stock options to previous holders of stock options of GPI
with terms and conditions consistent with their original GPI stock options. Of
these stock options, 150,000 are subject to straight line vesting for a period
of 36 months commencing October 1, 2002. The fair value of these incentive stock
options will be recorded as compensation expense over the vesting period. The
fair value of these options at the date of grant of $142,500 was estimated using
the Black-Scholes option pricing model with an expected life of three years, a
risk-free interest rate of 4% and an expected volatility of 226%. To March 31,
2004 a total of $71,250 (December 31, 2003 - $59,375) has been recorded as
consulting fees in connection with these options.
Of the stock options granted to date, a total of 160,000 originally
granted at prices ranging from $1.90 per share to $8.50 per share have been
repriced to $1.00 per share and as a result, are subject to variable accounting
in accordance with the provisions of the Financial Accounting Standards Board
Interpretation No.44, Accounting for Certain Transactions Involving Stock
Compensation - An Interpretation of APB Opinion No. 25 ("FIN 44"). No adjustment
14
was required during the period relating the variable accounting for these
incentive stock options.
The Company's stock option activity is as follows:
Weighted Average
Remaining
Number of Weighted Average Contractual Life
options Exercise Price
-------------- -------------------- ---------------------
Balance, December 31, 2002 3,168,000 $ 0.86 2.27 years
Granted during the year 4,325,000 0.59
Forfeited during the year (420,000) 1.00
Exercised during the year (2,318,630) 0.61
-------------- -------------------- ---------------------
Balance, December 31, 2003 4,754,370 0.74 5.55 years
Exercised during the period (357,270) 0.57
-------------- -------------------- ---------------------
Balance, March 31, 2004 4,397,100 $ 0.76 5.10 years
============== ==================== =====================
SHARE PURCHASE WARRANTS
The Company's share purchase warrant activity is as follows:
Weighted Average
Remaining
Number of Weighted Average Contractual Life
warrants Exercise Price
----------------- -------------------- ---------------------
Balance, December 31, 2002 846,860 $ 1.95 2.71 years
Issued during the year 299,175 1.93
Exercised during the year - -
Expired during the year (69,500) 2.82
----------------- -------------------- ---------------------
Balance, December 31, 2003 1,076,535 1.89 1.53 years
Issued during the period 857,143 0.70
Exercised during the period - -
Expired during the period (2,000) 7.50
----------------- -------------------- ---------------------
Balance, March 31, 2004 1,931,678 $ 1.36 1.55 years
================= ==================== =====================
15
NOTE 8 - INCOME TAXES
There were no temporary differences between GPI's tax and financial
bases that result in deferred tax assets, except for the Company's net operating
loss carryforwards amounting to approximately $7,046,000 at March 31, 2004
(December 31, 2003 - $6,388,000) which may be available to reduce future year's
taxable income. These carryforwards will expire, if not utilized, commencing in
2008. Management believes that the realization of the benefits from these
deferred tax assets appears uncertain due to the Company's limited operating
history and continuing losses. Accordingly a full, deferred tax asset valuation
allowance has been provided and no deferred tax asset benefit has been recorded.
16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Statements made in this Form 10-QSB that are not historical or current
facts are "forward-looking statements" made pursuant to the safe harbor
provisions of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). These statements often can be identified by the
use of terms such as "may," "will," "expect," "believe," "anticipate,"
"estimate," "approximate" or "continue," or the negative thereof. The Company
intends that such forward-looking statements be subject to the safe harbors for
such statements. The Company wishes to caution readers not to place undue
reliance on any such forward-looking statements, which speak only as of the date
made. Any forward-looking statements represent management's best judgment as to
what may occur in the future. However, forward-looking statements are subject to
risks, uncertainties and important factors beyond the control of the Company
that could cause actual results and events to differ materially from historical
results of operations and events and those presently anticipated or projected.
The Company disclaims any obligation subsequently to revise any forward-looking
statements to reflect events or circumstances after the date of such statement
or to reflect the occurrence of anticipated or unanticipated events.
OVERVIEW
The Company has raised $4,758,850 in funding since the May 2002
announcement of the GeneMax Pharmaceuticals acquisition for all issuances of the
Company's common stock. Management believes that an estimated $14,000,000 is
required over the next three years for expenses associated with the balance of
pre-clinical development and commencement of Phase I-II clinical trials for the
TAP Cancer Vaccine and for various operating expenses.
The Company has not generated any cash flow to fund its operations and
activities due primarily to the nature of lengthy product development cycles
that are normal to the biotech industry. Therefore, the Company must raise
additional funds in the future to continue operations. The Company intends
finance its operating expenses with further issuances of common stock. The
Company believes that any anticipated private placements of equity capital and
debt financing, if successful, may be adequate to fund the Company's operations
over the next twelve months. Thereafter, the Company expects it will need to
raise additional capital to meet long-term operating requirements.
During the quarter we advanced work on the Molecular Medicine contract.
Management believes that the first phase of the contract is essentially complete
with the delivery of vector clones to the Company. We are currently in the
process of evaluating the vector clones. We also entered into an exclusive
worldwide license agreement with UBC for the use of a novel assay technology
intended to be used to screen and select drugs that regulate immune responses.
17
RESULTS OF OPERATIONS
Three Months Ended March 31, 2004 Compared to Three Months Ended March 31, 2003
Net revenues during the quarters ended March 31, 2004 and 2003 were $0.
The lack of revenues during these quarters were the result of our continued
focus on research and development of the TAP technologies.
Consulting fees during the quarter ended March 31, 2004 was $11,832 as
compared to $56,000 during the quarter ended March 31, 2003, a decrease of
approximately 78.9%. The decreased consulting fees were primarily the result of
the reduction in stock option grants to consultants.
License fees during the quarter ended March 31, 2004 was $61,240 as
compared to $0 during the quarter ended March 31, 2003. The increase in license
fees was the result of our obligations to Crucell pursuant to the Research
License and Option Agreement.
Management fees during the quarter ended March 31, 2004 was $67,862 as
compared to $54,846 during the quarter ended March 31, 2003, an increase of
approximately 23.7%. The increase in management fees was primarily the result of
the direct payment in 2004 to an officer who previously provided services
through a contractor, Investor Communications International, Inc.
Office and general expenses incurred during the quarter ended March 31,
2004 was $93,414 as compared to $365,757 during the quarter ended March 31,
2003, a decrease of approximately 74.5%. The decreased office and general
expenses were primarily the result of a reduction in investor relations
expenditures, including media production, mailing, and printing.
Professional fees during the quarter ended March 31, 2004 was $110,726
as compared to $85,754 during the quarter ended March 31, 2003, a increase of
approximately 29.1%. The increased professional fees were primarily the result
of higher legal costs relating to potential financing opportunities and more
complicated accounting policies and regulatory requirements.
Travel expenses during the quarter ended March 31, 2004 was $50,457 as
compared to $14,958 during the quarter ended March 31, 2003, an increase of
approximately 237.3%. The increased travel expenses were primarily the result of
increased travel for financing and investor relations purposes.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2004, the Company had $17,758 in cash. Generally, the
Company has financed operations to date through the proceeds of the private
placement of equity securities. The Company received proceeds of $550,000 during
the quarter ended March 31, 2004 from the sale of common stock and $33,170 from
advances from related parties.
18
Net cash used in operating activities during the quarter year ended
March 31, 2004 was $577,099. The Company had no revenues during the fiscal 2003.
Expenditures were primarily the result of payments required under the external
contracts with UBC, Crucell and Molecular Medicine, as well as legal and
accounting activities.
As of March 31, 2004, we anticipate that we will need significant
financing to enable us to meet our anticipated expenditures for the next 18
months, which is anticipated to be $6 million assuming a single Phase 1 clinical
trial commences within that time frame.
The Company is currently in breach of the Collaborative Research
Agreement with UBC, Research License and Option Agreement with UBC, Biological
Materials Transfer Agreement with NIAID and the Production Service Agreement
with Molecular Medicine because of failure to make certain payments pursuant to
these agreements. The Company's failure to cure the breach of these agreements
within the time frames specified may result is termination of these agreements.
The termination any of these agreements would have a material adverse effect
upon the Company and its business.
The Company's financial statements have been prepared assuming that it
will continue as a going concern and, accordingly, do not include adjustments
relating to the recoverability and realization of assets and classification of
liabilities that might be necessary should the Company be unable to continue in
operation. Our ability to continue as a going concern is dependent upon our
ability to obtain the necessary financing to meet our obligations and pay our
liabilities arising from our business operations when they come due. We will be
unable to continue as a going concern if we are unable to obtain sufficient
financing. The Company's future capital requirements will depend on many factors
including the rate and extent of scientific progress in its research and
development programs, the timing, cost and scope involved in its clinical
trials, obtaining regulatory approvals and pursuing further patent protections
and the timing and costs of its commercialization activities.
The Company's future success and viability are dependent on the
Company's ability to raise additional capital through further private offerings
of its stock or loans from private investors. Additional financing may not be
available upon acceptable terms, or at all. If adequate funds are not available
or are not available on acceptable terms, the Company may not be able to conduct
its proposed business operations successfully, which could significantly and
materially restrict or delay the Company's overall business operations.
OFF-BALANCE SHEET ARRANGEMENTS
The Company does not have any off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on the Company's
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources that
are material to investors.
ITEM 3. CONTROLS AND PROCEDURES
An evaluation was conducted under the supervision and with the
participation of the Company's management, including Ronald L. Handford, the
Company's Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
19
and procedures as of March 31, 2004. Based on that evaluation, Mr. Handford
concluded that the Company's disclosure controls and procedures were effective
as of such date to ensure that information required to be disclosed in the
reports that it files or submits under the Exchange Act, is recorded, processed,
summarized and reported within the time periods specified in Commission rules
and forms. Such officers also confirm that there was no change in the Company's
internal control over financial reporting during the quarter ended March 31,
2004 that has materially affected, or is reasonably likely to materially affect,
the Company's internal control over financial reporting.
20
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
GLOBAL SECURITIES LITIGATION
On approximately September 4, 2002, the Company initiated litigation
against Global Securities Corporation and Union Securities Limited (the
"Defendants") by filing a Writ of Summons and Statement of Claim in the Supreme
Court of British Columbia, Registry No. S024914 (the "British Columbia
Complaint"). The British Columbia Complaint was modified in December 2002 to
include further individual brokers as defendants and John or Jane Does 1-10 and
to better define the causes of action (the "Amended British Columbia
Complaint"). The claims made by the Company against the Defendants involve the
alleged illegal naked short selling of the Company's shares of common stock. The
Company is seeking damages from the Defendants that include loss of investment
opportunity, injury to reputation, artificial issuance of shares that results in
devaluation of the Company's securities, and other damages.
The Defendants have filed an amended statement of defense and
counterclaim in response to the Amended British Columbia Complaint generally
denying the allegations and counterclaiming for defamation relating to
statements made by the Company about the litigation in news releases. The
Company has filed a motion for document production and for records from the
Canadian Depository for Securities Limited. The Defendants' motion to obtain a
summary hearing on whether the actions of the Defendants were unlawful was heard
on January 28, 2004. The Court dismissed the Defendants' motion. The Defendants
have filed another motion to obtain a summary hearing on whether the actions of
the Defendants were unlawful and a motion to dismiss the Company's document
motion and the Defendant's motions are scheduled to be heard by the Court at the
end of June 2004.
NEVADA LITIGATION
On November 14, 2003, the Company and Alexander Cox, a shareholder of
the Company filed a complaint against various broker-dealers, market makers and
clearing agents allegedly involved in naked short sales in the Second Judicial
District Court of the State of Nevada (Case No. CV-N-03-0656-ECR-RAM). The
complaint alleges the defendants engaged in the unlawful "shorting" of the
Company's shares of common stock, fraud, statutory misrepresentation, securities
law violations pursuant to the Nevada Securities Act, negligence, common law
misrepresentation, breach of the covenant of good faith and fair dealing,
conversion, deceptive trade practices, racketeering, interference with
contracts, interference with prospective economic advantages, prima facie tort,
and conspiracy. The defendants have filed an answer to our complaint and on
March 8, 2004 filed a motion to dismiss the claims in the complaint.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On January 29, 2004, the Company filed a registration statement on Form
S-8 registering 1,825,000 stock options under the Stock Option Plan exercisable
at $0.50 per share and 425,000 stock options exercisable at $1.00 per share for
an aggregate amount of 2,250,000 shares.
21
From November 2003 until February 2004, the Company engaged in a
private placement offering of up to 1,428,572 units of the Company, at a
subscription price of $0.70 per unit, with each such unit being comprised of one
share of restricted common stock and one warrant. Each warrant entitles the
holder to purchase one share of restricted common stock at an exercise price of
$0.70 within two years of the date of issuance. The Company sold 857,143 units
at $0.70 per unit, for gross proceeds of $600,000. The offering provides the
investors with piggy-back registration rights relating to any follow on
financing conducted that requires registration of the subject financing shares.
The Offering was exempt from registration pursuant to Regulation S and Rule 506
of Regulation D of the Securities Act. No underwriter was involved in the
transaction.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
ITEM 5. OTHER INFORMATION
On May 10, 2004, the Board of Directors amended and restated the
Company's bylaws to remove the provision that the Company's shares of common
stock be transferred only within the provisions of "certificate only" or
"custody only" and to remove the provision that each director participating in a
meeting shall sign the minutes. Based upon the amendment to the bylaws, the
Company's shares of common stock may become depository eligible and management
anticipates that this will occur. Previously, management had exited the
depository system to counteract naked short selling. The board of directors
believes it in the best interests of the Company to remove the "certificate
only" or "custody only" provisions. A copy of the revised bylaws is attached to
the quarterly report as Exhibit 3.1.
Also, on May 10, 2004 the Company issued a press release announced that
its patented TAP-1 anti-cancer technology is effective in generating immune
responses against melanoma in mice. A copy of the press release is attached to
the quarterly report as Exhibit 99.1.
Item 6. Exhibits and Reports on Form 8-K
1. Exhibits
3.1 Amended and Restated Bylaws of Genemax Corp. Effective May 10,
2004
31.1 Certification of Chief Executive Officer and Chief Financial
Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the
Securities Exchange Act of 1933, as amended.
32.1 Certification Pursuant to 18 U.S.C. 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
22
99.1 Press Release dated May 10, 2004 Announcing TAP-1 anti-cancer
technology is effective in generating immune responses against
melanoma in mice
2. Form 8-K
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 20, 2004 GENEMAX CORP.
/s/ RONALD L. HANDFORD
____________________________________
Ronald L. Handford, Chief Executive
Officer and Chief Financial Officer
23
EXHIBIT 3.1
AMENDED AND RESTATED
BYLAWS
OF
GENEMAX CORP.
As in effect on May 10, 2004
TABLE OF CONTENTS
ARTICLE I
OFFICES
PAGE
1.1 Business Office 1
1.2 Registered Office 1
ARTICLE II
SHARES AND TRANSFER THEREOF
2.1 Regulation 1
2.2 Stock Certificates: Facsimile Signatures and Validation 1
2.3 Fractions of Shares: Insurance; Payment of Value or Issuance of Scrip 2
2.4 Cancellation of Outstanding Certificates and Issuance of New Certificates:
Order of Surrender; Penalties for Failure to Comply 2
2.5 Lost, Stolen or Destroyed Certificates 2
2.6 Transfer of Shares 3
2.7 Restrictions on Transfer of Shares 3
2.8 Transfer Agent 3
2.9 Close of Transfer Book and Record Date 3
ARTICLE III
STOCKHOLDERS AND MEETINGS THEREOF
3.1 Stockholders of Record 4
3.2 Meetings 4
3.3 Annual Meeting 4
3.4 Special Meetings 4
3.5 Actions at Meetings not Regularly Called: Ratification and Approval 4
3.6 Notice of Stockholders' Meeting: Signature; Contents; Service; Waiver 5
3.7 Consent of Stockholders in Lieu of Meeting 5
3.8 Voting Record 5
3.9 Quorum 6
3.10 Manner of Acting 6
3.11 Stockholders' Proxies 6
3.12 Voting of Shares 6
3.13 Voting by Ballot 6
3.14 Cumulative Voting 6
3.15 Stockholder Nominations and Proposals 7
-xxv-
PAGE
ARTICLE IV
DIRECTORS, POWERS AND MEETINGS
4.1 Board of Directors 9
4.2 General Powers 9
4.3 Performance of Duties 9
4.4 Regular Meetings 10
4.5 Special Meetings 10
4.6 Notice 10
4.7 Waiver of Notice 10
4.8 Participation by Electronic Means 10
4.9 Quorum and Manner of Acting 10
4.10 Organization 11
4.11 Informal Action by Directors 11
4.12 Vacancies 11
4.13 Compensation 11
4.14 Removal of Directors 11
4.15 Resignations 11
ARTICLE V
COMMITTEES
5.1 Executive Committee 12
5.2 Audit Committee 12
5.3 Compensation Committee 13
5.4 Nominating/Governance Committee 13
ARTICLE VI
OFFICERS
6.1 Number of Officers 14
6.2 Election and Term of Office 14
6.3 Removal 14
6.4 Vacancies 14
6.5 Powers 14
6.6 Compensation 16
6.7 Bonds 16
ARTICLE VII
INDEMNIFICATION
ARTICLE VIII
DIVIDENDS 16
-xxvi-
ARTICLE IX
FINANCE
9.1 Reserve Funds 16
9.2 Banking 16
ARTICLE X
CONTRACTS, LOANS AND CHECKS
10.1 Execution of Contracts 16
10.2 Loans 17
10.3 Checks 17
10.4 Deposits 17
ARTICLE XI
FISCAL YEAR 17
ARTICLE XII
CORPORATE SEAL 17
ARTICLE XIII
AMENDMENTS 17
ARTICLE IVX
ADDITIONAL COMMITTEES 18
14.1 Appointment 18
14.2 Authority 18
14.3 Tenure and Qualifications 18
14.4 Meetings 18
14.5 Quorum 18
14.6 Informal Action by a Committee 19
14.7 Vacancies 19
14.8 Resignations and Removal 19
14.9 Procedure 19
ARTICLE XV
EMERGENCY BYLAWS 19
CERTIFICATE 19
-xxvii-
ARTICLE I
OFFICES
1.1 BUSINESS OFFICE. The principal office and place of business of the
corporation is located at 1681 Chestnut Street, Suite 400, Vancouver, British
Columbia, Canada V6J 4M6. Other offices and places of business may be
established from time to time by resolution of the Board of Directors or as the
business of the corporation may require.
1.2 REGISTERED OFFICE. The registered office of the corporation,
required by the Nevada Revised Statutes to be maintained in the State of Nevada,
may be, but need not be, identical with the principal office in the State of
Nevada, and the address of the registered office may be changed from time to
time by the Board of Directors in accordance with the procedures set forth in
the Nevada Revised Statutes.
ARTICLE II
SHARES AND TRANSFER THEREOF
2.1 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.
2.2 STOCK CERTIFICATES: FACSIMILE SIGNATURES AND VALIDATION. (A)
Ownership of stock in the corporation shall be evidenced by certificates of
stock in such forms as shall be prescribed by the Board of Directors, certifying
the number of shares owned by such stockholder in the corporation, and shall be
under the seal of the corporation and signed by the President or the
Vice-President and also by the Secretary or by an Assistant Secretary. Whenever
any certificate is countersigned or otherwise authenticated by a transfer agent
or transfer clerk and by a registrar, then a facsimile of the signature of the
officers or agents of the corporation may be printed or lithographed upon such
certificate in lieu of the actual signatures.
(B) All certificates shall be consecutively numbered; the name
of the person owning the shares represented thereby with the number of such
shares and the date of issue shall be entered on the corporation's books.
(C) No certificate shall be valid unless it is signed by the
President or Vice-President and by the Secretary or by an Assistant Secretary.
In the event any officer who shall have signed, or whose facsimile signature
shall have been used on, any such certificate shall cease to be such officer of
the corporation, whether because of death, resignation or otherwise, before such
certificate shall have been delivered by the corporation, such certificate may
nevertheless be adopted by the corporation and be issued and delivered as though
the person who signed such certificate or whose facsimile signature shall have
been used thereon, had not ceased to be such officer of the corporation.
2.3 FRACTIONS OF SHARES: ISSUANCE: PAYMENT OF VALUE OR ISSUANCE OF
SCRIP. The corporation is not obligated to, but may, execute and deliver a
certificate for or including a fraction of a share. In lieu of executing and
delivering a certificate for a fraction of a share, the corporation may, upon
resolution of the Board of Directors:
(A) make payment to any person otherwise entitled to become a
holder of a fractional share, which payment shall be in accordance with the
provisions of the Nevada Revised Statutes; or
(B) execute and deliver registered or bearer scrip over the
manual signature or facsimile signature of an officer of the corporation or of
its agent for that purpose, exchangeable as provided on the scrip for full share
certificates, but the scrip does not entitle the holder to any rights as a
stockholder except as provided on the scrip. The scrip may contain any other
provisions or conditions that the corporation, by resolution of the Board of
Directors, deems advisable.
2.4 CANCELLATION OF OUTSTANDING CERTIFICATES AND ISSUANCE OF NEW
CERTIFICATES: ORDER OF SURRENDER: PENALTIES FOR FAILURE TO COMPLY. All
certificates surrendered to the corporation for transfer shall be canceled 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 canceled, except as
hereinafter provided with respect to lost, stolen or destroyed certificates.
When the Certificate or Articles of Incorporation are amended in any way
affecting the statements contained in the certificates for outstanding shares,
or it becomes desirable for any reason in the discretion of the Board of
Directors, to cancel any outstanding certificate or shares and issue a new
certificate therefor conforming to the rights of the holder, the Board of
Directors shall order any holders of outstanding certificates for shares to
surrender and exchange them for new certificates within a reasonable time to be
fixed by the Board of Directors. Such order may provide that no holder of any
such certificate so ordered to be surrendered shall be entitled to vote or to
receive dividends or exercise any of the other rights of stockholders of record
until he shall have complied with such order, but such order shall only operate
to suspend such rights after notice and until compliance. The duty of surrender
of any outstanding certificates may also be enforced by action at law.
2.5 LOST, STOLEN OR DESTROYED CERTIFICATES. Any stockholder claiming
that his certificate for shares is lost, stolen or destroyed may make an
affidavit or affirmation of the 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.
2.6 TRANSFER OF SHARES. Subject to the terms of any stockholder
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. No transfer of stock shall be valid as against the corporation unless
the certificate is delivered and surrendered to the corporation for cancellation
of the certificate therefore, accompanied by an assignment or transfer by the
owner therefor, made either in person or under assignment, and a new certificate
shall be issued therefor. Upon such 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 treat 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, save as expressly provided by the statutes
of the State of Nevada. Whenever any transfer shall be expressed as made for
collateral security and not absolutely, the same shall be so expressed in the
entry of said transfer of the books of the corporation.
2.7 RESTRICTIONS ON TRANSFER OF SHARES. Subject to the limitation
imposed by Section 104.8204, Nevada Revised Statutes, a written restriction on
the transfer or registration of transfer of a security of the corporation may be
enforced against the holder of the restricted security or any successor or
transferee of the holder. A restriction on the transfer or registration of
transfer of the securities of the corporation may be imposed either by the
Certificate of Incorporation, the Bylaws or by an agreement among any number of
security holders or between one or more such holders and the corporation. No
restriction so imposed is binding with respect to securities issued prior to the
adoption of the restriction, unless the holders of the securities are parties to
an agreement or voted in favor of the restriction.
2.8 TRANSFER AGENT. Unless otherwise specified by the Board of
Directors by resolution, the Secretary of the corporation shall act as transfer
agent of the certificates representing the shares of stock of the corporation.
He shall maintain a stock transfer book, the stubs of which shall set forth
among other things, the names and addresses of the holders of all issued shares
of the corporation, the number of shares held by each, the certificate numbers
representing such shares, the date of issue of the certificates representing
such shares, and whether or not such shares originate from original issue or
from transfer. Subject to Section 3.8, the names and addresses of the
stockholders as they appear on the stubs of the stock transfer book shall be
conclusive evidence as to who are the stockholders of record and as such
entitled to receive notice of the meetings of stockholders; to vote at such
meetings; to examine the list of the stockholders entitled to vote at meetings;
to receive dividends; and to own, enjoy and exercise any other property or
rights deriving from such shares against the corporation. Each stockholder shall
be responsible for notifying the Secretary in writing of any change in his name
or address and failure so to do will relieve the corporation, its directors,
officers and agents, from liability for failure to direct notices or other
documents, or pay over or transfer dividends or other property or rights, to a
name or address other than the name and address appearing on the stub of the
stock transfer book.
2.9 CLOSE OF TRANSFER BOOK AND RECORD DATE. For the purpose of
determining stockholders entitled to notice of or to vote at any meeting of
stockholders, or any adjournment thereof, or stockholders entitled to receive
payment of any dividend, or in order to make a determination of stockholders for
any other proper purpose, the Board of Directors may prescribe a period not
exceeding sixty (60) days prior to any meeting of the stockholders during which
no transfer of stock on the books of the corporation may be made, or may fix a
day not more than sixty (60) days prior to the holding of any such meeting as
the day as of which stockholders entitled to notice and to vote at such meeting
shall be determined; and only stockholders of record on such day shall be
entitled to notice or to vote at such meeting. When a determination of
stockholders entitled to vote at any meeting of stockholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof.
ARTICLE III
STOCKHOLDERS AND MEETINGS THEREOF
3.1 STOCKHOLDERS OF RECORD. Only stockholders of record on the books of
the corporation shall be entitled to be treated by the corporation as holders in
fact of the shares standing in their respective names, and the corporation shall
not be bound to recognize any equitable or other claim to, or interest in, any
shares on the part of any other person, firm or corporation, whether or not it
shall have express or other notice thereof, except as expressly provided by the
laws of Nevada.
3.2 MEETINGS. Meetings of stockholders shall be held at the principal
office of the corporation, or at such other place, either within or without the
State of Nevada, as specified from time to time by the Board of Directors. If
the Board of Directors shall specify another location such change in location
shall be recorded on the notice calling such meeting.
3.3 ANNUAL MEETING. The annual meeting of stockholders of the
corporation for the election of directors, and for the transaction of such other
business as may properly come before the meeting, shall be held on such date,
and at such time and place as the Board of Directors shall designate by
resolution at any time within the first nine months following the close of the
corporation's fiscal year. If the election of directors shall not be held within
the time period designated herein for any annual meeting of the stockholders,
the Board of Directors shall cause the election to be held at a special meeting
of the stockholders as soon thereafter as may be convenient. Failure to hold the
annual meeting at the designated time shall not work a forfeiture or dissolution
of the corporation.
3.4 SPECIAL MEETINGS. Special meetings of the stockholders of the
corporation may be called by the Chairman of the Board of Directors or the Board
of Directors.
3.5 ACTIONS AT MEETINGS NOT REGULARLY CALLED: RATIFICATION AND
APPROVAL. Whenever all stockholders entitled to vote at any meeting consent,
either by (i) a writing on the records of the meeting or filed with the
Secretary; or (ii) presence at such meeting and oral consent entered on the
minutes; or (iii) taking part in the deliberations at such meeting without
objection; the doings of such meeting shall be as valid as if had at a meeting
regularly called and noticed. At such meeting any business may be transacted
which is not excepted from the written consent or to the consideration of which
no objection for want of notice is-made at the time. If a meeting be irregular
for want of notice or of such consent, provided a quorum was present at such
meeting, the proceedings of the meeting may be ratified and approved and
rendered likewise valid and the irregularity or defect therein waived by a
writing signed by all parties having the right to vote at such meeting. Such
consent or approval of stockholders may be made by proxy or attorney, but all
such proxies and powers of attorney must be in writing.
3.6 NOTICE OF STOCKHOLDERS' MEETING: SIGNATURE: CONTENTS, SERVICE
WAIVER. The notice of stockholders meetings shall be in writing and signed by
the President or a Vice President, or the Secretary, or the Assistant Secretary,
or by such other person or persons as designated by the Board of Directors. Such
notice shall state the purpose or purposes for which the meeting is called and
the time when, and the place, which may be within or without the State of
Nevada, where it is to be held. A copy of such notice shall be either delivered
personally to, or shall be mailed postage prepaid to, each stockholder of record
entitled to vote at such meeting not less than ten (10) nor more than sixty (60)
days before such meeting. If mailed, it shall be directed to a stockholder at
his address as it appears on the records of the corporation, and upon such
mailing of any such notice the service thereof shall be complete, and the time
of the notice shall begin to run from the date upon which such notice is
deposited in the mail for transmission to such stockholder. Personal delivery of
any such notice to any officer of a corporation or association, or to any member
of a partnership, shall constitute delivery of such notice to such corporation,
association or partnership. Notice duly delivered or mailed to a stockholder in
accordance with the provisions of this section shall be deemed sufficient, and
in the event of the transfer of his stock after such delivery or mailing and
prior to the holding of the meeting, it shall not be necessary to deliver or
mail notice of the meeting upon the transferee. Any stockholder may waive notice
of any meeting by a writing signed by him, or his duly authorized attorney,
either before or after the meeting. Such waiver shall be deemed equivalent to
any notice required to be given pursuant to the Articles of Incorporation, the
Bylaws, or the Nevada Revised Statutes.
3.7 CONSENT OF STOCKHOLDERS' IN LIEU OF MEETING. Any action which may
be taken by the vote of stockholders at a meeting may be taken without a meeting
if authorized by the written consent of stockholders holding at least a majority
of the voting power, except that:
(A) If any greater proportion of voting power is required for
such action at a meeting, then the greater proportion of written consents is
required; and
(B) This general provision for action by written consent does
not supersede any specific provision for action by written consent contained in
the Articles of Incorporation, the bylaws or the Nevada Revised Statutes. In no
instance where action is authorized by written consent need a meeting of
stockholders be called or noticed.
3.8 VOTING RECORD. The officer or agent having charge of the stock
transfer books for shares of the corporation shall make, at least ten days
before such meeting of stockholders, a complete record of the stockholders
entitled to vote at each meeting of stockholders or any adjournment thereof,
arranged in alphabetical order, with the address of and the number of shares
held by each. The record, for a period of ten days prior to such meeting, shall
be kept on file at the principal office of the corporation, whether within or
without the State of Nevada, and shall be subject to inspection by any
stockholder for any purpose germane to the meeting at any time during usual
business hours. Such record shall be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any stockholder
during the whole time of the meeting for the purposes thereof. The original
stock transfer books shall be the prima facie evidence as to who are the
stockholders entitled to examine the record or transfer books or to vote at any
meeting of stockholders.
3.9 QUORUM. One-third of the outstanding shares of the corporation
entitled to vote, represented in person or by proxy, shall constitute a quorum
at any meeting of stockholders, except as otherwise provided by the Nevada
Revised Statutes and the Articles of Incorporation. 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 sixty (60) days without
further notice. 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 stockholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
3.10 MANNER OF ACTING. If a quorum is present, the affirmative vote of
the majority of the shares represented at the meeting and entitled to vote on
the subject matter shall be the act of the stockholders, unless the vote of a
greater proportion or number or voting by classes is otherwise required by
statute or by the Articles of Incorporation or these Bylaws.
3.11 STOCKHOLDERS' PROXIES. At any meeting of the stockholders of the
corporation, any stockholder may be represented and vote by a proxy or proxies
appointed by an instrument in writing. In the event that any such instrument in
writing shall designate two or more persons to act as proxies, a majority of
such persons present at the meeting, or, if only one shall be present, then that
one shall have and may exercise all the powers conferred by such written
instrument upon all of the persons so designated unless the instrument shall
otherwise provide. No such proxy shall be valid after the expiration of six (6)
months from the date of its execution, unless coupled with an interest, or
unless the person executing it specifies therein the length of time for which it
is to continue in force, which in no case shall exceed seven (7) years from the
date of its execution. Subject to the above, any proxy duly executed is not
revoked and continues in full force and effect until an instrument revoking it
or a duly executed proxy bearing a later date is filed with the Secretary of the
corporation.
3.12 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
stockholders, and each fractional share shall be entitled to a corresponding
fractional vote on each such matter.
3.13 VOTING BY BALLOT. Voting on any question or in any election may be
by voice vote unless the presiding officer shall order or any stockholder shall
demand that voting be by ballot.
3.14 CUMULATIVE VOTING. No stockholder shall be permitted to cumulate
his votes.
3.15 STOCKHOLDER NOMINATIONS AND PROPOSALS. (A) No proposal for a
stockholder vote (a "Stockholder Proposal") shall be submitted to the
stockholders of the corporation unless the stockholder submitting such proposal
(the "Proponent") shall have filed a written notice setting forth with
particularity (i) the names and business addresses of the Proponent and all
Persons (as such term is defined in Section 3(a)(9) of the Securities Exchange
Act of 1934, as amended, (the "Exchange Act")) acting in concert with the
Proponent; (ii) the names and addresses of the Proponent and the Persons
identified in clause (i), as they appear on the Corporation's books (if they so
appear); (iii) the class and number of shares of the Corporation beneficially
owned by the Proponent and the Persons identified in clause (i); (iv) a
description of the Stockholder Proposal containing all information material
thereto; (v) a description of all arrangements or understandings between the
Proponent and any other Persons (including the names of such other Persons) in
connection with the Stockholder Proposal and any material interest of the
Proponent or such Persons in such Stockholder Proposal and (vi) such other
information as the Board of Directors reasonably determines is necessary or
appropriate to enable the Board of Directors and stockholders to consider the
Stockholder Proposal. Upon receipt of the Stockholder Proposal and prior to the
stockholders' meeting at which such Stockholder Proposal will be considered, if
the Board of Directors or a designated committee or the officer who will preside
at the meeting of the stockholders determines that the information provided in a
Stockholder Proposal does not satisfy the requirements of this Section 3.15 or
is otherwise not in accordance with applicable law, the Secretary of the
Corporation shall promptly notify the Proponent of the deficiency in the notice.
Such Proponent shall have the opportunity to cure the deficiency by providing
additional information to the Secretary within the period of time, not to exceed
five days from the date such deficiency notice is given to the Proponent,
determined by the Board of Directors, such committee or such officer. If the
deficiency is not cured within such period, or if the Board of Directors, such
committee or such officer determines that the additional information provided by
the Proponent, together with the information previously provided, does not
satisfy the requirements of this Section 3.15 or is otherwise not in accordance
with applicable law, then such Stockholder Proposal shall not be presented for
action at the stockholders' meeting in question.
(B) Only persons who are selected and recommended by the Board of
Directors or the nominating committee thereof, or who are nominated by the
stockholders in accordance with the procedures set forth in this Section 3.15,
shall be eligible for election or qualified to serve as directors. Nominations
of individuals for election to the Board of Directors at any annual meeting or
special meeting of the stockholders at which directors are to be elected may be
made by any stockholder of the Corporation entitled to vote for the election of
directors at that meeting by compliance with the procedures set forth in this
Section 3.15 except as may be otherwise provided in the Articles of
Incorporation with respect to the right of holders of Preferred Stock of the
Corporation to nominate and elect a specified number of directors. Nominations
by stockholders shall be made by written notice (a "Nomination Notice"), which
shall set forth (i) as to each individual nominated (A) the name, date of birth,
business address and residence address of such nominee; (B) the business
experience during the past five years of such nominee, including his or her
principal occupations or employment during such period, the name and principal
business of any corporation or other organization in which such occupations and
employment were carried on, and such other information as to the nature of his
or her responsibilities and the level of professional competence as may be
sufficient to permit assessment of his or her prior business experience; (C)
whether the nominee is or has ever been at any time a director, officer or owner
of 5% or more of any class of capital stock, partnership interests or other
equity interest of any Corporation, partnership or other entity; (D) any
directorships held by such nominee in any corporation with a class of securities
registered pursuant to section 12 of the Exchange Act or subject to the
requirements of section 15(d) of the Exchange Act or any corporation registered
as an investment company under the Investment Company Act of 1940, as amended;
(E) whether, in the last five years, such nominee has been convicted in a
criminal proceeding or has been subject to a judgment, order, finding or decree
of any federal, state or other governmental entity, concerning any violation of
federal, state, or other law, or any proceeding in bankruptcy, which conviction,
judgment, order, finding, decree or proceeding may be material to the evaluation
of the ability or integrity of the nominee; and (F) any other information
relating to the nominee that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with solicitations
of proxies for election of directors pursuant to section 14 of the Exchange Act,
and the rules and regulations promulgated thereunder; and (ii) as to the person
submitting the Nomination Notice and any Person acting in concert with such
Person, (w) the name and business address of such person and Persons, (x) the
name and business address of such person and Persons as they appear on the books
of the Corporation (if they so appear); (y) the class and number of shares of
the Corporation which are beneficially owned by such person and Persons, and (z)
any other information relating to such stockholder that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant to
section 14 of the Exchange Act and the rules and regulations promulgated
thereunder. A written consent to being named in a proxy statement as a nominee,
and to serve as a director if elected, signed by the nominee, shall be filed
with any Nomination Notice. If the presiding officer at any stockholders'
meeting determines that a nomination was not made in accordance with the
procedures prescribed by these Bylaws, the officer shall so declare to the
meeting and the defective nomination shall be disregarded.
(C) Nomination Notices and Stockholder Proposals must be delivered to
the Secretary at the principal executive office of the Corporation or mailed and
received at the principal executive offices of the Corporation (a) in the case
of any annual meeting, 120 days prior to the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that in the event
that the annual meeting is called for a date that is not within 30 days before
or 60 days after such anniversary date, notice by the stockholder in order to be
timely must be so received no later than the close of business on the tenth day
following the day on which notice of the date of the annual meeting was mailed
or public disclosure of the date of the annual meeting was made, whichever first
occurs; and (b) in the case of a special meeting of stockholders called for the
purpose of electing directors, not later than the close of business on the tenth
day following the day on which notice of the date of the special meeting was
mailed or public disclosure of the date of the special meeting was made,
whichever first occurs.
ARTICLE IV
DIRECTORS, POWERS AND MEETINGS
4.1 BOARD OF DIRECTORS. The business and affairs of the corporation
shall be managed by a board of not less than one (1) nor more than ten (10)
directors who shall be natural persons of at least 18 years of age but who need
not be stockholders of the corporation or residents of the State of Nevada and
who shall be elected at the annual meeting of stockholders or some adjournment
thereof. Directors shall hold office until the next succeeding annual meeting of
stockholders and until their successors shall have been elected and shall
qualify. The Board of Directors may increase or decrease the number of directors
by resolution.
4.2 GENERAL POWERS. The business and affairs of the corporation shall
be managed by the Board of Directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or by
the Articles of Incorporation or by these Bylaws directed or required to be
exercised or done by the stockholders including, but without thereby limiting
the generality of the foregoing, the power to create and to delegate, with power
to subdelegate, any of its powers to any committee. The directors shall pass
upon any and all bills or claims of officers for salaries or other compensation
and, if deemed advisable, shall contract with officers, employees, directors,
attorneys, accountants, and other persons to render services to the corporation.
Any contractor or conveyance, otherwise lawful, made in the name of the
corporation, which is authorized or ratified by the Board of Directors, or is
done within the scope of the authority, actual or apparent, given by the Board
of Directors, binds the corporation, and the corporation acquires rights
thereunder, whether the contract is executed or is wholly or in part executory.
4.3 PERFORMANCE OF DUTIES. A director of the corporation shall perform
his duties as a director, including his duties as a member of any committee of
the board upon which he may serve, in good faith, in a manner he 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 duties, 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 4.3; but he shall
not be considered to be acting in good faith if he has knowledge concerning the
matter in question that would cause such reliance to be unwarranted. A person
who so performs his 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 does not serve,
duly designated in accordance with the provisions of the Articles of
Incorporation or the Bylaws, as to matters within its designated authority,
which committee the director reasonably believes to merit confidence.
4.4 REGULAR MEETINGS. A regular, annual meeting of the Board of
Directors shall be held at the same place as, and immediately after, the annual
meeting of stockholders, and no notice shall be required in connection
therewith. The annual meeting of the Board of Directors shall be for the purpose
of electing officers and the transaction of such other business as may come
before the meeting. The Board of Directors may provide, by resolution, the time
and place, either within or without the State of Nevada, for the holding of
additional regular meetings without other notice than such resolution.
4.5 SPECIAL MEETINGS. Special meetings of the Board of Directors may be
called by or at the request of 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 Nevada, as the place for
holding any special meeting of the Board of Directors called by them.
4.6 NOTICE. Written notice of any special meeting of directors shall be
given as follows:
(A) By mail to each director at his business address at least
three (3) days prior to the meeting. If mailed, such notice shall be deemed to
be delivered when deposited in the United States mail, so addressed, with
postage thereon prepaid; or
(B) By personal delivery or telegram at least twenty-four (24)
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 notice be given by telegram, such notice shall be
deemed to be delivered when the telegram is delivered to the telegraph company.
4.7 WAIVER OF NOTICE. Whenever any notice whatever is required to be
given to directors, a waiver thereof in writing, signed by the person or persons
entitled to the notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
4.8 PARTICIPATION BY ELECTRONIC MEANS. Unless otherwise restricted,
members of the Board of Directors or any committee thereof, may participate in a
meeting of such board or committee by means of a conference telephone network or
a similar communications method by which all persons participating in the
meeting can hear each other. Participation in a meeting pursuant to this section
constitutes presence in person at such meeting.
4.9 QUORUM AND MANNER OF ACTING. A quorum at all meetings of the Board
of Directors shall consist of a majority of the number of directors then holding
office, but a smaller number may adjourn from time to time without further
notice, until a quorum is secured. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors, unless the act of a greater number is required by the laws of the
State of Nevada or by the Articles of Incorporation or these Bylaws.
4.10 ORGANIZATION. The Board of Directors shall elect a chairman from
among the directors to preside at each meeting of the Board of Directors and at
all meetings of the stockholders. If there shall be no chairman present, then
the President shall preside, and in his absence, any other director chosen by
the Board of Directors shall preside. The Board of Directors shall elect a
Secretary to record the discussions and resolutions of each meeting.
4.11 INFORMAL ACTION BY DIRECTORS. Unless otherwise restricted by the
Articles of Incorporation or these Bylaws, any action required or permitted to
be taken at any meeting of the Board of Directors or of any committee thereof,
may be taken without a meeting if a written consent thereto is signed by all the
members of the board or such committee. Such written consent shall be filed with
the minutes of proceedings of the board or committee.
4.12 VACANCIES AND ADDITIONAL DIRECTORS. Any vacancy on the Board of
Directors may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall be elected for the unexpired term of his
predecessor in office and shall hold such office until his successor is duly
elected and shall qualify. A director elected to fill a vacancy for which there
was no predecessor shall hold such office until his successor is duly elected
and shall qualify. Any directorship to be filled by reason of an increase in the
number of directors shall be filled by the affirmative vote of a majority of the
directors then in office or by an election at an annual meeting, or at a special
meeting of stockholders called for that purpose. A director chosen to fill a
position resulting from an increase in the number of directors shall hold office
only until the next election of directors by the stockholders.
4.13 COMPENSATION. By resolution of the Board of Directors and
irrespective of any personal interest of any of the members, each director may
be paid his 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.
4.14 REMOVAL OF DIRECTORS. Any director or directors of the corporation
may be removed from office at any time, with or without cause, by the vote or
written consent of stockholders representing not less than two-thirds of the
issued and outstanding capital stock entitled to voting power.
4.15 RESIGNATIONS. A director of the corporation may resign at any time
by giving written notice to the Board of Directors, President or Secretary of
the corporation. The resignation shall take effect upon the date of receipt of
such notice, or at such later time specified therein. The acceptance of such
resignation shall not be necessary to make it effective, unless the resignation
requires such acceptance to be effective.
ARTICLE V
COMMITTEES
5.1 EXECUTIVE COMMITTEE. (A) The Board of Directors may appoint an
executive committee consisting of such number of directors as it may appoint, to
serve at the pleasure of the Board of Directors, but in any event not beyond the
next annual meeting of the Board of Director. The Board of Directors may at any
time, without notice, remove and replace any member of the executive committee.
(B) Subject to the provisions of Section 4.2 of these bylaws,
the executive committee shall have a charter that will be approved and revised
as appropriate, from time to time by the executive committee and the Board of
Director. In general terms the functions of the executive committee shall be
those as set forth in the charter.
(C) The executive committee shall meet at stated times or on
notice to all by one of its number, in which notice the time and place of the
meeting shall be set forth. The executive committee shall fix its own rules of
procedure, and a majority shall constitute a quorum; but the affirmative vote of
a majority of the whole committee shall be necessary in every case. The
executive committee shall keep regular minutes of its proceedings and report the
same to the Board of Directors.
(D) Members of the executive committee, other than officers of
the corporation, may receive such compensation for their services as shall be
prescribed by the Board of Directors. Each member of the executive committee
shall be entitled to receive from the corporation reimbursement of his expenses
incurred in attending a meeting of such committee.
5.2 AUDIT COMMITTEE. (A) The Board of Directors may appoint an audit
committee, consisting of such number of directors as it may appoint, to serve at
the pleasure of the Board of Directors, but in any event not beyond the next
annual meeting of the Board of Directors. The Board of Directors may at any
time, without notice, remove and replace any member of the audit committee.
(B) Subject to the provisions of Section 4.2 of these bylaws,
the audit committee shall have a charter that will be approved and revised as
appropriate, from time to time by the audit committee and the Board of
Directors. In general terms, the functions of the audit committee shall be those
as set forth in the charter.
(C) The audit committee shall meet at stated times or on
notice to all by one of its number, in which notice the time and place of the
meeting shall be set forth. The audit committee shall fix its own rules of
procedure, and a majority shall constitute a quorum; but the affirmative vote of
a majority of the whole committee shall be necessary in every case. The audit
committee shall keep regular minutes of its proceedings and report the same to
the Board of Directors.
(D) Members of the audit committee, other than officers of the
corporation, may receive such compensation for their services as shall be
prescribed by the Board of Directors. Each member of the audit committee shall
be entitled to receive from the corporation reimbursement of his expenses
incurred in attending a meeting of such committee.
5.3 COMPENSATION COMMITTEE. (A) The Board of Directors may appoint a
compensation committee, consisting of such number of directors as it may
appoint, to serve at the pleasure of the Board of Directors, but in any event
not beyond the next annual meeting of the Board of Directors. The Board of
Directors may at any time, without notice, remove and replace any member of the
compensation committee.
(B) Subject to the provisions of Section 4.2 of these bylaws,
the compensation committee shall have a charter that will be approved and
revised as appropriate, from time to time by the audit committee and the Board
of Directors. In general terms, the functions of the compensation committee
shall be those as set forth in the charter.
(C) The compensation committee shall meet at stated times or
on notice to all by one of its number, in which notice the time and place of the
meeting shall be set forth. The compensation committee shall fix its own rules
of procedure, and a majority shall constitute a quorum; but the affirmative vote
of a majority of the whole committee shall be necessary in every case. The
compensation committee shall keep regular minutes of its proceedings and report
the same to the Board of Directors.
(D) Members of the compensation committee, other than officers
of the corporation, may receive such compensation for their services as shall be
prescribed by the Board of Directors. Each member of the compensation committee
shall be entitled to receive from the corporation reimbursement of his expenses
incurred in attending a meeting of such committee.
5.4 NOMINATING/GOVERNANCE COMMITTEE. (A) The Board of Directors may
appoint a nominating/governance committee, consisting of such number of
directors as it may appoint, to serve at the pleasure of the Board of Directors,
but in any event not beyond the next annual meeting of the Board of Directors.
The Board of Directors may at any time, without notice, remove and replace any
member of the nominating/governance committee.
(B) Subject to the provisions of Section 4.2 of these bylaws,
the nominating/governance committee shall have a charter that will be approved
and revised as appropriate, from time to time by the nominating/governance
committee and the Board of Directors. In general terms, the functions of the
nominating/governance committee shall be those as set forth in the charter.
(C) The nominating/governance committee shall meet at stated
times or on notice to all by one of its number, in which notice the time and
place of the meeting shall be set forth. The nominating/governance committee
shall fix its own rules of procedure, and a majority shall constitute a quorum;
but the affirmative vote of a majority of the whole committee shall be necessary
in every case. The nominating/governance committee shall keep regular minutes of
its proceedings and report the same to the Board of Directors.
(D) Members of the nominating/governance committee, other than
officers of the corporation, may receive such compensation for their services as
shall be prescribed by the Board of Directors. Each member of the
nominating/governance committee shall be entitled to receive from the
corporation reimbursement of his expenses incurred in attending a meeting of
such committee.
ARTICLE VI
OFFICERS
6.1 NUMBER. The officers of the corporation shall be a President, a
Secretary and a Treasurer, each of whom shall be elected by the Board of
Directors. Such other officers and assistant officers as may be deemed necessary
may be elected or appointed by the Board of Directors. Any two or more offices
may be held by the same person.
6.2 ELECTION AND TERM OF OFFICE. The officers of the corporation to be
elected by the Board of Directors shall be elected annually by the Board of
Directors at the first meeting of the Board of Directors held after the annual
meeting of the stockholders. 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 successor shall have been duly elected
and shall have qualified or until his death or until he shall resign or shall
have been removed in the manner hereinafter provided.
6.3 REMOVAL. Any officer may be removed by the Board of Directors
whenever in its judgment the best interests of the corporation will be served
thereby, but such removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of an officer or agent
shall not of itself create contract rights.
6.4 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. In the event of absence or inability of
any officer to act, the Board of Directors may delegate the powers or duties of
such officer to any other officer, director or person whom it may select.
6.5 POWERS. The officers of the corporation shall exercise and perform
the respective powers, duties and functions as are stated below, and as may be
assigned to them by the Board of Directors.
(A) PRESIDENT. The President shall be the chief executive
officer of the corporation and, subject to the control of the Board of
Directors, shall have general supervision, direction and control over all of the
business and affairs of the corporation. The President shall, when present, and
in the absence of a Chairman of the Board, preside at all meetings of the
stockholders and of the Board of Directors. The President may sign, with the
Secretary or any other proper officer of the corporation authorized by the Board
of Directors, 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 the 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.
(B) 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 by the Board of
Directors, 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 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, with the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary, certificates for shares of
the corporation; and shall perform such other duties as from time to time may be
assigned to him by the President or by the Board of Directors.
(C) SECRETARY. The Secretary shall: keep the minutes of the
proceedings of the stockholders and of the Board of Directors in one or more
books provided for that purpose; see that all notices are duly given in
accordance with the provisions of these Bylaws or as required by law; be
custodian of the corporate records and of the seal of the corporation and see
that the seal of the corporation is affixed to all documents the execution of
which on behalf of the corporation under its seal is duly authorized; keep a
register of the post office address of each stockholder which shall be furnished
to the Secretary by such stockholder; sign with the Chairman or Vice Chairman of
the Board of Directors, or the President, or a Vice President, certificates for
shares of the corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors; have general charge of the stock transfer
books of the corporation; and 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 by the President or by the Board of Directors.
(D) ASSISTANT SECRETARY. The Assistant Secretary, when
authorized by the Board of Directors, may sign with the Chairman or Vice
Chairman of the Board of Directors or the President or a Vice President
certificates for shares of the corporation the issuance of which shall have been
authorized by a resolution of the Board of Directors. An Assistant Secretary, at
the request of the Secretary, or in the absence or disability of the Secretary,
also may perform all of the duties of the Secretary. An Assistant Secretary
shall perform such other duties as may be assigned to him by the President or by
the Secretary.
(E) TREASURER. The Treasurer shall: have charge and custody of
and be responsible for all funds and securities of the corporation; receive and
give receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with the provisions of these Bylaws; and keep accurate books of accounts of the
corporation's transactions, which shall be the property of the corporation, and
shall render financial reports and statements of condition of the corporation
when so requested by the Board of Directors or President. The Treasurer shall
perform all duties commonly incident to his office and such other duties as may
from time to time be assigned to him by the President or the Board of Directors.
In the absence or disability of the President and Vice President or Vice
Presidents, the Treasurer shall perform the duties of the President.
(F) ASSISTANT TREASURER. An Assistant Treasurer may, at the
request of the Treasurer, or in the absence or disability of the Treasurer,
perform all of the duties of the Treasurer. He shall perform such other duties
as may be assigned to him by the President or by the Treasurer.
6.6 COMPENSATION. All officers of the corporation may receive salaries
or other compensation if so ordered and fixed by the Board of Directors. The
Board shall have authority to fix salaries in advance for stated periods or
render the same retroactive as the Board may deem advisable. No officer shall be
prevented from receiving such salary by reason of the fact that he is also a
director of the corporation.
6.7 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 their respective duties and
offices.
ARTICLE VII
INDEMNIFICATION
The corporation shall, to the fullest and broadest extent permitted by
law, indemnify all persons whom it may indemnify pursuant thereto. The
corporation may, but shall not be obligated to, maintain insurance, at its
expense, to protect itself and any other person against any liability, cost or
expense. The foregoing provision of this section shall be deemed to be a
contract between the corporation and each person who may be indemnified pursuant
to this section at any time while this section and the relevant provisions of
the General Corporation Law of Nevada and other applicable law, if any, are in
effect, and any repeal or modification thereof shall not affect any rights or
obligations then existing with respect to any state of facts then or theretofore
existing or any action, suit or proceeding theretofore or thereafter brought or
threatened based in whole or in part upon any such state of facts.
Notwithstanding the foregoing provisions of this section, the corporation shall
not indemnify persons seeking indemnity in connection with any threatened,
pending or completed action, suit or proceeding voluntarily brought or
threatened by such person unless such action, suit or proceeding has been
authorized by a majority of the entire Board of Directors.
ARTICLE VIII
DIVIDENDS
The Board of Directors from time to time may declare and the
corporation may pay dividends on its outstanding shares upon the terms and
conditions and in the manner provided by law and the Articles of Incorporation.
ARTICLE IX
FINANCE
9.1 RESERVE FUNDS. The Board of Directors, in its uncontrolled
discretion, may set aside from time to time, out of the net profits or earned
surplus of the corporation, such sum or sums as it deems expedient as a reserve
fund to meet contingencies, for equalizing dividends, for maintaining any
property of the corporation, and for any other purpose.
9.2 BANKING. The moneys of the corporation shall be deposited in the
name of the corporation in such bank or banks or trust company or trust
companies, as the Board of Directors shall designate, and may be drawn out only
on checks signed in the name of the corporation by such person or persons as the
Board of Directors, by appropriate resolution, may direct. Notes and commercial
paper, when authorized by the Board, shall be signed in the name of the
corporation by such officer or officers or agent or agents as shall be
authorized from time to time.
ARTICLE X
CONTRACTS, LOANS AND CHECKS
10.1 EXECUTION OF CONTRACTS. Except as otherwise provided by statute or
by these Bylaws, the Board of Directors may authorize any officer or agent of
the corporation to enter into any contract, or execute and deliver any
instrument in the name of, and on behalf of the corporation. Such authority may
be general or confined to specific instances. Unless so authorized, no officer,
agent or employee shall have any power to bind the corporation for any purpose,
except as may be necessary to enable the corporation to carry on its normal and
ordinary course of business.
10.2 LOANS. No loans shall be contracted on behalf of the corporation
and no negotiable paper or other evidence of indebtedness shall be issued in its
name unless authorized by the Board of Directors. When so authorized, any
officer or agent of the corporation may effect loans and advances at any time
for the corporation from any bank, trust company or institution, firm,
corporation or individual. An agent so authorized may make and deliver
promissory notes or other evidence of indebtedness of the corporation and may
mortgage, pledge, hypothecate or transfer any real or personal property held by
the corporation as security for the payment of such loans. Such authority, in
the Board of Directors discretion, may be general or confined to specific
instances.
10.3 CHECKS. Checks, notes, drafts and demands for money or other
evidence of indebtedness issued in the name of the corporation shall be signed
by such person or persons as designated by the Board of Directors and in the
manner prescribed by the Board of Directors.
10.4 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 XI
FISCAL YEAR
The fiscal year of the corporation shall be the year adopted by
resolution of the Board of Directors.
ARTICLE XII
CORPORATE SEAL
The Board of Directors may provide 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 the words "CORPORATE SEAL."
ARTICLE XIII
AMENDMENTS
Any Article or provision of these Bylaws may be altered, amended or
repealed at any time, or new Bylaws may be adopted at any time, by a majority of
the directors present at any meeting of the Board of Directors of the
corporation at which a quorum is present, in the sole and absolute discretion of
the Board of Directors.
ARTICLE IVX
ADDITIONAL COMMITTEES
14.1 APPOINTMENT. Notwithstanding Article V, the Board of Directors by
resolution adopted by a majority of the full Board, may designate one or more
additional committees, each committee to consist of one or more of the directors
of the corporation. 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.
14.2 AUTHORITY. Any such additional 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 committee and except also that the
committee shall not have the authority of the Board of Directors in reference to
declaring dividends and distributions, recommending to the stockholders that the
Articles of Incorporation be amended, recommending to the stockholders the
adoption of a plan of merger or consolidation, filling vacancies on the Board of
Directors or any committee thereof, recommending to the stockholders 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 stockholders a voluntary dissolution of the
corporation or a revocation thereof, authorize or approve the issuance or
reacquisition of shares, or amending the Bylaws of the corporation.
14.3 TENURE AND QUALIFICATIONS. Each member of such additional
committee shall hold office until the next regular annual meeting of the Board
of Directors following the designation of such member and until his successor is
designated as a member of such committee and is elected and qualified.
14.4 MEETINGS. Regular meetings of any additional committee may be held
without notice at such time and places as the committee may fix from time to
time by resolution. Special meetings of any additional committee may be called
by any member thereof upon not less than one day's notice stating the place,
date and hour of the meeting, which notice may be written or oral, and if
mailed, shall be deemed to be delivered when deposited in the United States mail
addressed to the member of the committee at his business address. Any member of
any such additional 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 any such additional committee need not state the business
proposed to be transacted at the meeting.
14.5 QUORUM. A majority of the members of a committee shall constitute
a quorum for the transaction of business at any meeting thereof, and any action
of such committee must be authorized by the affirmative vote of a majority of
the members present at a meeting at which a quorum is present.
14.6 INFORMAL ACTION BY A COMMITTEE. Any action required or permitted
to be taken by a 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 committee entitled to vote with respect to the subject matter
thereof.
14.7 VACANCIES. Any vacancy in a committee may be filled by a
resolution adopted by a majority of the full Board of Directors.
14.8 RESIGNATIONS AND REMOVAL. Any member of a committee may be removed
at any time with or without cause by resolution adopted by a majority of the
full Board of Directors. Any member of a committee may resign from such
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.
14.9 PROCEDURE. A 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 XV
EMERGENCY BYLAWS
The Emergency Bylaws provided in this Article XV shall be operative
during any emergency in the conduct of the business of the corporation resulting
from an attack on the United States or any nuclear or atomic disaster,
notwithstanding any different provision in the preceding articles of the Bylaws
or in the Articles of Incorporation of the corporation or in the Nevada Revised
Statutes. 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. No
officer, director, or employee shall be liable for any action taken by him in
good faith in such an emergency in furtherance of the ordinary business affairs
of the corporation even though not authorized by the Bylaws then in effect.
(F) These Emergency Bylaws shall be subject to repeal or
change by further action of the Board of Directors or by action of the
stockholders, 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 Amended and Restated Bylaws,
consisting of 19 pages, including this page, constitute the Bylaws of GENEMAX
CORP, as in effect on December 16, 2003.
____________________, President
____________________, Secretary
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Ronald Handford, certify that:
I have reviewed this quarterly report on Form 10-QSB of Genemax Corp.;
1. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period discovered
by this quarterly report;
2. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
3. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure control
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date") and;
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
4. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls, and
b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
5. The registrant's certifying officers and I have indicated in this quarterly
report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: May 20, 2003 /s/ RONALD HANDFORD
_______________________________
Ronald Handford, Chief Executive
Officer and Chief Financial Officer
EXHIBIT 32.1
CERTIFICATIONS PURSUANT TO SECURITIES EXCHANGE ACT OF 1934
RULE 13A-14(B) OR 15D-14(B) AND
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the annual report of GeneMax Corp. (the "Company")
on Form 10-QSB for the quarter ended March 31, 2004, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), Ronald L.
Handford, Chief Executive Officer and Chief Financial Officer of the Company,
each certifies for the purpose of complying with Rule 13a-14(b) or Rule
15d-14(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and
Section 1350 of Chapter 63 of Title 18 of the United States Code, that:
1. the Report fully complies with the requirements of Section 13(a) or
15(d) of the Exchange Act; and
2. the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of
the Company.
Date: May 20, 2004 /s/ RONALD L. HANDFORD
__________________________________________
Ronald L. Handford, President, Chief
Executive Officer and Chief Financial
Officer
EXHIBIT 99.1
PRESS RELEASE Source: GeneMax Corp.
GENEMAX CORPORATION'S TAP-1 TECHNOLOGY CORROBORATED IN MODELS OF SKIN CANCER
Monday May 10, 9:02 am ET
VANCOUVER, May 10 /PRNewswire-FirstCall/ - GeneMax Corp. (OTC Bulletin Board:
GMXX; Frankfurt: GX1) Today, GeneMax Corp. announced that its patented TAP-1
anti-cancer technology is effective in generating immune responses against
melanoma in mice. A recent article in the Journal of Immunology corroborates
GeneMax's TAP-1 technology (Transporters Associated with Antigen Processing)
that promotes an immune response that destroys these cancer cells. In this
study, two leading edge vaccine approaches (adenovirus and dendritic cell-based)
were tested for their efficacy against melanoma (skin cancer) cells. Experiments
with both tumor vaccines demonstrated that introduction of TAP-1 to the melanoma
cells increased the recognition and destruction of the cancer cells by the
immune system. The article entitled "CTL-Dependent and -Independent Antitumor
Immunity is Determined by the Tumor Not the Vaccine", can be found in the May 1,
2004 issue of the Journal of Immunology (reference 1;172(9):5200-5205).
Ronald L. Handford, President & CEO of GeneMax remarked, "Further corroboration
of our core technology demonstrates the potential of GeneMax's TAP-1 cancer
immunotherapy to affect a wide variety of cancers. These additional findings
suggest that many cancer vaccines under development by a variety of universities
and competing companies will not be maximally effective unless TAP-1 is
expressed in the cancer cells. GeneMax's TAP-1 vaccine technology increases TAP
expression in cancer cells making them visible to the immune system and allowing
for their effective destruction. GeneMax's anti-cancer technology thus addresses
a fundamental need in the field of cancer immunotherapies."
Collaborating authors of the article include Professor Wilfred Jefferies and Dr.
Qian-Jin Zhang, of the Biomedical Research Centre and Biotechnology Laboratory
at the University of British Columbia, Canada and Jaina Leitch, Dr. Yonghong
Wan, Dr. Jonathan L. Bramson, Katie Fraser, Cecilia Lane, Dr. Kelley Putzu and
Dr. Gosse J. Adema of McMaster University, Hamilton, Ontario, Canada. Professor
Jefferies is GeneMax's Chairman and Chief Scientific Officer. The research that
led to the scientific publication was supported by grants from the Canadian
Institutes of Health Research (CIHR) and the Canadian Network for Vaccines and
Immunotherapeutics (CANVAC), as well as funding from GeneMax through its
Collaborative Research Agreement with The University of British Columbia.
About GeneMax Corp.: GeneMax Corp. is a biotechnology company specializing in
the discovery and development of immunotherapeutics aimed at the treatment and
eradication of cancer, and therapies for infectious diseases, autoimmune
disorders and transplant tissue rejection. It is currently producing and testing
a cancer vaccine in anticipation of clinical trials.
For further information:
Contact: Kendra Payne
Phone: Toll Free (866) 872-0077 or (604) 714-1225, Fax: (604) 331-0877
Stock Exchange Information: (Symbol: OTCBB - GMXX, Symbol FWB - GX1,
WKN: 645096, ISN: US36870Q1031)
SAFE HARBOR STATEMENT
THIS NEWS RELEASE INCLUDES FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
SECTION 27A OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND SECTION
21E OF THE UNITED STATES SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED. THESE
STATEMENTS ARE MADE UNDER THE "SAFE HARBOR" PROVISIONS OF THE UNITED STATES
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. EXCEPT FOR THE HISTORICAL
INFORMATION PRESENTED HEREIN, MATTERS DISCUSSED IN THIS PRESS RELEASE CONTAIN
FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM ANY FUTURE RESULTS,
PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH STATEMENTS. STATEMENTS
THAT ARE NOT HISTORICAL FACTS, INCLUDING STATEMENTS THAT ARE PRECEDED BY,
FOLLOWED BY, OR THAT INCLUDE SUCH WORDS AS "ESTIMATE," "ANTICIPATE," "BELIEVE,"
"PLAN" OR "EXPECT" OR SIMILAR STATEMENTS ARE FORWARD- LOOKING STATEMENTS. RISKS
AND UNCERTAINTIES FOR GENEMAX CORP. INCLUDE BUT ARE NOT LIMITED THE RISKS
ASSOCIATED WITH PRODUCT DISCOVERY AND DEVELOPMENT AS WELL AS THE RISKS SHOWN IN
GENEMAX'S MOST RECENT ANNUAL REPORT ON FORM 10-KSB AND ON FORM 10-QSB AND FROM
TIME-TO-TIME IN OTHER PUBLICLY AVAILABLE INFORMATION REGARDING GENEMAX. OTHER
RISKS INCLUDE RISKS ASSOCIATED WITH OBTAINING GOVERNMENT GRANTS, THE SUCCESS OF
PRECLINICAL AND CLINICAL TRIALS, THE PROGRESS OF RESEARCH AND PRODUCT
DEVELOPMENT PROGRAMS, THE REGULATORY APPROVAL PROCESS, COMPETITIVE PRODUCTS,
FUTURE CAPITAL REQUIREMENTS, AND GENEMAX'S ABILITY AND LEVEL OF SUPPORT FOR ITS
RESEARCH ACTIVITIES. THERE CAN BE NO ASSURANCE THAT GENEMAX'S DEVELOPMENT
EFFORTS WILL SUCCEED, THAT SUCH PRODUCTS WILL RECEIVE REQUIRED REGULATORY
CLEARANCE, OR THAT EVEN IF SUCH REGULATORY CLEARANCE WERE RECEIVED, THAT SUCH
PRODUCTS WOULD ULTIMATELY ACHIEVE COMMERCIAL SUCCESS. GENEMAX DISCLAIMS ANY
INTENT OR OBLIGATIONS TO UPDATE THESE FORWARD-LOOKING STATEMENTS."