"We are reincorporating in Nevada to allow the Company to buy back issued and outstanding Common Stock of the Company. Under the Washington Business Corporation Act, a Washington corporation (i.e., the Company) is not permitted to buy back its common stock if, among other conditions, the Company’s assets are less than the Company’s liabilities. As of the quarter ended September 30, 2010, the Company’s total assets were $316,464 and its total liabilities were $2,073,419. Therefore, under the Washington Business Corporation Act, the Company is prohibited from buying back its issued and outstanding common stock held by its stockholders. However, the Nevada Revised Statutes (NRS) permit a company to purchase shares of common stock if its Certificate of Incorporation allows it to regardless if the assets of the company are less than its liabilities. Section 78.288(2)(b) of the NRS 78.288 provides, in part, that no distribution (i.e., buy back) may be made if, after giving it effect except as otherwise specifically allowed by the articles of incorporation, the corporation’s total assets would be less than the sum of its total liabilities."
Above is taken from Form PRER14C filed December 7, 2010.
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