SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
Amendment No. 1
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
Commission File Number 333-08305
UTG COMMUNICATIONS INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 13-3895294
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
17 Cattano Avenue, Morristown, New Jersey 07960
Address of principal executive offices) (Zip Code)
(973) 644-3161
(Registrant's telephone number, including area code)
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. Yes [X] No [ ]
At November 13, 1998, there were 1,523,190 shares of Common Stock, par
value $.00001 per share, outstanding.
Transitional Small Business Disclosure Format (check one):
Yes |_| No |X|
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<PAGE>
The undersigned registrant hereby amends its Form 10-QSB filed with the
Securties Exchange Commission on November 16, 1998, for the quarter ended
September 30, 1998, pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. Part II, Item 6(a), entitled "Exhibits," of the registrant's
Quarterly Report on on Form 10-QSB for the quarter ended September 30, 1998 is
hereby amended to inlcude Exhibits 10.32, 10.33 and 10.34.
Part II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.32 Loan Agreement, dated August 13, 1998
10.33 Agreement dated September 25, 1998 between Medfield and the
Company
10.34 Interconnection Agreement dated August 21, 1998 between the
Company and Swisscom
27* Financial Data Schedule
* Previously filed.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter ended
September 30, 1998.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Amendment No. 1 to the registrant's Quarterly
Report on Form 10-QSB to be signed on its behalf by the undersigned thereunto
duly authorized.
UTG COMMUNICATIONS INTERNATIONAL, INC.
Date: January 20, 1999 By: /s/ Ueli Ernst
---------------------------------------
Ueli Ernst, Chairman and CEO
(Principal Executive Officer)
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Exhibit 10.32
LOAN AGREEMENT
This Loan Agreement (hereinafter referred to as "Agreement"), is entered into as
of the 13th day of August 1998, by and between UTG Communications International,
Inc. or its assigns ("UTG") and Blacksea Inv. Ltd. ("Lender") with reference to
the following:
WHEREAS Lender has valuable knowledge of and contact with certain persons who
are interested in this loan for UTG.
NOW, THEREFORE, IN CONSIDERATION OF and in reliance upon the respective
representations and warranties, covenants, terms and conditions herein
contained, the parties agree as follows:
Lender provides a loan of SFr. 250,000.00 to UTG for a fixed period of five
years ending June 30, 2003. The interests are 5%, payable on June 30 each year.
Lender provides a loan of $200,000.00 to UTG for a fixed period of five years,
ending June 30, 2003. The interests are 8%, payable on June 30 each year.
Within 6 months of the date hereof, UTG will issue to the Lender the following 3
years warrants which will entitle the Lender to purchase from UTG, validly
issued and non-assessable shares of common stock, $ .00001 par value, of UTG at
any time following the effective date of a registration statement under the
Securitites Act covering the Warrant Shares through and including June 30, 2001
are included in this agreement.
3000 warrants at a strike price of USD 30.--
3000 warrants at a strike price of USD 50.--
3000 warrants at a strike price of SFR 45.--
3000 warrants at a strike price of SFR 75.--
The Lender has a further option to increase the loans by the same loan amounts
as indicated in paragraphs 1 and 2 under the same conditions. All other
conditions remain the same as per this Agreement including the warrants issuance
to the Lender. This additional option must be excecuted in writing before Januar
31, 1999 and is also payable within this time.
Financial Conditions. UTG has supplied to the Lender and the Investors the
latest reports filed within the last six months by UTG. UTG represents and
warrants to the Lender and the Investors, that UTG is current with all filings
with the Securities Exchange Commission ("SEC") and that it has disclosed any
adverse events.
Confidentiality. UTG and Lender agree that the contents and nature of this
Agreement are to remain strictly confidential between UTG and Lender. Neither
UTG nor Lender shall divulge or distribute the contents of this Agreement to
anyone else or use this Agreement in any way except as intended between the
parties hereto, unless required by law. In addition, UTG shall hold and keep
confidential any information regarding the identity and financial status of any
investors and Lender shall hold and keep confidential any information regarding
the terms and conditions of this Agreement, unless required by law.
<PAGE>
Indemnification. UTG hereby agrees to indemnify Lender for and hold it harmless
against any loss, liability, damage, claim or expense (including the reasonable
fees and disbursments of its attorney(s) incurred by or asserted against
Lender), arising out of or in connection with its entering into this Agreement,
the performance of its duties hereunder and otherwise in respect hereof,
including the costs and expenses of defending itself against any claim or
liability in connection with this Agreement, except that UTG shall not be liable
hereunder as to matters in respect of which Agent is determined to have acted
with gross negligence or in bad faith. Agent shall have no liability to the
Investor or the Issuer, or any other person in respect to any action taken or
UTG, or any other person in respect to any action taken or any failure to act in
respect of this Agreement if such action was taken or omitted to be taken in
good faith, and Lender shall be entitled to rely in this regard on the advice of
counsel.
Miscellaneous
Entire Agreement. This Agreement constitutes the entire Agreement between the
parties pertaining to the subject matter hereof. No supplement, modification or
amendement of this Agreement shall be binding unless executed in writing by all
the parties. No waiver shall be binding unless executed in writing by the party
making the waiver.
Counterparts. This Agreement may be executed simultaneously in one or more
conterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimile signatures may
be acceptable for the purpose of execution of this Agreement.
Assignment. The rights and interests granted hereunder may not be assigned to
any third party without the prior written consent of the other party. Upon any
valid assignment, this Agreement shall be binding on, and shall inure to the
benefit of, the parties to it and their respective heirs, legal representatives,
successors and assigns.
Attorneys' Fees. UTG shall pay from the proceeds all of the attorneys' fees.
Governing Law. This Agreement shall be construed in accordance with and governed
by the laws of Switzerland.
Arbitration. The parties hereto agree that any controversy or claim arising
under this Agreement will be settled by arbitration in accordance with the Rules
of the American Arbitration Association and judgment upon the award rendered by
the arbitrator(s) may be entered in any court or tribunal having jurisdiction
thereof. This arbitration shall be commenced within 60 days of the commencement
of the arbitration. The findings of such arbitration shall be final and binding
on all parties thereto and neither party shall have the right to appeal such
findings to any other forum. The place of arbitration will be New York.
Severability. If any portion of this Agreement shall be declared or determined
to be invalid, the remainder hereof shall nevertheless remain in full force and
effect.
Notice. All written notices, demands or requests of any kind, which either party
may be required or may desire to serve on the other in
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connection with this Agreement, must be served by registered or certified mail,
with postage prepaid and return receipt requested. In lieu of mailing, either
party may cause delivery of such notices, demands and requests to be made by
personal service, provided that acknowledgment of receipt is made. Notice shall
be deemed given upon personal delivery or three (3) days after depositing in the
U.S. Mail, postage prepaid.
Headings and Interpretation. Titles or captions contained herein are inserted as
a matter of convenience and for reference, and in no way, define, limit, extend
or describe the scope of this Agreement or any provision thereof. No provision
in this Agreement is to be interpreted for or against either party because that
party or its legal representative drafted such provision.
Further Assurances. Each party agrees to execute and acknowledge such other
instruments as may be reasonably necessary to effect the transactions
contemplated herein.
Gender and Number. As used in this Agreement, the masculine, feminine or neuter
gender, and the singular or plural number, shall each include the others
whenever the context so indicates.
IN WITNESS WHEREOF, the parties hereof have executed this Agreement as of the
date herein first written above.
/s/ Ueli Ernst
- ---------------------------------------------------
UTG Communications International, Inc.
/s/ A. Sala
- --------------------------------------------------
Lender - BLACKSEA INVESTMENT LTD.
Mr. A. SALA, Director
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Exhibit 10.33
CONTRACT
between
Medfield Investment S.A.
Steinhaldenring 8, CH - 8954 Geroldswil, Switzerland
as Investor
and
UTG Communications International, Inc.
17 Cattano Avenue, Morristown, New Jersey 07960, USA
as Seller
Referring to the Subscription Agreement dated January 16, 1998, both parties
hereby agree and confirm to extend the terms of this agreement so that the
Investor and the Seller can call the options until December 31, 1998 and that
the Investor can buy the shares until that time.
All other clauses and conditions remain the same.
The Seller The Investor
UTG Communications International, Inc. Medfield Investment S.A.
Date: September 25, 1998 Date: September 25, 1998
Signature: /s/ Ueli Ernst Signature: /s/ David L. Deck
Exhibit 10.34
The following is a fair and accurate English translation of the original
contract.
AGREEMENT
between
Swisscom AG
represented by Network Services
Viktoriastrasse 21, 3050 Bern
(in the following referred to as Swisscom)
and
STARFON Telecom Services AG
Dachslernstrasse 67
Postfach
8048 Zurich
(in the following referred to as STARFON)
concerning
the Joining of Telecommunication Systems and Services
Preamble
1. Integral Parts of this Contract
1.1 Present Contractual Document
1.2 Terms and Conditions of Business of Swisscom for the Joining of
Telecommunication Systems and Services (in the following referred to as
Terms and Conditions of Business, Version 2.0 dated 30.4.1998)
1.3 Standard Service Descriptions (incl. possible Appendices) for the
following services of the parties: (Please tick services agreed)
Swisscom:
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Swisscom Network to Provider of Swisscom PSTN International Access
Telecommunications Services Service (Version 1.4 dated
Network 7.08.1998)
Joining Service (Version 2.0 dated Swisscom ISDN International
30.4.1998) Access Service (Version 1.4 dated
7.08.1998)
--------------------------------------------------------------------------
Swisscom PSTN Interconnection
Terminating Service (Version 2.0
dated 30.4.1998)
--------------------------------------------------------------------------
Swisscom PSTN to Selected Carrier
(Provider of Telecommunication
Services)
Service (Version 2.0 dated
30.4.1998)
--------------------------------------------------------------------------
Swisscom PSTN Emergency Services
Access (Version 2.0 dated
30.4.1998)
--------------------------------------------------------------------------
Swisscom PSTN National Directory
Enquiry Access Service (Version 2.0
dated 30.4.1998)
--------------------------------------------------------------------------
Swisscom to PTS 0800 Access Service
(Version 2.0 dated 1.7.1998)
--------------------------------------------------------------------------
Swisscom Transit Access Service
(Version 2.1 dated 22.7.1998)
--------------------------------------------------------------------------
1.4 Standard Manual of Technical Specifications (Version 2.0 dated 30.4.1998)
incl. possible Appendix
1.5 Standard Manual of Operational Procedures (Version 2.1 dated 17.8.1998)
incl. possible Appendix
<PAGE>
1.6 Standard Manual of Accounting & Billing (Version 1.0 dated 20.1.1998)
incl. possible Appendix
1.7 Standard Manual of Definitions (Version 2.0 dated 30.4.1998)
2. Special Agreements According to Terms and Conditions of Business
2.1 Contact Addresses (according to Paragraph 3.8 of Terms and Conditions of
Business)
Subject to specially designated contact addresses in other integral parts
of the contract, the parties shall communicate via the following contact
addresses:
Swisscom AG
NWS-NWP-3 (Carrier Services)
Viktoriastrasse 21
Bern
Telephone 031/342 93 74, fax 031 / 342 92 53
STARFON Telecom Services AG
Mr. Andreas Popovici, Director
Dachslernstr. 67, Postfach
8048 Zurich
Telephone 01/438 88 00, fax 01/438 88 01
2.2 Costs of Interoperability Test (Paragraph 4.6 of Terms and Conditions of
Business)
The network acceptance test listed in the following is performed once per
PTS switch type. On the other hand, network implementation and ISUP confidence
tests are performed per signalling connection, i.e. between all signalling point
codes opposite each other in the networks to be connected and between which one
or several signalling links are installed (per AP/POP).
The following prices are charged once and are listed excluding VAT.
--------------------------------------------------------------------------
Description
--------------------------------------------------------------------------
Network Acceptance Planned time frame = 4 weeks CHF28,000.--
Test
(Level 4, Q. 748.1 and level 4
(once per PTS and Q.788)
switch type)
--------------------------------------------------------------------------
Network Planned time frame = 1 week CHF 7,000.--
Implementation Test
(Level 1, G.821; levels 2, 3 and 4
(once per AP/POP) Q.781; Q.782 and Q.788 reduced)
--------------------------------------------------------------------------
ISUP Confidence Planned time frame = 1 week CHF 7,000.--
Test
(Live traffic tests after putting
(once per AP/POP) the link into service)
--------------------------------------------------------------------------
Test documentation Delivery after completion of tests CHF 6,800.--
--------------------------------------------------------------------------
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--------------------------------------------------------------------------
Extra cost per day These extra costs will be charged CHF 1,680.--
and person as accrued if the above mentioned per day and
planned time frames cannot be held. person
--------------------------------------------------------------------------
2.3 Costs and Rebates for Set-up Work (Paragraph 4.7 of Terms and Conditions
of Business)
Rebate
When one of the services of Swisscom, except the Swisscom Network Joining
Service, the costs of the interoperability tests as well as the costs of the
numbering and metering set-up is entered - sorted - at the dates listed below
(valid as from 1.1.98), a rebate of 25% on the installation charges is granted.
Rebate at the following dates
------------------------------------------------
Entry deadline Implemented up to
------------------------------------------------
31.1. 31.3
------------------------------------------------
31.3 31.5
------------------------------------------------
31.5 31.7
------------------------------------------------
31.7 30.9.
------------------------------------------------
30.9. 30.11.
------------------------------------------------
30.11. 31.1.
------------------------------------------------
2.4 Public holidays
The same time periods and tariffs as on Sundays are valid on the following
public holidays:
January 1 and 2, Good Friday, Easter Monday, Ascension Day, Whit Monday,
August 1, December 25 and 26.
2.5 Special Long-Distance Dialling Codes
The long-distance dialling codes 051 and 075 are offered by Swisscom at
the national tariff subject to withdrawal.
2.6 Swisscom Help Desk Number
The Swisscom Help Desk Number is 033 224 28 24.
2.7 Designations
When PTS (Provider of Telecommunication Services) is mentioned in this
contract in the individual integral parts of the contract , STARFON is referred
to.
3. Supplements to / Deviations from the Terms and Conditions of Business
Paragraph 6 of the Terms and Conditions of Business is supplemented as
follows:
6.8 Swisscom is entitled to demand advance payment or a security should
Swisscom have substantiated doubts whether the other party meets the Terms and
Conditions of Payment according to the contact.
6.9 If the other party does not make an advance payment or does not
provide a security, Swisscom is entitled to cease the provision of
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<PAGE>
its services and annul the contract without notice and without compensation. The
same regulation applies in case of insolvency or adjudication of bankruptcy when
the other party or the receivership does not provide a security for the payment
of future invoices.
6.10 Swisscom waives the security when it has the guarantee that the other
party will comply with the conditions of payment according to the contract.
Securities in the form of a cash deposit shall bear interest according to the
market rates.
6.11 Swisscom is entitled to set off accounts receivable from the other
party with its security.
4. Entry into Force and Official Copies
4.1 This contract enters into force when signed.
4.2 This contract is made out in two official copies. Each party to the
contract receives one copy.
Bern, August 21, 1998 Bern, August 21, 1998
For For
Swisscom AG STARFON Telecom Services AG
Network Services
/s/ Heinz Rohrbach /s/ U. Ernst
/s/ Gerd Otten /s/ A. Popovici
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