RushNet, Inc. Company Information and Disclosure Statement. September 30, 2018

Transcription

1 RushNet, Inc. Company Information and Disclosure Statement September 30, 2018

2 RushNet, Inc. Company Information and Disclosure Statement September 30, 2018 PART A GENERAL COMPANY INFORMATION ITEM 1 NAME OF ISSUER AND PREDECESSOR RushNet, Inc. as of September 30, 2018 ITEM 2 ADDRESS OF ISSUER S PRINCIPAL EXECUTIVE OFFICES 1001 Grand Avenue, Suite 207 Glenwood Springs, Colorado ITEM 3 JURISDICTION AND DATE OF ISSUER S INCORPORATION Colorado January 15, 1997 (predecessor issuer) September 25, 2018 (successor issuer) PART B SHARE STRUCTURE ITEM 4 - TITLE AND CLASS OF SECURITIES OUTSTANDING Common Stock The Company is authorized to issue 9,000,000,000 shares of $.001 par value common stock. The Company s common stock is traded through OTC Markets Electronic Quotation Service under the symbol RSHN (Cusip ). As of September 30, 2018, there were 7,729,739,834 shares of the Company s common stock outstanding. Preferred Stock The Company is authorized to issue 50,000,000 shares of $.0001 par value Series A nonconvertible, preferred stock. As of September 30, 2018, there were 35,000,000 shares of the Company s Series A preferred stock outstanding.

3 ITEM 5 DESCRIPTION OF SECURITIES Common Stock (Par Value $.001 per share) a. Dividends Through September 30, 2018, the Company has not declared or paid any dividends. b. Voting Rights one vote per share of common stock c. Preemption Rights None d. Material Rights None e. Provisions in Charter or By-Laws that would delay, defer or prevent a Change in control of the issuer None. Preferred Stock (Par Value $.0001 per share) (1) Dividend Rate. The holders of Series A Preferred Stock shall be entitled to receive dividends in the amount of 10% (ten percent) of the assets legally available therefore before the payment of dividends to the holders of shares of Common Stock. (2) Voting Rights. Each holder of Series A Preferred Stock shall be entitled to 300 (three hundred) votes for each one share of Series A Preferred Stock held by him. (3) Liquidation Rights. In the event of a liquidation, dissolution, or winding up of the affairs of the corporation, whether voluntary or involuntary, the holders of shares of the Series A Preferred Stock shall have priority over the corporation's assets available for distribution in the event of any liquidation or dissolution of the corporation. A merger, conversion, exchange, or consolidation of the corporation with or into any other person or sale or transfer of all or any part of the assets of the corporation (which shall not in fact result in the liquidation of the corporation and the distribution of assets to stockholders) shall not be deemed to be a voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the corporation. (4) Conversion, Redemption, or Preemptive Rights. The holders of Series A Preferred Stock shall have no right to convert their shares of Series A Preferred Stock to Common Stock.

4 ITEM 6 NUMBER OF SHARES OR TOTAL AMOUNT OF SECURITIES OUTSTANDING FOR EACH CLASS OF SECURITIES AUTHORIZED Common Stock Shares authorized 9,000,000,000 9,000,000,000 9,000,000,000 Shares outstanding 7,729,739,834 7,729,739,834 7,729,739,834 Freely tradable 7,127,023,194 7,127,023,194 7,127,023,194 Beneficial shareholders Shareholders of record Preferred Stock Shares authorized 50,000,000 50,000,000 50,000,000 Shares outstanding 35,000,000 35,000,000 35,000,000 Freely tradeable Beneficial shareholders Shareholders of record PART C BUSINESS INFORMATION ITEM 7 NAME AND ADDRESS OF TRANSFER AGENT Mountain Share Transfer, LLC 2030 Powers Ferry Road SE Atlanta, GA Registered under the Exchange Act ITEM 8 NATURE OF ISSUER S BUSINESS Business Development The Company s focus is on developing businesses and products for the hemp and CBD industries. We are currently listed with the National Quotation Bureau under the trading symbol RSHN.

5 The Company is on a calendar year-end basis. The Company is not party to any material legal proceedings or administrative actions. Business of Issuer The Company s focus is on developing businesses and products for the hemp and CBD industries including specialty beverages. In that pursuit, on August 1, 2018, the Company acquired a 12½% interest in a 15-acre cannabis farming, harvesting, processing, extraction and product infusion operation in Colorado. The acquisition also included a 12 ½% interest in water rights, situated in the vicinity of this full-service CBD operation. Those water rights have been independently appraised at $40,500,000. The initial harvesting commenced in early October This operation also includes facilities for the processing, extracting and product infusion of CBD oils in a manner which facilitates the extraction of full spectrum CBD oils. Additionally, for its products, it has access to the use of a Nebulizer/ Aqueous CBD Nanotization Technology Combination. This appears to be peculiarly well suited for combination with a unique ability to dissolve CBD in an aqueous solution and further miniaturize the molecular size with nanotization techniques (Aqueous CBD Nanotization). Less CBD is needed for this mode of administration using this combination of technologies. Among other applications, this combination of technologies is a rapidly administration technology that may well change the way we deal with anxiety attacks, among other medical maladies. On March 8, 2018, the Company acquired the intellectual property rights pertaining to the trademark Knockout Punch TM. It has also applied for various other trademarks, including K.O. Punch TM, Awater TM, Cwater TM and Ewater TM. The Company s SIC Code is The Company is not now a shell company. The Company has two employees. ITEM 9 NATURE OF PRODUCTS OR SERVICES OFFERED Principal Products The Company s principal products are being developed, including some under the names Knockout Punch TM, K.O. Punch TM, Awater TM, Cwater TM and Ewater TM for which the Company has a trademark or trademark application. Distribution and Marketing

6 The Company is developing its distribution and marketing plans. New Products None at this time Competitive Business Conditions None identified at this time. Sources and Availability of Raw Materials None identified at this time. Major Customers None identified at this time. Patents and Trademarks The Company has a trademark for Knockout Punch TM. It has also applied for various other trademarks, including K.O. Punch TM, Awater TM, Cwater TM and Ewater TM. Government Regulations None identified at this time. ITEM 10 NATURE AND EXTENT OF ISSUER S FACILITES The Company s current business operations do not require the maintenance of an administrative office or the incurrence of month-to-month rent. PART D MANAGEMENT STRUCTURE AND FINANCIAL INFORMATION ITEM 11 NAME OF CHIEF EXECUTIVE OFFICER, MEMBERS OF THE BOARD OF DIRECTORS AND CONTROL PERSONS Richard Goulding Frank Deangelo Director, Chairman Chief Medical Officer, Vice President, Treasurer, Secretary Chief Executive Officer There is currently no family relationship between any Director or Executive Officer of the Company.

7 Listed below are the names of all Directors and Executive Officers of the Company, all positions and offices with the Company held by such person, the period during which he has served as such, and the principal occupations and employment of such persons during the last five years: Frank Deangelo Chief Executive Officer Richard Goulding, Director Frank Deangelo is the Chief Executive Officer of RushNet, Inc. Mr. Deangelo is the retired President and CEO of Applejam, Inc. which was one of the world s largest restaurant franchises which he grew to having over $120,000,000 in sales with over 2500 employees before selling it. Richard Goulding, M.D. is the chairman of the board, Vice President, treasurer and secretary. He is a Board-certified surgeon who, as CEO of POTN, presided over their twelve-fold escalation of stock price. He offers his years of expertise to the project. Dr. Goulding is currently engaged in CBD products testing and effectiveness for proprietary POTN products and oversees physicians actively engaged in the process. Compensation from Issuer: YTD 9/30/18 YE 12/31/17 YE 12/31/16 Salary $ -0- $ -0- $ -0- Restricted Stock Awards Michael Hough served as CEO, President, CFO, from October 24, 2016 until his resignation on June 10, Legal/Disciplinary History Within in the last five years, none of the foregoing persons has been convicted in a criminal proceeding or has been named as a defendant in a criminal proceeding; been subject to an order, judgment or decree by a court of competent jurisdiction

8 that permanently or temporarily enjoined, barred, suspended or otherwise limited such person s involvement in any type of business, securities, commodities or banking activities; been subject to a finding or judgment by a court of competent jurisdiction, the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator, of a violation of federal or state securities or commodities law; or been subject of an order by a selfregulatory organization that permanently or temporarily barred, suspended or otherwise limited such person s involvement in any type of business or securities activities. Family Relationships There are no family relationships among or between the issuer s directors, officers or beneficial owners of more than five percent of any class of the issuer s equity securities. Related Party Transactions There are no transactions within the last three fiscal years involving the issuer in which (i) the amount involved exceeds the lesser of $120,000 or one percent of the average of the issuer s total assets at year-end for its last three fiscal years and (ii) any related person had or will have a direct or indirect material interest. Conflicts of Interest There were no conflicts of interest with any executive officer or director with competing professional or personal interests. ITEM 12 FINANCIAL INFORMATION FOR THE ISSUER S MOST RECENT FISCAL PERIOD SEE EXHIBIT A ATTACHED ITEM 13 FINANCIAL INFORMATION FOR THE ISSUER S TWO PRECEEDING FISCAL YEARS SEE EXHIBIT A ATTACHED

9 ITEM 14 BENEFICIAL OWNERS None No. of Shares Beneficially Owned None ITEM 15 - NAME, ADDRESS, TELEPHONE NUMBER, AND ADDRESS OF OUTSIDE PROVIDERS THAT ADVISE THE ISSUER ON MATTERS RELATING TO THE OPERATIONS, BUSINESS DEVELOPMENT AND DISCLOSURE Counsel John E. Dolkart, Jr., Esq Kettner Blvd, Suite 416 San Diego, CA Tel: (702) Fax: (619) john@dolkartlaw.com Investor Relations None ITEM 16 MANAGEMENT S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

10 The Company s focus is on developing businesses and products, with particular emphasis on the hemp and CBD industries and products that are particularly well suited to this sector. On March 8, 2018, the Company acquired the intellectual property rights pertaining to the trademark Knockout Punch TM, including the rights to all copyrights, inventions, designs, trade secrets, trademarks, trade styles, trade names, logos, trade dress, domain names and any other intellectual property used in connection with the development, design, formulation, packaging, distribution and sale of products bearing the IP, including all patent licenses and sub-licenses granted and obtained with respect to the IP, and rights thereunder and remedies against infringements thereof in connection with the IP. Issues and Uncertainties None material at this time. Results of Operations We generated no revenues during the fiscal years ended December 31, 2016 and 2017 and for the nine months ended September 30, We incurred costs and expenses totaling $0 for the year ended December 31, 2016, $900 for the year ended December 31, 2017 and $600 for the nine months ended September 30, Our net loss for the year ended December 31, 2016 was $0, $900 for the year ended December 31, 2017 and $142,097 of net income (not from revenues, but the result of a miscellaneous income recognition from stock price fluctuation arising out of the company s obligations on the acquisition of the CBD farming operation and water rights) for the nine months ended September 30, We had negative working capital of $76,683 as of December 31, 2016, $77,583 as of December 31, 2017 and $29,945 as of September 30, To the extent that cash flow is unavailable, management intends to raise all necessary capital through private financing, the sale of our securities and/or joint venture partnerships. During the period from January 15, 1997 (inception) through September 30, 2018, the Company has accumulated a deficit of $7,729,739,834. During this period, the Company has engaged in its business of developing its beverage product lines, which included an acquisition of a partial interest in the cannabis farming, harvesting, processing, extraction and product infusion operation in Colorado. The acquisition also included a 12 ½% interest in water rights, situated in the vicinity of this full-service CBD operation. It also engaged in substantial efforts identifying and contracting with suitable joint venture partners. Success of our planned activities are dependent upon our ability to obtain adequate financing. Financing, is being sought through private loans, the sale of equity and joint ventures.

11 Plan of Operations and Need for Additional Financing During the fiscal years ending December 31, 2016 and 2017 and the nine months ended September 30, 2018, the Company continued with efforts to seek, investigate, and, if warranted, acquire properties and businesses. In order to proceed with its plans for the next year, it is anticipated that the Company will require additional capital in order to meet its cash needs. These include the costs of compliance with the continuing reporting requirements of the Securities Exchange Act of 1934, as amended, as well as any costs the Company may have incurred in developing the current business plan. No specific commitments to provide additional funds have been made by management or other stockholders, and the Company has no current plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities, except as set forth above. Accordingly, there can be no assurance that any additional funds will be available to the Company to allow it to cover its expenses. Notwithstanding the foregoing, to the extent that additional funds are required, the Company anticipates receiving such funds through the private placement of restricted securities rather than through a public offering. Off-Balance Sheet Transactions The Company does not have any transactions, agreements or other contractual arrangements that constitute off-balance sheet arrangements. PART E ISSUANCE HISTORY ITEM 17 LIST OF SECURITIES OFFERING AND SHARES ISSUED FOR SERVICES IN THE PAST TWO YEARS herein. NONE. However, issuances are imminent based on existing contracts as described PART F EXHIBITS ITEM 18 MATERIAL CONTRACTS July 30, 2018 Stock and Asset Purchase Agreement including the acquisition of

12 the farming, harvesting, processing, extraction and product infusion operation in Colorado and the acquisition of a 12 ½% interest in water rights, situated in the vicinity of this full-service CBD operation. ITEM 19 ARTICLES OF INCORPORATION SEE EXHIBIT B ATTACHED ITEM 20 PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS The Company, nor any purchasers affiliated with the Company, has made no purchases of equity securities. ITEM 21 ISSUER S CERTIFICATIONS 1. I, Richard Goulding, have reviewed this Company Information and Disclosure Statement dated September 30, 2018 of RushNet, Inc.; 2. Based on my knowledge, this disclosure statement 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 covered by the disclosure statements; and 3. Based on my knowledge, the financial statements, and other financial information included or incorporated by reference in this disclosure statement, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure statement. Date: November 15, 2018 /s/ Richard Goulding Richard Goulding, CEO

13 Exhibit A

14 RushNet, Inc. Balance Sheets (Unaudited) ASSETS September 30, December 31, December 31, Current assets Cash and cash equivalents $ - $ - $ - Legal retainer deposit 5, Total current assets 5, Other assets Investment - WSRA 8,714, Investment - XYZ Hemp 3, Total other assets 8,717, Total assets $ 8,722,738 $ - $ - LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT) Current liabilities Accounts payable $ 35,433 $ 34,833 $ 33,933 Advances from shareholders 20, Loan payable 6,250, Loan payable - shares 2,310, Total liabilities 8,615,474 34,833 33,933 Stockholders' equity/(deficit) Common stock - par value $ ,000,000,000 shares authorized; 7,729,739,834 shares issued and outstanding 7,729,740 7,729,740 7,729,740 Preferred stock - par value $.0001; 50,000,000 shares authorized; 35,000,000 shares issued and outstanding 3,500 3,500 3,500 Accumulated deficit (7,625,976) (7,768,073) (7,767,173) Total stockholders' equity/(deficit) 107,264 (34,833) (33,933) Total liabilities and stockholders' equity/(deficit $ 8,722,738 $ - $ - The accompanying notes are an integral part of these financial statements.

15 RushNet, Inc. Statements of Operations (Unaudited) Nine Months Ended Year Ended Year Ended September 30, December 31, December 31, Revenues $ - $ - $ - Operating expenses Advertising & marketing 6, Bank & finance charges Computer & internet Dues & subscriptions 4, Patent fees 1, Legal fees 1, Travel Total operating expenses 15, Other income Change in value of stock liability 157, Net income/(loss) $ 142,097 $ (900) $ (600) Basic weighted average number of common shares outstanding 7,729,739,834 7,729,739,834 7,729,739,834 Basic income/(loss) per share $ 0.00 $ (0.00) $ (0.00) Diluted weighted average number of common shares outstanding 18,229,739,834 18,229,739,834 18,229,739,834 Diluted income/(loss) per share $ 0.00 $ (0.00) $ (0.00) The accompanying notes are an integral part of these financial statements.

16 RushNet, Inc. Statement of Stockholders' Equity/(Deficit) (Unaudited) Common Stock Preferrd Stock Paid-in Accumulated Shares Amount Shares Amount Capital Deficit Total Balance, December 31, ,729,739,834 $ 7,729,740 35,000,000 $ 3,500 $ - $ (7,767,173) $ (33,933) Net loss for period 0 - Balance, December 31, ,729,739,834 7,729,740 35,000,000 3,500 - (7,767,173) (33,933) Net loss for period (900) (900) Balance, December 31, ,729,739,834 7,729,740 35,000,000 3,500 - (7,768,073) (34,833) Net income for period 142, ,097 Balance, September 30, ,729,739,834 $ 7,729,740 35,000,000 $ 3,500 $ - $ (7,625,976) $ 107,264 The accompanying notes are an integral part of these financial statements.

17 RushNet, Inc. Statements of Cash Flows (Unaudited) Nine Months Ended Year Ended Year Ended September 30, December 31, December 31, Cash flows from operating activities Net loss $ 142,097 $ (900) $ (600) Adjustments to reconcile net loss to net cash used in operating activities: Increase in legal retainer (5,488) - - Increase in accounts payable Change in value of stock liability (157,250) - - Net cash used in operating activities (20,041) - - Cash flows from investing activities Cash flows from financing activities Advances from shareholders 20, Net cash provided by financing activities 20, Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Supplemental cash flow information: Cash paid during the period for interest $ - $ - $ - Cash paid during the period for income taxes $ - $ - $ - The accompanying notes are an integral part of these financial statements.

18 RushNet, Inc. Balance Sheets (Unaudited) ASSETS December 31, December 31, CURRENT ASSETS Cash and cash equivalents $ - $ - Total current assets - - OTHER ASSETS - - Total Assets $ - $ - STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 34,833 $ 33,933 Advances from shareholders - - January 2, 2015 conversion to Colorado Accrued expenses - - In Nevada nothing was filed from 2009 to current. Current maturities of notes payable - - The amount due is $7125 per year $7,125 Total current liabilities 34,833 33,933 The number of years is 6 $42,750 LONG-TERM NOTES PAYABLE - - Total Liabilities 34,833 33,933 STOCKHOLDERS' EQUITY Common stock - par value $ ,000,000,000 shares authorized; 7,729,739,834 shares issued and outstanding respectively 7,729,740 7,729,740 Preferred stock - par value $.0001; 50,000,000 shares authorized; 35,000,000 shares issued and outstanding respectively 3,500 3,500 Stock to be issued - - Paid-in capital - - Retained earnings (deficit) (7,768,073) (7,767,173) Total stockholders' equity (34,833) (33,933) Total Liabilities and Stockholders' Equity $ - $ - The accompanying notes are an integral part of these financial statements.

19 RushNet, Inc. Statements of Operations (Unaudited) Year Ended Year Ended December 31, December 31, REVENUES $ - $ - OPERATING COSTS AND EXPENSES Total Expenses Operating Income (Loss) (900) (600) OTHER INCOME (EXPENSES) - - Income before income taxes (900) (600) Provision for income taxes - - NET INCOME (LOSS) $ (900) $ (600) Earnings Per Share (see Note 2): Basic weighted average number of common shares outstanding 7,729,739,834 7,729,739,834 Basic income (loss) per share $ - $ - Diluted weighted average number of common shares outstanding 18,229,739,834 18,229,739,834 Diluted income (loss) per share $ - $ - The accompanying notes are an integral part of these financial statements.

20 RushNet, Inc. Statement of Stockholders' Equity (Unaudited) Common Stock Preferrd Stock Paid-in Retained Shares Amount Shares Amount Capital Earnings Total Balance, December 31, ,729,739,834 $ 7,729,740 35,000,000 $ 3,500 $ - $ (7,767,173) $ (33,933) Net income (loss) for period 0 - Balance, December 31, ,729,739,834 $ 7,729,740 35,000,000 $ 3,500 $ - $ (7,767,173) $ (33,933) Net income (loss) for period (900) (900) Balance, December 31, ,729,739,834 $ 7,729,740 35,000,000 $ 3,500 $ - $ (7,768,073) $ (34,833) Net income (loss) for period (600) (600) The accompanying notes are an integral part of these financial statements.

21 RushNet, Inc. Statements of Cash Flows (Unaudited) Year Ended Year Ended December 31, December 31, Operating activities: Net income (loss) $ (900) $ - Adjustments to reconcile net income/loss to net cash useed in operating activities: Non-cash compensation - - (Increase) decrease in assets: Other assets - - Increase (decrease) in liabilities: Accounts payable Accrued expenses - - Total adjustments Net cash from/(used in) operating activities - - Investing activities: Purchases of property and equipment - - Net cash used in investing activities - - Financing activities: Issuance of stock for cash - - Payments on borrowings - - Proceeds from borrowings - - Net cash provided by financing activities - - Net increase(decrease) in cash and cash equivalents $ - $ - Cash and cash equivalents at beginning of period - - Cash and cash equivalents at end of period $ - $ - Supplemental cash flow information: Cash paid during the period for interest $ - $ - Cash paid during the period for income taxes $ - $ - Noncash investing and financing activities: Capitalized development costs $ - $ - The accompanying notes are an integral part of these financial statements.

22 Exhibit B

23 AMENDED ARTICLES OF INCORPORATION OF RUSHNET INC. Pursuant to the applicable provisions of Section and Section of the Colorado Revised Statutes ( CRS ), RushNet Inc., a Colorado corporation, hereby amends its Articles of Incorporation as follows: ARTICLE I, NAME. The name of this corporation is RushNet Inc. ARTICLE II PURPOSES AND POWERS. 1. Purposes. Except as may otherwise be restricted by these Articles of Incorporation, the Corporation is organized for the purpose of transacting all lawful business for which Corporations may be incorporated under the Colorado Business Corporation Act. 2. General Powers. Except as restricted by these Articles of Incorporation, the Corporation shall have and may exercise all powers and rights to which a Corporation may exercise legally pursuant to the Colorado Business Corporation Act in force as of the filing date of these Articles of Incorporation. 3. Duration. The Corporation shall have the power to exist in perpetuity, from and after the date of the filing of these Articles of Incorporation with the Secretary of State of the State of Colorado unless otherwise dissolved by the shareholders (as provided hereinbelow) or by operation of law. ARTICLE III CAPITAL STOCK. 1. Authorized Shares. The aggregate number of shares which the Corporation shall have authority to issue is nine billion (9,000,000,000) shares, consisting of two classes of stock. The first class shall be designated Common Stock, par value $ per share, and the second class shall be designated Series A Preferred Stock, par value $ per share. Non-Assessment of Stock. The capital stock of the Corporation, after the amount of the subscription price has been fully paid by the subscriber to the Corporation, shall not be assessable for any purpose, and no stock issued as fully paid shall ever be assessable or assessed. No Personal Liability of Shareholders. No shareholder of the Corporation, whether the holder of Common Stock or Series A Preferred Stock is or shall become individually liable for the debts or liabilities of the Corporation. The voting powers, designations, preferences, limitations, restrictions, and relative, participating,

24 optional, and other rights, and the qualifications, limitations, or restrictions thereof, of the Corporation s series and classes of common and preferred stock, respectively, are as follows: a. Common Stock. (1) Dividend Rate. Subject to the rights of holders of the Series A Preferred Stock, having preference as to dividends and except as otherwise provided or limited in these Articles of Incorporation, as from time to time amended (hereinafter, the Articles ) or the CRS, the holders of Common Stock shall be entitled to receive dividends when, as, and if declared by the board of directors out of assets legally available therefor. (2) Voting Rights. Except as otherwise provided by the CRS, the holder of one duly authorized and issued, fully-paid and non-assessable share of Common Stock shall be entitled to one vote. No holder of shares of Common Stock shall have the right to cumulate votes. (3) Liquidation Rights. In the event of liquidation, dissolution, or winding up of the affairs of the Corporation, whether voluntary or involuntary, subject to the prior rights and reservations by holders of the Series A Preferred Stock, the holders of shares of Common Stock can share ratably in the Corporation s assets and shall share equally and ratably in the Corporation s assets available for distribution after giving effect to any liquidation preference of any shares of the Series A Preferred Stock. A merger, conversion, exchange, or consolidation of the Corporation with or into any other person or sale or transfer of all or any part of the assets of the Corporation (which shall not in fact result in the liquidation of the Corporation and the distribution of assets to stockholders) shall not be deemed to be a voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Corporation. (4) No Conversion, Redemption, or Preemptive Rights. Unless otherwise provided by the Corporation s board of directors, the holders of Common Stock shall not have any conversion, redemption, or preemptive rights. (5) Consideration for Shares. Shares of Common Stock authorized by this article shall be issued for such consideration as shall be fixed, from time to time, by the board of directors. b. Series A Preferred Stock. (1) Dividend Rate. The holders of Series A Preferred Stock shall be entitled to receive dividends in the amount of 10% (ten percent) of the assets legally available therefor before the payment of dividends to the holders of shares of Common Stock. (2) Voting Rights. Each holder of Series A Preferred Stock shall be entitled to 300 (three hundred) votes for each one share of Series A Preferred Stock held. (3) Liquidation Rights. In the event of a liquidation, dissolution, or winding up of the affairs of the Corporation, whether voluntary or involuntary, the holders of shares of the Series A Preferred Stock shall have priority over the Corporation s assets available for

25 distribution in the event of any liquidation or dissolution of the Corporation. A merger, conversion, exchange, or consolidation of the Corporation with or into any other person or sale or transfer of all or any part of the assets of the Corporation (which shall not in fact result in the liquidation of the Corporation and the distribution of assets to stockholders) shall not be deemed to be a voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Corporation. (4) Conversion, Redemption, or Preemptive Rights. The holders of Series A Preferred Stock shall have no right to convert shares of Series A Preferred Stock to Common Stock. (5) Consideration for Shares. Shares of the Series A Preferred Stock issued in future shall be issued for such consideration as shall be fixed, from time to time, by the board of directors. ARTICLE IV DIRECTORS AND OFFICERS. 1. Number of Directors. The members of the governing board of the Corporation are styled as directors. The board of directors of the Corporation shall be elected in such manner as shall be provided in the bylaws of the Corporation. The board of directors shall consist of at least one (1) natural person, aged 18 years or older. The number of directors may be changed from time to time in such manner as shall be provided in the bylaws of the Corporation. 2. Limitation of Liability. The liability of directors and officers of the Corporation shall be eliminated or limited to the fullest extent permitted by the CRS. If the CRS is amended to further eliminate or limit or authorize corporate action to further eliminate or limit the liability of directors or officers, the liability of directors and officers of the Corporation shall be eliminated or limited to the fullest extent permitted by the CRS, as so amended from time to time. 3. Payment of Expenses. In addition to any other rights of indemnification permitted by the laws of the State of Colorado or as may be provided for by the Corporation in its bylaws or by agreement, the expenses of officers and directors incurred in defending any threatened, pending, or completed action, suit, or proceeding (including without limitation, an action, suit, or proceeding by or in the right of the Corporation), whether civil, criminal, administrative, or investigative, involving alleged acts or omissions of such officer or director in his or her capacity as an officer or director of the Corporation or member, manager, or managing member of a predecessor limited liability company or affiliate of such limited liability company or while serving in any capacity at the request of the Corporation as a director, officer, employee, agent, member, manager, managing member, partner, or fiduciary of, or in any other capacity for, another Corporation or any partnership, joint venture, trust, or other enterprise, shall be paid by the Corporation or through insurance purchased and maintained by the Corporation or through other financial arrangements made by the Corporation, as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of the officer or director to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the Corporation. To the extent that an officer or director is successful on the merits in defense of any such action, suit, or proceeding, or in the defense of any claim, issue, or matter therein, the Corporation shall indemnify him or her against expenses, including attorneys fees, actually and reasonably incurred by him or her in connection with the defense. Notwithstanding anything to the contrary contained herein or in the bylaws, no director

26 or officer may be indemnified for expenses incurred in defending any threatened, pending, or completed action, suit or proceeding (including without limitation, an action, suit or proceeding by or in the right of the Corporation), whether civil, criminal, administrative or investigative, that such director or officer incurred in his or her capacity as a stockholder. ARTICLE V INDEMNIFICATION. The Corporation will indemnify any director, officer, employee, fiduciary, or agent of the Corporation to the full extent permitted by the Colorado Business Corporation Act as in effect at the time of the conduct by such person. ARTICLE VI AMENDMENTS. The Corporation reserves the right from time to time to amend its Articles of Incorporation in accordance with CRS, these Articles of Incorporation, and any reservations or limitations in the Corporation s bylaws. ARTICLE VII ADOPTION AND AMENDMENT OF BYLAWS. The initial bylaws of the Corporation shall be adopted by its initial board of directors, as the same are set forth hereinabove these Amended Articles. Subject to repeal or change by action of the shareholders, the power to alter, amend, or repeal the bylaws or adopt new bylaws shall be vested in the board of directors. The bylaws may contain any provisions for the regulation and management of the affairs of the Corporation not inconsistent with the CRS or these Articles of Incorporation. ARTICLE VIII REGISTERED OFFICE AND REGISTERED AGENT. The Corporation s initial address of the registered office of the Corporation is 1001 Grand Ave. Suite 207, Glenwood Springs, CO 81602, and the name of the registered agent at such address is Roger Johnson. Either the registered office or the registered agent may be changed in the manner permitted by law. Acceptance of Appointment by Registered Agent. Roger Johnson does hereby accept his appointment as the Corporation s initial registered agent in accordance with the terms of his appointment in this article tenth. ARTICLE IX LIMITATION OF LIABILITY OF DIRECTORS TO CORPORATION AND SHAREHOLDERS. No director shall be liable to the Corporation or to any shareholder for monetary damages for breach of fiduciary duty as a director, except for any matter in respect of which such director (a) shall be liable under the CRS Section or any amendment thereto or successor provision thereto; (b) shall

27 have breached the director s duty of loyalty to the Corporation or its shareholders; (c) shall have not acted in good faith or, in failing to act, shall not have acted in good faith; (d) shall have acted or failed to act in a manner involving intentional misconduct or a knowing violation of law; or (e) shall have derived an improper personal benefit. Neither the amendment nor repeal of this article, nor the adoption of any provision in these Articles of Incorporation inconsistent with this article, shall eliminate or reduce the effect of this article in respect of any matter occurring prior to such amendment, repeal, or adoption of any subsequent inconsistent provision. This article shall apply to the full extent now permitted by the CRS or as may be permitted in the future by changes or enactments in the CRS, including without limitation Section and/or Section This corporation may, in its bylaws, confer powers upon its directors in addition to the foregoing, and in addition to the powers and authorities expressly conferred upon them by statute. IN WITNESS WHEREOF, I, Richard E Goulding MD, authorized and empowered to act on behalf of RushNet Inc., a Colorado corporation, have subscribed this document and do hereby affirm, under penalty of perjury, that the statements contained herein have been examined by me and are true and correct as of November 15, /s/ Richard E Goulding MD By: Richard E Goulding MD Its: Chairman of the Board Telephone:

28 CERTIFICATE OF INCUMBENCY AND CORPORATE AUTHORITY To: The Secretary of State The State of Colorado Suite Broadway Denver, Colorado From: Richard E Goulding MD Chairman of the Board RushNet Inc. ( RushNet ) 1001 Grand Ave. Suite 207, Glenwood Springs, CO The undersigned, being the Chairman of the Board of RushNet, hereby certifies to the Secretary of State of the State of Colorado, as follows: 1. I am the duly appointed Chairman of the Board of RushNet. 2. RushNet is a corporation duly organized and in good standing under the laws of the State of Colorado. 3. Pursuant to RushNet s governing documents, as amended, and as currently in full force and effect, I am the person ( Authorized Representative ) who has been duly designated and appointed to the position indicated by my name, I continue to hold the indicated position at this time, and the signature set forth below by my name is my genuine signature. 4. I have been given authority by RushNet s Board of Directors to act on behalf of and to bind with respect to filing the Articles of Incorporation for RushNet Inc. with the Secretary of State of the State of Colorado to which this Certificate is annexed, and in any amendments or exhibits thereto. 5. I have the power and authority to execute this Certificate on behalf of RushNet. 6. The State of Colorado may rely on this Certificate and on the authorization of my authority until this Certificate is rescinded by RushNet s Board of Directors or shareholders or until the corporation is dissolved by a plan of reorganization or by operation of law. IN WITNESS WHEREOF, the undersigned duly executes this Certificate and affixes his signature hereto as of the date first above written. RUSHNET INC., a Colorado corporation ( RushNet ) /s/ Richard E Goulding MD By: Richard E Goulding MD Its: Chairman of the Board

29 CERTIFICATE OF INCUMBENCY AND CORPORATE AUTHORITY To: The Secretary of State The State of Colorado Suite Broadway Denver, Colorado From: Richard E Goulding MD Chairman of the Board RushNet Inc. ( RushNet ) 1001 Grand Ave. Suite 207, Glenwood Springs, CO The undersigned, being the Chairman of the Board of RushNet, hereby certifies to the Secretary of State of the State of Colorado, as follows: 1. I am the duly appointed Chairman of the Board of RushNet. 2. RushNet is a corporation duly organized and in good standing under the laws of the State of Colorado. 3. Pursuant to RushNet s governing documents, as amended, and as currently in full force and effect, I am the person ( Authorized Representative ) who has been duly designated and appointed to the position indicated by my name, I continue to hold the indicated position at this time, and the signature set forth below by my name is my genuine signature. 4. I have been given authority by RushNet s Board of Directors to act on behalf of and to bind with respect to filing the Resignation as the Incorporator of RushNet Inc. with the Secretary of State of the State of Colorado to which this Certificate is annexed, and in any amendments or exhibits thereto. 5. I have the power and authority to execute this Certificate on behalf of RushNet. 6. The State of Colorado may rely on this Certificate and on the authorization of my authority until this Certificate is rescinded by RushNet s Board of Directors or shareholders or until the corporation is dissolved by a plan of reorganization or by operation of law. IN WITNESS WHEREOF, the undersigned duly executes this Certificate and affixes his signature hereto as of the date first above written. RUSHNET INC., a Colorado corporation /s/ Richard E Goulding MD By: Richard E Goulding MD Its: Chairman of the Board