SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
FORM 10/A3
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934
EduLink Inc.
--------------------------------------------------------------------------------
(Exact name of the registrant as specified in its charter)
Nevada 95-4562316
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. employer
Incorporation or Organization) Identification no.)
450 North Roxbury Drive
Suite 602
Beverly Hills, California 90210
---------------------------------------- ----------------
(Address of principal executive offices) (Zip code)
Registrant's Telephone number, including area code (310) 247-7800
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Names of each exchange on which
to be so registered Each class is to be registered
------------------- -------------------------------
None N/A
--------------------------------------------------------------------------------
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 Par Value
--------------------------------------------------------------------------------
(Title of Class)
1
<PAGE>
ITEM 1: BUSINESS
(a) General Development of Business.
The registrant, Edulink, Inc., ("Edulink") was originally incorporated
in January 1994 in Nevada under the name URREA Enterprises, Inc. ("URREA").
URREA was a development stage company that attempted to engage in the business
of extracting minerals. URREA's developmental operations did not generate
revenues. URREA was a publicly traded company listed on the Over-the-Counter
Bulletin Board.
In October, 1999, URREA agreed to acquire the issued and outstanding
common stock of EduLink, Inc., a California corporation, in exchange for
7,776,000 shares of common stock of URREA. At the time, URREA had no assets or
liabilities and a net asset value of $0. EduLink, Inc., the California
corporation, entered into the merger in order to achieve the value of being a
publicly trading company, including obtaining liquidity for its shareholders. We
are not in any manner conducting the mineral extraction business that URREA
attempted to engage in prior to the merger.
Prior to the acquisition of EduLink, Inc., the California corporation,
URREA effected a forward stock split of its issued and outstanding shares on a
50:1 basis, which increased its outstanding shares of common stock from
5,180,450 to 259,022,500, as well as the number of shares of common stock to be
issued and delivered in exchange for the shares of EduLink, Inc., the California
corporation. At the closing on October 27, 1999, EduLink merged with and into
URREA in exchange for 388,800,000 shares of URREA common stock and URREA changed
its name to EduLink, Inc. The 388,800,000 shares issued in the merger were
equivalent to the 7,776,000 shares URREA agreed to issue, as adjusted to give
effect to the 50:1 forward stock split.
We are currently engaged in the design and development of an Internet
educational service program, called the "EduLink Smart Schoolhouse(sm)", which
is being designed to offer and market to schools and homes: (i) a comprehensive
school information management and communications system; and (ii) an
individualized standards based and nationally recognized 3rd through 12th grade
curriculum with the appropriate instructional strategies and student assessment
(the "Schoolhouse System"). It is intended that this service will be utilized by
four separate categories of end users: students, parents, teachers, and school
administrators. The total service will be provided to schools, without charge
over the Internet. The total service includes the premium service which means
access to those inquiry-based instruction strategies and problems that are
planned to be housed within the Schoolhouse System's proposed Virtual Lab
described below. The service provided to schools will also be provided to homes
without charge except that we plan to charge homes nominal fees for the premium
service.
From July, 1996 through approximately April, 1998, EduLink developed an
initial business plan for the Schoolhouse System, built a prototype Website,
produced a limited number of educational content lesson plans and developed an
initial template to construct educational content. After April 1998, EduLink
re-defined the business plan for the Schoolhouse System, redeveloped the
structure and methodology for building interdisciplinary and interactive
lessons, as well as Virtual Labs utilizing inquiry based instruction. The basic
architecture of the Schoolhouse System developed from July 1996 through April
1998, however, remained unchanged.
The architecture of the proposed Schoolhouse System is comprised of four
elements:
* The Systems Architecture: Consisting of an instructional and
school information system which will deliver educational
content and school-related information across the Internet to
web-based users;
* Site Architecture: Consisting of the structure of the website
that will be the user's portal to the proposed EduLink system,
specifically the hierarchy of web pages for the proposed
EduLink site, starting from the home page, as well as the list
of services available from those pages;
2
<PAGE>
* Software Architecture: Consisting of a three-tiered structure
of the software components of the proposed EduLink system. The
first tier, or the "presentation layer," will consist of the
software components responsible for delivering graphical user
interfaces to the user. This function will be performed by two
software components: (a) user-supplied web browsers, with
which users will access the system; and (b) the EduLink web
servers, which will manage the connections between the users
and the EduLink servers, and which will also be responsible
for assembling content data into a presentable format. The
second tier, or the "application layer", will consist of one
or more software components that (i) implement all of the
EduLink-specific application logic to permit communications
between the web servers and the EduLink database; (ii)
implement all of the EduLink tools; and (iii) facilitate the
interpretation of user requests and data inputs, the
formulation of requests to the EduLink database, and the
receipt and disbursement of the results. The third tier will
consist of the EduLink database and the EduLink software
components for storing and retrieving data from that database.
The database consists of Oracle (relational database) and SimDB
(content-based database) tools.
* Hardware Architecture: Consisting of the arrangement of the
hardware components of the proposed EduLink system,
specifically: (a) user computer systems which will host the
users' web browsers; and (b) the EduLink servers, which will
host the EduLink web server, the EduLink application software
and the EduLink database. The EduLink development environment
consists of 4 Del PowerEdge 1300 Servers that will connect to
the users' computers through the Internet. Prior to the
January 2001 planned beta testing of the Schoolhouse System
for the 7th and 8th grades, the EduLink servers will be
migrated to more powerful Sun Enterprise computer systems, to
be purchased in January 2001 at an anticipated cost of
$200,000 and installed at a commercial web hosting facility at
an anticipated cost of $7,000 per month.
Inquiry-based instruction is a learning technique that requires
students to solve a problem by planning, carrying out and reporting the results
of their investigation. Problems that require inquiry or investigative steps are
planned to be revealed to students in an online Virtual Lab setting, with an
emphasis placed on student laboratory and field investigation, as well as case
studies. It is our goal that inquiry-based instruction in an online Virtual Lab
setting will facilitate a deep and personal understanding of how learning works
by participating in the conduct of investigations and solving a problem in an
electronic world which will have characteristics that are simulated to represent
a real world environment, i.e., an online Virtual World. A Virtual Lab refers to
a pre-designated real world characteristic which is part of an online Virtual
World and which, once entered, gives the student access to a problem involving
one discipline (math, science, history or literature) as well as access to
resources and tools designed to facilitate resolutions to the problem. It is
expected that each online Virtual World will contain four online Virtual Labs,
each such Virtual Lab to relate to one of the four disciplines. For example, if
a student enters an online Virtual World which simulates a tent on grass next to
a stream, and a night sky, lit by a bright star, and if the student "clicks" on
the simulated star, that student would enter the online Virtual Lab and be asked
to create an online working model of a solar system and be provided tools to
assist and guide the student.
Material aspects of the proposed Schoolhouse System described above
have yet to be developed. The current status of the development of our proposed
products and services is set forth in the sections entitled "Narrative
Description of Business" and "The Current Status of our Proposed Products and
Services".
EduLink estimates that approximately $8.5 million will be needed to
produce, alpha test, beta test and launch the proposed Schoolhouse System for
the 7th and 8th grades and to pay sums currently owed by EduLink to third
parties. To date, EduLink has raised approximately $5.2 million from the sale of
its common stock, of which $400,000 has been paid to Saatchi & Saatchi North
America under our agreement with them. See "The Saatchi Agreements." While these
funds are sufficient to complete and alpha test the material aspects of the
Schoolhouse System for the 7th and 8th grades, EduLink does not currently have
the additional monies needed to beta test, launch and market the
3
<PAGE>
proposed Schoolhouse System for the 7th and 8th grades and to continue its
overall operations. There can be no assurance that EduLink will be able to raise
these additional monies either in the form of revenue from operations or
proceeds from the offering of its securities. There also can be no assurance
that EduLink will be able to penetrate the school and home markets if it should
be able to launch its 7th and 8th grade Schoolhouse System.
Additional funds beyond the estimated $8.5 million will also be needed
to continue operations after the proposed launch of the service for the 7th and
8th grades and to produce the content, beta test and launch the Schoolhouse
System for additional grade levels. EduLink estimates that following the
potential launch of the service for the 7th and 8th grades, approximately $3.5
million will be needed during each of four succeeding 12 month periods to
continue operations, pay debts, produce content, upgrade technology, beta test,
market and launch the Schoolhouse System for two additional grade levels per
each of the four 12 month periods. This $3.5 million does not include expenses
related to any potential global expansion or modifications to educational
content for the homeschooler market.
EduLink intends to obtain such additional funds from operating revenue
and/or from the sale of its securities, but there can be no assurance that there
will be operating revenue or that funds can be secured on terms acceptable to
EduLink.
EduLink's corporate offices are located at:
450 North Roxbury Drive 5743 Corsa Avenue
Suite 602 Suite 207
Beverly Hills, Ca 90210 Westlake Village, Ca 91362
Telephone (310) 247-7800 Telephone (818) 874-1273
(b) Financial Information about Segments.
EduLink operates in only one business segment, the design, development
and sale of educational products.
(c) Narrative Description of Business.
EduLink plans that the proposed Schoolhouse System will provide:
(i) A 3rd through 12th U.S.A. public and private school
curriculum packaged in units. A unit is a body of information
that covers a defined topic. For example, in United States
history, there may be a unit on the settling of America. In
the proposed EduLink curriculum for the 7th and 8th grades,
there are 10 units which cover material from the period of
America's settlement through the period known as the "space
age." Each unit covers a specific time period. Each unit will
consist of approximately 14 lessons (with each lesson
including 10 activities) and four inquiry based problems. Each
two grade levels will require approximately 10 units.
Lessons are the discrete elements into which units are
segmented. They cover detailed information regarding one
aspect of a unit and cover material in history, math, science
and literature. For example, in the unit on the settling of
America there may be lessons regarding the American Indians,
the Slave Trade and the Spanish Conquest.
Activities are the series of tasks or assignments which follow
each lesson. For example, in the unit on the settling of
America, the lessons on the Spanish Conquest may have an
accompanying activity that asks the student to write a journal
as though he were a soldier in the army of Hernando Cortez
reporting on what he sees happening to the Aztecs.
The curriculum will be structured in an interdisciplinary
manner, meaning it will encompass two or
4
<PAGE>
more forms of content disciplines (for example, a history unit
involving the California Gold Rush may have embedded in it a
math lesson using weights and measures, a science lesson
involving geologic formations and an English lesson exploring
the writings of Bret Harte), cross-age, meaning combining the
curriculum content to fit the needs of two grades, such as 7th
grade 13 year old students with 8th grade 14 year old
students (for example, although 8th graders typically study
U.S. History and 7th graders typically study World History,
the EduLink cross-age curriculum explores the peopling of the
Americas through a review of not only the events in the
Americas which brought the Bering Land Bridge nomads, European
explorers and West and Central Africans together, but also
through a review of the cultures from which these people came,
with lessons on the European Renaissance, the Reformation
African myths and traditions and American Indian agriculture).
Our graphical design engineers and database engineers have
standardized the icons and information flows inside the user
screens. The targeted users for this service are students,
parents and teachers.
(ii) Educational curriculum content and student skill proficiencies
based upon National Content Standards. National Content
Standards refers to the guidelines and educational standards
and curriculum frameworks recommended by several organizations
focused on education including: the National Council of
Teachers of English, the California Language Arts Content
Standards, the National Center for History in the Schools, the
National Center for History Standards, the National Geography
Alliance, the American Association for the Advancement of
Science, the Center for Research on Evaluation, Standards and
Student Testing, the National Council of Teachers of Math, and
the Council for Basic Education. Our content engineers have
finished the alignment of curriculum content and student skill
proficiencies with National Content Standards for the first
unit. The targeted users for this service are students,
parents and teachers.
(iii) The integration of quality multi-media educational content,
educational assessment, and teacher instructional strategies
in a web-based environment. "Multimedia content" means content
which incorporates text, photos, audio, video and/or
animation. Multimedia content can include public domain
material, or proprietary material which requires the securing
of a license, such as archived audio, video, still pictures
and data from nationally recognized content organizations like
National Geographic, CNN and Reuters. EduLink has had
discussions regarding licensing arrangements with National
Geographic, CNN and Reuters, but no licensing agreements have
been reached. EduLink does not intend to develop or create its
own multimedia content, nor does it intend to compile an index
of websites containing multimedia content. However, all
multimedia content proposed to be utilized will be hosted by
EduLink inside the proposed Schoolhouse System. All resources
that relate to multi-media educational content for the first
unit for the 7th and 8th grades have been identified,
collected and all licenses to use the information on the web
have been obtained. The targeted users for this service are
students, parents and teachers.
5
<PAGE>
(iv) Two-minute video teasers as introductions to the curriculum
units. Our content engineers have written descriptions of the
video teaser segments as introductions to the first two units
of the 7th and 8th grade curriculum. The targeted users for
this service are teachers, students and parents.
(v) A means to enhance student collaboration through the Internet
either at home, via a computer with Internet access, or at
school, via a computer with Internet access. Collaboration, in
this context, means that students from different physical
locations can assist each other in working out assigned
problems by utilizing their access to the proposed Schoolhouse
System via the Internet, and the "Chat" areas within the
proposed Schoolhouse System, inclusive of the Virtual Labs,
meaning areas which allow for communications by typing
messages in designated spaces.
(vi) A comprehensive information management and communication
service with programs uniquely tailored to school, teacher,
student and parent needs, such as an electronic filtered
24-hour daily news feed; Edu-Chat rooms (meaning on-line chat
areas), free Edu-Mail (meaning on-line E-Mail), a calendar of
events, schedules and announcements. Our content and database
engineers are writing design specifications and have begun the
initial web-based engineering build-out for this service. The
targeted users for this service are students, parents,
teachers and school administrators.
(vii) Online Virtual Labs with emphasis on inquiry. Our content
engineers have written a description of the inquiry and design
problems for the first unit of the 7th and 8th grade
interdisciplinary curriculum that has been completed. A
web-based format has been produced to standardize electronic
icons, schoolhouse structure and unit lesson and activities.
No Virtual Labs have been created or tested. The targeted
users for this service are teachers and students.
(viii) An electronic essay grader and a student essay tutorial
program. The electronic essay grader refers to a software tool
which grades student essays based upon the input of relative
values allocated to various possible answers to the question
posed. The student essay tutorial program means software that
will guide students as to how to write essays. Our content
engineers have finished a written description of an electronic
grading system for
6
<PAGE>
designated student work. Our database engineers have developed
initial algorithms for the web-based electronic essay grader.
The targeted users for this service are teachers.
(ix) Teacher, student and parent tools to enhance learning. These
tools include existing reference web-based software, such as
thesaurus, dictionary, encyclopedia, atlas, word processor and
calculator. These tools also include non-reference type tools
currently being designed by our technology engineers to help
students learn by working systematically through a problem,
including: (a) an Inquiry Step Tool, meaning a tool which sets
out in a linear fashion the steps a student should take to
solve a problem, inclusive of identifying the problem,
formulating hypotheses and conducting research; (b) a
Cognitive Mapping Tool, meaning a tool which promotes the
discovery and segregation of various elements associated with
a problem (i.e., identifying the elements, determining how to
retrieve the elements using the student's prior knowledge and
determining how to organize the elements into categories and
subcategories) and facilitates an examination of the elements
and the logical ways to connect them so as to arrive at a
solution. This tool is intended to provide the student with a
"map" of his thought processes, and for example, prompt the
student for more information or ask if one response might
better fit into another category; and (c) an Intelligent
Student Coaching Tool, meaning a tool which will inform the
student, on-line, when he is not properly processing the
problem (i.e. the student improperly formulates a hypothesis).
Existing reference web-based tools have been identified and
located and the content engineers have developed a written
description of non-reference web-based tools that are to be
developed. Our database engineers are designing the database
in order to integrate the tools into the database. The
targeted users for this service are teachers, students and
parents.
(x) A teacher authoring tool kit (which includes a web-based
lesson design template) to publish teacher created lessons
inside the proposed Schoolhouse System. Our database engineers
have developed the algorithms for the teacher authoring tool;
it is currently in an alpha testing format. A teacher
authoring tool means a software tool which allows a teacher
to gather digital data (inclusive of multimedia content) from
various locations and formats in a user-friendly manner, so as
to create lesson plans. In order to utilize portions of any
textbook curriculum used by a teacher in the classroom
together with portions of lessons, activities or other
7
<PAGE>
material stored within the proposed Schoolhouse System, the
teacher must place that textbook material inside the proposed
Schoolhouse System (meaning inputting the text thus converting
it to a digital format). Teachers that are not employed by
schools affiliated with EduLink will not have access to the
teacher authoring tool kit. Teachers that are employed by
schools affiliated with EduLink will have access to the
teacher authoring tool from any location that allows them
access to the proposed Schoolhouse System. The targeted users
for this service are teachers.
(xi) Tutorial services for use by students in the home. EduLink
plans to hire teachers as tutors, accessible through Edu-Chat
e-mail, chat rooms and/or telephone lines. Tutorial services
will be offered to students for a nominal fee. The targeted
users for this service are students.
(xii) The School Store. The School Store means an area planned to be
within the Schoolhouse System, which allows a user to purchase
products such as school sweaters, notebooks and sportswear.
The software to facilitate this part of the proposed
Schoolhouse System is being designed by our technology
engineers. In order to operate such a store, EduLink must
conclude agreements with product suppliers who will warehouse
and ship products as they are ordered by users of the system.
The targeted users for this service are students, parents,
teachers and administrators.
(xiii) An educational system that is adaptable to a worldwide
educational audience. The proposed Schoolhouse System is
adaptable to a world wide educational audience because its
targeted users, i.e., students, parents, teachers and schools,
have universal educational characteristics. The unit, lesson
and activity structure can be made specific to a country's
national educational agenda. The structure of the proposed
Schoolhouse System can be used in any country, but the
educational content comprised of units, lesson plans,
activities and inquiry based problems must be created
specifically so as to satisfy the language and educational
requirements of the country in question. EduLink has no
expertise in terms of non-U.S. educational content; thus, in
order to bring the proposed Schoolhouse System to other
countries, EduLink must form alliances with entities based in
the particular country, which have the expertise necessary to
create the appropriate educational content and which will
provide the funds required to create the applicable
educational content. EduLink has not entered into any
negotiations or agreements with any entities for purposes of
expanding the proposed Schoolhouse System to other countries.
The targeted users for this service are administrators,
teachers, parents and students of the applicable foreign
country.
8
<PAGE>
SCHOOLS, TEACHERS, STUDENTS AND PARENTS
EduLink intends that the proposed Schoolhouse System will be used by
school administrators, teachers, students and parents. There will be no
requirement that schools use the proposed Schoolhouse System. Instead, schools
will be able to voluntarily adapt to the proposed Schoolhouse System because it
is a free service and as such, they will be able to utilize the system when and
how they please.
SCHOOL ADMINISTRATORS. It is planned that the portions of the proposed
Schoolhouse System designed for school administrators will serve as the
administrative arm of the proposed Schoolhouse System in a particular school and
that it will, among other things, detail school district resources and Internet
technology capabilities. EduLink intends to provide a full array of services to
school administrators including: (i) a web-based home page to the school with
active links to additional web pages about the school, its community, faculty
and staff and school information; (ii) comprehensive calendar and scheduling
capabilities which will automatically be propagated to teacher, student, and
parent desktops; (iii) school-wide and staff-only announcement capabilities
which will also be propagated to the affected persons; (iv) collaboration
capabilities both within the school and with outside educators using the
proposed Schoolhouse System; (v) home pages for administrative staff, with
information (such as education and areas of interest) for use in establishing
collaborative connections with outside educators; and (vi) site administrators
associated with the school, to permit them to register themselves and their
classes with the proposed Schoolhouse System. It is planned that all information
to support these basic functions will reside on EduLink host computers.
Administrators will have the same basic abilities as teachers to examine the
curriculum (unit, lessons and activities) offered by EduLink. Administrators
will also have access to the common set of office tools: word processing,
dictionary and thesaurus. EduLink also plan to furnish news feeds to
administrators.
EduLink believes that administrators will want this information
described above because it is essential to their daily operations, housed in one
place and will be easily accessible.
TEACHERS. It is planned that teachers will have access to all proposed
Schoolhouse System curriculum units, lessons, news feeds, video teasers, the
Virtual Labs and the inquiry based problems and tools. Teachers will be able to
use the proposed Schoolhouse
9
<PAGE>
System to enhance their existing programs and to allow them more time to
individualize instruction. By using the time saving tools, such as the
electronic essay grader and the inquiry step tool, teachers can become
facilitators of the student's learning experiences rather than dispensers of
knowledge. Teachers will be able to guide students into inquiry learning while
encouraging them to interact and collaborate with other students. Teachers will
be able to use the proposed Schoolhouse System to assess student performance, to
collaborate with students on writing and problem solving exercises, to create
lessons from the news feeds and from the bank of archived resources using
EduLink electronic authoring tools, to exchange information instantaneously with
other educators, and to communicate quickly and directly to parents.
Teachers can encourage students to interact and collaborate via the
proposed Schoolhouse System by explaining orally in the classroom, or in writing
through e-mail or individual chat sessions or group chat sessions in chat rooms.
Teachers can use this proposed Schoolhouse System to assess student performance
by observing the student's work while using the Cognitive Mapping and Inquiry
Step tools, and this assessment can be accomplished by reviewing the student's
work after completion (it will be stored) or by reviewing the Student's work
"real time," i.e., while in progress, which therefore enables the teacher to
collaborate with the student while in the problem solving process. It is
anticipated that a teacher/student collaboration will include e-mails,
individual chat sessions, group chat sessions and other interactive
collaboration within the Virtual Lab environment. EduLink intends to save
teachers' time in some areas (i.e. by the use of electronic essay graders, use
of the system's lessons and activities) while causing them to expend some of the
time saved in other areas (such as those that are designed to promote critical
thinking and assessment of thinking skills). A teacher will be able to "pick and
choose" from the services offered in that a teacher can, for example, opt to
communicate with parents via the proposed Schoolhouse System or elect not to do
so; a teacher can use one, more than one or none of EduLink's lessons and
activities within a unit in the classroom; a teacher can use traditional
curriculum textbook material while also using related EduLink lessons,
activities or Virtual Lab inquiry based problems as a supplement. The proposed
Schoolhouse System is not intended to replace traditional curriculum, but rather
to be used by teachers as an additional asset to draw from. Moreover, even if
the proposed Schoolhouse System is accepted into a school it does not mean every
teacher within that school will desire or be given the opportunity to access the
proposed Schoolhouse System; and EduLink assumes that, initially, those teachers
within an EduLink affiliated school who have technological awareness will be
more likely to desire and be given the opportunity to use the system in the
classroom. It is the school, through
10
<PAGE>
administrators (usually with guidance from teachers) that will elect to
affiliate with EduLink, and because EduLink is not attempting to replace the
traditional curriculum, no formal adoption of the proposed Schoolhouse System's
curriculum is required.
Additionally, it is planned that the archived resources will be
developed from strategic alliances that EduLink plans to make with national and
regional organizations to license their electronic educational media resources.
It is anticipated that the image and informational banks of archived resources
will be integrated into the EduLink database. Moreover, the proposed Schoolhouse
System will provide a repository for teaching and learning practices as well as
a distribution outlet for teachers employed by EduLink affiliated schools around
the world to publish and license their lessons. To facilitate this publishing
aspect, EduLink intends to build and integrate into its database a web-based
teacher-authoring tool (including a web-based lesson design template).
STUDENTS. It is intended that students will be able to access the
proposed Schoolhouse System at any time if they have a computer that has
Internet access at home. This will allow them to supplement and enhance their
learning, and collaborate with other students and teachers. Students will be
able to review their course work, obtain materials and interactive resources
related to their course work and, if necessary, receive direct tutorial aid.
EduLink expects that the interactive resources will include videos, audios and
still pictures that will have the capacity to be stopped and played back within
the proposed Schoolhouse System, making each resource interactive. EduLink
expects to offer students direct tutorial aid in the home, for a fee, through
its e-mail program and the Edu-Chat program as well as by telephone connection.
The portion of the proposed Schoolhouse System designed for students is
intended to have, among other things, the applicable educational information for
the grade of the particular student courses, daily lessons and related
materials, as well as a school information guide to help organize a student's
schedule, events, sports activities and clubs. Students will be able to access
via the internet student-run web pages, current news events, updated bus
schedules and a daily read out of their teachers, classes and activities.
Students will also have their assignment lists and personal "lockers" with their
own private passwords to record their outside activities, appointments and
errands.
The proposed Schoolhouse System, and all of the elements to be designed
for student use, inclusive of applicable tools, will be structured so that it
can be used by all age groups (i.e. 3rd graders through 12th graders) but the
curriculum content itself and the language appearing within the proposed
Schoolhouse System to direct the student's use of the various components of the
proposed Schoolhouse System (including the tools) will be made age appropriate.
11
<PAGE>
PARENTS. It is planned that through the use of the proposed Schoolhouse
System, parents will have the ability to interact directly with a variety of
persons involved in their child's education including teachers, guidance
counselors and career counselors. For college-bound students, all of the
pertinent information relating to prospective colleges, scholarships, financial
aid and sample SAT and ACT tests will be available to parents. Parents will also
be able to maintain direct contact with teachers, school administrators, coaches
and other parents through a special PTA menu. They will be able to schedule
"chat" sessions on a regular basis and at their own convenience. "Chat" sessions
and bulletin board postings will allow parents to participate by sharing
experiences with parents of same age students around the city, state, nation,
and world. Parents using their own personal access code will be able to interact
with their child's school program from any computer with access to the Internet.
Parents will be able to enter the School Store and shop for educational
merchandise at discounted rates. The majority of the School Store merchandise
will be rated and endorsed by EduLink.
EduLink believes that parents will want access to the proposed
Schoolhouse System not only to provide their children with access to the
proposed Schoolhouse System at home, but also to allow the parents to become
more involved in their child's educational experiences.
The parents of homeschoolers will also be able to access the proposed
Schoolhouse System. EduLink also believes there is a significant opportunity in
the homeschoolers market and plans to focus on trying to gain penetration into
this market. EduLink has not, however, made any efforts to date to penetrate
this market. In order to penetrate this market, curriculum content may have to
be modified in order to satisfy various states' educational agendas; however,
the National Standards upon which EduLink's curriculum content is to be based
are generally more rigorous and demanding than the standards set forth in the
various 50 United States; accordingly, we expect that the modifications that
might be required with respect to any specific State would generally not be
significant. The additional costs, which would be required for such
modifications, if any, have not been determined, and as such, such costs are not
included in the funding requirements earlier set forth.
12
<PAGE>
DELIVERY OF AND ACCESS TO THE SCHOOLHOUSE SYSTEM
EduLink has developed a demonstrable prototype Internet website for the
proposed Schoolhouse System. It is intended that school administrators,
teachers, students and parents, free of charge, will access the website through
desktop computers using his or her personal account. The website currently only
has minimal, basic available information regarding the Schoolhouse System.
Within each end user group, a member of the particular group will only have
access to certain information and services. For example, students will receive
access codes allowing them access to the curriculum services, but not to the
grades or records of other students. Only a student's teacher and school
administrator will have such access. Each end user will have a personal
identification code, which will allow them access to their private information.
EduLink plans to host the system for Internet use. Through the
Internet, administrators, teachers, parents and students will be able to access
and use the system. The content and services provided by the system will be
delivered via the web to the users. The computers hosting the system will be
provided by EduLink.
It is expected that the school, not EduLink, will operate as the system
administrator. When the school registers itself with EduLink, a site
administrator (such as the principal or an assistant principal) will be selected
by the registering school. The site administrator will be furnished with a
special access code, which will permit the site administrator to provide and
manage access privileges for the administrators, teachers, students and parents
associated with that school.
EduLink anticipates that schools (administrators), teachers, students,
and parents, will each furnish pertinent data that will be maintained on the
EduLink computers. It is expected that this will include general contact
information, and also (for all except the parents) the additional profile
information necessary to maintain such user's calendar, activities and
interests, progress on assignments, class schedules, course work and other
EduLink preferences. The school, teacher, parent and student information will be
gathered by using electronic templates that identify specific fields of
information. The data content from these templates will be stored on the EduLink
host computers.
Currently the EduLink technology consists of an Instructional
Management System facilitated by a messaging process which implements XML
encoding techniques. The technology also includes an application server that
13
<PAGE>
bridges Internet users with the internal framework; within the application
system, advanced extensible Stylesheet Language technology is being used to
apply style characteristics to the content management systems that are indexed
for rapid retrieval. The EduLink System is currently being developed in a
distributed Window NT environment. This development environment consists of 4
Dell PowerEdge 1300 Servers owned by EduLink, but in the future and prior to the
contemplated Beta Test in January 2001, EduLink components will be migrated to
more powerful Sun Enterprise computer systems (which EduLink plans to purchase).
The development environment also utilizes an Oracle database (relational
database) and SimDB database (content based database), and these two databases
are expected to satisfy EduLink's future needs.
THE CURRENT STATUS OF OUR PROPOSED PRODUCTS AND SERVICES
EduLink expects to rollout its service in stages by initially
developing and producing the Schoolhouse System for the 7th and 8th grades, by
conducting alpha tests during portions of the development and production process
period from June 2000 through December 2000, by conducting a six week beta test
in January 2001 and by launching the service for the 7th and 8th grades
following the completion of the beta test and resultant modifications to the
system, if any. Thereafter, EduLink intends to beta test and launch the service
for two additional grades (e.g. 9th-10th, 5th- 6th and 3rd-4th) each succeeding
twelve month period.
Our technology engineers, Science Applications International
Corporation ("SAIC"), are designing and building the EduLink architecture,
inclusive of various software tools (such as the Electronic Essay Grader, the
Intelligent Coaching Tool, the Inquiry Step Tool, the Cognitive Mapping Tool,
the Teacher Authoring Tool, the Virtual World and Virtual Labs). Our estimated
completion date for such architecture is December 2000. The software relating to
the Schoolhouse System's information and communication system (i.e. e-mail,
chat, schedules, school store) have been identified and are being designed and
built by our technology engineers, and we anticipate completion by December
2000. The graphics within the Schoolhouse System are also being designed by SAIC
and the estimated completion dates are: (i) with respect to graphics relating to
the first 8 units of the 7th and 8th grade curriculum and the other portions of
the Schoolhouse System for the 7th and 8th grades by December, 2000; and (ii)
with respect to the graphics relating to the last 2 units of the 7th and 8th
grade curriculum, at various times during the period January through March 2001.
The curriculum content for the 7th and 8th grades (units,
14
<PAGE>
lessons, activities, inquiry based problems) are being created by our content
design team, headed by Kathleen McGuire, Ph.D. of McGuire and Associates and
supervised by Professor Gary Nash of the University of California at Los
Angeles. The first unit has been completed by the design team and delivered to
SAIC for incorporation into the Schoolhouse System. We estimate that eight of
the units for the 7th and 8th grades will be completed during the period June
through December 2000, and the last two units will be completed and operational
between January and March 2001.
It is intended that curriculum for two additional grade levels will be
completed within every 12 month period following the launch of the Schoolhouse
System service for the 7th and 8th grades. The technological aspects of the
Schoolhouse System will not require any changes for different grade levels;
it is only the language used, the graphics used and the curriculum content that
will require changes to make them age appropriate.
MARKETING
EduLink plans to market the proposed Schoolhouse System to public and
private schools throughout the United States and to homes of school aged
children. EduLink intends to reach schools and homes by several methods,
including direct sales and telemarketing, alliances with companies that have a
substantial regional and national presence in school and/or home markets (such
as local telephone companies, cable companies, computer companies and internet
service providers), cross promotion with companies attempting to reach
demographics similar to those of EduLink, and public relations activities
that will illustrate the academic value of EduLink's content.
In this regard, EduLink intends to have the academic content of its
proposed Schoolhouse System evaluated by various nationally recognized
educators, such as Professor Gary B. Nash, Ph.D., Project Co-Director for the
National Standards for History, UCLA, Professor Christopher Slater, Ph.D.,
Founder of the National Geography Alliance, University of Missouri, Professor
Sheridan Blau, Ph.D., former President of the National Council of English
Teachers; UCSB, Dr. Linda Plattner, Council for Basic Education Coordinator of
National Math Standards and Dr. Rodger Bybee of the National Research Council at
a cost of approximately $50,000 in the aggregate.
The type of alliances EduLink envisions include co-branding agreements
with well known portals such as Yahoo; bundling agreements with computer
companies like Dell, telcos like GTE; co-promotional agreements with sponsors
and advertisers which provide promotional material about EduLink through the
distribution of their own products or within their own environment, such as
Pepsi Cola and Wal-Mart. EduLink has not commenced discussions or entered into
any agreements relating to any such marketing alliances. Instead, EduLink's
marketing activities to date have been limited to securing written commitments
from several schools relating to their participation in the alpha and beta tests
for the 7th and 8th grade Schoolhouse System, including the Lincoln Middle
School in Santa Monica, California and the Assumption School in Wood-Ridge, New
Jersey. All of the schools may opt out of such alpha and/or beta testing at any
time.
15
<PAGE>
POTENTIAL SOURCES OF REVENUE
If EduLink is able to fully develop and market the proposed Schoolhouse
System, it expects to derive revenue from one or more of the following sources:
1. home subscriptions for premium services;
2. tutorial services;
3. transactional revenue from the school store and links to other
websites;
4. traditional corporate advertising within the commercial zones
of the Schoolhouse System;
5. corporate sponsorship in various forms, including corporate
underwriting. As an example, corporations may underwrite
premium service fees for corporate employees who are parents;
6. international franchises of the proposed Schoolhouse
System; and
7. federal grants. The federal grant possibilities relate to
those designed to assist the development of education on-line
(such the Learn Anytime, Anywhere Annual Federal Grant, and
one U.S. Department of Education Filed Institute Studies
program); in order for EduLink to qualify for such grants, a
partnership between EduLink (a "for profit" entity) and a
public or private educational institution would be required.
An applicable model for pursuit of such a grant would be the
combination of EduLink and one or more of the public schools
involved in EduLink's contemplated Alpha Test of the
Schoolhouse System for the 7th - 8th grades or EduLink's
contemplated Beta Tests of the Schoolhouse System for the 7th
- 8th grades, as well as additional grade levels.
COMPETITION
The market for companies providing educational related materials is
highly and intensely competitive. EduLink will be in direct competition with
companies with significantly longer operating histories, significantly greater
financial, technical, product development and marketing resources, greater name
recognition and larger customer bases than that of EduLink. Competitors of
EduLink include education curriculum software companies such as Edscape
Corporation, Lightspan Networks, Inc., Softkey International, Inc., National
Education Corporation, Davidson and Associates, Inc., Scholastic Corporation,
Broderbund Software, Inc.,
16
<PAGE>
Knowledge Adventures, Inc., Jostens LLC, CNN newsroom, PBS Mathline, CTB McGraw
Hill, Net School/ACTV Inc., e Schooland, and CCC, Inc. Moreover, other entities
not currently in this industry may in the future attempt to launch a business
similar to or identical to that of EduLink's. EduLink's competitors may develop
products comparable or superior to those developed by EduLink, adapt more
quickly than EduLink to new technologies, evolving industry trends or customer
requirements, or devote greater resources to the development, promotion and
license of their products than EduLink. Accordingly, there can be no assurance
that competition will not intensify or that EduLink will be able to compete
effectively in its proposed market. However, to EduLink's knowledge, there are
no other companies currently engaged in the business of providing all of the
various elements of the proposed Schoolhouse System from a single system which
EduLink intends to provide. There are various software companies that are
providing organizational information between teachers and administrators, but we
are not aware of any company currently providing organizational information
between parents and teacher, parent and student, teacher and student, parents
and administrators, and student and administrator, inside one system.
EduLink does not believe it will be in competition with companies that provide
extra curriculum games that are designed to be educational because EduLink's
content is focused on a national standards based curriculum that relates
directly to history, math, science and literature.
Additionally, although sources such as newsfeeds are available on the web for
free, such as CNN and Internet Newsfeeds, EduLink does not believe they provide
a software filtering system that allows users to identify and archive
information for use at another time, something which the proposed Schoolhouse
System is intended to provide. Cable and other companies have a class room
presence over cable networks for newsfeeds and in some cases for storing and
retrieving lesson plans. This information is usually available in an analog
format and not digital, therefore restricting its use to TVS and VCRs. By having
a 24 hour newsfeed with a filtering system, and by delivering the newsfeed over
the internet inside the proposed Schoolhouse System, EduLink hopes to provide
something uniquely different.
17
<PAGE>
THE SAATCHI AGREEMENTS
From approximately February 1997 through April 1998, Saatchi & Saatchi
North America, Inc. ("Saatchi") provided production and consulting services in
connection with the proposed Schoolhouse System. In January 1998, Saatchi and
EduLink executed an agreement, effective as of July 1997, pursuant to which
Saatchi agreed to provide various services, including but not limited to
designing and establishing a website for the proposed Schoolhouse System (the
"1998 Saatchi Agreement"). Pursuant to the terms of the 1998 Saatchi Agreement,
EduLink executed and delivered an $850,000 note to Saatchi relating to fees owed
for past services through December 1997 (the "Saatchi Note"). In addition,
pursuant to the Saatchi Agreement, Saatchi claimed additional fees of $548,000
as of June 10, 1998, which charges were disputed by EduLink.
Pursuant to the provisions of the 1998 Saatchi Agreement, EduLink's
ownership of the intellectual property Saatchi developed in connection with the
proposed Schoolhouse System was subject to EduLink making all required payments
to Saatchi under the Saatchi Agreement and the Saatchi Note. The intellectual
property at issue is the graphical user interface developed for the three
existing prototype websites and for the six prototype web based lesson plan
Internet prototypes.
From April 1998, the date Saatchi discontinued services, the proposed
Schoolhouse System concept went through substantial modifications, rendering the
Saatchi graphical user interface antiquated for EduLink's purposes.
On January 5, 2000, Saatchi and EduLink entered into a second
agreement to resolve their dispute under the following terms (the "2000 Saatchi
Agreement"):
* EduLink's total obligation to Saatchi, inclusive of sums due
under the Saatchi Note, was reduced to $1,000,000 payable out
of 15% of the net proceeds obtained by EduLink from the sales
of its securities;
18
<PAGE>
* interest at prime plus one percent will accrue on the
$1,000,000 debt, commencing as of January 1, 2000, if, but
only if, the debt is not paid by December 31, 2000;
* in lieu of 31,000,000 shares and 14,000,000 warrants that were
to be issued to Saatchi under the 1998 Saatchi Agreement,
Saatchi is to receive 11,435,000 shares of EduLink's common
stock (which shares have not yet been delivered);
* EduLink agreed that it would pay Saatchi by January 15, 2000,
the difference between $100,000 and the sums theretofore paid
by EduLink to Saatchi from EduLink's sale of its securities;
by April 30, 2000, the difference between $400,000 and the
sums theretofore paid by EduLink to Saatchi from EduLink's
sale of its securities; and by December 31, 2000, the
difference between $600,000 and the sums theretofore paid by
EduLink to Saatchi from EduLink's sale of its securities.
EduLink paid Saatchi $100,000 on January 5, 2000 and $300,000
on April 28, 2000.
* EduLink will assign the proposed Schoolhouse System's
intellectual property rights to Saatchi if the $1,000,000
obligation is not paid by December 31, 2001.
19
<PAGE>
MANUFACTURING, DISTRIBUTION
EduLink will not manufacture or distribute software, but intends to
contract with third parties for the manufacturing, packaging, marketing and
distribution of any software. The software architecture is in the design stage.
We anticipate that the software will include software already developed by SAIC,
commercially available software and software to be specifically developed for
EduLink by SAIC.
EMPLOYEES-ALLIANCES:
EduLink currently has three employees -- Michael Rosenfeld, Dr.
Ronald Rescigno and Ian Rescigno. In addition, EduLink has entered into
agreements for services with the following individuals and entities:
* For content development, research grants, and online educational
tutorial experts - McGuire and Associates, headed by Kathleen McGuire,
Ph.D., director of the Distance Learning Program, University of
California, Los Angeles ("UCLA") extension; Los Angeles, California;
* For content oversight, including units, lessons, activities and the
inquiry based problems within the Virtual World and endorsement -
Professor Gary B. Nash, Ph.D., Project Co-Director for the National
Standards for History, National Center for History in the Schools,
UCLA, Los Angeles, California;
* For data base engineering, front end graphic design services, Virtual
World design, and the Graphic User Interface for inquiry based problems
- Science Applications International Corporation (SAIC), Center for
Advanced Information Technology; Annapolis, Maryland;
* For teacher, parent and student filtering and curriculum development
tool and the teacher curriculum center - SAIC, Center for Advanced
Information Technology; Annapolis, Maryland; and
* For the inquiry based software and tool kit - SAIC, Center for Advanced
Information Technology; Annapolis, Maryland; and
* For research and educational marketing - McGuire and Associates, headed
by Kathleen McGuire, Ph.D., director of the Distance Learning
Programs, UCLA; Los Angeles, California.
20
<PAGE>
The three employment agreements were all entered into on September 1,
1999 and provide as follows:
Ronald Rescigno has been employed as President of EduLink from
September 1, 1999 through December 31, 2004. Compensation equals $150,000 per
year (the monthly pro-rata compensation from September 1 - December 31, 1999 was
waived), plus a bonus equal to the greater of 10% of the Net Pre-Tax Profits or
10% of the Net Cash Flow of EduLink computed annually, but not to exceed an
amount equal to $300,000 for each of the calendar years 2000 and 2001 and
$450,000 for each of the calendar years 2002, 2003 and 2004; in addition, Dr.
Rescigno is entitled to four weeks vacation, annually, and fifteen paid sick
days annually, and insurance benefits. Warrants to purchase 5,717,650 shares of
EduLink's common stock at $.0022 per share are to be issued to Dr. Rescigno upon
completion of each of the Design Phase, the Build-Out Elements, the Beta Test
and the National launch of the proposed Schoolhouse System for the 7th and 8th
grades. Although the Design Phase has been completed none of the above-described
warrants have yet been issued. Dr Rescigno is exclusive to EduLink, Inc. for the
term of the employment agreement.
Michael Rosenfeld has been employed as Chief Executive Officer of
EduLink from September 1, 1999 through December 31, 2004. Compensation equals
$150,000 per year (the monthly pro-rata compensation from September 1 - December
31, 1999 was waived), plus a bonus equal to the greater of 10% of the Net
Pre-Tax Profits or 10% of the Net Cash Flow of EduLink computed annually, but
not to exceed an amount equal to $300,000 for each of the calendar years 2000
and 2001 and $450,000 for each of the calendar years 2002, 2003, and 2004; in
addition, Mr. Rosenfeld is entitled to four weeks vacation, annually, and
fifteen paid sick days, annually, and insurance benefits. Warrants to purchase
5,717,650 shares of EduLink's common stock at $.0022 per share are to be issued
to Mr. Rosenfeld upon completion of each of the Design Phase, the Build-Out
Elements, the Beta Test and the National launch of the proposed Schoolhouse
System for the 7th and 8th grades. Although the Design Phase has been completed
none of the above-described warrants have yet been issued. Mr. Rosenfeld may
render outside services so long as it does not interfere with his obligation as
an officer of EduLink.
Ian Rescigno has been employed as Senior Vice President of Operations
for EduLink from September 1, 1999 through December 31, 2004. Compensation
equals $90,000 per year (the monthly pro-rata compensation from September 1 -
December 31, 1999 was waived), plus a bonus equal to the greater of 10% of the
Net Pre-Tax Profits or 10% of the Net Cash Flow of EduLink computed annually,
but not to exceed an amount equal to $180,000 for each of the calendar years
2000 and 2001 and $270,000 for each of the calendar years 2002, 2003, and 2004;
in addition, the employee is entitled to four weeks vacation, annually, and
fifteen paid sick days, annually, and insurance benefits. Warrants to purchase
5,717,650 shares of EduLink's common stock at $.0022 per share are to be issued
to Mr. Rescigno upon completion of each of the Design Phase, the Build-Out
Elements, the Beta Test and the National launch of the proposed Schoolhouse
System for the 7th and 8th grades. Although the Design Phase has been completed
none of the above-described warrants have yet been issued. In addition, Mr.
Rescigno was issued warrants to purchase 34,305,000 shares of common stock at an
exercise price of $.0022 per share. Mr. Rescigno is exclusive to EduLink, Inc.
for the term of the employment agreement.
21
<PAGE>
The agreement between EduLink and Professor Gary B. Nash was entered
into as of February 1, 2000. The agreement provides that Professor Nash will
supervise the design of our curriculum for the proposed 7th and 8th grade. The
curriculum is to consist of 10 units with approximately 140 lessons and 1,400
activities, plus 40 inquiry based questions for a contemplated Virtual World.
Professor Nash's engagement with EduLink is non-exclusive and all of the results
and proceeds of his services are assigned to EduLink and are deemed a work for
hire from inception. Professor Nash is to be paid $3,000 per month until the 10
units are delivered, not to exceed 12 months. The $3,000 is an advance against
fees of $100 per hour, but he must obtain pre-approval for hours to be incurred
in excess of 40 hours in a month. He also is to receive a bonus of 7.5% of any
license fees paid to UCLA by EduLink pursuant to any license agreement between
EduLink and UCLA which may in the future be consummated with respect to
intellectual property relating to history curriculum of the 7th and 8th grades.
He also is to receive warrants to purchase 100,000 shares of EduLink's common
stock at $.10 per share upon delivery of each unit, to a maximum of warrants to
purchase 1,000,000 shares. He also is engaged to serve on EduLink's to be formed
Quality Control Curriculum Committee and will be entitled to receive warrants to
purchase 500,000 shares of stock at $.20 per share for his service on the
Committee. Professor Nash is also to receive an additional 1,000,000 warrants
for securing three approved individuals to serve on the Committee, one-third of
which vest as each of such individuals agrees to serve on the Committee.
The agreement between EduLink and Ms. McGuire was entered into as of
February 1, 2000. The agreement provides that Ms. McGuire is to develop content
for the proposed 7th and 8th grade curriculum. Content development includes
responsibility to core curriculum standards, integration of educational software
applications, presentation and final editing of content, and recruitment and
training of on-line tutors. The deliverable schedule is to be mutually
determined. EduLink's payment obligation is $148,000, payable as deliverables
are completed and accepted in accordance with the mutually approved schedule.
The payments include all sums otherwise payable to the specialists supplied by
Ms. McGuire and the results and proceeds of all work product, including the
copyrights therein, is to be owned by EduLink and is to be considered a work for
hire from inception. In addition, Ms. McGuire is to manage the specialists,
liaison between the specialists and EduLink's other technology providers and
content supervisors, analyze student assessment of the curriculum, assist in
obtaining federal grants, identify possible schools to participate in the
contemplated beta test, and assist in planning the rollouts of additional grade
level curriculum. For such additional services, Ms. McGuire is to receive the
sum of $3,000 per month for 12 months (commencing February, 2000), unless the
agreement is terminated earlier based upon a failure to deliver on a timely
basis.
The agreement between EduLink and SAIC was entered into as of October
1, 1999. The agreement provides that SAIC will render services relating to the
development and construction of the proposed Schoolhouse System, such services
and the actual deliverables to be fully described by Individual Task Order
Statements of Work and Schedule, such work to be performed on a time and
material basis. The hourly fees per category are established for the one year
term of the agreement (e.g. Program Manager at $200 per hour; Jr. technical
staff at $90 per hour). Each Task Order may include one or more labor
categories. There is no limit as to the number of Task Orders that may be
issued. All materials furnished and services performed shall be subject to
inspection and test. All materials, computer programs software or other data or
information, whether fabricated, manufactured, purchased or otherwise obtained
by SAIC for the performance of its services and charged to EduLink are the
property of EduLink.
22
<PAGE>
TRADEMARKS AND COPYRIGHTS
EduLink has obtained a trademark for its corporate logo including the
design plus words and letters. Additionally, EduLink is in the process of
researching and applying for a servicemark for the proposed EduLink Smart
Schoolhouse and the History Hopper. EduLink believes that any software it is
able to develop in the future will be proprietary and it will attempt to protect
such software under copyright, trademark and trade secret laws as well as
through contractual restrictions on disclosure, copying and distribution.
Software products are susceptible to unauthorized copying. It may be possible
for unauthorized third parties to copy or to reverse engineer EduLink's
products. As the number of interactive software products in the market increases
and the functionality of these products further overlaps, EduLink believes that
interactive software will increasingly become the subject of claims that such
software infringes on the property of others.
As disclosed in the section entitled "The Saatchi Agreements", EduLink
may lose those intellectual property rights derived from services performed by
Saatchi if EduLink fails to pay sums due Saatchi by December 31, 2001.
LITIGATION
EduLink is not a party to any legal proceedings and is not aware of any
pending or threatened legal proceedings.
AVAILABLE INFORMATION
EduLink has filed with the Securities and Exchange Commission (the
"Commission") this Registration Statement on Form 10 under the Securities
Exchange Act of 1934, as amended. For further information with respect to
EduLink, reference is made to the documents filed as exhibits to this Form 10
Registration Statement. Statements contained in this Form 10 Registration
Statement regarding the contents of any contract or any other document to which
reference is made are not necessarily complete, and, in each instance where a
copy of such contract or other document has been filed as an exhibit to the Form
10 Registration Statement, reference is made to the copy so filed, each such
statement being qualified in all respects by such reference. A copy of the Form
10 Registration Statement and the exhibits thereto may be inspected without
charge at the offices of the Commission at Judiciary Plaza, 450 Fifth Street,
Washington, D.C. 20549, and copies of all or any part of the Registration
Statement may be obtained from the Public Reference Section of the Commission,
Washington, D.C. 20549 upon the payment of the fees prescribed by the
Commission. The Commission maintains a Web site (http://www.sec.gov) that
contains reports, proxy and information statements and other information
regarding registrants such as EduLink that file electronically with the
Commission.
23
<PAGE>
ITEM 2: FINANCIAL INFORMATION.
The following information has been derived from EduLink's financial
statements. Such information should be read in conjunction with EduLink's
audited financial statements for the years ended December 31, 1998 and 1999 and
the unaudited financial statements for the quarter ended March 31, 2000
appearing elsewhere in this Registration Statement.
SELECTED FINANCIAL DATA
(Dollars in thousands, except per share data)
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, 1997 AND 1996,
AND FOR THE QUARTERS ENDED MARCH 31, 2000 AND 1999
<TABLE>
<CAPTION>
March 31, March 31,
Income statement: 1999 1998 1997 1996 2000 1999
------ ------ ------ ------ ------ ------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Revenue $ -- $ -- $ -- $ --
Software development expenses $ (121) $ 897 $1,840 $ 305 $ 149 $ --
Operating expenses $ 145 $ 143 $ 246 $ 128 208 51
Net loss $ 24 $1,040 $2,086 $ 433 359 51
Net loss per share $ 0.0 $ 0.0 $ 0.01 $ 0.0 $ 0.00 $ 0.0
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion is provided to afford the reader an
understanding of all the material matters of EduLink's financial condition,
results of operation, capital resources and liquidity. It should be read in
conjunction with the financial statements and notes thereto and other
information appearing elsewhere in this Registration Statement.
Overview
EduLink is engaged in the design, development and creation of an
internet educational web based software service program to schools and homes. It
is intended that this service will be marketed to and utilized by students,
parents, teachers and school administrators. It is planned that the service will
be delivered over the Internet to personal computer users.
We expect that our expenses (including software development costs and
general and administrative costs) in the next few years will stay steady at
approximately $3.5 million per year, commencing in early 2001 following the
planned launch of the 7-8th grade system and content, of which $1.4 million will
be required to hire the additional administrative and technical personnel needed
to run our business and $1.5 million will be needed to upgrade the proposed
Schoolhouse System. This $3.5 million does not include funds which may be
required for any global expansion or development for the homeschooling market.
We have agreed to issue 5,717,650 warrants to purchase common stock at
$.0022 per share upon completion of each of the Design Phase, The Build-Out
Elements, the Beta Test and the National Launch of the proposed Schoolhouse
System, each to Mr. Rosenfeld, Dr. Rescigno and Ian Rescigno for a total of
68,611,800 warrants. It is not possible to estimate the charge to earnings at
this time by reason of these warrant issuances because it is dependent on the
then current market value of the common stock. However, to the extent that the
then current market value exceeds $.0022 per share, there will be a charge to
earnings and it could be significant. We do not expect to incur any other
charges to earnings by reason of warrant issuances and are considering revising
the terms of the warrants to be issued to Mssrs. Rosenfeld, Rescigno and
Rescigno to minimize the potential charge to earnings.
24
<PAGE>
We anticipate generating revenues beginning in mid-2001 subsequent to
the launch of the service from sponsorship fees generated by corporate
sponsorships, fees generated by home subscriptions to the premium service and
commissions earned on sales of products within the proposed Schoolhouse Store.
Once revenues do begin generating, we will then have a better opportunity to
assess any trends in that revenue flow. There can be no assurance, however, that
any revenues will in fact be generated.
We have not yet determined the exact amounts we expect to charge for
our proposed services. However, we anticipate a charge of approximately $5.00
per month for the online premium service at home, a charge of approximately
$15.00 per hour for home online tutorial services, and commissions of
approximately 10% on the sale of products through the proposed online School
Store.
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999 AS COMPARED TO YEAR ENDED DECEMBER 31, 1998
REVENUE
EduLink is a development stage enterprise and has spent most of its
efforts during the past three years in developing the proposed Schoolhouse
System web based software initially for the 7th & 8th grades, which is intended
to be beta tested in January 2001 and launched in September 2001 following the
completion of the beta test and resultant modifications to the system, if any.
Accordingly, EduLink has not generated any revenues to date. EduLink's
cumulative losses from inception through March 31, 2000 was $7,205,544.
In October of 1999, EduLink, Inc., a California corporation, merged
with and into URREA Enterprises, Inc. ("URREA") and URREA changed its name to
EduLink, Inc. This recapitalization of EduLink had no effect on EduLink's
financial condition and results of operations as URREA was a non operating
public shell with no assets or liabilities.
SOFTWARE DEVELOPMENT COSTS
In January 1997, EduLink contracted with an outside software
development vendor to provide production and consulting services in connection
with the web based Schoolhouse System.
Software development expenses decreased by 98% to $(121,000) in 1999
from $897,000 in 1998. The credit to software development cost in 1999 arose
from the adjustment of a disputed liability relating to work done in 1997 and
1998 which was recorded in the books in those years. The adjustment was
accounted for as a change in accounting estimate and accordingly resulted in a
net credit to software development cost during 1999. In addition, during 1999,
EduLink was conceptualizing its business plan and focusing on how to utilize
the development work completed during 1998.
Software development costs include amounts paid to the software
development vendor and other consultants.
NET LOSSES
EduLink has not generated any revenues to date, accordingly, net losses
for the years ended December 31, 1999, 1998 and 1997 consisted primarily of
software development costs and general and administrative expenses.
For the quarter ended March 31, 2000, general and administrative
expenses included $3,082,500 of compensation expense in connection with warrants
issued to an employee. The expenses for the quarter ended March 31, 2000 also
include $22,500 of interest expense for the Saatchi loan.
25
<PAGE>
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses in 1999 in the aggregate were
nearly the same as in 1998. These expenses consist primarily of rent, salaries
and legal and professional fees and amounted to $125,000 in 1999 as compared
with $123,000 in 1998.
YEAR ENDED DECEMBER 31, 1998 AS COMPARED WITH YEAR ENDED DECEMBER 31, 1997
SOFTWARE DEVELOPMENT COSTS
Software development costs decreased by $944,000 or 51% from $897,000
in 1998 as compared with $1,840,000 in 1997. These comprised of expenditures on
Schoolhouse System Software development paid to the vendor amounting to $604,000
in 1998 as compared with $920,000 in 1997 and fees paid to consultants and other
contractors of $161,000 in 1998 as compared with $799,000 in 1997. In general,
software development costs decreased in 1998 as EduLink stopped further
production and development of the web based software and focused on developing
its business plan, which included strategic planning and reengineering.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses decreased by $16,000 or 49% to
$123,000 in 1998 as compared with $240,000 in 1997. The decrease was
attributable to decrease in travel, legal and professional and office expenses.
YEAR ENDED DECEMBER 31, 1997 COMPARED WITH YEAR ENDED DECEMBER 31, 1996
Software development costs increased by $1,535,000 from $306,000 in
1996 to $1,840,000 in 1997. This was primarily due to $920,000 paid to Saatchi &
Saatchi North America, Inc. for the development and production of the
Schoolhouse System and $798,000 paid to consultants, contractors and teachers in
connection with the development of the Schoolhouse System.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses increased by $107,000 or 80% to
$240,000 in 1997 as compared to $133,000 in 1996. The increase was primarily due
to an increase in legal and accounting fees of $80,000 incurred in connection
with general business matters and raising capital, an increase in office
expenses of $17,000 and insurance expenses of $21,000.
QUARTER ENDED MARCH 31, 2000 AS COMPARED WITH QUARTER ENDED MARCH 31, 1999
(UNAUDITED)
SOFTWARE DEVELOPMENT COSTS
Software development expenses increased by 36,438% to $ 149,442 in
first quarter 2000 from $409 in first quarter 1999. The increase in software
development cost in 2000 arose from the increased software development
activities. During 1999, EduLink was conceptualizing its business plan and
focusing on how to utilize the development work completed during 1998. In
addition, EduLink was lacking in necessary funds for software development in
early 1999. In October 1999, the Company signed a contract agreement with an
outside software development vendor to continue the development of Schoolhouse
System web based software. In the first quarter 2000, EduLink obtained
additional funds through capital contributions by private placements.
Software development costs include amounts paid to the software
development vendor and consultants.
26
<PAGE>
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses increased by $156,366 or 279% to $212,497 in
first quarter 2000 as compared with $51,540 in first quarter 1999. The increase
was attributable to increase in travel, legal and professional, payroll and rent
expenses.
EduLink's payroll expense increased by $42,753 or 205% to 63,600 in first
quarter 2000 from $20,847 in first quarter 1999. This was because EduLink
entered into employment contracts with three officers in September 1999.
Cash used in operations was $476,000 in the first quarter of 2000 as compared to
$73 in the first quarter of 1999.
In addition, EduLink merged with a public company in October 1999. Additional
expenses were incurred for services rendered in correction with SEC filing
requirements and raising capital through a private placement.
LIQUIDITY AND CAPITAL RESOURCES
Since 1996, we have financed our working capital needs through capital
contributions by owners, private placements and bridge loans. As of December 31,
1999, we had cash in hand of approximately $74,000. Cash used in operations was
$25,000, $203,000 and $1,455,000 in 1999, 1998 and since inception,
respectively. Cash used in operations was primarily for consulting fees
related to the design and development of computer software and general and
administrative expenses. Since 1996 through November 1999, we have raised
$1,375,000 through private placements and seed capital from one of our
executives and approximately $376,000 in bridge loans. $50,000 of the bridge
notes were repaid, and $125,000 worth of the bridge notes were converted into
common stock in 1997. In the first quarter of year 2000, EduLink issued
21,750,000 shares of common stock in a private placement for $1,087,500. In
addition, EduLink received $3,502,500 in cash for common stock subscribed under
the private placement offering.
We estimate that we need approximately $8,500,000 for our ongoing
software content development, content oversight, data base engineering, graphic
design services, graphic user interface, curriculum development tool,
information technology center, inquiry based software and for research and
educational marketing. In December 1999, we offered 380 Units consisting of
500,000 shares of our common stock per Unit at a price per Unit of $25,000. The
proceeds from this private placement offering net of placement agent's fees and
expenses is expected to be not less than $8,550,000. As of May 17, 2000, we have
received $5,227,500 on which a total of $133,750 in commissions was due, and
paid, by the Company.
We also estimate that we will need additional working capital funds of
$3.5 million per year to continue operations, pay debt, maintain and upgrade (if
necessary) the system and produce content, test, launch, sell and market the
system for additional grade levels. This $3.5 million does not include funds
which may be required for any global expansion or modification that may be
required for homeschoolers. Our working capital needs, however, will instead be
approximately $2.0 million per year if we decide to not launch, sell, and market
the system for additional grade levels in any given year.
We plan to purchase Sun Enterprise Computer Systems in January 2001 at
an anticipated cost of $200,000 and installed at a commercial web hosting
facility at an anticipated cost of $7,000 per month.
EduLink intends to generate revenue from sponsorships, advertising,
subscriptions to the premium service and e-commerce and to raise funds in the
long-term from sales of its securities. There can be no assurance, however, that
such revenues will be generated or such funds will be raised.
From approximately February 1997 through April 1998, Saatchi & Saatchi
North America, Inc. ("Saatchi") provided production and consulting services in
connection with the proposed Schoolhouse System. Pursuant to an agreement
entered into between EduLink and Saatchi, EduLink is to pay Saatchi $1,000,000
out of 15% of the net proceeds obtained by EduLink from its financing
activities. The minimum payments required pursuant to the agreement, however,
are an aggregate of $100,000 by January 15, 2000, an aggregate of $400,000 by
April 30, 2000, an aggregate of $600,000 by December 31, 2000 and an aggregate
of $1 million by December 31, 2001. EduLink has paid $400,000 to date (the
required minimum) in accordance with this agreement.
27
<PAGE>
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
MARKET RISK. EduLink's exposure to market risk is principally confined
to cash in bank, money market accounts and notes payable, which have short
maturities and therefore we believe to be minimal and immaterial market risk.
INTEREST RATE SENSITIVITY. As of March 31, 2000, EduLink had cash in
checking and money market accounts. Because of the short maturities of these
instruments, we believe that a sudden change in market interest rates would not
have a material impact on the fair value of these assets.
FOREIGN CURRENCY EXCHANGE RISK. EduLink does not have any foreign
currency exposure because it currently does not transact business in foreign
currencies.
ITEM 3: PROPERTIES.
FACILITIES
EduLink is utilizing a portion of the offices used by Michael Rosenfeld
at 450 North Roxbury Drive, Suite 602, Beverly Hills, California 90210 as its
administrative offices. EduLink also has its production offices located at 5743
Corsa Avenue, Suite 207, Westlake Village, California 91362. Edulink paid
$31,711, $28,648 and $3,124 in 1999, 1998 and 1997, respectively, to the
landlord of the premises, which is not an affiliate of Edulink.
ITEM 4: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of EduLink's outstanding common stock as of the date
hereof by:
* each person who is known by it to be the beneficial owner of
5% or more of its outstanding common stock;
* each director and executive officer individually; and
* all executive officers and directors as a group, as of
the date of this Registration Statement.
EduLink believes that each of the beneficial owners of the common stock
listed in the table, based on information furnished by such owner, has sole
investment and voting power with respect to such shares.
28
<PAGE>
BENEFICIAL OWNERSHIP
NAME & ADDRESS OF BENEFICIAL OWNER NUMBER PERCENTAGE (1)
Michael Rosenfeld (2) 172,101,170 (3) 23.68%
Ronald Rescigno (2) 173,816,469 (3) 23.92%
Ian Rescigno (2) 34,305,000(4) .05%
Kathleen McGuire(2) 5,717,647 (5) .01%
Dorothy Tucker (2) 5,717,647 (5) .01%
All executive officers and directors as a
group ( five persons) 391,642,933 47.20%
---------------------------
(1) Calculated on the basis of 669,572,500 shares of common stock issued
and outstanding. For purposes of this table, a person or group of
persons is deemed to have "beneficial ownership" of any shares which
such person has the right to acquire within 60 days after the date of
this registration statement. For purposes of computing the percentage
of outstanding shares held by each person or group of persons named
above on the date of this registration statement, any security which
such person or group of persons has the right to acquire within 60 days
after such date is deemed to be outstanding for the purpose of
computing the percentage ownership for such person or persons, but is
not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person.
(2) Address is c/o EduLink, Inc., 450 North Roxbury Drive, Beverly Hills,
CA 90210.
(3) Includes 57,176,470 shares issuable upon exercise of warrants, at an
exercise price of $.0022 per share, which expire on August 14, 2004.
(4) Consists of 34,305,000 shares issuable upon exercise of warrants, at an
exercise price of $.0022 per share, which expire on January 31, 2007.
(5) Consists of 5,717,647 shares issuable upon exercise of warrants, at an
exercise price of $.0022 per share, which expire on September 14, 2003.
ITEM 5: DIRECTORS AND EXECUTIVE OFFICERS.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
EduLink's directors and executive officers are comprised of the
following individuals:
29
<PAGE>
NAME AGE POSITION
Michael Rosenfeld 57 Co-Chairman of the Board of Directors and
Chief Executive Officer
Ronald Rescigno 63 Co-Chairman of the Board of Directors and
President
Ian Rescigno 34 Senior Vice President - Operations
Kathleen McGuire 45 Director
Dorothy Tucker 50 Director
MICHAEL ROSENFELD is Co-Chairman and Chief Executive Officer of
EduLink. Mr. Rosenfeld has spent approximately the last thirty years practicing
entertainment law with an emphasis on the music recording and publishing
industry. Mr. Rosenfeld formerly was of counsel to Rosenfeld, Meyer & Susman,
LP, an entertainment law firm with offices in Beverly Hills, California, from
January 1995 through December 1997. He has been Chief Executive Officer and
Co-Chairman of the Board of Directors of EduLink since January 1998 and devotes
substantially all his working time and energies on the business of EduLink. Mr.
Rosenfeld received his Bachelors of Arts degree from UCLA in 1964, and his
L.L.B. from UCLA in 1967, where he was a member of the UCLA Law Review.
RONALD R. RESCIGNO, Ed.D., D.H.L., Co-Chairman and President, EduLink
Inc. Effective January 1997, Dr. Rescigno retired as a public school
superintendent in California. Dr. Rescigno served in the public schools of the
United States for 39 years, 17 as a school superintendent. Dr. Rescigno was
Superintendent of the Hueneme School district located in Port Hueneme,
California since 1983. Since January 1997 Dr. Rescigno has been President and
Co-Chairman of the Board of Directors of EduLink. Dr. Rescigno holds two
doctorates; the degree of Doctor of Humane Letters (honoris causa) awarded by
Wilkes University, Wilkes-Barre, Pennsylvania, in 1989 for his international
work in student learning and the integration of computer networked technology
and a Doctor of Education degree awarded by the University of North Colorado,
Greeley, Colorado in 1978. Dr. Rescigno received his Bachelor of Science degree
from Wilkes College, Wilkes-Barre, Pennsylvania in 1958 and a Master of Arts
degree from Columbia University, New York, New York, in 1967. He is the author
of the book Smarter Classrooms - Smarter World and produced a video on the same
subject. He is currently working on a sequel to the above book describing his
vision of the cyberspace school-i.e., the proposed Schoolhouse System.
30
<PAGE>
IAN RESCIGNO, Vice President - Operations, has responsibilities which
include video production, content licensing and acquisition, strategic content
partnerships, project management. Mr. Rescigno was the founder and president of
Eco International, Inc. ("Eco") from 1989 through December 1996. Mr. Rescigno
has been working for EduLink in varying capacities since January 1997. In 1989,
after Mr. Resicigno graduated from the University of California at Los Angeles
with a degree in History, he founded ECO. After graduating from UCLA in 1988,
Mr. Rescigno formed ECO International, Inc. ECO established a training and
consultancy center in manufacturing technologies in Bulgaria for the purpose of
improving the technological capabilities and efficiency of the Bulgarian
industry through the accelerated introduction of computers in automation of
manufacturing. ECO conducted research to develop and integrate different
elements of advanced manufacturing technologies, such as CAD/CAM, FMS cells,
industrial robotics, computerized factory management, automated inventory and
distribution systems.
KATHLEEN MCGUIRE, Ph.D., is a Director of the Company. Dr. McGuire has
been Project Director, Distance Learning Program, UCLA Extension, since January
1995. Dr. McGuire received her B.A. and Masters from Cal Poly and her Ph.D. from
UCLA Graduate School of Education and Information Studies.
DOROTHY TUCKER, Ph.D., is a Director of the Company. Since January
1995, Dr. Tucker has been President of Dorothy M. Tucker, Associates,
psychological consultants to corporations and governmental agencies, including
the Los Angeles Police Department and General Electric. Dr. Tucker received her
Ph.D. in Psychology from California School of Professional Psychology and her
Ph.D. in Counselor Education from Ohio State University. She currently serves as
a member of the California State Bar Board of Governors and the President's Task
Force on Urban Initiatives.
31
<PAGE>
ITEM 6: EXECUTIVE COMPENSATION.
Through 1999, the Chief Executive Officer has not received any
compensation. Through 1999 no other executive officer has received compensation
in excess of $100,000.
On September 4, 1999, employment agreements were entered into between
EduLink and each of Dr. Rescigno, Ian Rescigno and Michael Rosenfeld. The terms
of these employment agreements include an employment term through December 31,
2004, annual base compensation, commencing January 2000 of $150,000 for each of
Dr. Rescigno and Mr. Rosenfeld, and $90,000 for Ian Rescigno, with bonuses based
upon formulae relating to EduLink's revenue. In addition, each of Mr. Rosenfeld,
Dr. Rescigno and Ian Rescigno have the right to receive warrants to purchase
shares of EduLink's common stock as each of four separate deliverables are
completed within specific time limits. Pursuant to the terms of Mr. Rosenfeld's
agreement, he is to receive the sum of $10,000 per month in lieu of $10,000 in
monthly compensation otherwise payable to him until his receipt of sums advanced
to EduLink by Mr. Rosenfeld on an interest free basis during 1999. Mr. Rosenfeld
and Dr. Rescigno also had each previously been granted warrants to purchase
57,176,470 shares of common stock of EduLink.
The following table sets forth the annual compensation paid to
executive officers of EduLink for the fiscal years ended December 31, 1997, 1998
and 1999. No executive officer received annual compensation in excess of
$100,000.
<TABLE>
<CAPTION>
Other Annual Restricted Options/ LTIP All Other
Name and Principal Position Year Salary($) Bonus($) Compensation Stock Awards SARs Payouts Compensation
--------------------------- ---- --------- -------- ------------ ------------ ------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dr. Ronald Rescigno, 1999 $0 $0 0 0 0 0 0
Co-Chairman and President(1)(4) 1998 $0 $0 0 0 0 0 0
1997 $60,000 $0 0 0 0 0 0
Michael Rosenfeld, 1999 $0 $0 0 0 0 0 0
Chief Executive Officer 1998 $0 $0 0 0 0 0 0
and Co-Chairman(2)(4) 1997 $0 $0 0 0 0 0 0
Ian Rescigno, 1999 $0 $0 0 0 0 0 0
Senior Vice President - 1998 $0 $0 0 0 0 0 0
Operations(3) 1997 $0 $0 0 0 0 0 0
</TABLE>
--------------
(1) Dr. Rescigno agreed to waive all compensation under the September 4, 1999
employment agreement through 1999.
(2) Mr. Rosenfeld agreed to waive all compensation under the September 4, 1999
employment agreement through 1999.
(3) Mr. Rescigno agreed to waive all compensation under the September 4, 1999
employment agreement through 1999.
(4) Directors of Edulink currently do not receive any compensation for their
services as directors.
STOCK OPTION PLAN
EduLink intends to adopt a stock option plan to attract and retain key
employees and directors of EduLink.
ITEM 7: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Mr. Rosenfeld advanced funds to or on behalf of EduLink during 1999
equal to $112,902.42, on an interest-free basis, and EduLink has agreed to repay
these funds to Mr. Rosenfeld on a periodic basis, such payments to be made in
lieu of, and shall serve to reduce, the monthly compensation otherwise payable
to him under the terms of his EduLink employment agreement. To date, $50,000 of
this loan has been repaid to Mr. Rosenfeld. In addition, Mr. Rosenfeld has
waived his right to receive reimbursement for $140,403.25 in sums advanced by
him to or on behalf of EduLink during the years 1996, 1997 and 1998. Dr.
Rescigno was reimbursed $22,500 by EduLink in December 1999 and January 2000 for
expenses incurred in 1998 and 1999 relating to secretarial services, office
supply purchases and travel expenses incurred by him on behalf of EduLink.
EduLink utilizes a portion of Mr. Rosenfeld's offices. EduLink paid
$31,711, $28,648 and $3,124 in 1999, 1998 and 1997, respectively to the landlord
of the premises, which is not an affiliate of EduLink. The remainder of the
office space is used by The Audrey Hepburn Children's Fund.
On February 1, 2000, EduLink entered into an agreement with Ian
Rescigno, Senior Vice President-Operations of EduLink, to issue warrants,
exercisable through January 31, 2007, to purchase 34,305,000 shares of common
stock at an exercise price of $.0022 per share.
32
<PAGE>
ITEM 8: LEGAL PROCEEDINGS.
None.
ITEM 9: MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
EduLink's common stock was publicly traded on Nasdaq's Over-the-Counter
Bulletin Board Market under the symbol "MYIQ" until May 3, 2000 when it was
temporarily deleted from the Over-the-Counter Bulletin Board while EduLink
attempts to become a fully reporting company. Its symbol is currently MYIQE and
its common stock is traded in the "Pink Sheets".
The following table sets forth the range of high and low bid prices for
EduLink's common stock for each quarterly period since its common stock began
trading, as reported by brokers and dealers making a market in the capital
stock. Such quotations reflect inter-dealer prices without retail markup,
markdown or commission, and may not necessarily represent actual transactions:
HIGH LOW
Year ended December 31, 2000
First Quarter............................ 1/2 2/11
April 1 through May 3................... 1 2/11
HIGH LOW
Year ended December 31, 1999
Fourth Quarter........................... 1/4 1/11
HOLDERS
As of the date of this registration statement, there were approximately
110 record holders of EduLink's common stock.
DIVIDENDS
EduLink has not paid any cash or other dividends on its common stock
since its inception and does not anticipate paying any such dividends in the
foreseeable future. EduLink intends to retain any earnings for use in its
operations and to finance the expansion of its business.
ITEM 10: RECENT SALES OF UNREGISTERED SECURITIES.
In October 1999, URREA Enterprises, Inc. acquired the issued and
outstanding shares of the common stock of EduLink Inc., a California
corporation, through a merger and stock-for- stock exchange. At the closing,
EduLink, Inc., the California corporation, merged with and into URREA in
exchange for 388,800,000 shares of URREA common stock and URREA changed its name
to EduLink, Inc. The shares of URREA common stock were issued in reliance upon
the exemption from the registration requirements of the Securities Act of 1933,
as amended, (the "Securities Act") provided by Section 4(2) of the Securities
Act for transactions by an issuer not involving a public offering.
33
<PAGE>
From December 1999 through May 17, 2000, EduLink sold 209.1 Units
consisting of 500,000 shares of its common stock per Unit to 105 unaffiliated
persons at a price per Unit of $25,000 for total proceeds of $5,227,500. The
Units were sold and issued in reliance upon the exemption from the registration
requirements of the Securities Act for transactions by an issuer not involving a
public offering provided by Section 4(2) of the Securities Act and Regulation D
promulated thereunder. The purchasers of the securities in each of the above
transactions were "accredited investors", as defined in the Securities Act and
acquired the securities for investment only and not with a view to a sale in
connection with any distribution thereof. Winchester Investment Securities, Inc.
("Winchester"), an NASD member firm, acted as the placement agent in these
issuances. EduLink paid $113,750 in commissions to Winchester in connection with
such sales.
The names of the purchasers are as follows:
Stanley Merdinger; C. F. Stone, III;
Dr. John D. Martin; Aldo and Julie Anne Saad;
Natalie Merdinger; Ginta Kizys;
Quarum Capital; Michael F. Lascher;
Carmine L. Aloia; S. Glenn Eichler;
Allen Notowitz; Michael Sabbio;
Leo Ross; John Lucadamo;
AMC Consumer Services LLC; Maria Totino;
Dennis Ringer; Julia Coluccio;
Fran A. Rutigliano; Nicholas Coluccio;
Salvatore Coluccio; Joses Jean Richter Residuary Trust;
Anita P. Friedman; Joseph L. Pikulski;
Martin Koitz; Dean Witter Reynolds
Mordechai A. Kahan; FBO John Pasiecznik, IRA;
Norbert Gottenberg; Morgan Stanley Dean Witter, Custodian FBO
Evan G. Marmott; Roger C. Spayde, IRA Rollover;
Roni Nigri; Donna Mack;
Myron Radowych; Lorraine F. Meisner;
William D. Evangelatos, M.D. Guy J. Louthan;
Trustee of the Larry E. Hedrick;
William D. Evengelatos and Lawrence Segal;
Helen Evangelatos Trust; Richard Kessler;
Iris London; Anthony Aquilino;
Nick Costidis; Michael P. Tepedino;
Dennis Evangelatos; Billy Eubanks;
Andrew and Pauline M. Evangelatos, Robert N. Penney;
Joint Tenants; Joseph L. Cusick;
Jean and Matthew Castellano; Henry M. Burger;
Michael Pisani; James Muro;
Mitchell Schwartz; RBB Bank Aktiengesellschaft;
David Tanen; Gary F. Harris;
Charles E. Brittain; Reginald S. and Patricia A. Gebeau;
Ralph Pasquarosa; Brian McCann;
Warren Bell; Thomas D. Terranova, Jr.;
Mitchell Bloch; Charles R. Drago;
Lester Summerfield; Frances Rubel;
Elliot Antebi; Gary A. Gilles;
Thomas E. Sawyer; Ross Kuflik, in trust Harriet Kuflik;
Vincent J. Mannino; Martin L. Schlow;
Joseph A. Lucci; Steven D. Rizzi;
Thomas J. Gerbasio; Theodore H. Zambelis;
Ary C. Arneson; Keith J. McPhee;
John E. Lautemann; Masi Family Trust;
James A. Ciandella; Robert A. Greco;
Lou and Karen Cordileone; Ralph Tommaso;
L. Neil LeRoy; Harry M. Lowell;
Jerry & Carolyn Faske; Behin & Associates, LLC;
Clifford Webb Heidinger; Frank J. Mazza;
Avrohm S. Perl; Mark R. Drago;
Sterimark Motors; John J. Cina, Jr.;
Royce L. Felder; Donna Reale;
Gilberte Hemery; Alexander D. Antonucci;
Peter R. Cafaro; Shawn A. Wooden;
Germaine Lozach; Loren F. Sparks;
Stephen V. Mulderry; Dennis D. and Angela G. Pearson;
Paul D. Martin.
34
<PAGE>
ITEM 11: DESCRIPTION OF REGISTRANT'S SECURITIES TO BE
REGISTERED.
EduLink is authorized to issue 1.5 billion shares of common stock,
$.001 par value, per share. As of the date of this Form 10 Registration
Statement, 669, 572,500 shares of common stock were issued and outstanding.
EduLink's common stock was publicly traded on Nadaq's Over-the-Counter
Bulletin Board Market under the symbol "MYIQ" until May 3, 2000 when it was
temporarily deleted from the Over-the-Counter Bulletin Board while EduLink
attempts to become a fully reporting company. Its symbol is currently MYIQE and
its common stock is traded in the "pink sheets" maintained by the National
Quotation Bureau.
Each share of common stock is entitled to one vote per share held on
each matter submitted to a vote at a meeting of shareholders. Each shareholder
may exercise such vote either in person or by proxy. Shareholders are not
entitled to cumulate their votes for the election of Directors. There are no
preemptive or other preferential rights to purchase additional shares of common
stock. Upon liquidation, dissolution or winding-up of EduLink the holders of
common stock are entitled to receive, pro rata, the assets of EduLink which are
legally available for distribution to shareholders subject to the prior rights
on liquidation of creditors. All of the issued and outstanding shares of common
stock are validly authorized, fully paid and non-assessable.
Dividends
EduLink has not paid any cash dividends on its common stock. The
present policy of the Board of Directors is to retain earnings to finance the
operations and development of EduLink's business. Accordingly, it is anticipated
that no cash dividends will be paid in the foreseeable future.
Transfer Agent
The transfer agent for the common stock is Standard Registrar and
Transfer Company, 12528 South 1840 East, Draper, Utah 84020.
Reports to Stockholders
EduLink by filing this Registration Statement, is registering its
common stock under the provisions of Section 12(g) of the Securities Exchange
Act of 1934, as amended. Such registration requires EduLink to comply with
periodic reporting, proxy solicitation and certain other requirements of the
Securities Exchange Act of 1934, as amended.
35
<PAGE>
ITEM 12: INDEMNIFICATION OF DIRECTORS AND OFFICERS.
EduLink's By-laws provide for indemnification of officers and directors
to the fullest extent permitted by Nevada law. In addition, under EduLink's
By-laws, no director shall be liable personally to EduLink or its stockholders
for monetary damages for breach of fiduciary duty as a director; provided that
the Certificate of Incorporation does not eliminate the liability of directors
for (i) any breach of the director's duty of loyalty to EduLink or its
stockholders; (ii) acts of omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) acts or omissions in
respect of certain unlawful dividend payments or stock redemptions or
repurchases; or (iv) any transaction from which such director derives improper
personal benefit.
ITEM 13: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
EduLink's financial statements are included in a separate Section of
this Report following Item 15.
ITEM 14: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 15: FINANCIAL STATEMENTS AND EXHIBITS.
Index to Financial Statement and Exhibits Page
Report of Independent Certified Public Accountants........... F-1
Financial Statements
Balance Sheets............................................. F-2
Statements of Operations................................... F-3
Statements of Stockholders' Deficit........................ F-4
Statements of Cash Flows................................... F-5
Notes to the Financial Statements.......................... F-7
36
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Stockholders
EduLink, Inc.
We have audited the accompanying balance sheets of EduLink, Inc. (a development
stage company) as of December 31, 1999 and 1998, and the related statements of
operations, stockholders' deficit, and cash flows for each of the three years in
the period ended December 31, 1999 and for the period from January 25, 1996
(inception) to December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of EduLink, Inc. as of December
31, 1999 and 1998, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1999 and for the period from
January 25, 1996 (inception) to December 31, 1999 in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. During the years ended December 31,
1999, 1998, and 1997, the Company incurred net losses of $153,956, $1,040,237,
and $2,091,226, respectively. In addition, the Company's net cash used in
operating activities was $25,837, $203,875, and $885,562 for the years ended
December 31, 1999, 1998, and 1997, respectively, and the Company's accumulated
deficit was $3,764,686 and $3,610,730 as of December 31, 1999 and 1998,
respectively. In addition, successful completion of the Company's transition,
ultimately, to the attainment of profitable operations is dependent upon
obtaining adequate financing to fulfill its development activities and achieving
a level of sales adequate to support the Company's cost structure. These
factors, among others, as discussed in Note 2 to the financial statements, raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
March 8, 2000
F-1
<PAGE>
EDULINK, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
DECEMBER 31, 1999 AND 1998 AND MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS
DECEMBER 31,
MARCH 31, -------------------------
2000 1999 1998
---------- ---------- ----------
<S> <C> <C> <C>
CURRENT ASSETS
Cash $ 4,179,085 $ 74,130 $ --
Prepaid 30,655 -- --
Deposit 2,198 -- --
----------- ----------- -----------
Total current assets 4,211,938 74,103 --
PROPERTY AND EQUIPMENT, net 8,285 -- --
----------- ----------- -----------
TOTAL CURRENT ASSETS $ 4,220,223 $ 74,103 $ --
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Book Overdraft $ -- $ -- $ 60
Bridge notes payable 200,000 200,000 200,000
Accounts payable 1,156,335 1,284,357 1,970,774
Accrued interest payable 62,500 -- --
Due to related party 92,902 112,902 140,519
---------- ---------- ----------
Total current liabilities 1,511,737 1,597,259 2,311,353
---------- ---------- ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value
1,500,000,000 shares authorized
671,572,500 (unaudited),
647,822,500,and 388,800,000
shares issued and outstanding 671,573 647,823 388,800
Shares committed to be issued 4,074,250 671,750 --
Additional paid-in capital 5,168,207 921,957 910,577
Deficit accumulated during the
development stage (7,205,544) (3,764,686) (3,610,730)
----------- ----------- -----------
Total stockholders' equity
(deficit) 2,708,486 (1,523,156) (2,311,353)
----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 4,220,223 $ 74,103 $ --
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
EDULINK, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997,
FOR THE PERIOD FROM JANUARY 25, 1996 (INCEPTION) TO DECEMBER 31, 1999,
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED), AND FOR
THE PERIOD FROM JANUARY 25, 1996 (INCEPTION) TO MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
PERIOD FROM PERIOD FROM
FOR THE FOR THE JANUARY 25, JANUARY 25,
THREE MONTHS THREE MONTHS FOR THE YEAR ENDED 1996 1996
ENDED ENDED DECEMBER 31, (INCEPTION) TO (INCEPTION) TO
MARCH 31, MARCH 31, ---------------------------------------- DECEMBER 31, MARCH 31,
2000 1999 1999 1998 1997 1999 2000
------------ ------------- ----------- ------------ ------------ ------------ ------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME
Interest $ 3,581 $ -- $ -- $ -- $ 2,052 $ 6,818 $ 10,399
------------ ------------ ------------ ------------ ------------ ------------ ------------
EXPENSES
Software development costs 149,442 409 (121,070) 896,836 1,840,421 2,921,814 3,071,256
General and administrative 3,294,997 51,131 275,026 143,401 252,857 849,690 4,144,687
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total expenses 3,444,439 51,540 153,956 1,040,237 2,093,278 3,771,504 7,215,943
------------ ------------ ------------ ------------ ------------ ------------ ------------
NET LOSS $ (3,440,858) $ (51,540) $ (153,956) $ (1,040,237) $ (2,091,226) $ (3,764,686) $ (7,205,514)
============ ============ ============ ============ ============ ============ ============
BASIC AND DILUTED LOSS PER
SHARE $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00
============ ============ ============ ============ ============ ============ ============
WEIGHTED-AVERAGE SHARES
OUTSTANDING 659,697,500 388,800,000 433,630,817 388,800,000 372,557,966 390,281,195 413,159,430
============ ============ ============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
EDULINK, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1999, 1998, AND 1997 AND
FOR THE THREE MONTHS ENDED MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DEFICIT
SHARES ACCUMULATED
COMMON STOCK COMMITTED ADDITIONAL DURING THE
------------------------- TO BE PAID-IN DEVELOPMENT
SHARES AMOUNT ISSUED CAPITAL STAGE TOTAL
----------- --------- --------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 25, 1996 (INCEPTION) -- $ -- -- $ -- -- $ --
SALE OF COMMON STOCK 28,302,353 28,302 594,575 622,877
SHARES ISSUED TO FOUNDERS 233,280,000 233,280 (233,280) --
SHARES ISSUED TO PROFESSIONALS 43,454,118 43,454 (3,454) 40,000
SHARES ISSUED FOR INVESTMENT
BANKING SERVICES 58,320,000 58,320 (33,320) 25,000
NET LOSS (479,267) (479,267)
----------- --------- --------- ---------- ----------- -----------
BALANCE, DECEMBER 31, 1996 363,356,471 363,356 -- 324,521 (479,267) 208,610
SALE OF COMMON STOCK 17,152,942 17,153 410,968 -- 431,500
CONVERSION OF BRIDGE NOTES 6,003,529 6,004 172,375 -- 175,000
SHARES ISSUED TO PROFESSIONALS 2,287,058 2,287 2,713 -- 5,000
NET LOSS (2,091,226) (2,091,226)
----------- --------- --------- ---------- ----------- -----------
BALANCE, DECEMBER 31, 1997 388,800,000 388,800 -- 910,577 (2,570,493) (1,271,116)
NET LOSS (1,040,237) (1,040,237)
----------- --------- --------- ---------- ----------- -----------
BALANCE, DECEMBER 31, 1998 388,800,000 388,800 -- 910,577 (3,610,730) (2,311,353)
CHANGES DUE TO RECAPITALIZATION 259,022,500 259,023 (259,023) --
LOAN FROM STOCKHOLDER CONTRIBUTED
TO CAPITAL 140,403 140,403
COMMON STOCK SUBSCRIPTION RECEIVED 100,000 100,000
COMMON STOCK TO BE ISSUED 571,750 571,750
COMPENSATION WAIVED BY OFFICERS 130,000 130,000
NET LOSS (153,956) (153,956)
----------- --------- --------- ---------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
EDULINK, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1999, 1998, AND 1997 AND
FOR THE THREE MONTHS ENDED MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DEFICIT
SHARES ACCUMULATED
COMMON STOCK COMMITTED ADDITIONAL DURING THE
------------------------- TO BE PAID-IN DEVELOPMENT
SHARES AMOUNT ISSUED CAPITAL STAGE TOTAL
----------- --------- --------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1999 647,822,500 $ 647,823 $ 671,750 $ 921,957 $(3,764,686) $(1,523,156)
ISSUANCE OF COMMON STOCK (unaudited) 21,750,000 21,750 -- 1,065,750 -- 1,087,500
ISSUANCE OF COMMON STOCK (unaudited) 2,000,000 2,000 (100,000) 98,000 -- --
COMMON STOCK SUBSCRIPTION RECEIVED
(unaudited) -- -- 3,502,500 -- -- 3,502,500
WARRANTS ISSUED FOR SERVICES
(unaudited) 3,082,500 3,082,500
NET LOSS (unaudited) -- -- -- -- (3,440,858) (3,440,858)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, MARCH 31, 2000 (UNAUDITED) 671,572,500 $ 671,573 $ 4,074,250 $ 5,168,207 $(7,205,544) $ 2,708,486
=========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
EDULINK, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999, 1998, AND 1997 AND
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED)
AND FOR THE PERIOD FROM JANUARY 25, 1996 (INCEPTION)
TO MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
PERIOD FROM PERIOD FROM
FOR THE FOR THE JANUARY 25, JANUARY 25,
THREE MONTHS THREE MONTHS FOR THE YEAR ENDED 1996 1996
ENDED ENDED DECEMBER 31, (INCEPTION) TO (INCEPTION) TO
MARCH 31, MARCH 31, ------------------------------------------- DECEMBER 31, MARCH 31,
2000 1999 1999 1998 1997 1999 2000
------------- ------------- ------------- ------------- ------------- ------------- --------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $(3,440,858) $ (51,540) $ (153,956) $(1,040,237) $(2,091,226) $(3,764,686) $(7,205,544)
Adjustments to reconcile
net loss to net cash
used in operating
activities
Common stock to be
issued for software
development costs -- -- 571,750 -- -- 571,750 571,750
Common stock issued for
professional services -- -- -- -- 5,000 70,000 70,000
Common stock issued for
related party payable -- -- 140,403 -- -- 140,403 140,403
Compensation waived by
officers -- -- 130,000 -- -- 130,000 130,000
Warrants issued for
services 3,802,500 3,802,500
(Increased) decrease in
Paid (30,655) -- -- -- -- -- (30,655)
Deposit (2,198) -- -- -- -- -- (2,198)
Increase (decrease) in
Accounts payable (93,022) 2,517 (686,417) 717,845 1,230,662 1,284,357 1,191,335
Due to related party (20,000) 49,096 (27,617) 118,517 (29,998) 112,902 92,902
----------- ----------- ----------- ----------- ----------- ----------- -----------
Accrued interest
payable 27,500 -- -- -- -- -- 27,500
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net cash used in
operating activities (476,733) 73 (25,837) (203,875) (885,562) (1,455,274) (1,932,007)
----------- ----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
EDULINK, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997,
FOR THE PERIOD FROM JANUARY 25, 1996 (INCEPTION) TO DECEMBER 31, 1999,
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED), AND FOR
THE PERIOD FROM JANUARY 25, 1996 (INCEPTION) TO MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
PERIOD FROM PERIOD FROM
FOR THE FOR THE JANUARY 25, JANUARY 25,
THREE MONTHS THREE MONTHS FOR THE YEAR ENDED 1996 1996
ENDED ENDED DECEMBER 31, (INCEPTION) TO (INCEPTION) TO
MARCH 31, MARCH 31, ------------------------------------------- DECEMBER 31, MARCH 31,
2000 1999 1999 1998 1997 1999 2000
------------- ------------- ------------- ------------- ------------- ------------- --------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property
and equipment $ (8,285) $ -- $ -- $ -- $ -- $ -- $ (8,285)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net cash used in
investing activities (8,285) -- -- -- -- -- (8,285)
----------- ----------- ----------- ----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Common stock
subscription received 3,502,500 -- 100,000 -- -- 100,000 3,602,500
Proceeds from issuance
of bridge notes -- -- -- 200,000 -- 375,000 375,000
Repayment of bridge
notes -- -- -- -- -- (50,000) (50,000)
Proceeds from issuance
of common stock 1,087,500 -- -- -- 500,000 1,375,000 2,462,500
Cost of issuance of
common stock -- -- -- -- (68,500) (270,623) (270,623)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net cash provided by
financing activities 4,590,000 -- 100,000 200,000 431,500 1,529,377 6,119,377
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease)
in cash 4,104,982 73 74,163 (3,875) (454,062) 74,103 4,179,085
CASH (BOOK OVERDRAFT),
BEGINNING OF PERIOD 74,103 (60) (60) 3,815 457,877 -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
CASH (BOOK OVERDRAFT),
END OF PERIOD $ 4,179,085 $ 13 $ 74,103 $ (60) $ 3,815 $ 74,103 $ 4,179,085
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
EDULINK, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997,
FOR THE PERIOD FROM JANUARY 25, 1996 (INCEPTION) TO DECEMBER 31, 1999,
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED), AND FOR
THE PERIOD FROM JANUARY 25, 1996 (INCEPTION) TO MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE FOR THE
PERIOD FROM PERIOD FROM
FOR THE JANUARY 25, JANUARY 25,
THREE MONTHS FOR THE YEAR ENDED 1996 1996
ENDED DECEMBER 31, (INCEPTION) TO (INCEPTION) TO
MARCH 31, -------------------------------------- DECEMBER 31, MARCH 31,
2000 1999 1998 1997 1999 2000
------------- ------------ ------------- ---------- ------------- --------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
INTEREST (RECEIVED) PAID $ (3,531) $ -- $ -- $ -- $ 11,521 $ 7,900
=========== =========== =========== =========== =========== ===========
INTEREST TAXES PAID $ -- $ -- $ -- $ 1,600 $ 1,600 $1,6000
=========== =========== =========== =========== =========== ===========
</TABLE>
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
During the year ended December 31, 1999, a stockholder contributed $140,403 due
this stockholder as additional paid-in capital.
During the year ended December 31, 1999, the Company recorded $571,750 of
software development costs as additional paid-in capital, which represents the
Company's commitment to issue 11,435,000 shares of common stock to a vendor (see
Note 4).
During the year ended December 31, 1999, the Company's officers contributed
$130,000 in compensation due to them as additional paid-in capital.
During the year ended December 31, 1997, the Company converted $175,000 of
bridge notes into 6,003,529 shares of common stock.
During the 3 months ended March 31, 2000, the Company issued 34,305,000
warrants for services valued at $3,082,500.
The accompanying notes are an integral part of these financial statements.
F-8
<PAGE>
EDULINK, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
--------------------------------------------------------------------------------
NOTE 1 - DESCRIPTION OF BUSINESS
URREA Enterprises, Inc. ("URREA"), a Nevada corporation, acquired
EduLink, Inc. ("OLD EduLink"), a California corporation engaged in the
development of educational software, on October 28, 1999. After the
acquisition, URREA changed its name to EduLink, Inc.
URREA issued 388,800,000 shares of common stock to acquire 100% of the
common stock of OLD EduLink. The acquisition was accounted for as an
issuance of stock by OLD EduLink for the net assets of URREA as the
stockholders of OLD EduLink owned 60% of the common stock of URREA
after the acquisition, resulting in a recapitalization of OLD EduLink.
URREA had no significant assets or liabilities at the date of
acquisition and did not have significant operations prior to the
acquisition. Therefore, no pro forma information is presented.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Going Concern
The accompanying financial statements have been prepared on a going
concern basis which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. As shown
in the financial statements, during the years ended December 31, 1999,
1998, and 1997 and the three months ended March 31, 2000, the Company
incurred losses of $153,956, $1,040,237, $2,091,226 and $358,358
(unaudited), respectively. As of December 31, 1999, the Company is in
the development stage and is primarily engaged in research and
development activities. Accordingly, the accompanying statements of
operations should not be regarded as typical for normal periods of
operation. The Company's development stage status, recurring net
losses, and capital deficit raise substantial doubt about its ability
to continue as a going concern. Additional financing will be required
in order for the Company to complete its development stage activities.
Management believes that it will be able to obtain such financing from
new investors.
To meet these objectives, the Company expects to complete an additional
$9,500,000 private placement of equity in 2000, which management
expects will provide net proceeds to the Company of $8.5 million which
we expect will be sufficient funding to continue the Company's present
operations and support future marketing and development activities.
Management believes that these plans will enable the Company to
continue as a going concern for at least 12 months from the balance
sheet date. The Company has received a subscription amounting to
$5,227,500 through May 17, 2000 on which $113,750 in commissions was
due and paid by the Company. In connection with the offering, $100,000
was received prior to December 31, 1999.
F-9
<PAGE>
EDULINK, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
--------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Going Concern (Continued)
The financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be
necessary should the Company be unable to continue as a going concern.
Development Stage Enterprise
The Company is a development stage company as defined in Statement of
Financial Accounting Standards ("SFAS") No. 7, "Accounting and
Reporting by Development Stage Enterprises." The Company is devoting
substantially all of its present efforts to establish a new business,
and its planned principal operations have not yet commenced. All losses
accumulated since inception have been considered as part of the
Company's development stage activities.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements, as well as the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Revenue Recognition
Home subscriptions for premium services revenue will be recognized over
the term of the subscription agreement, and unearned subscription
revenue will be classified as a liability. Transactional revenue from
school stores and links to other websites will be recognized in the
period the transactions take place. Advertisement and sponsorship
revenue will be recognized in the period the advertisement takes place,
and in the case of sponsorships, when the milestones specified in the
sponsorship agreement are reached. Royalties from international
franchisees will be recognized over the term of the franchising
agreement based on revenues reported by the franchisees. Federal grant
revenues will be recognized in the period to which the grant relates.
Software Development Costs
Development costs incurred in the research and development of new
software products are expensed as incurred until technological
feasibility in the form of a working model has been established. To
date, the Company has not completed its software development to the
point of technological feasibility, and accordingly, no costs have been
capitalized.
Stock Split
In October 1999, the Company's Board of Directors declared a 50-for-one
stock split. All applicable share and per share data have been
retroactively restated for the stock split.
F-10
<PAGE>
EDULINK, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
--------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes
The Company uses the asset and liability method of accounting for
income taxes. The asset and liability method accounts for deferred
income taxes by applying enacted statutory rates in effect for periods
in which the difference between the book value and the tax bases of
assets and liabilities are scheduled to reverse. The resulting deferred
tax asset or liability is adjusted to reflect changes in tax laws or
rates. Because the Company has incurred losses from operations, no
benefit is realized for the tax effect of the net operating loss
carryforward and software development costs capitalized for tax
purposes due to the uncertainty of its realization.
Impairment of Long-Lived Assets
The Company reviews long-lived assets to be held and used for
impairment whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. If the sum of
the expected future cash flows (undiscounted and without interest
charges) is less than the carrying amount of the asset, the Company
would recognize an impairment loss based on the estimated fair value of
the asset.
Stock-Based Compensation
SFAS No. 123, "Accounting for Stock-Based Compensation," establishes
and encourages the use of the fair value based method of accounting for
stock-based compensation arrangements under which compensation cost is
determined using the fair value of stock-based compensation determined
as of the date of grant and is recognized over the periods in which the
related services are rendered. The statement also permits companies to
elect to continue using the current intrinsic value accounting method
specified in Accounting Principles Bulletin ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees," to account for stock-based
compensation issued to employees. The Company has elected to use the
intrinsic value based method and will disclose the pro forma effect of
using the fair value based method to account for its stock-based
compensation.
Loss per Share
Basic loss per share is computed by dividing loss available to common
stockholders by the weighted-average number of common shares
outstanding. Diluted loss per share is computed similar to basic loss
per share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if
the potential common shares had been issued and if the additional
common shares were dilutive. Because the Company has incurred net
losses, basic and diluted loss per share are the same.
F-11
<PAGE>
EDULINK, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
--------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Comprehensive Income
The Company utilizes SFAS No. 130, "Reporting Comprehensive Income."
This statement establishes standards for reporting comprehensive income
and its components in a financial statement. Comprehensive income as
defined includes all changes in equity (net assets) during a period
from non-owner sources. Examples of items to be included in
comprehensive income, which are excluded from net income, include
foreign currency translation adjustments and unrealized gains and
losses on available-for-sale securities. Comprehensive income is not
presented in the Company's financials statements since the Company did
not have any of the items of comprehensive income in any period
presented.
NOTE 3 - CASH
The Company maintains its cash in a bank located in California. The
balance is insured by the Federal Deposit Insurance Corporation up to
$100,000. As of March 31, 2000, the uninsured portions of the balances
held at the bank aggregated to $3,402,696 (unaudited).
NOTE 4 - ACCOUNTS PAYABLE
On January 5, 2000, the Company entered into an agreement with its
major vendor and the vendor's affiliates to settle a disputed amount of
a contractual obligation arising from a software development contract.
The Company owed $1,708,000 at December 31, 1999 to this vendor and its
affiliates, of which $1,032 was recorded in 1997 and $676,000 was
recorded in 1998. The agreement calls for a settlement of the entire
outstanding balance for $1,000,000 within the period specified by the
agreement. The Company has agreed to pay the vendor at specified dates
15% of the net financing proceeds it receives pursuant to its financing
activities. In the event the Company is unable to pay this agreed
amount by December 31, 2000, commencing January 1, 2000, interest shall
accrue on the unpaid balance at the prime rate as determined at the end
of each quarter, plus 1%.
In addition, the agreement states that the Company will assign to the
vendor intellectual property rights of the software developed if the
$1,000,000 obligation is not paid by December 31, 2001.
F-12
<PAGE>
EDULINK, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
--------------------------------------------------------------------------------
NOTE 4 - ACCOUNTS PAYABLE (Continued)
Further, the Company has agreed to issue approximately 11,435,000
shares of its common stock as part of the settlement agreement within
60 days of the date of this agreement in lieu of shares and warrants
that were agreed upon previously. This commitment to issue common stock
has been recorded as common stock to be issued at $571,750, which
represents the value of the Company's common stock based on a recent
subscription of shares through a private placement memorandum dated
December 19, 1999.
The settlement has been recorded as a change in accounting estimate.
Accordingly, software development costs have been credited for a net
amount of $136,000. The effect of this change in accounting estimate is
to decrease net loss for the year ended December 31, 1999 by $136,000
and to decrease net loss per share by $0.00031.
NOTE 5 - BRIDGE NOTES PAYABLE
Bridge notes represent notes payable at 10% (annual percentage rate
10.47%) per annum and are currently due for payment. The Company issued
20,869,412 and 11,435,294 warrants to purchase shares of common stock
to the 1998 and 1996 lenders, respectively, at an average exercise
price of $0.034 per share. These warrants expire four years from the
date of grant or four years from the date of an initial public
offering.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Lease
The Company co-leases its facility under an operating lease agreement
with an unrelated third party. Future minimum lease payments at
December 31, 1999 were as follows:
<TABLE>
<CAPTION>
YEAR ENDING GROSS COMPANY'S
DECEMBER 31, COMMITMENT PORTION
------------ ---------- ---------
<S> <C> <C>
2000 $103,254 $ 36,139
2001 106,673 37,335
2002 106,673 37,335
-------- --------
TOTAL $316,600 $110,809
======== ========
</TABLE>
F-13
<PAGE>
EDULINK, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
--------------------------------------------------------------------------------
NOTE 6 - COMMITMENTS AND CONTINGENCIES (Continued)
Lease (Continued)
Rent expense was $31,711, $28,648, $5,124, and $16,192 (unaudited) for
the years ended December 31, 1999, 1998, and 1997 and the three months
ended March 31, 2000, respectively.
Employment Agreements
In September 1999, the Company entered into five-year employment
contracts with its President, Chief Executive Officer, and Senior Vice
President that provide for a minimum annual salary, incentives, and
bonuses, which are based on the Company's attainment of specified
levels of sales and earnings. The annual salaries for the three
officers are $150,000, $150,000, and $90,000, respectively. During the
year ended December 31, 1999, all three officers were not compensated,
and unpaid compensation in the amounts of $50,000, $50,000, and
$30,000, respectively, was waived by the officers.
NOTE 7 - RELATED PARTY TRANSACTIONS
During the year ended December 31, 1999, one of the principal
stockholders of the Company paid $112,902 of the Company's expenses,
which are recorded on the accompanying balance sheet as due to related
party. In addition, this principal stockholder contributed $140,403 due
to this stockholder as additional paid-in capital.
During the three months ended March 31, 2000, the Company paid $20,000
to one of the principal stockholders as repayment of the loan from the
stockholder. The remaining balance at March 31, 2000 was $92,902
(unaudited).
NOTE 8 - COMMON STOCK AND COMMON STOCK WARRANTS
During the period from January 25, 1996 (inception) to December 31,
1996, the Company issued 28,302,353 shares of common stock in
connection with a private placement for $622,877, net of expenses of
$202,213. In addition, the Company issued 233,280,000 shares of common
stock to its founders and 43,454,118 shares to professionals.
Compensation expense of $40,000 was recorded, representing the fair
value of the services rendered. In addition, 58,320,000 shares were
issued to the investment bankers in exchange for services valued at
$25,000.
F-14
<PAGE>
NOTE 8 - COMMON STOCK AND COMMON STOCK WARRANTS (Continued)
During the year ended December 31, 1997, the Company issued 17,152,942
shares of common stock in connection with a private placement for
$431,500, net of expenses of $68,500. In addition, the Company issued
2,287,058 shares of common stock to professionals for services valued
at $5,000, which was recorded as compensation expense.
During the three months ended March 31, 2000, the Company issued
21,750,000 (unaudited) shares of common stock in connection with a
private placement for $1,087,500 (unaudited). In addition, the Company
issued 2,000,000 (unaudited) shares of common stock for a subscription
received in 1999.
The Company issued warrants to purchase 51,458,824 common shares in
connection with a private placement at an average exercise price of
$0.035. In addition, the Company also issued 125,788,235 warrants to
its principal stockholders and directors and 2,287,059 warrants to a
consultant.
A summary of the Company's warrant activity is listed below:
<TABLE>
<CAPTION>
WEIGHTED- WEIGHTED-
WEIGHTED- AVERAGE AVERAGE
AVERAGE EXERCISE EXERCISE
STOCK STOCK REMAINING PRICE OF PRICE OF
EXERCISE WARRANTS WARRANTS CONTRACTUAL WARRANTS WARRANTS
PRICE OUTSTANDING EXERCISABLE LIFE OUTSTANDING EXERCISABLE
-------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ O.035 84,907,059 84,907,059 2.74 years $ 0.035 $ 0.035
$ 0.0022 125,788,235 125,788,235 4.51 years $ 0.0022 $ 0.0022
----------- -----------
211,838,823 211,838,823
=========== ===========
</TABLE>
The fair value of the warrants was calculated using the Black-Scholes
option valuation model with the following weighted-average assumptions
for the years ended December 31, 1999 and 1998: dividend yields of 0%
and 0%, respectively; risk free interest rates of 7% and 6%,
respectively; expected volatility of 0% and 0%, respectively; and
expected lives of four and four years, respectively.
The weighted-average fair value of the warrants issued during the years
ended December 31, 1999 and 1998 was $0.022 and $0, respectively.
During the three months ended March 31, 2000, the Company issued
21,750,000 (unaudited) shares of common stock in connection with a
private placement for $1,087,500 (unaudited). In addition, the Company
issued 2,000,000 (unaudited) shares of common stock for a subscription
received in 1999.
On February 1, 2000, the Company issued a warrant to an employee to
purchase 34,500,000 shares of common stock at an exercise price of
$0.0022 per share. The warrant can be exercised at any time through
January 31, 2007. The warrant is not registered under the Securities
Act of 1933. The Company recorded compensation expense of $3,082,500
in accordance with APB 25.
F-15
<PAGE>
NOTE 9 - INCOME TAXES
The Company has incurred no income tax expenses since inception. The
actual tax benefit differs from the expected tax benefit computed by
applying the United States federal corporate tax rate of 34% to loss
before income taxes as follows:
<TABLE>
<CAPTION>
FOR THE
THREE MONTHS FOR THE YEAR ENDED
ENDED DECEMBER 31
MARCH 31, -------------------------------
2000 1999 1998 1997
---------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
Expected tax benefit $(122,00) $ (8,000) $(354,000) $(709,000)
-------- --------- --------- ---------
State income taxes, net
of federal benefit (4,000) -- (10,000) (20,000)
Changes in valuation
allowance 126,000 8,000 364,000 729,000
------- -------- -------- --------
TOTAL $ -- $ -- $ -- $ --
======== ========= ========== =========
</TABLE>
The tax effects of temporary differences that give rise to deferred tax
assets were as follows:
<TABLE>
<CAPTION>
FOR THE
THREE MONTHS FOR THE YEAR ENDED
ENDED DECEMBER 31
MARCH 31, -------------------------------
2000 1999 1998 1997
---------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net operating loss
carryforwards $ 401,000 $ 317,000 $ 308,000 $ 76,000
Software development
costs capitalized
for tax purposes 1,216,000 1,156,000 1,1210,000 1,033,000
---------- ---------- ---------- ----------
1,617,000 1,473,000 1,518,000 1,109,000
Less valuation
allowance 1,617,000 1,473,000 1,518,000 1,109,000
---------- ---------- ---------- ----------
TOTAL $ -- $ -- $ -- $ --
========= ========= ========== =========
</TABLE>
At December 31, 1999, the Company had federal and state net operating
loss carryforwards of approximately $794,000 and $396,000,
respectively, which begin to expire in 2001, respectively.
F-16
<PAGE>
EDULINK, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
--------------------------------------------------------------------------------
NOTE 10 - YEAR 2000 ISSUE
The Company has completed a comprehensive review of its computer
systems to identify the systems that could be affected by ongoing Year
2000 problems. Upgrades to systems judged critical to business
operations have been successfully installed. To date, no significant
costs have been incurred in the Company's systems related to the Year
2000.
Based on the review of the computer systems, management believes all
action necessary to prevent significant additional problems has been
taken. While the Company has taken steps to communicate with outside
suppliers, it cannot guarantee that the suppliers have all taken the
necessary steps to prevent any service interruption that may affect the
Company.
NOTE 11 - SUBSEQUENT EVENTS
On February 1, 2000, the Company entered into an agreement with an
officer to issue warrants to purchase 34,305,000 shares of common stock
at an exercise price of $0.0022 per share.
As of May 17, 2000, the Company has received cash for shares subscribed
amounting to $5,227,500, including $100,000 received in December 1999,
on which $113,750 in commissions were due and paid by the Company.
F-17
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
EduLink, Inc.
------------------
Registrant
Date: June 21, 2000 By: /s/ Michael Rosenfeld
----------------------
Title: Chief Executive Officer
<PAGE>
Exhibits
2.1 Agreement and Plan of Merger between URREA Enterprises and EduLink Inc.*
3.1 Articles of Incorporation of URREA Enterprises, Inc.*
3.2 Articles of Merger for URREA Enterprises, Inc.*
3.3 By-laws of EduLink Inc.*
4.1 Form of Warrant Agreement with Michael Rosenfeld (Rosenfeld Warrant
Agreement)*
4.2 Amendment to Rosenfeld Warrant Agreement, dated September 15, 1999*
4.3 Form of Warrant Agreement with Ronald C. Rescigno (Rescigno Warrant
Agreement)*
4.4 Amendment to Rescigno Warrant Agreement, dated September 15, 1999*
4.5 Warrant Agreement with Dorothy Tucker, dated September 15, 1999.*
4.6 Warrant Agreement with Kathleen McGuire, dated September 15, 1999*
4.7 Warrant Agreement with Ian Rescigno, dated February 1, 2000*
4.8 Specimen of common stock certificate*
10.1 Agreement with Saatchi & Saatchi North America, Inc. dated January 5,
2000.*
10.2 Employment Agreement between Michael Rosenfeld and EduLink Inc., dated
September 4, 1999 ("Rosenfeld Employment Agreement")*
10.3 Amendment to Rosenfeld Employment Agreement, dated February 1, 2000*
10.4 Employment Agreement between Ronald Rescigno and EduLink Inc., dated
September 4, 1999 ("Dr. Rescigno Employment Agreement")*
10.5 Amendment to Dr. Rescigno Employment Agreement dated February 1, 2000*
10.6 Employment Agreement between Ian Rescigno and EduLink Inc., dated
September 4, 1999 ("Ian Rescigno Employment Agreement")*
<PAGE>
10.7 Amendment to Ian Rescigno Employment Agreement, dated February 1, 2000*
10.8 Agreement with Science Applications International Corporation.*
10.9 Agreement with Professor Gary B. Nash, Ph.D.*
10.10 Agreement with McGuire and Associates.*
10.11 Agreement with Rodger W. Bybee, dated March 17, 2000.
10.12 Agreement with Sheldon Blau, dated March 16, 2000.
10.13 Agreement with Linda Plattner, dated March 16, 2000.
10.14 Agreement with Christopher L. Salter, dated March 16, 2000.
10.15 Letter to Assumption School, dated May 31, 2000.
10.16 Letter to Lincoln Middle School, dated May 22, 2000.
11.1 Statement of Computation of Per Share Earnings*
21.1 Subsidiaries of the Registrant*
27.1 Financial Data Schedule*
---------------------------------
* Previously Filed
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Document
------- ------------------------------------
2.1 Agreement and Plan of Merger between URREA Enterprises and
EduLink Inc.*
3.1 Articles of Incorporation of URREA Enterprises, Inc.*
3.2 Articles of Merger for URREA Enterprises, Inc.*
3.3 By-laws of EduLink Inc.*
4.1 Form of Warrant Agreement with Michael Rosenfeld (Rosenfeld
Warrant Agreement)*
4.2 Amendment to Rosenfeld Warrant Agreement, dated September 15,
1999*
4.3 Form of Warrant Agreement with Ronald C. Rescigno (Rescigno
Warrant Agreement)*
4.4 Amendment to Rescigno Warrant Agreement, dated September 15,
1999*
4.5 Warrant Agreement with Dorothy Tucker, dated September 15,
1999.*
4.6 Warrant Agreement with Kathleen McGuire, dated September 15,
1999*
4.7 Warrant Agreement with Ian Rescigno, dated February 1, 2000*
4.8 Specimen of common stock certificate*
10.1 Agreement with Saatchi & Saatchi North America, Inc. dated
January 5, 2000.*
10.2 Employment Agreement between Michael Rosenfeld and EduLink
Inc., dated September 4, 1999 ("Rosenfeld Employment
Agreement")*
10.3 Amendment to Rosenfeld Employment Agreement, dated February 1,
2000*
10.4 Employment Agreement between Ronald Rescigno and EduLink Inc.,
dated September 4, 1999 ("Dr. Rescigno Employment Agreement")*
10.5 Amendment to Dr. Rescigno Employment Agreement dated February
1, 2000*
<PAGE>
10.6 Employment Agreement between Ian Rescigno and EduLink Inc.,
dated September 4, 1999 ("Ian Rescigno Employment Agreement")*
10.7 Amendment to Ian Rescigno Employment Agreement, dated February
1, 2000*
10.8 Agreement with Science Applications International
Corporation.*
10.9 Agreement with Professor Gary B. Nash, Ph.D.*
10.10 Agreement with McGuire and Associates.*
10.11 Agreement with Rodger W. Bybee, dated March 17, 2000.
10.12 Agreement with Sheldon Blau, dated March 16, 2000.
10.13 Agreement with Linda Plattner, dated March 16, 2000.
10.14 Agreement with Christopher L. Salter, dated March 16, 2000.
10.15 Letter to Assumption School, dated May 31, 2000.
10.16 Letter to Lincoln Middle School, dated May 22, 2000.
11.1 Statement of Computation of Per Share Earnings*
21.1 Subsidiaries of the Registrant*
27.1 Financial Data Schedule*
------------------------------------
* Previously filed
