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Item 3.03 Material Modification to Rights of Security Holders. On August 23, 2004 the Board of Directors of Registrant passed a resolution designating 5,102,041 shares of the 100,000,000 shares of preferred stock authorized as Series A Preferred Stock. Pursuant to the Designation Certificate, The Series A Preferred Stock will have no preferences as to standing in the event of liquidation and has no stated dividend rate or dividend preference. The newly designated Series A Preferred Stock has voting right equal to the equivalent of 100 shares of common stock for each 1 share of Series A preferred held, limited to the specific purpose of voting on a 100 to 1 reverse stock split of the currently issued and outstanding common stock, but not the total authorized common capital stock, of the Registrant. Thereafter, the Series A Preferred will have the same voting rights as the common stock of 1 vote for 1 share held.
The Creation and issuance of the Series A Preferred Stock affects the rights and powers of the Registrant's common stock holders in at least two ways. The common stockholders voting power on the matter of whether the Registrant should reverse split the common stock outstanding has been reduced to approximately thirty-two (49) percent of all shares entitled to vote on the issue thus assuring that the common stock reverse split will be approved, and; the relative percentage of the capital stock of the company represented by the class of common stock issued and outstanding is diminished and may, if new equity securities are issued after giving effect to the reverse split, be reduced substantially. As of the effective date of the reverse split, however, the relative holdings of all equity securities holders will remain the same as before the reverse split.
Section 4 - Matters Related to Accountants and Financial Statements
Section 5 - Corporate Governance and Management
Section 6 - [Reserved]
Section 7 - Regulation FD
Section 8 - Other Events
Item 8.01 Other Events. The intent by Registrant's Board of Directors to reverse split the issued and outstanding common stock of Registrant has been made public but no record date and effective date has been set for such reverse split. Registrant anticipates that the split will not take effect until an information statement is prepared and filed with the SEC on Schedule 14C and distributed to shareholders, and under the timing requirements of the laws of the state of Nevada, if any, in light of the notice requirements of the NASD, Inc.
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