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As filed with the Securities and Exchange Commission on February 6, 1998
REGISTRATION No. 333-18439
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form SB-2/A2
Registration Statement Under the Securities Act of 1933
MOBILE AREA NETWORKS, INC.
(Name of small business issuer in its charter)
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<S> <C> <C>
Florida 4813 59-3482752
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization Classification Code Number) Identification No.)
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George E. Wimbish, Chairman
1275 Lake Heathrow Lane, Suite 115
Heathrow, Florida 32746
407-333-2350 FAX 407-333-9903
(Address and telephone of principal
executive offices and principal place of business)
James R. Leone, P.A.
1275 Lake Heathrow Lane, Suite 115
Heathrow, Florida 32746
407-805-9200 FAX 407-805-9030
(Name, address and telephone of agent for service)
Approximate Date of Proposed Sales to the Public: As soon as practicable
after the Registration Statement becomes effective.
CALCULATION OF REGISTRATION FEE
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Amount Proposed Proposed
Title of Each Class of To be Maximum Maximum Amount of
Securities to be Registered Registered Offering Price Aggregate Registration Fee
Per Unit Offering Price
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Common Stock, no par value. 5,000,000 $6.00 $30,000,000 $7,500.00
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Total
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The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
the registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
Subject To Completion, Dated ( )
MOBILE AREA NETWORKS, INC.
5,000,000 Common Shares (maximum) at $6.00 for $30,000,000
Mobile Area Networks, Inc, a Florida corporation, (the "Company") offers the
users of laptop computers and handheld digital communication devices its very
low cost, very fast, encrypted (private) wireless communication service called
MOBILAN(R). This system uses a unique combination of second-generation megabit
transceiver PC card, encryption software, local relays, and fiber optics
transmission for clean, fast, LAN access to main computer groups, including the
Internet and the Intranet. Digital, audio, and video live interaction will be
available on a real-time basis, at a small fraction of the cost of telephone
modem usage. The Company is a development stage company with no operating
history and no revenues.
To buy the stock, read the Prospectus and mail or wire your funds as described
in the enclosed Subscription Agreement and on the Internet at
HTTP://WWW.MOBILEAREA.NET.
CONTACT: GEORGE E. WIMBISH, CHAIRMAN
1275 LAKE HEATHROW LANE, SUITE 115
HEATHROW, FLORIDA 32746
Tel: 407-333-2350, Fax: 407-333-9903
E-MAIL: [email protected]
(HTTP: //WWW.MOBILEAREA.NET)
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PRICING TABLE PRICE SALES PROCEEDS TO
TO PUBLIC(1) COMMISSION (2) COMPANY(3)
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PER SHARE $6.00 $.60 $5.40
MINIMUM PURCHASE 100 SHARES $600.00 $60.00 $540.00
TOTAL MAXIMUM $30,000,000 $3,000,000 $27,000,000
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1. The offering price was determined in the Company's discretion.
2. The Company's officers and directors are selling the shares without
compensation. However, this column reflects the fact that the Company may
engage one or more licensed broker dealers as selling agents for agreed
upon commissions not to exceed ten percent (10%), who may allot a portion
thereof to other licensed broker dealers assisting in the sales. The
Company and broker dealers will mutually indemnify and defend each other
for claims attributable to the indemnifying party. Persons selling or
assisting in sales may be deemed to be underwriters under securities laws.
No broker dealers or other terms of selling have been determined.
3. Before deducting offering expenses payable by the Company estimated to
total $300,000 in the case of the Maximum Offering (1% of gross proceeds).
(See "Use of Proceeds", herein.) The proceeds from the sale of shares
will be transmitted by noon of the business day following receipt, to the
Company's bank account.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE U.S. SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY, NOR HAVE THEY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
These securities are being sold on a best efforts, no minimum amount basis. The
offering will expire nine months after the effective date of the registration
statement for the securities, if not updated by amendment or terminated sooner.
The shares are offered subject to prior sale, and the Company reserves the
right to reject subscriptions in whole or in part, or to accept them in any
order. The Company will send by U.S. mail to subscribers within thirty (30)
days, signed copies of their Subscription Agreement and Common Stock
certificates. The Company intends to qualify the securities in every state of
the U.S. in which sales are solicited or made.
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IMPORTANT INFORMATION
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INVESTMENT IN SMALL BUSINESSES INVOLVES A HIGH DEGREE OF RISK, AND
INVESTORS SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD
TO LOSE THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" HEREIN FOR CERTAIN
SUBSTANTIAL RISKS TO INVESTORS.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED.
THE COMPANY IS A DEVELOPMENT STAGE COMPANY.
THIS OFFERING IS INTENDED TO BE QUALIFIED (AS PROVIDED IN PUBLIC LAW
104-290) FOR OFFERING IN ALL STATES OF THE UNITED STATES IN WHICH SALES ARE
SOLICITED OR MADE.
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SUMMARY
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The following summary information is qualified in its entirety by the
detailed information and financial statements appearing elsewhere herein. See
"Risk Factors" for a discussion of certain factors that should be considered in
connection with an investment in the stock. THE COMPANY IS A DEVELOPMENT STAGE
COMPANY WITH NO OPERATING HISTORY AND NO REVENUES.
FAST, LOW COST WIRELESS SERVICE
Mobile Area Networks, Inc., (the "COMPANY"), will be providing its
MOBILAN(R) wireless communication service for laptop Personal Computers and
handheld communication devices through a secure, low cost, very fast wireless
connection to remote home-office network services and to the Internet, from
select hotels and convention centers. Unlike a telephone modem connection, no
cord or telephone line connection is necessary for this service. The Company
will charge a user fee for this communication service. The user's hardware (PC
Card) and software for the MOBILAN(R) service will be paid for by such user or
by the user's employer as a setup fee, or as negotiated with the user's
employer.
The telephone modem was created so that a telephone line could carry
computerized data. The millions of miles of telephone wiring and millions of
telephone jacks support the modem strategy. The laptop Personal Computer modem
market (PC Card modems that fit into laptop computers) totaled three billion
dollars ($3,000,000,000) in modem equipment sales in 1995(1), and the usage fees
paid to telephone companies for line access and long distance charges probably
were much greater than that amount.
A study published on the Internet in December of 1997 by Killen &
Associates of Palo Alto, California predicts that the market for equipment and
software for connecting wireless users to the Internet will grow to 19.2 billion
dollars ($19,200,000,000) in the year 2002. This amount would be in addition to
the fees to Mobile Area Networks, Inc. for "access" to the Internet through the
MOBILAN(R) communications system.
FIBER OPTIC TO LEC TO WIRELESS RELAY CONNECTION
There are now millions of miles of fiber optic cable for computer style
data transport installed in the U.S. These fiber network installations are
within miles of nearly every major corporation office, hotel, and airline club
in the U.S. Local Exchange Carriers (LECs) can provide a high-speed local data
connection from these fiber optic networks to almost any building site in the
U.S. The Company will use a high-speed, short-range wireless relay to reach the
LEC to make this high-speed fiber optic data connection from inside each relay
equipped building; and a faster-than-modem-speed, long-range wireless technology
from outside locations. The WLAN (Wireless Local Area Networks) relays are
low-cost, small, easily installed, and use a very small amount of electric
power. With these two technologies, laptop users can communicate from nearly any
location, and be securely connected to their home-office Local Area Network
(LAN), or to the Internet.
MASSIVE COST ADVANTAGES
The Company's exclusive MOBILAN(R) wireless communication service will
have a dramatic economic advantage over a telephone modem connection because it
is uniquely based on the unregulated computer style data network and not on the
highly regulated long distance telephone system. The underlying cost per bit of
data on the fiber optic data network is about 1/100th the cost of carrying a
bit of data on the telephone network. The Company has a unique method of
connecting the users of laptop PCs and handheld digital communication devices
to the data network.
There were seventeen million (17,000,000) business users of laptop
computers at the end of 1995(2). Nearly three million (3,000,000) of these
laptop users travel an average of three (3) times per month to interstate
destinations. BIS Strategic Decisions estimated that these mobile
professionals are spending over fifty million dollars
__________________________________
(1) AP Research Corporation, International Data Corporation.
(2) Ablonci, Wm. F., and Elliot, Thomas R.: Mobile Professional Market
Segmentation Study, March 1995, BIS Strategic Decisions, 1-617-982-9500
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($50,000,000) per month, or six hundred million dollars ($600,000,000) per
year in long distance charges and surcharges to check e-mail and send faxes
from hotels.
HOW MOBILAN(R) WORKS
THE COMPANY HAS INTEGRATED A NUMBER OF KEY EXISTING TECHNOLOGIES TO
CREATE THIS MOBILE DATA COMMUNICATION SERVICE, AND HAS ADDED KEY PROPRIETARY
CONTENT NECESSARY TO MAKE THE NETWORK FULLY FUNCTIONAL AND MORE COST
EFFECTIVE.
The Company is developing the MOBILAN(R) communications network by
joining wireless/wired public networks, which this offering will allow the
company to build, on a nationwide basis. Laptops are the lifeblood of the
business traveler "roadwarrior". With the PC Card expansion slots in laptops
and the Company's service called MOBILAN(R)(1), travelers will be able to
connect back to corporate networks from almost anywhere, without plugging into
a telephone line.
One PC Card is a high-speed, short-range wireless card. The cards are
known as WLAN (Wireless Local Area Networks) cards. The MOBILAN(R) WLAN cards
can communicate at more than 1 Mbps (Megabits per second) and are used inside
buildings. Initial target areas are hotels, convention centers, major office
buildings, airports, resorts, and restaurants.
The Company obtained an exclusive contract for its major markets with
the Raytheon Company to provide the WLAN PC Card and transceiver hardware to
Mobile Area Networks, Inc. However; the Company has acquired access to other
hardware from manufacturers who may better serve the Company's requirements.
Therefore, the Company is not dependent upon any single manufacturer for its
supply of hardware.
The second PC Card is a wireless wide-area data-networking card using
the CDPD (Cellular Data Packet Delivery) network. CDPD is a computer style
data extension to the existing cellular telephone network. CDPD can
communicate wirelessly at about 10 Kbps, or about the actual speed of a wired
modem, from nearly anywhere. CDPD service is deployed in over 100 metropolitan
areas throughout the U.S. Therefore, anywhere in these communities, outdoors or
indoors, a laptop computer user has full access to the home office network LAN
or to the Internet using the Company's MOBILAN(R) encrypted connection. These
metropolitan areas were selected by AT&T, GTE MobilNet, Bell Atlantic NYNEX and
others because they have the largest concentrations of cellular telephones. The
Company currently has CDPD cards available from more than one manufacturer.
A user in a MOBILAN(R) equipped hotel simply opens a properly equipped
laptop computer anywhere in the hotel room, the hotel convention room, the club
or the bar, and is logged onto the home office network at megabit speeds. All
network resources are available as if the user were sitting at a desk in the
home office with a direct Ethernet connection. When in the home office, the
WLAN card likewise will provide performance comparable to a direct connection,
but gives a user the freedom to roam throughout the facilities without a
telephone cord connection to the laptop.
So, by means of a laptop equipped with PC Cards from the Company and
the MOBILAN(R) network, a user can connect to the home LAN or the Internet, in
home-office facilities, in hotels, in airline clubs, in a car, at home, in a
park, in the airport, and in the users' client location.
COMMUNICATION NETWORK VIA INTRANET (NOT INTERNET)
MOBILAN(R) will provide both high-speed and modem-speed data
communication connections between the wireless PC user and the home office LAN,
or other computer network through a high-speed private Intranet backbone of
fiber optic cables. It is a separate IP (Internet Protocol) network dedicated
primarily to corporate and business communication, not the public Internet.
SECURITY
__________________________________
(1) Service Mark was registered with the U.S. Patent and Trademark Office on
10/21/96
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MOBILAN(R) can achieve the industry's highest level of security,
thanks to some of the most comprehensive security software available. This
encryption software sets up impenetrable "tunnels" through which data can
travel safely. Authenticated, encrypted tunnels keep data from being accessed
or modified as it passes from a remote wireless client to the home LAN.
MOBILAN(R)'s encryption software products are commercially available from
software vendors.
MOBILAN(R) ECONOMICS
MOBILAN(R) WLAN service provides reliable, high-speed encrypted
communications at specific locations such as hotels and airline clubs.
MOBILAN(R) service is priced very competitively with local dial-up Internet
connectivity on a monthly basis for an unlimited amount of data, but also may
be purchased by the hour or the day at selected hotels and convention centers.
There is no comparable service available at any price.
MOBILAN(R) CDPD service is a wireless and encrypted (totally private)
form of the cellular modem's non-secure (non-private), reliable, slow-speed
communications across most major metropolitan areas. This CDPD service is ideal
for providing short, moderately rapid and timely data exchanges. CDPD service is
priced at approximately $50 per month for a total of 1 Mbyte of data
communication. The CDPD service is merely intended to be a backup to the
MOBILAN(R) system for the user who is not in range of the high speed system, but
must be connected at any speed.
THERE IS A THIRD SERVICE THAT MOBILE AREA NETWORKS, INC. IS
DEVELOPING. THIS WILL PROVIDE A COMBINATION OF LONG RANGE, AS WELL AS
MEDIUM-HIGH-SPEED WIRELESS SERVICE WITH WIDE AREA COVERAGE. THIS SERVICE IS IN
THE DEVELOPMENT STAGE.
MOBILE COMPUTING COMMUNICATIONS
Mobile computing is booming(1):
- In the U.S. alone, more than 4,600,000 (4.6-million) portable PCs
were sold in 1995, an increase of 23% over 1994. Figures for 1996
and 1997 should indicate a dramatic increase in this amount.
- Research indicates that at the end of 1995, there were nearly
17,000,000 (17 million) portable computers in use in the U.S.
- Airline and other research data show that 27,300,000 (27.3
million) professionals travel for business. At the end of 1994
approximately 20 percent or 5,500,000 (5.5 million) were using a
portable computer from a remote location.
However; in spite of the fact that 5,500,000 mobile professionals
travel with a laptop computer, these users are almost always limited to a data
connection of between 2400 and 28,800 baud (500 to 10,000 bits per second)
through a modem and telephone line connection, when and if they can find access
to a telephone jack connection.
Because the modem uses the public telephone network, the lack of
security and the slow transmission rate both, prevent direct home office LAN
connection. Thus, the use of a remote modem connection is limited to low volume
data transactions, such as messaging or e-mail applications that are on servers
outside the normal in-house network (LAN or Mainframe CPU). The remote use and
benefit of a laptop is significantly less than the power of the same laptop
when connected directly to the business network, thus reducing productivity.
MOBILAN(R) allows approximately 30 to 100 times faster data transfer on an
encrypted (totally private) basis at far lower cost.
Mobile professionals are not the only remote-computer users. Other
users include telecommuters (some with portables, but most with deskbound PCs),
workers operating from remote sites, and the millions of workers in the other
70 percent of the work force who are not classified as professionals, but who
use computers or digital communication devices (meter readers, inventory
clerks, rental car return verifiers, parking enforcement personnel, etc.).
__________________________________
(1) Computer Retailer News 12/8/95
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THE COMPANY'S PEOPLE
GEORGE E. WIMBISH: Board Chairman, President and CEO, is a founder of
Mobile Area Networks, Inc. He is a successful private investor with over 20
years of experience in acquisitions/mergers and company startups. He has a
diversified background in wholesaling, manufacturing, and direct marketing. His
most recent prior position was CEO of a financial services company. In 1984
he was a qualified candidate for the U.S. senate, and has personally lobbied
the U.S. Senate. He has experience with regulatory agencies including
Underwriters Laboratory and the Nuclear Regulatory Agency.
DR. ROBERT M. GOOD: Director, is a founder of Mobile Area Networks,
Inc. He has been a successful private investor and entrepreneur for the past
15 years. He is a licensed stockbroker. He had a successful dental practice
in Long Island, New York, which he sold to achieve early retirement. Dr. Good
has served as an officer of numerous companies, and served as an Army Officer.
Dr. Good is responsible for investor relations and alliance building.
JAMES R. LEONE: Director, is a practicing attorney and has had his own
law firm since 1985, concentrating in the fields of securities and corporate
law. Previously, Mr. Leone was with Gray, Harris & Robinson in Orlando, FL.,
and with Quinn, Jacobs, Barry and Miller in Chicago, IL. Until 1981, Mr. Leone
was a financial attorney and financial analyst with the U.S. Securities and
Exchange Commission in Washington, DC.
EDWARD M. BELL: Director of Sales and Marketing. Prior to joining
Mobile Area Networks, Inc. Mr. Bell served 30 years with AT&T. During his
career with AT&T he held numerous leadership positions in Marketing Management,
Network Sales, Operations Planning, Access Management, Strategic Marketing, and
High Frequency Radio Relay Maintenance. His most recent assignment was as
Southern Regional Manager for AT&T's Consultant Liaison Program, where he was
responsible for AT&T's industry consultants in 14 southeastern states.
MICHAEL A. TOMASSINI: Comptroller, has over 20 years experience in
Accounting and Finance, with expertise in financial and strategic planning. He
has developed accounting systems for several businesses and has specialized in
cost efficiency management for the last seven years.
DAVID J. PACKWOOD: Business Development, with over 25 years experience
in the computer industry both in the U.S. and Europe. Mr. Packwood has been
President of two computer software companies, and Vice President, and Sales and
Marketing Director of numerous other companies. Mr. Packwood most recently
served 10 years with Digital Equipment Corporation in the Advanced Technology
Group, where he was responsible for Media and Entertainment marketing.
Throughout his career he has held senior management positions with Xerox
Corporation, Systime Computers and Thorn EMI (UK).
G. TERRY GILBREATH: Communications Network and Information Technology
Director. Mr. Gilbreath served almost 30 years with AT&T in many areas of
network design and management. After serving as a consultant to the industry,
he joined Mobile Area Networks, Inc.
The Company has radio frequency, communications network, and software
engineers on staff. All employees and consultants are under contract for
non-compete, non-circumvent, non-disclose, and trade secrets protection.
The Company has a resource of certain investors who serve as advisors
and consultants in the field of telecommunications and management. This
resource allows the Company to access knowledge that is unsurpassed in the
industry.
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NOTE: THIS PROSPECTUS IS PART 1 OF AND OMITS CERTAIN INFORMATION CONTAINED IN
PART 2 OF THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. SUCH OMITTED INFORMATION INCLUDES, BUT IS NOT LIMITED TO THE
FOLLOWING: Charter and By-laws and amendments thereto, certain material
contracts, consents of experts, opinion of legal counsel re: legality. Such
information is available on request, for which there may be reasonable charges
for copying.
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RISK FACTORS
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AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK AND
SHOULD BE REGARDED AS SPECULATIVE. AS A RESULT, THE PURCHASE OF SHARES SHOULD
BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD A LOSS OF THEIR ENTIRE INVESTMENT.
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, PROSPECTIVE
PURCHASERS SHOULD CAREFULLY CONSIDER THE FOLLOWING:
A. LIMITED OPERATING HISTORY.
The Company is newly organized, and is dependent upon the proceeds of
this offering to implement its plan to deploy and operate its communications
network. Accordingly, an investment in the Company's shares is highly
speculative and is only a suitable investment for an investor who recognizes
the high risks involved, has no need for liquidity in the investment, and who
can afford a total loss of the investment. There cannot be any guarantee that
the Company will be profitable or that additional capital will not be required.
B. ILLIQUID INVESTMENT; RISK OF LOSS.
This investment is not recommended for investors who do not have
adequate additional liquid assets such that they can afford a long-term
non-liquid investment and the risk of complete loss of the investment.
C. DEPENDENCE ON MANAGEMENT.
The Company is dependent on the services of the Company's principal
Officers and Directors. In the Company's development stage, the loss of this
management could have a materially adverse impact on the Company. The Company
does not currently maintain any key-person life insurance policy, but is
investigating acquiring this type of insurance.
D. REGULATORY RISKS.
At the present time, no regulations are known to the Company which
would materially adversely affect the Company's contemplated operations.
Future government regulation with respect to applications permitted for certain
radio wave frequencies possibly could have an adverse impact on the Company.
E. CONTROL BY MANAGEMENT.
Upon completion of this offering, the officers and directors of the
Company will own, in the aggregate, between 72% and 79% of the outstanding
shares of the Company's common stock, assuming the maximum shares (5,000,000)
are sold. Accordingly, the Company's management will continue to be able to
elect a majority of the directors and thus control the management and affairs
of the Company.
F. COMPETITION.
The communications industry is a highly competitive business, and the
Company will be competing with numerous other companies, both privately and
publicly owned, which have substantially more resources and experience
available to them than the Company. This includes major telephone companies,
regional telephone companies, and existing wireless technology suppliers.
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G. ARBITRARY OFFERING PRICE.
The initial price at which the shares are offered hereby has been
arbitrarily set by the Company's management on a non-arm's length basis, and
has no relationship to the book value per share, current earnings of the
Company, (there having been none because of business development expenses), or
other generally accepted measurement of value. Investors in this Offering will
incur immediate and substantial dilution in net tangible book value of their
shares. See "Dilution".
H. LACK OF PUBLIC MARKET; NASDAQ APPLICATION WHEN ELIGIBLE.
Prior to this Offering, there has been no public market for the shares
offered, and none is anticipated to develop in the near future. In the event a
regular public trading market does not develop, or is not sustained, any
investment in the Company's Common Stock would be highly illiquid. Accordingly,
an investor in the shares may not be able to sell the shares readily, if at
all. Consequently, if as a result of some change in circumstances arising from
an event not now contemplated, an investor wishes to transfer the shares owned,
the investor may find he or she has only a limited or no ability to transfer or
market the shares. The Company intends to apply for inclusion of its shares in
the NASDAQ quotation system, assuming eligibility results from this Offering.
The Company plans to seek the support of NASD member firms which are
recognized market makers with the intention of obtaining their assistance in
the creation of a viable market in the Company's securities for the benefit of
its shareholders. In this regard, the Company may employ one or more finders
to assist with introductions to appropriate market makers, for which such
finders would be paid finders fees commensurate with current market practices.
No such finders have been identified, nor have any proposed terms of their
engagement been determined.
Under Rule 15c2-11 under the Securities Exchange Act of 1934,
broker-dealers acting as market makers are required to have certain current
information about the Company before they can make a market and thereafter as
they continue making a market in its common stock. The Company plans to
furnish periodically to broker-dealers the information specified in Rule
15c2-11 in order to enhance such firms' ability to make a market in the
Company's stock.
I. SUBSTANTIAL DILUTION.
Purchasers of the shares offered hereby will suffer an immediate and
substantial dilution of their investment. Specifically, in the case of the
maximum offering, dilution will be up to $5.26 per share, or up to 88%, (or
more if less than all shares are sold). (See "Dilution" herein, where the
dilution is illustrated by a table).
J. POSSIBLE NEED FOR ADDITIONAL FINANCING.
The Company cannot guarantee that sufficient funding will be available
from this offering to fund all its development and operational needs. In the
event the Company requires additional financing, the Company may seek such
financing through bank borrowing, debt, or other equity financing, or
otherwise. There can be no assurance that such financing will be available to
the Company on acceptable terms, if at all. The Company does not presently
have a credit line available with any lending institution. Any additional
equity financing may involve the sale of additional shares of the Company's
Common Stock on terms that have not yet been established. These terms may (or
may not) be more favorable than those contained herein. Any future sales of
securities may (or may not) result in dilution to the investors herein.
K. PENNY STOCK REGULATION.
Broker-dealer practices in connection with transactions in "penny
stocks" (also referred to as "designated securities") are regulated by certain
penny stock rules adopted by the Securities and Exchange Commission. Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted
on the NASDAQ system). The penny stock rules require a broker-dealer, prior to
a transaction in a penny stock not otherwise exempt from the rules, to deliver
a standardized risk
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disclosure document that provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and monthly account statements showing the market value of each penny stock
held in the customer's account. In addition, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
These requirements may have the effect of reducing the level of trading
activity, if any, in the secondary market for a security that becomes subject
to the penny stock rules. If the Company's common stock becomes subject to the
penny stock rules, investors in this offering may find it more difficult to
sell their shares.
L. ADVERSE EFFECT ON MARKET PRICE OF FUTURE SALE OF SHARES.
The approximately 33,090,880 shares of Common Stock issued by the
Company prior to this Offering were sold in private transactions in reliance on
an exemption from registration under the Act. Accordingly, all of such
securities are "restricted securities" within the meaning of Rule 144 and
cannot be resold without registration, or except in reliance on Rule 144 or
another applicable exemption from registration.
In general, under Rule 144 as currently in effect, a person (or
persons whose shares are required to be aggregated), including any affiliate of
the Company, who beneficially owns "restricted shares" for a period of one to
two years is entitled to sell within any three-month period, shares equal in
number to the greater of (i)1% (380,908) of the then outstanding shares of
Common Stock after this offering if the maximum shares are sold under this
offering or (ii) the average weekly trading volume of the same class of shares
during the four calendar weeks preceding the filing of the required notice of
sale with the Securities and Exchange Commission. The seller also must comply
with the Form 144 notice and manner of sale requirements of Rule 144, and there
must be current public information available about the Company. In addition,
any person (or persons whose shares are aggregated) who is not, at the time of
the sale, nor during the preceding three months, an affiliate of the Company,
and who has beneficially owned restricted shares for at least two years, can
sell such shares under Rule 144 without regard to notice, manner of sale,
public information or the volume limitations described above.
Future sales of shares of Common Stock (or securities convertible into
Common Stock) by the Company or as stated above could adversely affect the
prevailing market price, if any, of the Company's Common Stock.
M. DIVIDENDS NOT LIKELY.
No dividends on this Company's Common Stock have been declared or paid
by the Company to date. The Company does not presently intend to pay dividends
for the foreseeable future, but intends to retain all earnings, if any, for use
in the Company's business. There can be no assurance that dividends will ever
be paid on the Common Stock. Investors who anticipate the need for dividends
from their investment in the Company should not purchase the shares offered
hereby.
N. EFFECT OF PREFERRED STOCK AS ANTI-TAKEOVER PROVISIONS.
The Company currently has no authorized preferred stock, and the only
anti-takeover provision available is the ownership position of its management
group.
O. DEPENDENCE ON PROPRIETARY TECHNOLOGY.
The Company relies on a combination of trade secrets, copyright laws,
non-disclosure, non-circumvention and other contractual and technical measures
to protect its proprietary technology. There can be no assurance that these
provisions will be adequate to protect its proprietary rights. No single or
closely related group of items of proprietary technology is material to the
Company's business. Although the Company believes that its products and
services do not infringe upon the proprietary rights of third parties; there
can be no assurance that third parties will not assert infringement claims
against the Company, or the Company's clients. See "Description of
Business-Intellectual Property."
10
<PAGE> 11
- ------------------------------------------------------------------------------
DILUTION
- ------------------------------------------------------------------------------
Private investors have provided the Company with Approximately $700,000
in cash in order to finance the Company's working capital needs to develop the
working relationships and contractual agreements that contribute to the
MOBILAN(R) communication system. As of December 30, 1997, the aggregate net
tangible book value of the Company's Common Stock was $363,384 (See "Financial
Statements"). The net tangible book value per share as of December 30, 1997 was
$01.2 Net tangible book value per share is calculated by dividing the tangible
net worth of the Company (total tangible assets less total liabilities) by the
number of shares of Common Stock outstanding.
Giving effect to the sale by the Company of 5,000,000 shares of Common
stock offered hereby (at the offering price of $6.00 per share and after
deducting offering expenses), the pro forma net tangible book value of the
Company as of December 30, 1997, would have been $27,363,384 or $.75 per share.
This represents an immediate increase in the net tangible book value of $.74 to
existing stockholders and an immediate dilution of $5.26 per share to the
persons purchasing the shares offered hereby at the initial public offering
price ("New Investors").
THE FOLLOWING TABLE ILLUSTRATES THE PER SHARE DILUTION TO THE NEW INVESTORS:
<TABLE>
<CAPTION>
@ MAXIMUM SUBSCRIPTIONS
<S> <C>
Initial offering price per share. $ 6.00
Net tangible book value before offering. $363,384
Net tangible book value per share before the offering. $ 01.2
Increase in net tangible book value per share attributable to
the cash payment by new investors. $ 0.74
Pro forma net tangible book value per share after offering. $ 0.75
Dilution per share to New Investors. $ 5.26
</TABLE>
The following tables summarize on a pro forma basis as of December 31,
1997, the number of shares of Common Stock purchased from the Company and the
total consideration paid by existing stockholders and by new investors in the
offering being made hereby (based on, in the case of new investors, an offering
price of $6.00 per share).
OUTSTANDING SHARES OF TOTAL AUTHORIZED 50,000,000
<TABLE>
<CAPTION>
At Maximum Subscriptions Shares Purchased Total Net Consideration
Number Percent Amount Percent
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Officers, & Directors: 28,005,000. 74.5% $ 49,000. .19%
Other Private Investors: 5,665,880. 13.4% $ 646,906. 2.4%
New Investors: 5,000,000. 13.1% $27,000,000. 97.4%
- -----------------------------------------------------------------------------------------------------------------
TOTAL: 38,670,880. 100% $27,695,906. 100%
</TABLE>
11
<PAGE> 12
- ------------------------------------------------------------------------------
PLAN OF DISTRIBUTION
- ------------------------------------------------------------------------------
The shares are being offered at the offering price set forth on the
Cover Page of this Prospectus. An investor must purchase a minimum of 100
shares. The shares are being sold on a best efforts basis, subject to no minimum
offering proceeds, up to a maximum of 5,000,000 shares. The offering expires
nine months after the Registration Statement becomes effective, unless
terminated sooner or extended by the Company.
The shares are being offered by the Company through its officers and
directors (i.e. George Wimbish, Robert Good and James Leone) who will not
receive compensation therefor.
The Company plans to seek the support of NASD member firms which are
recognized market makers with the intention of obtaining their assistance in the
creation of a viable market in the Company's securities for the benefit of its
shareholders. In this regard, the Company may employ one or more finders to
assist with introductions to appropriate market makers, for which such finders
would be paid finders fees commensurate with current market practices. No such
finders have been identified, nor have any proposed terms of their engagement
been determined.
Under Rule 15c2-11 under the Securities Exchange Act of 1934,
broker-dealers acting as market makers are required to have certain current
information about the Company before they can make a market and thereafter as
they continue making a market in its common stock. The Company plans to furnish
periodically to broker-dealers the information specified in Rule 15c2-11 in
order to enhance such firms' ability to make a market in the Company's stock..
The price at which the shares are offered hereby has been arbitrarily
set by the Company's management, and has no relationship to the book value per
share, current earnings of the Company, or other generally accepted measurement
of value. No securities are to be offered for the account of any existing
shareholder.
The purchase price paid by investors must be wired or mailed directly
to the Company by check, or money order, payable only to: "MOBILE AREA NETWORKS,
INC." as stated in the enclosed Subscription Agreement.
The proceeds from the sale of the shares will be transmitted to the
Company bank account by noon of the business day following receipt. The shares
are offered subject to prior sale and the Company reserves the right to reject
any offer in whole or in part, or to accept subscriptions in any order, for any
or no reason. The Company will send by U.S. mail to subscribers within thirty
(30) days, signed copies of the Subscription Agreement and Common Stock
certificates.
12
<PAGE> 13
- ------------------------------------------------------------------------------
USE OF PROCEEDS
- ------------------------------------------------------------------------------
The Company will use the maximum proceeds primarily for
commercialization of its MOBILAN(R) service. This includes installing
demonstration systems for high profile accounts. The following table illustrates
the use of maximum proceeds. This summary table is a compilation of the
financial projections illustrated near the end of this Prospectus.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
Maximum Footnote
CATEGORY Subscriptions Percentage
------------------------------------------------------------------------------
<S> <C> <C> <C>
Gross Offering Proceeds $30,000,000 100.0% (1)
------------------------------------------------------------------------------
Sales commission (Offering) 3,000,000 10.0% (2)
------------------------------------------------------------------------------
Offering Expenses 300,000 1.0% (3)
------------------------------------------------------------------------------
Network Operating Costs 1,450,000 5.0% (4)
------------------------------------------------------------------------------
Data Line Recurring Charges 7,000,000 24.0% (5)
------------------------------------------------------------------------------
Network Installation Costs 8,050,000 27.0% (6)
------------------------------------------------------------------------------
Physical Build-Out In House 1,000,000 4.0% (7)
------------------------------------------------------------------------------
System Sales Commission 3,000,000 10.0% (8)
------------------------------------------------------------------------------
Management Salaries 1,560,000 6.0% (9)
------------------------------------------------------------------------------
Sales and Promotion 1,350,000 5.0% (10)
------------------------------------------------------------------------------
Engineering 750,000 3.0% (11)
------------------------------------------------------------------------------
Administration 1,540,000 5.0% (12)
------------------------------------------------------------------------------
Total $30,000,000 100.0% (13)
------------------------------------------------------------------------------
</TABLE>
Percentages rounded to nearest decimal.
FOOTNOTES
(1) Same as Prospectus Cover Page Pricing table footnote (1).
(2) Same as Prospectus Cover Page Pricing table footnote (2).
(3) Other offering expenses; totaling approximately $300,000. For filing,
accounting and legal fees, printing, travel, postage, delivery,
miscellaneous, lodging, phone, promotion, blue sky, Internet
promotional development, and edgarizing documents for SEC. See item #25
in part-II for details.
(4) Network help desk activities to support the mobile users of the
MOBILAN(R) services and network operator personnel.
(5) Monthly charges for data system infrastructure to remote sites from
network center. Assuming 300 hotels on line.
(6) One time cost of MOBILAN(R) hardware and data line installations at
hotels, primarily data relay labor costs, plus approximately $500,000.
For management of sales efforts.
(7) Equipment capitalization to support communications from the home
network.
(8) Commissions paid to independent sales agents for system marketing.
(9) Executive and senior management salary (three years).
(10) Advertising, sales promotions, trade shows, and related activities.
(11) System design, site surveys, and installation support, including help
desk support and new feature development. (12) Middle management and
clerical support, including finance, accounting and employee benefits..
(13) To the extent revenues may cover certain of the expenses shown,
then such amounts will be utilized to increase marketing and order
fulfillment to more locations.
If less than the maximum proceeds were to be received, the Company
would expend the proceeds in approximately the same ratio as for the maximum
proceeds. In such event, the Company could seek more funding. However, the
Company's growth, market share, and profitability could be less than projected
herein, by an amount that cannot be determined but might be substantial.
Pending the actual use of proceeds for the stated purposes, the Company
intends to invest the funds in U.S. Government issued securities, such as U.S.
Treasury Bills.
13
<PAGE> 14
------------------------------------------------------------------------------
DESCRIPTION OF BUSINESS
------------------------------------------------------------------------------
COMPANY HISTORY
The Company was incorporated in Florida on November 28, 1997 and became
the successor in interest to a Texas corporation of the same name, effective as
of January 1, 1998. The Texas corporation, formed May 22, 1996, transferred all
right, title and interests in and to its assets, over to the Company. Such
transfer was made in exchange for the Company's issuance of stock to the Texas
Company's shareholders on a five (5) for one (1) share basis. That is, each
share of the previously outstanding stock was in effect split up into five (5)
shares of the Company's stock.
GENERAL MARKET INFORMATION
FAST, LOW COST WIRELESS COMMUNICATIONS
Mobile Area Networks, Inc. will provide traveling business people
(roadwarriors) who have laptop computers, with a very fast, very low cost,
totally private, wireless data communications service to remote home-office
network services, and to the Internet. Unlike a modem attachment, no telephone
line connection is necessary for this service.
A telephone modem does allow limited communication. However, slow speed
and vulnerability to interception and interference inhibit the mobile user from
having most of the productivity benefits enjoyed by in-house computer users.
Millions of miles of fiber optic cable for digital information
transport are installed in the U.S. The fiber network transceiver switch or
junction installations called Points of Presence (POPs), are within miles of
nearly every major corporate location, hotel, and airline club. Local Exchange
Carriers (LECs) can provide a high-speed local data connection from these POPs
to almost any building in the U.S. The Company will use a high-speed, wireless
technology PC Card to reach this high-speed data connection inside buildings.
The Company's MOBILAN(R) system will have a significant economic
advantage over a modem telephone cord connection because it utilizes the
unregulated data network, not the highly regulated and tariffed long distance
public telephone system. The underlying cost per-bit on the fiber data network
is about 1/100th the cost of carrying a bit on the public voice network.
LAPTOPS EXPLODING
There were 17,000,000 (17 million) business users of laptop computers
at the end of 1995(1). Nearly 3,000,000 (3 million) of these laptop users travel
an average of three times per month to interstate destinations. BIS Strategic
Decisions estimated that these mobile professionals are spending over
$50,000,000 ($50 million) per month or $600,000,000 ($600 million) per year in
long distance charges and surcharges to check e-mail and send faxes from hotels.
The Company's MOBILAN(R) high-speed communications service will reduce this cost
substantially. Lower cost will encourage usage and new applications, giving
greater productivity from existing resources of people and equipment, which will
attract new users and expand the market rapidly because of the huge cost
reduction.
THE COMPANY HAS INTEGRATED A NUMBER OF KEY EXISTING TECHNOLOGIES TO
CREATE THIS MOBILE DATA COMMUNICATION SERVICE, AND HAS ADDED PROPRIETARY CONTENT
TO MAKE THE NETWORK FUNCTIONAL AND MORE COST EFFECTIVE.
_____________________
(1) Ablonci, Wm. F., and Elliot, Thomas R.: Mobile Professional Market
Segmentation Study, March 1995, BIS Strategic Decisions, 1-617-982-9500
14
<PAGE> 15
Today's laptops are the lifeblood of the business traveling
roadwarrior. With the PC Card expansion slots in laptop computers and the
Company's communications service called MOBILAN(R)(1) travelers can connect to
the corporate computer network from nearly anywhere, for real-time interaction,
without plugging into a telephone line.
PC CARD APPLICATION
FAST WLAN PC CARD
One PC Card is a high-speed, short-range wireless card. These cards are
known as WLAN cards. The MOBILAN(R) cards can communicate at more than 1 Mbps,
and are used inside buildings. Initial target areas are hotels, convention
centers, airports, major office buildings, resorts, and restaurants.
Wireless LANs (local area networks) consist of a transceiver that plugs
into the laptop PCMCIA card slot and transmits to an access point relay. Most
laptops can support two PC Cards at the same time. The access point transceiver
is about the size of a small hardcover book, looks much like a smoke alarm or
thermostat, and could mount on the ceiling or the wall. However; in most
installations the public does not see the transceiver as it is hidden above the
ceiling or is mounted in a utility area.
Under ideal conditions, good wireless communications from the laptops
to the access point can be established within a range of approximately 500 feet.
Two access points will cover about 785,000 square feet of space, depending upon
building construction and layout. For a hotel, two access points could cover two
or three floors, but the actual number of access points required depends upon
construction density. In an airline club, one Access Point could cover the
space, but more Access Points may be needed for problem free operation in this
multiple user environment. The Company's current installations have revealed
that the number of access points required will be substantially higher than was
previously represented to the Company by transceiver manufacturers. Retail price
of the WLAN PC Cards is about $700 (about 1/2 the cost of CDPD modems and about
2 times the cost of a high-speed telephone line modem), and the retail price of
the access point is about $1,500 which can serve up to 256 simultaneous PC Cards
users, so the per unit cost is much less than CDPD PC Cards, and the data
capacity is virtually infinite.
Some of the wide area network (WAN) communications suppliers are AT&T,
Sprint, MCI, WorldCom, and MFS Datanet. This WAN data communications market was
about $2,000,000,000 ($2-billion) in 1995.
The Company has obtained suitable PC card transceiver products from
more than one source, and is therefore, not dependent upon any single
manufacturer for its supply of hardware.
SLOW CDPD CARD
The second PC card is a wireless wide-area data networking card using
the CDPD network. CDPD is a digital extension to the existing cellular telephone
network. CDPD can communicate wirelessly at about 10 Kbps, or about the actual
speed of a wired modem, from nearly anywhere. CDPD service is deployed in over
100 metropolitan areas throughout the U.S. Therefore, anywhere in these
communities, outdoors or indoors, a laptop user can connect via MOBILAN(R) with
total security and full access to a home office network. CDPD's slow speed
(10,000 bits per second) is equivalent to telephone line modem speed, but allows
MOBILAN(R) to offer both line-free mobility plus fully encrypted privacy from
almost anywhere. This slower CDPD service is offered only as a backup for the
user who needs connectivity at any time. Over 100 cities have CDPD service
across their metropolitan areas that MOBILAN(R) can utilize. This was expected
to grow to over 200 cities by year end 1997. The current price for CDPD PC Cards
is approximately $1,000. They are intended to be used as a backup to the WLAN
card if the MOBILAN(R) user is out of range of the fast system that the Company
is developing. The CDPD PC Cards are available from computer hardware suppliers.
_________________
(1) Service Mark was registered with the Patent and Trademark office on 10/21/96
15
<PAGE> 16
INTRANET INFRASTRUCTURE
Mobile Area Networks, Inc. will use an Intranet TCP/IP WAN fiber optic
data line service for fast problem free transmission for both WLAN and WAN data.
Intranet uses the same Internet Protocol concepts as Internet but is a private
network so it does not have the slow response times and the lack of security of
the Internet. The key technical features of a "connectionless" network needed to
make Mobile Area Networks, Inc. successful require an excellent fit to an
Intranet service, which the Company is developing. The Company is currently
utilizing data lines supplied by more than one carrier, and has developed the
capability to operate with multiple carriers. Therefore, the Company is not
dependent upon a single carrier for its service.
Local high-speed lines will be utilized, and the data capacity is
virtually infinite, with the bit cost at approximately 1/100th the cost of a
telephone line and modem connection.
The short-range 802.11 wireless technology, the high-speed local loop
connections and the WAN data carriage comprise the data infrastructure of
MOBILAN(R). These costs and the encryption software costs will be amortized into
monthly user fees or possibly fairly modest up-front payment by a user's
employer for a specific home office.
The Company's connections with Local Exchange Carriers are provided for
the Company by its data line service providers. The fiber optic Intranet service
providers selected by the Company can provide service to virtually any location.
COMPANY ENCRYPTION SOFTWARE
Security will be implemented using commercially available "tunnel"
software. Tunnel software encapsulates the initial information within a coded
mathematical formula for totally secured communications. The Company is using
commercially available encryption software, and is not dependent upon a single
supplier for this product.
COMPETITION
NO DIRECT COMPETITION
Mobile Area Networks, Inc.'s. proposed (dual-speed, low cost, wireless
data communication service will be uniquely implemented. There currently exists
no announced direct competitors within the knowledge of the Company. Implied
competition exists in both the wired and wireless market. Eventually, perhaps
within a year or two, the vast cost savings of the MOBILAN(R) services will
create more customer demand and force competition to emerge, but the Company
expects to have a substantial, highly profitable market share and will
vigorously protect that market share against likely competition.
WIRED
The largest current competition is the telephone line modem connection.
The laptop PC card modem market (PC cards that fit into laptop computer PCMCIA
slots) totaled $3,000,000,000 ($3 billion) in sales in 1995(1). However, the
modem has now reached the maximum speed the public telephone network can support
(33.6 Kbps)(2). That modem speed has proved acceptable for short message
information, such as e-mail and is marginally acceptable for small record
database applications, such as Lotus Notes. The low security and lack of privacy
in phone connections has required most companies to use "firewall" systems that
block access to protect their LAN (Local Area Networks) computer systems. Thus,
remote users may get to e-mail or to Notes, but cannot break through to the
network. Modem companies are primarily manufacturing firms and consequently are
not expected to enter the high speed wireless telecommunications service
business until sometime after feasibility and market share has been established
by Mobile Area Networks, Inc.
__________________
(1) AP Research Corporation, International Data Corporation.
(2) Blankenhorn, Dana: ISDN to the Net - U.S. Robotics sets its modem strategy,
Interactive Age, August 19, 1995
16
<PAGE> 17
Communication by traveling laptop PC users with regular modems can be
made through the public telephone network, the Internet, or leased lines. The
public phone long distance network is the most widely available service, but
often has high surcharges from public places, even for credit card calls.
Internet service (at local call rates plus a monthly and/or per minute charge)
is widely available but is the least secure and has serious performance
problems. Dedicated leased lines have the highest performance standards but are
prohibitively expensive. Leased lines are most often used for remote branch
offices with multiple users sharing the cost of these lines.
ISDN (Integrated Services Data Network) communication service is
available to the public. By the end of 1995, Datapro(1) reports a total of
431,105 lines were installed. ISDN connections, like analog POTS (Plain Old
Telephone Service) links, can be either dial-up or dedicated. Pricing is highly
variable, availability is spotty, and installation and service have been poor.
Application of ISDN has been to replace leased lines for small satellite offices
and as dedicated connections for highly computer literate telecommuters
(engineers, network technicians, travel agents). ISDN is a dedicated line, or a
point-to-point connection, and it will be unlikely that ISDN to every room in a
hotel will be available before an even higher speed alternative, like Mobile
Area Networks, Inc.'s MOBILAN(R) will offer higher speeds at much lower cost.
WIRELESS
In the existing wireless network market, it is important to point out
that every potential competitive solution has a slower data rate, costs much
more, requires massive capital for infrastructure deployment, and requires the
use of an expensive, non-standard connection device. Many potential competitors
are seeking to optimize their infrastructure investment, but in doing so, they
are forcing the end user to embrace unacceptably high levels of change in user
habits and unacceptably poor network performance.
Wireless to satellite may be reaching the masses in 1998 or 1999 with
bi-directional satellite service coming of age. At $3 per minute and low
bandwidth (limited information) capacity, these services will be targeted at
emerging countries and very remote location users. They may, however, offer an
alternative to private radio networks in the U.S. when these services become
available. Satellite service will always be slow communication to a broad
audience so they will not be viable competition to Mobile Area Networks, Inc.
Ardis and RAM rely on radio frequencies to transmit packet data over
their proprietary nationwide networks. Ardis offers service in 410 Metropolitan
Service Areas; RAM offers it in 266. Like CDPD, a packet radio is best suited
for short bursts of data. RAM's network operates at 8Kbps (Kilobits per second),
with actual throughput (effective transmission rates) of 2.4 to 4.8Kbps. These
services require proprietary modems for connection. These companies have built a
proprietary infrastructure and will not be abandoning their investments to
develop competition to MOBILAN(R). CDPD and PCS are expected to effectively
compete with these companies, but are not expected to rival Mobile Area
Networks, Inc.
PCS is short for Personal Communication Services, and in its simplest
terms, is a combination of current devices: a cellular telephone, a pager, and a
small message screen with two-way communications in a small single device. The
frequency spectrum for narrow-band PCS was bid in 1995, with Sprint, AT&T and
AirTouch being the major winners. PCS is all digital, and requires about three
times the number of towers as cellular. The PCS data rate is 7.2Kbps so it is
targeted at a short messaging and voice marketplace. Broadband frequencies for
PCS (intended to compete against cable) were auctioned by the FCC (U.S. Federal
Communications Commission) in 1996(2). The system requires a
transmitter/receiver ground station, a rooftop antenna, interface electronics,
and a set-top terminal. This very slow service will not be competition to
MOBILAN(R).
Wireless communication within a building is developed under the
International Electronic Equipment Compatibility standard IEEE 802.11. Basic
rates are 1 and 2 Mbps with actual throughputs from 350 Kbps to 1.2 Mbps.
____________________
(1) DataPro is a Boston based research firm specializing on data communication
products and services.
(2) Schneideman, Ron: Wireless Broad Market Awaits FCC Action, Wireless System
Design July, 1996
17
<PAGE> 18
The following table compares the overall and per data-bit costs of
current and planned telecommunication services. The massive cost savings offered
by the Company's MOBILAN(R) system are dramatic. This offers a great opportunity
for the Company to gain market share before competition can get into the market
with comparable systems and services.
The "New Infrastructure cost" column is the infrastructure cost to
reach 5,000,000 (5 million) users as indicated in the footnoted source. For
MOBILAN(R) the cost estimate was developed by the Company.
<TABLE>
<CAPTION>
Wireless Connection New Infrastructure Data Speed(2) Application(3) Consumer cost for (1)
cost(1) megabyte file(4)
<S> <C> <C> <C> <C>
Wireless to Space (ARTWORK)
- Motorola Iridium $3.4B 6.4 Kbps Voice N/A
- Teledisic $ 40B 16 Kbps 5-10 Kbytes $ 120
Wireless to a Tower
- Ardis (ARTWORK) $700M 4.8 Kbps 2-5 Kbytes $ 125
- RAM $400M 4.8 Kbps 2-5 Kbytes $ 180
- CDPD $440M 10 Kbps 2-5 Kbytes $ 60
- PCS $ 20B 4.8 Kbps <140 bytes $ 250
Wireless to a WAN
MOBILAN(R) (ARTWORK) $ 10M 1.5Mbps LAN extension $0.25
</TABLE>
(1) Fowler, Joe: The Race to Global Information Super-Skyway, Pacific
Electric, Wire and Cable Industry Report, January 6, 1996
(2) Gilder, George: ETHERSHERE, Forbes Magazine, October 10, 1994
(3) Garciss, Robin: Special Report/Wireless Data Services, Data Communication
Magazine, March 21, 1995
(4) Mobile Area Networks, Inc.: Calculated as to competitors from published
pricing and published data rates, as described in the March 21, 1995 Data
Communication magazine article by Robin Garciss, Special Report on Wireless Data
Services. Calculated for Mobile Area Networks, Inc. based on the monthly $2,000
charge for a T-1 fiber optic line with 1.5 Mbps capacity.
18
<PAGE> 19
DATA CARRIAGE
Mobile Area Networks, Inc. has a major economic advantage because the
MOBILAN(R) system is being built on the unregulated structure of the fiber optic
data network (the private Intranet), not the regulated and tariffed public voice
long distance telephone network. The voice network has a multi-tiered regulated
market and pricing structure. The local voice call is generally a fixed cost but
varies by region, based mainly on competition. Legislation sets the rates at
each hand-off between the Local Exchange Carriers (LECs) and the Inter-Exchange
Carriers (IXE or long distance). The hand-off cost from LEC to IXE and from IXE
to LEC is about $0.05 on each call. The long distance (IXE) varies by distance,
time of day, and competition. Currently voice connection costs for long distance
calls range from $0.12 to $0.42 per minute. Surcharges are also added in public
places to share revenue on public calls.
Much of the news media coverage in 1996 was about the growing market
for Competitive Access Providers (CAPs) that connect fiber optics directly to
large buildings or institutions, and directly connect that fiber into the
wide-area network. With this connection, CAPS are able to eliminate the $0.05
charge on one end of the call and can thereby price under the LECs in their
market. MFS Datanet is the largest CAP with local connection rights in Texas and
many mid-western states. MFS Datanet now has over 5,000 buildings on their
network.
Data communications networks that are the infrastructure backbone of
the Company's MOBILAN(R) service have a structure similar to the voice network.
LECs provide a local data circuit to a wide-area network Point-of-Presence (POP)
of the fiber based data network. The local hard-wired connection is offered in
discrete sizes: 64Kbps; 128Kbps; 256Kbps; 512Kbps; 896Kbps; 1024Kbps; 1.544Mbps;
45Mbps. The 1.544Mbps service is termed T-1 or DS1 and the 45Mbps service is
termed DS3. DS is a data service classification.
Comparing the Sprint DS1 data service versus $0.20 per minute voice
service shows that the cost on a per-bit basis is about 1/250th that of data on
the voice service.
For example; if a user was spending $250 per month on data
communications over conventional voice grade telephone circuits, the DS1 data
communication cost to the Company to provide that service would be about $1.00.
The Company may price that service to the user at $2.50 for a 99% savings to the
user, and the Company would realize a gross profit of $1.50 (60% gross margin).
In addition, the Company may realize a profit on the hardware (PC card) and
software sale or lease to the user/employer, or add to the data transmission fee
to amortize such costs, plus profits, and the Company would retain ownership of
the equipment and software.
MARKETING
There are two basics concepts developed for the early marketing plan
for Mobile Area Networks, Inc. First is a concept termed "Customer Specified
Relay Locations". Second is the "Early Customers Focus" concept.
CUSTOMER SPECIFIED RELAY LOCATIONS
The Company will develop early customers with large mobile workforces.
These customers will define the locations of MOBILAN(R) relays for data service
they require to support their workforce and to justify deployment. For example,
the first large customer may require coverage in six major cities at one or more
of its offices and at either Hyatt or Hilton hotels and the American Airline
clubs in those cities. The second customer may require three additional cities
and a different hotel chain. The third customer may require two additional
cities and stay at the same hotel as customer one or two.
The cost and risk of infrastructure deployment is in small incremental
steps, about $30,000 per hotel and $20,000 per airline club. Therefore, unlike
the potential competition, who spends millions of dollars to get the first
customer, the Company can grow incrementally in small steps. This is expected to
result in a shorter period of early operating losses and a lower amount of
losses, with a lower break even point. It is important to note that the business
traveler residence is well defined.
19
<PAGE> 20
By penetrating five major hotel chains, and two airline clubs, the Company can
supply 75% of business travelers' laptop computer communications requirements.
The estimated cost to accomplish this goal is thirty million dollars
($30,000,000)
which the Company anticipates spending in one to three years after substantial
funding is realized. The projections herein are based on the more conservative
three year schedule.
EARLY CUSTOMERS FOCUS
Early customers will be computer savvy technologists looking to jump
ahead of the competition, but also will include those who appreciate new
technology for its own sake. They are "self-referencing" and believe they know
enough about technology, and do not depend on other reference points or outside
influence. If these technologists reference, they do so horizontally in their
industry segment rather than vertically in their own company. These technology
visionaries will begin with a pilot or beta test, which makes sense to them as
they venture into new ideas and products.
These visionary technologists generally are a "small pond" of
customers. The targeted early market customer profile for Mobile Area Networks,
Inc. (having these two criteria, a large mobile workforce and visionary
technologists), has focused attention on the Big Six accounting firms. Almost
100% of their workforce are mobile and they have pioneered new software
technology. For example, Price Waterhouse pioneered Lotus Notes, Deloitte &
Touche pioneered audit software, Coopers & Lybrand developed TeleSim for the
telecommunications industry, and KPMG has teamed with Integral and Hyperion for
client server software.
The Company has a unique benefit for the Big Six type accounting firms.
Besides communicating from the laptop computer through an access point to a
distant home office LAN system, MOBILAN(R) wireless technology allows
peer-to-peer interaction from laptop to laptop. Four tax auditors in a client
conference room or in different remote file rooms could network among
themselves wirelessly between laptops. This is very important to these firms
because they have travelers who want wireless communications at the multiple
offices of the client, at the hotel, and at home. MOBILAN(R) allows them to be
everywhere they want to be.
For roadwarriors who spend time at client sites for consulting work or
vendor service, or installation of equipment or services, MOBILAN(R) allows
users with the wireless cards the opportunity to establish peer-to-peer local
area networks among small groups of people on site. This is a tremendous time
and money saver in passing information and in printing. A printer can be
attached to anyone's laptop and everyone can print at different locations
instead of copying and delivering documents, especially multiple short periodic
communications.
The Big Six firms combined have over 400,000 mobile workers.
Penetrating these six firms could produce substantial annual revenue for Mobile
Area Networks, Inc. while allowing those firms to realize substantial savings.
Through the audit, tax accounting, and consulting services of these Big
Six firms, their clients will also become knowledgeable of the MOBILAN(R)
service. It is believed that through the Big Six firms many additional
customers for MOBILAN(R) will be recruited.
To provide locations for users to have traveling telecommunications
access, the Company has focused its efforts on the hotel industry. The Company
developing models that will generate revenue for the hotel instead of costing
the hotel to provide the availability of high speed Internet. Each hotel
property with the Company's system installed can immediately begin charging per
use access for this service. The Company has a demonstration system in place as
referred to under "Business Relationships".
BUSINESS RELATIONSHIPS
The Company has agreements to provide service into one or more hotel properties
of more than one major hotel chain.
20
<PAGE> 21
The predecessor Company signed an exclusive contract for its major
markets with the Raytheon Company to provide the PC Card and transceiver
hardware to Mobile Area Networks, Inc. However, the Company has acquired access
to other hardware from manufacturers who may better serve the Company's
requirements. Therefore, the Company is not dependent upon any single
manufacturer for its supply of hardware.
The Company has data lines installed by more than one carrier on a
non-exclusive basis. The success of the Company is not dependent upon any single
provider of data lines, hardware, or software, but the Company does intend to
develop long term relationships with suppliers when in the best interest of the
Company.
INTELLECTUAL PROPERTY
Mobile Area Networks, Inc. has integrated existing technologies of
wireless communication, wide-area data networks, and security and other software
products to develop a communications infrastructure. The Company owns all
intellectual property created for hire, and all business and technical solutions
developed are being treated as proprietary trade secrets.
REGULATORY AFFAIRS
After careful review and research into the regulatory issues involved,
the Company believes that its service offering will not be subjected to
regulatory review and FCC oversight.
There are two regulatory areas that relate to the MOBILAN(R) operation:
- Use of the radio wave spectrum (broadcast frequencies)
- Provision of telecommunications service
The FCC has proactively continued to affirm that the 2.4GHz spectrum
will not be regulated nor will the spectrum be auctioned. There are already over
330,000 wireless LANs installed using the frequency (as well as millions of
microwaves ovens), so the industry (and the public) would very much oppose any
change in the regulation of this frequency.
Calls that start and end locally are regulated by the state public
utility commissions; calls that cross state lines are regulated by the Federal
Communications Commission by virtue of the Interstate Commerce Clause of the
Constitution. CompuServe is in a similar position as Mobile Area Networks, Inc.
in providing telecommunications services, and has not been subjected to
regulation. However, it does not provide communication services on a large scale
as a primary business, as the Company intends to do. The exploding Internet
growth is in a similar area of communications activities and is being promoted
by the Federal Government without regulation. The Company can therefore cite
strong precedence against regulation.
PRICING
Pricing of the Mobile Area Networks, Inc. service is expected to be a
dynamic issue. The initial rate will be approximately $50 to $60 per month per
user for the monthly subscriber, which compares very favorably with the much
slower speed service (telephone line modems) presently widely used in the
market.
Fixed rate billing was selected for two reasons. First, Internet
Service Providers (ISPs) did not experience explosive growth under variable rate
billing (i.e. $ per hour of use). Only after fixed rate pricing was introduced,
did the Internet service explode. Secondly, Intranet cannot provide detailed
billing information. Intranet pricing is simply based on the speed of the
connection port selected so no time or data volume billing information is
available per user. Because the Intranet is so dramatically less costly than
regular telephone service, there presently is no significant incentive to
"meter" or bill by the minute for the service, and especially because the PC
WLAN Card allows the very fast transmission rate of over 1Mbps.
21
<PAGE> 22
If customer demand warrants, the Company can develop a billing system
so a customer can re-bill to its own clients, or account for internal users for
cost control. For a casual user in a hotel who is not a subscriber, daily or
hourly charges can be added to the users room charge or can be charged to the
user's credit card by the Company.
EMPLOYEES
The Company has eight full time and two part time staff members, and
has available an additional six commission only sales persons. Those now working
include a full time CEO, two part time officers, and seven full time staff
members holding the positions of comptroller, marketing director, sales manager,
sales person, and three computer and software technical support personnel. The
Company also has available certain private share holders who provide technical
and business expertise on a volunteer basis. All Employees and consultants to
the Company are under non-compete, non-circumvent, and non-disclose of trade
secrets Agreements.
DESCRIPTION OF PROPERTY
The Company is conducting its operations through leased offices and
technical facilities located at 1275 Lake Heathrow Lane (Suite 115) Heathrow,
Florida 32746. The Company's requirements for physical facilities are minimal
until substantial network connections are in place. The Company negotiated a
facilities lease with favorable terms which allowed the Company ability to
build-out as the facilities as the Company desired.
The Company is currently installing a major fiber optic
telecommunications system into the building which should meet the needs of the
Company for massive amounts of data lines into the forseeable future. The system
being installed is a "Self Healing Sonet Ring" which means the system will have
back-ups built in which would reroute data traffic if a portion of the system
should fail or become damaged.
MANAGEMENT
BACKGROUND OF MANAGEMENT
(A) DIRECTORS:
At the present time, the Company's Board of Directors consists of three
members:
GEORGE E. WIMBISH, age 54, is a founder and has been a Director of the
predecessor (Texas) Company since November 3, 1996, and Chairman, President and
CEO since March 28, 1997. He was a successful private investor with over 20
years of experience in acquisitions/mergers and company startups. He has a
diversified background in wholesaling, manufacturing, and direct marketing. His
most recent prior position was CEO of a financial services company. In 1984 he
was a qualified candidate for the U.S. Senate, and has personally lobbied the
U.S. Senate. He has experience with regulatory agencies including Underwriters
Laboratory and the Nuclear Regulatory Agency. He resides in Heathrow, Florida.
DR. ROBERT M. GOOD, age 60, is a founder and has been a Director of the
predecessor (Texas) Company since November 3, 1996. He has been a successful
private investor and entrepreneur for the past 15 years. He is a licensed
stockbroker. He operated a successful dental practice in Long Island, New York
and sold the practice to achieve early retirement. Dr. Good has served as an
officer of numerous companies. He was an Army Officer. Dr. Good resides in
Heathrow, Florida.
JAMES R. LEONE, age 54, is a practicing attorney and has had his own
law firm since 1985, concentrating in the fields of securities and corporate
law. Previously, Mr. Leone was briefly with Gray, Harris & Robinson in Orlando,
FL (1984-1985) and with Quinn, Jacobs, Barry and Miller in Chicago, IL. Until
1981 Mr. Leone was a financial attorney and financial analyst with the U.S.
Securities and Exchange Commission in Washington, D.C. Mr. Leone resides in
Oviedo, Florida.
22
<PAGE> 23
(B) PERSONS NOMINATED OR CHOSEN TO BECOME DIRECTORS:
At the present time, no other person, other than those listed above,
has been chosen or nominated to become a Director of the Company.
(C) EXECUTIVE OFFICERS AND PERSONS CHOSEN TO BECOME EXECUTIVE OFFICERS:
At present, the Company's Executive Officers consist of its Directors,
mentioned above, Mr. George E. Wimbish as Chairman, President, and CEO, Dr.
Robert M. Good as Vice President and Treasurer, and James R. Leone as Secretary.
It is anticipated that additional officers will be added.
(D) CERTAIN LEGAL PROCEEDINGS:
The Company is not aware of any legal proceedings within the last five
years against any Director, Officer, Significant Employee, or candidate for any
such position involving a petition under the Bankruptcy Act or any State
insolvency law or of any receiver, fiscal agent or similar officer appointed by
a court for the business or property of such person or any partnership in which
he was general partner or within two (2) years before the time of such filing,
or any corporation or business association of which he was an executive officer
at or within two (2) years before the time of such filing; nor is the Company
aware of any of the above-mentioned persons being convicted in a criminal
proceeding; except as follows:
On August 14, 1995 James R. Leone & Assoc., P.A., a Florida
professional corporation, filed a reorganization petition in the Bankruptcy
Court in Orlando, Florida. Its Plan of Reorganization was scheduled for a
confirmation hearing on January 14, 1997 but a notice of conversion to
liquidation was filed on that date and it is currently awaiting confirmation. A
Director and the corporate Secretary of the Company, James R. Leone, was the
sole shareholder, officer and director of that corporation. On March 10, Mr.
Leone filed a personal reorganization petition on the advice of counsel because
of liabilities caused by the corporate liquidation.
REMUNERATION OF MANAGEMENT
The Company's current policy is that Directors serve without
compensation. However; in the future, it may be in the Company's best interests
to compensate Directors in a manner that will attract the most qualified people
to serve on the Company's Board. Through December 31, 1997 the officers of the
Company have served without compensation other than the allowance to acquire
founders stock at a discounted price. The Company's management will determine
when it is in the best interest of the Company to compensate officers.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of December 31, 1997 with respect to
each director and officer and any person who is known to the Company to be the
beneficial owner of five percent (5%) or more of the Company's outstanding
Common Stock. Also set forth in the table is the beneficial ownership of all
shares held by all directors and officers, individually and as a group.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
NAME AND ADDRESS SHARES OWNED PERCENT PERCENT AFTER
OF OWNER BEFORE OFFERING MAXIMUM OFFERING.
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
George E. Wimbish 25,500,000(a) 77.% 66.9%
Director, Chairman, President, & CEO
1275 Lake Heathrow Lane (Suite 115)
Heathrow, Fl 32746
Dr. Robert M. Good 2,500,000(a) 7.5% 6.5%
Director, Vice-President, Treasurer
1275 Lake Heathrow Lane (Suite 115)
Heathrow, Fl 32746
</TABLE>
23
<PAGE> 24
<TABLE>
<S> <C> <C> <C>
James R. Leone 5,000 .02% .02%
Director, Secretary
1275 Lake Heathrow Lane (Suite 115)
Heathrow, FL 32746
- -------------------------------------------------------------------------------------------------
Subtotal 28,005,000 84.5% 73.4%
Other Private Shareholders 5,085,880(b) 15.5%(c) 13.4%(c)
New Shareholders 5,000,000 ----- 13.2%
From Offering
- -------------------------------------------------------------------------------------------------
TOTAL 38,090,880 100.0% 100.0%
</TABLE>
(a) Within the knowledge of the issuer, no other person holds or
shares the power to vote or direct the voting of securities
described pursuant to subsection (a) above. No other person
holds shares or the power to vote 5% or more of the issuer's
voting securities.
(b) The Company may utilize private stock shares as incentive or
compensation for the product and service marketing efforts of
the Company's employees, when appropriate.
(c) Some of the restricted shares included in this total have been
conditionally assigned to certain employees or consultants
with performance and or tenure requirements. The possibility
that all of these private shares may or may not be rescinded
would not dramatically affect this percentage.
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
All transactions during the previous two years and any presently
proposed transaction to which the issuer is a party in which any person having a
relationship with the issuer has a direct or indirect material interest are the
following transactions, and no others:
On October 2, 1997 the Company signed a Compromise Settlement and
Release Agreement with William J. Reid. Reid was formerly the predecessor
Company's CEO, a Director and 45% shareholder. He agreed that he no longer held
those positions (his stock being surrendered) and he dismissed a lawsuit against
the Company and returned certain assets to it in exchange for payment of $8,345
claimed by him as back salary, and release of him from a noncompetition clause
he had signed. His lawsuit, Reid vs Mobile Area, case No. 97-03622 was filed in
the 162nd Judicial District Court in Dallas County, Texas. He claimed that the
Company owed him monies and that the noncompete covenant was not valid, while
the Company counterclaimed for return of the assets, cancellation of the stock,
and damages for wrongful acts.
SECURITIES DESCRIPTION
The Company is offering only Common Stock in this Offering.
COMMON STOCK
The Company is authorized to issue up to Fifty Million (50,000,000)
shares of Common Stock with no par value. Approximately 33,090,880 shares have
been issued to 62 persons as of the date of this Prospectus. Each holder of
Common Stock is entitled to one vote for each share held of record on each
matter to be voted on by stockholders, except as otherwise may be provided by
law.
Subject to any preferences which may be granted to the holders of
Preferred Stock (if ever authorized by the shareholders) which the Company could
choose to issue in the future, each holder of Common Stock is entitled to
receive ratably such dividends as may be declared by the Board of Directors from
funds legally available. Upon liquidation or dissolution of the Company, the
holders of Common Stock are entitled to share ratability
24
<PAGE> 25
in all the assets after payment of all creditors, subject to the rights of any
Preferred Stock then outstanding. The Common Stock does not have cumulative
voting rights or preemptive purchase rights.
The shares hereby offered, when paid for, will be fully paid and
non-assessable.
PREFERRED STOCK
The Company is not currently authorized to issue Preferred Stock. The
Company currently has no plans to issue shares of Preferred Stock.
TRANSFER AGENT AND REGISTRAR
The Company currently acts as its own Transfer Agent and Registrar
for its Common Stock
LEGAL MATTERS
JAMES R. LEONE has provided a legal opinion as to certain matters
relating to the issuance of the shares pursuant to applicable securities laws.
This Prospectus has been prepared by the Company's management and its advisers
and has been reviewed by JAMES R. LEONE, who also is a Director and the
corporate Secretary of the Company. Neither he nor the Company's management
believes there is a significant conflict of interest in regard to his integrity
and lack of bias in issuing the opinion letter referred to above because he is a
Director and the corporate Secretary.
EXPERTS
The Financial Statements included in this Prospectus and Registration
Statement, to the extent and for the period indicated in the accompanying
auditors report thereon, have been examined by Parks, Tschopp & Whitcomb, P.A.,
certified public accountants, and are included herein in reliance on their
authority as experts in accounting and auditing.
25
<PAGE> 26
INDEX TO FINANCIAL STATEMENTS OF
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
<TABLE>
<S> <C>
Independent Auditors' Report F-2
Financial Statements:
Balance Sheet F-3
Statement of Operations F-4
Statement of Stockholders' Equity F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7
</TABLE>
F-1
26
<PAGE> 27
PARKS, TSCHOPP & WHITCOMB, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
2600 MAITLAND CENTER PARKWAY, SUITE 330
MAITLAND, FLORIDA 32751
407-875-2760
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Mobile Area Networks, Inc.:
We have audited the accompanying balance sheet of Mobile Area Networks, Inc. (a
development stage company) as of December 31, 1997, and the related statements
of operations, stockholders' equity, and cash flows for the year then ended and
for the period from May 23, 1996 (date of inception) through December 31, 1997.
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 audit.
We conducted our audit 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 audit provides 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 Mobile Area Networks, Inc. (a
development stage company) as of December 31, 1997, and the results of its
operations and its cash flows for the year then ended and for the period from
May 23, 1996 (date of inception) through December 31, 1997, in conformity with
generally accepted accounting principles.
/S/J/ Parks, Tschopp & Whitcomb, P.A.
January 30, 1998
F-2
27
<PAGE> 28
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
BALANCE SHEET
December 31, 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 279,482
Inventory 35,792
Other Current Assets 6,504
Total current assets 321,778
Office Furniture and equipment, net 59,756
Intangible assets, net of accumulated amortization of $3,052 12,206
$ 393,740
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 30,356
Total current liabilities 30,356
Stockholders' Equity:
Common stock, no par value, authorized 50,000,000 shares,
issued and outstanding 31,245,530 710,804
Deficit accumulated during the development stage (347,420)
Total stockholders' equity 363,384
$ 393,740
</TABLE>
F-3
<PAGE> 29
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
Statement of Operations
For the year ended December 31, 1997 and for the
period from May 23, 1996 (date of inception) through December 31,1997
<TABLE>
<CAPTION>
For the Year FOR THE
Ended December PERIOD
31, 1997 FROM MAY
23, 1996
THROUGH
DECEMBER
31, 1997
<S> <C> <C>
Revenues $ -- $ --
Costs and expenses:
Product development and marketing 38,071 39,617
General and administrative 316,678 321,707
--------- ---------
Total costs and expenses 354,749 361,324
Interest income 13,904 13,904
--------- ---------
Net loss $(340,845) $(347,420)
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE> 30
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
Statement of Stockholders' Equity
For the year ended December 31, 1997 and for the
period from May 23, 1996 (date of inception) through December 31, 1997
<TABLE>
<CAPTION>
Stock Total
Subscription Accumulated Stockholders'
Common Stock Receivable Deficit Equity
Shares Amount
<S> <C> <C> <C> <C> <C>
Common stock issued in exchange for services 5,000 $ 1,000 -- -- 1,000
Common stock issued for cash 26,138,500 178,000 (2,300) -- 175,700
Net loss -- -- -- (6,575) (6,575)
Stock issuance cost -- (5,091) -- -- (5,091)
Balances at December 31, 1996 26,143,500 $ 173,909 (2,300) (6,575) 165,034
Net loss -- -- -- (340,845) (340,845)
Common stock issue for cash 5,102,030 544,156 2,300 -- 546,456
Stock issuance cost -- (7,261) -- -- (7,261)
Balances at December 31, 1997 31,245,530 $ 710,804 $ -- $(347,420) $ 363,384
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE> 31
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
Statement of Cash Flows
For the year ended December 31, 1997 and for the
period from May 23, 1996 (date of inception) through December 31, 1997
<TABLE>
<CAPTION>
For the Period
Year Ended May 23, 1996 through
December 31, 1997 December 31, 1997
----------------- ---------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(340,845) $(347,420)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization
Change in operating assets and liabilities: 9,691 9,691
Accounts payable 12,859 30,356
Inventory (35,792) (35,792)
Other current assets (6,504) (6,504)
Net cash used in operating activities (360,591) (349,669)
Cash flows from investing activities:
Patent acquisition costs -- (15,258)
Purchase of furniture and equipment (66,395) (66,395)
Net cash used in investing activities (66,395) (81,653)
Cash flows from financial activities:
Proceeds from issuance of common stock 546,456 723,156
Stock issuance cost (7,261) (12,352)
Net cash provided by financing activities 539,195 710,804
Net increase in cash 112,209 279,482
Cash at beginning of period 162,273 --
Cash at end of period $ 279,482 $ 279,482
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE> 32
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
Notes to Financial Statements
Period from May 23, 1996 (date of inception) to December 31, 1997
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) NATURE OF DEVELOPMENT STAGE OPERATIONS
Mobile Area Networks (the Company) was incorporated on May 23, 1996 in
Texas and later transferred its assets to a Florida Corporation which
was formed for that purpose. The Company will be providing wireless
data communications connectivity service for remote home-office
network services and to the Internet from frequently traveled routes
and places such as hotels, convention centers, and airports. Unlike a
modem connection, no cord or telephone line connection is necessary
for this service.
Operations of the Company through the date of these financial
statements have been devoted primarily to product development and
marketing, raising capital, and administrative activities. The
Company's fiscal year end is December 31.
(b) CASH AND CASH EQUIVALENTS
Cash equivalents consist of liquid debt instruments purchased with
original maturities of three months or less.
(c) INVENTORY
Inventory is valued at the lower of cost or market. Cost is determined
on a first-in, first-out (FIFO) method.
(d) FURNITURE AND EQUIPMENT
Furniture and equipment are stated at cost. Depreciation is computed
at the straight line method of the estimated useful lives of the
assets of five years.
(e) INTANGIBLE ASSETS
Intangible assets consist of patents which will be amortized over
their estimated useful life, of five years, using the straight-line
method.
(f) INCOME TAXES
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to temporary differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax
credit carryforwards. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be
recovered or settled. Changes in tax rates are recognized in the
period that includes the enactment date.
Development stage operations for the period ended December 31,1997
resulted in a net operating loss. It is uncertain whether any tax
benefit of net operating loss will be realized in future periods.
Accordingly, no income tax provision has been recognized in the
accompanying financial statements.
(g) USE OF ESTIMATES
Management of the Company has made certain estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure
of contingent assets and liabilities to prepare these financial
statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.
<PAGE> 33
(2) OFFICE FURNITURE AND EQUIPMENT
Office furniture and equipment consist of the following at December 31,
1997:
<TABLE>
<S> <C>
Office furniture $15,468
Computer equipment 17,670
Leasehold improvements 33,257
66,395
Less accumulated depreciation 6,639
</TABLE>
$59,756
F-7
<PAGE> 34
PROJECTIONS
The following financial projections are forward-looking statements and are
subject to Section 13(a) and Section 15(d) of the Securities Exchange Act of
1934. These statements were prepared to qualify under the applicable Safe Harbor
provisions of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These projections have been prepared by the
Company's management and are not included in the audited financial statements of
the Company.
Mobile Area Networks, Inc. is a communications service provider for
traveling professionals and as such has some of the characteristics of
traditional communication service providers like AT&T, MCI and Sprint in that
certain investments in infrastructure development have to be made before the
service has enough coverage to be of value to users of the service. Mobile Area
Networks, Inc. utilizes the existing infrastructure of fiber optic networks and
copper wire networks, but has to establish the last approximate 500 feet of
connectivity. Mobile Area Networks, Inc. believes that this 500 feet of
infrastructure development can be matched to the specific requirements of large
customers as described in "Description of Business". See "MARKETING".
Some factors in this infrastructure development are the most significant
factors in the financial needs and results of the Company; as follows:
1. The initial installation of hardware and software will constitute
the 500 feet of infrastructure to sell the large customers. The financial
forecast shown has the assumption that four hotel chains would be
installing systems. This assumption has not been tested.
2. The Company believes that the 500 feet of infrastructure deployment
can be matched to the requirements of the increasing customer base. For
example; the assumption is made that Mobile Area Networks, Inc. can justify
its value to 1,500 users with 28 sites installed and can justify its value
to 10,000 users with 265 sites installed. This assumption has not been
tested.
If these assumptions are accurate, modest infrastructure development (less
than $30 million) is required over a three (3) year period. If a much larger
infrastructure development is required, additional capital may be needed. Some
infrastructure development could be handled by debt financing or by customers
pre-payments against expected massive cost savings (i.e., repayment in months,
not years) but this is not assumed in these forwarding-looking projections.
The Company also believes that hotel owners will be more willing to
participate in financing installations after travelers request the MOBILAN(R)
service.
The projected financial results are in line with customer development. It
may be desirable to develop infrastructure earlier to attract more customers.
Earlier infrastructure development will require substantially more capital than
illustrated in these projections.
F-8
<PAGE> 35
SUMMARY OF FINANCIAL PROJECTIONS
The following table summarizes a set of forward-looking market and
financial projections based on the assumptions discussed in this section.
1. Business Class hotel with 300 rooms, 20% of guests use service 20 days
per month @ $5 per user revenue to the Company.
60 USERS X 20 DAYS X $5. = $6,000
2. Each hotel has 4 meeting rooms with 3 group meetings per week with 20 of
the attendees per meeting requesting high-speed Internet access. Meeting room
charge for service at $30 per day is higher than for a sleeping room
60 USERS X 4 ROOMS X $30= $7,200.
3. Some hotel owners may choose to pay a negotiated monthly amount to
Mobile Area Networks Inc. for unlimited service that they can offer as they
choose.
4. These projections do not assume service that will be offered for larger
convention users.
5. No significant user churn in the three year period.
6. Network monthly costs: $3,000.00 for a high speed data line and
maintenance The Company expects this cost to decline over a three year term
based on discussions with data carriers.
7. Network Installation labor and material is estimated to be $5,000.00 per
site. This covers the data line and routing hardware, but does not cover the
wireless equipment.
8. Wireless transceiver hardware installation per site is a minimum of
$10,000.00 per site, and runs much higher in a large hotel. To date
9. the Company anticipates spending approximately $30,000.00 per business
class hotel installation.
F-9
<PAGE> 36
<TABLE>
<CAPTION>
F Y 98 1st. Q 98 2nd. Q 98 3rd. Q 98 4th. Q 98.
<S> <C> <C> <C> <C>
Total hotels on line 8 16 48 100
*Assuming proceeds from this
Offering
- ----------------------------------------------------------------------------------------------
Revenue per hotel 13,200 13,200 13,200 13,200
- ----------------------------------------------------------------------------------------------
Monthly gross Revenue 105,600 211,200 633,600 1,320,000
- ----------------------------------------------------------------------------------------------
Installation cost, amortized
Over 36 months 8,000 16,000 48,000 100,000
- ----------------------------------------------------------------------------------------------
Data network cost per
Month per site x 3,000 24,000 48,000 144,000 300,000
- ----------------------------------------------------------------------------------------------
Monthly service cost and
Overhead per site. x 3,000 24,000 48,000 144,000 300,000
- ----------------------------------------------------------------------------------------------
Gross profit per site 6,200 6,200 6,200 6,200
- ----------------------------------------------------------------------------------------------
Gross profit (Per Month),
Less general & administrative 49,600 99,200 297,600 620,000
- ----------------------------------------------------------------------------------------------
</TABLE>
F-10
<PAGE> 37
SUBSCRIPTION AGREEMENT
INVESTOR SUBSCRIPTION AGREEMENT FOR MOBILE AREA NETWORKS, INC.
Persons interested in purchasing shares of the Common Stock of Mobile Area
Networks, Inc. must return this completed Subscription Agreement along with
their wire transfer, check or money order for their total payment, payable only
to: MOBILE AREA NETWORKS, INC., 1275 LAKE HEATHROW LANE, (SUITE 115) HEATHROW,
FLORIDA 32746.(HTTP://WWW.MOBILEAREA.NET).
If and when accepted by Mobile Area Networks, Inc., (the "Company"), this
Subscription Agreement shall constitute a subscription for shares of Common
Stock, no par value per share, of the Company. The minimum investment is $600.
(100 shares). An accepted copy of this Agreement will be returned to you as your
receipt, and a stock certificate will be issued to you shortly thereafter.
Method of Payment: (CIRCLE ONE) Check, Money Order or Wire (fax or e-mail for
instructions) payable only to: "MOBILE AREA NETWORKS, INC.".
- -------------------------------------------------------------------------------
I hereby irrevocably tender this Subscription Agreement for the purchase of
_________ shares at six dollars ($6.00) per share. With this subscription
Agreement, I tender payment in the amount of $__________ ($6.00 per share) for
the shares subscribed.
In connection with this investment in the Company, I represent and warrant as
follows:
(a) Prior to tendering payment for the shares, I received the Company's
final Prospectus dated ( ).
(b) I am a bona fide resident of the state of ________________________.
Please issue the shares which I am purchasing as follows:
1. INDIVIDUAL(S) -- if more than one owner, please issue as follows:
- -- Tenants-in-Common (all parties must sign -- each investor has an undivided
interest)
- -- Joint Tenants with Right of Survivorship (all parties must sign joint
ownership)
- -- Minor with adult custodian under the Uniform Gift to Minors Act in
your state (the minor will have sole beneficial ownership)
- -------------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------
INVESTOR NO. 1 (PRINT NAME ABOVE) INVESTOR NO. 2 (PRINT NAME ABOVE)
Street (residence address) Street (residence address)
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
City State Zip City State Zip
- ---------------------------------------- ----------------------------------
Home Tele. Business Tele. Home Tele. Business Tele.
- ---------------------------------------- ----------------------------------
FAX e-mail FAX e-mail
- ---------------------------------------- ----------------------------------
Social Security Number Social Security Number
- ---------------------------------------- ----------------------------------
Signature Date Signature Date
ACCEPTED BY: MOBILE AREA NETWORKS, INC.
- ----------------------------------------
Name, Title Date.
A-1
<PAGE> 38
SUBSCRIPTION FORM FOR OTHER THAN INDIVIDUAL
Purchasers of shares of the Common Stock of Mobile Area Networks, Inc. for other
than individuals must complete this form for the proper entity that will hold
title to the shares. Send this completed Subscription Agreement along with the
proper wire transfer, check or money order for the total payment, payable only
to: MOBILE AREA NETWORKS, INC., 1275 LAKE HEATHROW LANE, (SUITE 115) HEATHROW,
FLORIDA 32746 (http://www.mobilearea.net).
If and when accepted by Mobile Area Networks, Inc., (the "Company"), this
Subscription Agreement shall constitute a subscription for shares of Common
Stock, no par value per share, of the Company. The minimum investment is six
hundred dollars (S600.) (100 shares). An accepted copy of this Agreement will be
returned to you as your receipt, and a stock certificate will be issued to you
shortly thereafter.
Method of payment: (CIRCLE ONE) Check, Money Order or Wire (fax or e-mail for
instructions) payable only to: "Mobile Area Networks, Inc".
Entity:
[ ] Corporation (authorized agent of corporation must sign)
[ ] Existing Partnership (at least one partner must sign)
[ ] Trust (all trustees must sign)
- ----------------------------------------------------------
Name of Entity
- ----------------------------------------------------------
Authorized Agent (print name above)
- ----------------------------------------------------------
Title of Authorized Agent
- ----------------------------------------------------------
Social Security or Federal Identification Number of Entity
- ----------------------------------------------------------
Street (business address) or address of Registered Agent
- ----------------------------------------------------------
City State Zip
- ----------------------------------------------------------
Business Tele. or Home Tele. of Registered Agent of Entity
- ----------------------------------------------------------
FAX e-mail
The undersigned acknowledges under the penalties of perjury
that the foregoing information is true, accurate, and complete.
- ----------------------------------------------------------
Signature Date
- ----------------------------------------------------------
For a Trust, all Trustees must sign. Add a line for each to
the Right of form.
ACCEPTED BY: MOBILE AREA NETWORKS, INC.
- ------------------------------------------------
Name, Title Date.
A-2
<PAGE> 39
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus, and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any of the securities offered
hereby in any jurisdiction or to any person to whom it is unlawful to make such
offer or solicitation in such jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information herein is correct as of any time subsequent
to the date hereof or that there has been no change in the affairs of the
Company since such date.
SUMMARY OF CONTENTS
<TABLE>
<S> <C>
SUMMARY ............................ 2
RISK FACTORS ....................... 6
DILUTION ........................... 9
LAN OF DISTRIBUTION ................ 10
USE OF PROCEED ..................... 11
DESCRIPTION OF BUSINESS ............ 14
DESCRIPTION OF PROPERTY ............ 22
MANAGEMENT ......................... 22
REMUNERATION OF MANAGEMENT ......... 23
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN SECURITY HOLDERS ........... 23
INTEREST OF MANAGEMENT AND OTHERS IN
CERTAIN TRANSACTIONS ............... 24
SECURITY DESCRIPTION ............... 24
LEGAL MATTERS ...................... 25
FINANCIAL STATEMENTS ............... 26 (F-1)
PROJECTIONS ........................ 34 (F-8)
SUBSCRIPTION AGREEMENT ............. 36 (A-1)
</TABLE>
Date of Issuance:
__________, 1998
Mobile Area Networks, Inc.
"Boundary Free Wireless LAN Connectivity"
5,000,000 (MAXIMUM)
SHARES OF COMMON STOCK
PROSPECTUS
MOBILE AREA NETWORKS, INC.
1275 LAKE HEATHROW LANE (SUITE 115)
HEATHROW, FL 32746
1-407-333-2350
FAX 1-407-333-9903
[email protected]
--------------------------------------
39
<PAGE> 40
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 24. Indemnification of Directors and Officers
The Company's Articles of Incorporation and Bylaws contain provisions
indemnifying its directors and officers to the extent permitted by the Act.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "1933 Act"), as amended, may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the 1933 Act and, therefore, is unenforceable. In the event that a
claim for indemnification against such liability (other than the payment by the
Company of the expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any such action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
will submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1993 Act and
will be governed by the final adjudication of such issue.
Item 25. Other Expenses of Issuance and Distribution
<TABLE>
<S> <C>
Filing Fee - SEC $ 9,000.00
Listing Fee -- Stock Exchange, If Qualified $ 5,000.00
Transfer Agent & Registrar's Fees $ 5,000.00
Accounting Fees $ 20,000.00
Legal Fees $ 25,000.00
Printing Expense $ 30,000.00
Indemnification Insurance Premium $ 10,000.00
Miscellaneous $ 15,000.00
Travel $ 20,000.00
Postage & Delivery $ 10,000.00
Lodging $ 10,000.00
Telephone $ 10,000.00
Internet Development $ 28,000.00
Edgarizing (Converting Documents) $ 15,000.00
State Blue Sky Preparation and Filing Fees $ 30,000.00
Promotion and Advertising $ 58,000.00
Total $300,000.00
</TABLE>
II-1
<PAGE> 41
Item 26. Recent Sales of Unregistered Securities
The Company's predecessor in interest (a Texas corporation of the same name)
sold unregistered Common Stock. The following share figures have been adjusted
to reflect the ratio at which shares have been issued by the Company to the
shareholders of its predecessor.
In the past three (3) years the Company's sales of securities not registered
under the Securities Act of 1933 were as follows:
(a) Amount Sold, Title and Date. The amount of common stock sold is the
amount set forth below, since the May 22, 1996 date of incorporation.
(b) Underwriter Non-Public Transferees. No underwriters. Three officers and
directors, 62 private investors.
(c) Cash Offering Price, Commission.
$1.00 per share to private investors, no commission paid.
$0.01 per share to officers and directors, no commission paid, cash
sales (28,005,000 shares).
d) Directors/Officers Purchases (3 persons, cash and/or services)
<TABLE>
<CAPTION>
DATE SHARES $/SH TOTAL
<S> <C> <C> <C>
11/2/96 25,500,000 $ .01 $23,000 +prior services
11/2/96 2,500,000 $ .05 $25,000 +prior services
12/2/96 5,000 $1.00 $ 1,000 of services
SUBTOTAL 28,005,000 $51,300
</TABLE>
Private Investor Purchases (62 Persons, all cash) between .05 to $2./share),
pre-split. Some individuals have made more than one single purchase.
<TABLE>
<CAPTION>
DATE SHARES $TOTAL
<S> <C> <C>
11-6-96 150,000 30,000
11-11-96 50,000 10,000
11-14-96 50,000 10,000
11-15-96 25,000 5,000
11-26-96 25,000 5,000
12-4-96 50,000 10,000
12-9-96 25,000 5,000
12-11-96 68,500 13,700
12-16-96 50,000 10,000
12-23-96 30,000 6,000
12-30-96 15,000 3,000
1996 total 535,000 107,700
1-10-97 50,000 10,000
1-16-97 227,500 45,500
1-22-97 105,000 21,000
1-24-97 25,000 5,000
1-27-97 50,000 10,000
2-7-97 185,000 37,000
2-11-97 100,000 20,000
2-13-97 75,000 15,000
2-14-97 60,000 12,000
2-24-97 331,500 66,300
2-27-97 125,000 25,000
3-3-97 25,000 5,000
3-4-97 140,500 28,100
3-6-97 115,000 23,000
</TABLE>
<PAGE> 42
3-7-97 50,000 10,000
3-17-97 152,530 30,506
3-20-97 75,000 15,000
4-2-97 75,000 15,000
4-7-97 105,000 21,000
4-8-97 50,000 10,000
4-10-97 25,000 5,000
4-15-97 24,500 4,900
5-12-97 100,000 20,000
6-10-97 85,000 17,000
6-12-97 10,000 2,000
6-18-97 5,000 1,000
7-8-97 3,000 150
8-4-97 15,000 3,000
9-8-97 25,000 5,000
9-24-97 137,500 27,500
9-30-97 50,000 10,000
10-6-97 20,000 4,000
10-10-97 15,000 150
10-20-97 15,000 6,000
10-24-97 12,500 5,000
11-4-97 16,250 6,500
11-7-97 11,250 4,500
12-6-97 25,000 10,000
12-19-97 37,500 5,250
12-23-97 65,500 13,100
12-31-97 25,000 5,000
1997 total 2,845,030 579,456
<PAGE> 43
Item 27. Exhibits
3i. Articles of Incorporation C/
3ii. Bylaws, as amended C/
4. Common Stock voting rights per Articles of Incorporation Page 1,
incorporated by reference from Exhibit 3i. C/
5. Opinion of JAMES R. LEONE as to the legality and non-accessibility of
the securities being distributed C/
23a. Consent of PARKS, TSCHOPP & WHITCOMB, P.A. C/
23b. Consent of James R. Leone (filed as part of Exhibit 5) C/
27. Financial Data (SEC use only) C/
Footnotes:
C/ Filed herein with Pre-Effective Amendment No. 2 (File No. 333-18439)
D/ Previously filed on December 20, 1996 with original Registration Statement
No. 333-18439
E/ Previously filed on January 8, 1997 with Pre-Effective Amendment No. 1 (File
NO. 333-18439)
Item 28. Undertakings
(A) To the extent the registrant is registering securities under Rule 415
under the Securities Act of 1933, the registrant will:
(1) File, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement; and Notwithstanding the
forgoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of a
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in the volume and price represent no more than a
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to
be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
(B) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "1933 Act"), as amended, may be permitted to Directors,
Officers and controlling persons of the Company pursuant to the foregoing
provisions or otherwise, the Company has been advised that in the opinion of the
Securities and Exchange
<PAGE> 44
Commission such indemnification is against public policy as expressed in the
1933 Act and, therefore, is unenforceable. In the event that claims for
indemnification against such liability (other than the payment by the Company of
the expenses incurred or paid by a Director, Officer or controlling person of
the Company in the successful defense of any such action, suit or proceeding) is
asserted by such Director, Officer or controlling person in connection with the
securities being registered, the Company, unless in the opinion of its counsel
the matter has been settled by controlling precedent, will submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1993 Act and will be governed by the
final adjudication of such issue.
II-3
<PAGE> 45
Signatures
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements of filing on Form SB-2/A and authorized this Amended
Registration Statement to be signed on its behalf by the undersigned in the Town
of Heathrow, State of Florida on February 6, 1998.
MOBILE AREA NETWORKS, INC.
/s/ George Wimbish
-------------------------------------
BY: George Wimbish
President & CEO
Pursuant to the Securities Act of 1933, this Amended Registration Statement was
signed by the following persons in the capacities and on the dates stated.
- -------------------------------------------------------------------------------
Signature Title Date
- -------------------------------------------------------------------------------
/s/ George Wimbish Director, Chairman, President, February 6, 1998.
- ----------------------------- Chief Executive.
George Wimbish
/s/ Robert M. Good Director, Treasurer. February 6, 1998.
- -----------------------------
Robert M. Good
/s/ James R. Leone Director, Secretary. January 6, 1998.
- -----------------------------
James R. Leone
II-4
<PAGE> 46
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Title of Exhibit Footnotes &
Number Page #
<S> <C> <C>
3i. Articles of Incorporation.......................................... C/
3ii. ByLaws, as amended................................................. C/
5 Opinion of James R. Leone as to the legality and non-assessability
of the securities being distributed
23a. Consent of Parks, Tschopp & Whitcomb, P.A.......................... C/
23b. Consent of James R. Leone.......................................... C/
27. Financial Data..................................................... C/
</TABLE>
Footnotes:
B/ To be filed by Amendment
C/ Filed herein with Pre-Effective Amendment No. 2 (File No. 333-18439)
D/ Previously filed with original Registration Statement No. 333-18439.
<PAGE> 1
(3i).
ARTICLES OF INCORPORATION FOR MOBILE AREA NETWORKS, INC. (COPYRIGHT 1995, 1996
AND 1997 BY JAMES R. LEONE...
ARTICLES OF INCORPORATION
OF
MOBILE AREA NETWORKS, INC.
a for profit corporation formed under
Florida Statutes Chapter 607,
The Florida Business Corporation Act
ARTICLE I - NAME
The name of this corporation is:
MOBILE AREA NETWORKS, INC.
ARTICLE II - PRINCIPAL OFFICE STREET AND MAILING ADDRESSES
The street address of the initial principal office, and, if different, the
mailing address of the corporation, is as follows:
1275 Lake Heathrow Lane, Suite 115
Heathrow, Florida 32746
ARTICLE III - CAPITAL STOCK
3A. Number And Classes Of Shares
3A(1) Total Shares Issuable; Applicable Terms. The number of shares of
capital stock this corporation is authorized to issue and have outstanding at
any one time is FIFTY MILLION (50,000,000) shares, ALL WITH NO PAR OR STATED
VALUE UNLESS OTHERWISE SPECIFIED. If a par or stated value is specified, stock
may not be originally issued by the corporation for a consideration of less than
par or stated value. Stock shall be issued only for consideration, as permitted
by law, and the dollar value thereof shall be determined by the Board of
Directors. For accounting and other purposes, any required allocation of
consideration for shares with no par or stated value shall be $.0001 per share
for paid in capital or as otherwise legally determined by the Board of Directors
or its delegates. The corporation's stock authorized for issuance pursuant to
the provisions of applicable law, consists of the following number of shares and
classes, subject to any legally permissible terms set forth in these Articles,
as may be amended.
3A(2) Series A Common Shares. Fifty Million (50,000,000) shares of
Common Stock, without par or stated value.
3A(3) Certain Terms Of Shares. As required by law, each class or series
of any class or series of shares of stock shall be designated herein by
amendment prior to issuance, as Preferred Shares or by any name and/or letter or
number, but such name shall be (A) other than common shares if entitled to
preference in the distribution of dividends or assets, or (B) other than
preferred shares if not entitled to preference in the distribution of dividends
or assets.
3B. Common Stock Series; Voting And Dissolution Rights Of Common And Other
Stock.
<PAGE> 2
3B(1) Common Stock Rights In General. Common Shares shall have all of
the proprietary interests in the corporation, nonexclusively including all
rights as to voting, dividends, and assets, except as expressly provided to the
contrary herein or by operation of law, and subject only to any preferences and
rights expressly granted to any other class or series of securities.
3B(2) Voting Rights. COMMON STOCK HAS UNLIMITED VOTING RIGHTS, but
additional classes or series of voting shares of any nature may be established
to the extent permitted by law. References to "vote" or "voting" herein, in the
Bylaws, or other governing documents, shall be deemed to include action by
written consent to the full extent permitted by law.
3B(3) Rights To Assets Following Dissolution. Unless otherwise
specified, holders of Common Shares are entitled to receive prorata share by
share the net assets of the corporation following dissolution (and liquidation
of assets and payment of creditors), but additional classes or series of shares
or other securities of any nature entitled to receive the net assets of the
corporation following dissolution (and liquidation of assets and payment of
creditors) may be established to the extent permitted by law.
3B(4) Other Series Of Common Stock. In particular, other classes or
series of Common Shares may be established by the Board of Directors.
3B(5) Cross Reference To Stock Designation Requirements Of Law. See
"CERTAIN TERMS OF SPECIAL OR OTHER SHARES", SECTION 3A(3) herein.
3C. Additional Classes Or Series; Redesignation Of Securities.
3C(1) Board Power To Designate Securities And Fix Terms. The Board of
Directors shall have full authority to the extent permitted by law to amend
these articles to establish one or more classes or series of any common,
preferred, special or other class or series of stock or other securities, to
designate same, and to fix and determine the variations in the relative rights,
preferences and limitations between classes or series. See "Certain Terms Of
Shares", Section 3A(3) herein. Also, the Board of Directors may redesignate the
title of any class or series of any outstanding or unissued securities in a
distinguishable manner from every other class or series, by amendment hereto.
The Board of Directors may or may not require or permit replacement of any
securities certificates at any time other than upon transfer, subdivision or
consolidation of holdings, at which time replacement shall be required, to show
the new designation.
3D. Bylaws May Define And Clarify These Provisions.
To the extent permitted by Florida Statutes Section 607.0601(3)(b) the
Bylaws may define and clarify any provisions contained herein relating to stock
shares or other securities.
ARTICLE IV - REGISTERED OFFICE AND AGENT APPOINTMENT
The street address of the registered office of this corporation shall be:
1275 Lake Heathrow Lane, Suite 115
Heathrow, Florida 32746
The name of the registered agent of this corporation at the registered
office of this corporation shall be:
JAMES R. LEONE
The written statement of the simultaneous acceptance of appointment of
the registered agent, required by Florida Statutes Sections 607.0501(3) and
607.0505, is enclosed with this appointment.
ARTICLE V - INCORPORATOR(S)
The name and address of each incorporator of the corporation is:
<PAGE> 3
Name Address
JAMES R. LEONE 1275 Lake Heathrow Lane, Suite 115
Heathrow, Florida 32746
ARTICLE VI - DURATION; EFFECTIVE COMMENCEMENT DATE
This corporation shall exist perpetually. This corporation shall
commence at the time and on the date of filing of these Articles, unless
(A) these Articles are filed within five (5) business days after an
earlier date stated herein, in which case the earlier date specified herein
shall be the effective date, or
(B) a later date is stated herein which is within ninety (90) days
after the date of filing, in which case such later date shall be the effective
date.
Any such different commencement date and time shall be:
Date: November 11, 1997
Time: 9:00 A. M., Eastern Time.
If no time is specified on an effective date (different than the filing
date), then the Articles shall become effective as of the close of business on
such different date.
ARTICLE VII - CERTAIN STATUTORY EXCEPTIONS
This corporation hereby elects to be excepted from the following
provisions of law or any comparable replacement provisions:
Florida Statutes Section 607.0901 "Affiliated Transactions", as
permitted by Subsection (5) therein.
Florida Statutes Section 607.0902, "Control-Share Acquisitions", as
permitted by Subsection (5) therein.
ARTICLE VIII - AMENDMENT
8A. General Amendment Provision. This corporation reserves the right to
amend or repeal any provisions contained in these Articles of Incorporation or
the corporation's Bylaws, or in any amendment hereto, and all rights conferred
upon the shareholders are subject to this reservation.
8B. Amendment of Articles or Bylaws for Supermajority Quorum or Vote
Requirement; Delayed Repeal of This Provision. Any provision of these Articles
of Incorporation or the corporation's Bylaws requiring more than a majority
quorum or vote of directors or shareholders may be adopted and may be amended or
repealed, in each case, only by the percentage vote specified in such provision,
so long as this requirement is in effect in this form. This requirement shall
remain in effect in this form (A) until amended or repealed by unanimous
vote(s), unless it is legally permissible for it to remain in this form as
follows, (B) for six (6) months after the taking of a vote or the giving of all
the necessary signatures on a consent, pursuant to which vote or consent this
requirement is to be repealed or amended or replaced in any fashion (for
example, by merger with, or by sale of assets to, a commonly controlled entity)
effectively lowering or permitting lowering the vote so required. This provision
may only be repealed or amended by a majority vote of shareholders unless a
different vote is required by law, or these Articles of Incorporation. See
Florida Statutes Sections 607.0725, 607.0726, 607.0727, 607.1020, 607.1021,
607.1022.
ARTICLE IX - DIRECTORS AND OFFICERS
9A. Number Of Directors; Bylaws Automatically Amended To Reflect
Number of Directors. The number of directors of this corporation shall be THREE
(3). The number of directors may be increased or decreased from time to time by
the Bylaws but shall never be less than one, as required by Florida Statutes
Section 607.0803. Any duly adopted resolution adding or removing a Director, or
setting forth the entire Board of Directors, shall be
<PAGE> 4
deemed to amend the Bylaws to the extent necessary to reflect any change in
their number, except to the extent a larger number is specifically provided.
9B. Present Directors And Officers. The name and address of each
director and officer of this corporation are as follows:
<TABLE>
<CAPTION>
Name Address Office
<S> <C> <C>
George Wimbish 1275 Lake Heathrow Lane, Suite 115 Director,
Heathrow, Florida 32746 Chairman, President
Robert M. Good 1275 Lake Heathrow Lane, Suite 115 Vice President,
Heathrow, Florida 32746 Director
James R. Leone 1275 Lake Heathrow Lane, Suite 115 Secretary,
Heathrow, Florida 32746 Director
</TABLE>
ARTICLE X - PURPOSE/BUSINESS
This corporation is organized for the purpose of transacting any and
all lawful business for which corporations may be incorporated under Florida
Statutes Chapter 607, provided that it will not engage in any act or activity
requiring the consent or approval of any government official, department, board,
agency or other body of any local, state or federal government having
jurisdiction over such act or activity, without obtaining such consent or
approval.
ARTICLE XI - BYLAWS
The power to adopt, alter, amend or repeal Bylaws shall be vested in
the Board of Directors and/or the shareholders, except as otherwise provided by
law. However, the shareholders, in amending or repealing the Bylaws generally or
a particular Bylaw provision, may provide expressly that the Board of Directors
may not amend or repeal the Bylaws or that Bylaw provision. See Article VIII -
Amendment, herein.
SIGNATURE OF INCORPORATOR(S)
IN WITNESS WHEREOF, the undersigned has executed these Articles Of
Incorporation this November 11, 1997.
/s/ James R. Leone
----------------------
JAMES R. LEONE
Incorporator
ACCEPTANCE OF REGISTERED AGENT
Pursuant to Florida Statutes Sections 607.0501(3) and 607.0505 I
hereby accept appointment as a registered agent of this corporation and will
accept service of process in legal proceedings as to the corporation, at the
registered office stated herein. I am familiar with and I accept the
obligations of that position, including Florida Statutes Section 607.0505, and
particularly Subsection (9) as to mailing to the corporation notice of receipt
of a Florida Department of Legal Affairs subpoena to produce testimony and
records. I shall comply with the provisions of all statutes relating to the
proper and complete performance of my duties.
November 11, 1997 /s/ James R. Leone
----------------------
JAMES R. LEONE
Agent For Service
<PAGE> 5
ARTICLES OF INCORPORATION
TABLE OF CONTENTS
<TABLE>
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ARTICLE I - NAME................................................................................................ 1
ARTICLE II - PRINCIPAL OFFICE STREET AND MAILING ADDRESS........................................................ 1
ARTICLE III - CAPITAL STOCK..................................................................................... 2
3A. Number And Classes Of Shares............................................................................... 2
3A(1) Total Shares Issuable; Applicable Terms.................................................................. 2
3A(2) Series A Common Shares................................................................................... 2
3A(3) Certain Terms of Shares.................................................................................. 2
3B. Common Stock Series; Voting And Dissolution Rights Of Common And Other Stock............................. 2
3B(1) Common Stock Rights In General........................................................................... 2
3B(2) Voting Rights............................................................................................ 2
3B(3) Rights To Assets Following Dissolution................................................................... 2
3B(4) Other Series Of Common Stock............................................................................. 2
3B(5) Cross Reference To Stock Designation Requirements Of Law................................................. 2
3C. Additional Classes Or Series; Redesignation Of Securities................................................ 3
3C(1) Board Power To Designate Securities And Fix Terms........................................................ 3
3D. Bylaws May Define And Clarify These Provisions........................................................... 3
ARTICLE IV - REGISTERED OFFICE AND AGENT APPOINTMENT............................................................ 3
ARTICLE V - INCORPORATOR(S)..................................................................................... 3
ARTICLE VI - DURATION; EFFECTIVE COMMENCEMENT DATE.............................................................. 3
ARTICLE VII - CERTAIN STATUTORY EXCEPTIONS...................................................................... 4
ARTICLE VIII - AMENDMENT........................................................................................ 4
8A. General Amendment Provision................................................................................ 4
8B. Amendment of Articles or Bylaws for Supermajority Quorum or Vote Requirement;
Delayed Repeal of This Provision........................................................................... 4
ARTICLE IX - DIRECTORS AND OFFICERS............................................................................. 5
9A. Number Of Directors; Bylaws Automatically Amended To Reflect Number of Directors........................... 5
9B. Present Directors And Officers............................................................................. 5
ARTICLE X - PURPOSE/BUSINESS.................................................................................... 5
ARTICLE XI - BYLAWS............................................................................................. 5
SIGNATURE OF INCORPORATOR(S).................................................................................... 5
ACCEPTANCE OF REGISTERED AGENT.................................................................................. 6
</TABLE>
<PAGE> 1
BYLAWS
OF
MOBILE AREA NETWORKS, INC.
<TABLE>
<S> <C> <C>
ARTICLES I. . . . . . . . . . . . . . . . 1
OFFICES . . . . . . . . . . . . . . . . . 1
Section 1. Principal Office . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Other Offices. . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. . . . . . . . . . . . . . . . 1
SHAREHOLDERS. . . . . . . . . . . . . . . 1
Section 1. Time and Place of Meetings . . . . . . . . . . . . . . . . . . . 1
Section 2. Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 4. Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 5. Closing of Share Transfer Records and
Fixing Record Dates for Matters other than
Consents to Action . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 6. Fixing Record Dates for Consents to
Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 7. List of shareholders . . . . . . . . . . . . . . . . . . . . . . 2
Section 8. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 9. Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 10. Action to Consent. . . . . . . . . . . . . . . . . . . . . . . . 4
Section 11. Presence at Meetings by Means of
Communications equipment . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLES III. . . . . . . . . . . . . . . 5
DIRECTORS . . . . . . . . . . . . . . . . 5
Section 1. Number of Directors . . . . . . . . . . . . . . . . . . . . . . 5
Section 2. Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3. General Powers . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4. Place of Meetings. . . . . . . . . . . . . . . . . . . . . . . . 6
Section 5. Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 6. Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 7. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 8. Quorum Voting . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 9. Committees of the Board of Directors . . . . . . . . . . . . . . 7
Section 10. Compensation of Directors . . . . . . . . . . . . . . . . . . . 7
Section 11. Action By Unanimous Vote . . . . . . . . . . . . . . . . . . . 7
Section 12. Presence at Meetings by Means of
Communications Equipment . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV. . . . . . . . . . . . . . . . 8
NOTICES . . . . . . . . . . . . . . . . 8
Section 1. Form of Notice . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3. When Notice Unnecessary . . . . . . . . . . . . . . . . . . . . 18
ARTICLE V . . . . . . . . . . . . . . . . 9
OFFICERS . . . . . . . . . . . . . . . . 9
Section 1. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2. Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
<PAGE> 2
<TABLE>
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Section 3. Chairman of the Board . . . . . . . . . . . . . . . . . . . . . 9
Section 4. President . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5. Vice Presidents . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6. Assistant Vice Presidents . . . . . . . . . . . . . . . . . . . 10
Section 7. Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 8. Assistant Secretaries . . . . . . . . . . . . . . . . . . . . . 10
Section 9. Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 10. Assistant Treasurers . . . . . . . . . . . . . . . . . . . . . . 11
Section 11. Bonding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLES VI. . . . . . . . . . . . . . . 11
CERTIFICATES REPRESENTING SHARES . . . . . . . . . . . . . . . . . 11
Section 1. Form of Certificates . . . . . . . . . . . . . . . . . . . . . 11
Section 2. Lost Certificates . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3. Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4. Registered Shareholders. . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VII . . . . . . . . . . . . . . 12
INDEMNIFICATION OF OFFICERS AND DIRECTOR . . . . . . . . . . . . . 12
Section 1. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VIII . . . . . . . . . . . . . . 13
GENERAL PROVISIONS . . . . . . . . . . . . . 13
Section 1. Distributions and Share Dividends . . . . . . . . . . . . . . . 13
Section 3. Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4. Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5. Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IX . . . . . . . . . . . . . . . 14
AMENDMENTS TO BYLAWS . . . . . . . . . . . . . 14
</TABLE>
ARTICLE I
OFFICES
Section 1. Principal Office. The principal office of the Corporation
shall be determined by the Board of Directors.
Section 2. Other Offices. The Corporation may also have offices at such other
places both within and without the State of Florida as the Board of Directors
may from time to time determine or the business of the Corporation may require.
ARTICLE II
SHAREHOLDERS
Section 1. Time and Place of Meetings. Meetings of the shareholders
shall be held at such time and at such place, within or without the State of
Florida, as shall be determined by the Board of Directors.
Section 2. Annual Meetings. Annual meetings of shareholders shall be
held on such date and at such time as shall be determined by the Board of
Directors. At each annual meeting the shareholders shall elect a Board of
Directors and transact such other business as may properly be brought before the
meeting.
Section 3. Special Meetings. Special meetings of the share-holders may
be called at any time by the Chief Executive Officer or the Board of Directors,
and shall be called by the Chief Executive Officer or the Secretary at
<PAGE> 3
the request in writing of the holders of not less than ten percent (10%) of the
voting power represented by all the shares issued, outstanding and entitled to
be voted at the proposed special meeting, unless the Articles of Incorporation
provide for a different percentage, in which event such provision of the
Articles of Incorporation shall govern. Such request shall state the purpose or
purposes of the proposed meeting. Business transacted at special meetings shall
be confined to the purposes stated in the notice of the meeting.
Section 4. Notice. Written or printed notice stating the place, day and
hour of any shareholders' meeting and, in case of a special meeting, the purpose
or purposes for which the meeting is called, shall be delivered not less than
ten nor more than 60 days before the date of the meeting, either personally or
by mail, by or at the direction of the Chief Executive Officer, the Secretary or
the officer or person calling the meeting, to each shareholder entitled to vote
at such meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, postage prepaid, addressed to the
shareholder at his address as it appears on the share transfer records of the
Corporation.
Section 5. Closing of Share Transfer Records and Fixing Record Dates
for Matters Other than Consents to Action. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any distribution or
share dividend, or in order to make a determination of shareholders for any
other proper purpose (other than determining shareholders entitled to consent to
action by shareholders proposed to be taken without a meeting of shareholders),
the Board of Directors of the Corporation may provide that the share transfer
records shall be closed for a stated period but not to exceed, in any case, 60
days. If the share transfer records shall be closed for the purpose of
determining shareholders, such records shall be closed for at least ten days
immediately preceding such meeting. In lieu of closing the share transfer
records, the Board of Directors may fix in advance a date as the record date for
any such determination of shareholders, such date in any case to be not more
than 60 days and, in the case of a meeting of shareholders, not less than ten
days prior to the date on which the particular action requiring such
determination of shareholders is to be taken. If the share transfer records are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a distribution (other than a distribution
involving a purchase or redemption by the Corporation of any of its own shares)
or share dividend, the date on which notice of the meeting is mailed or the date
on which the resolution of the Board of Directors declaring such distribution or
share dividend is adopted, as the case may be, shall be the record date for such
determination of shareholders. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in this section,
such determination shall apply to any adjournment thereof except where the
determination has been made through the closing of share transfer records and
the stated period of closing has expired.
Section 6. Fixing Record Dates for Consents to Action. Unless a record
date shall have previously been fixed or determined pursuant to this section 6,
whenever action by shareholders is proposed to be taken by consent in writing
without a meeting of shareholders, the Board of Directors may fix a record date
for the purpose of determining shareholders entitled to consent to that action,
which record date shall not precede, and shall not be more than ten days after,
the date upon which the resolution fixing the record date is adopted by the
Board of Directors. If no record date has been fixed by the Board of Directors
and the prior action of the Board of Directors is not required by the Florida
Business Corporation Act (herein called the"Act"), record date for determining
shareholders entitled to consent to action in writing without a meeting shall be
the first date on which a signed written consent setting forth the action taken
or proposed to be taken is delivered to the Corporation by delivery to its
registered office, its principal place if business, or an officer or agent of
the Corporation having custody of the records in which proceedings of meetings
of shareholders are recorded. Delivery shall be by hand or by certified or
registered mail, return receipt requested. Delivery to the Corporation's
principal place of business shall be addressed to the President or the Chief
Executive Officer of the Corporation. If no record date shall have been fixed by
the Board of Directors and prior action of the Board of Directors is required by
the Act, the record date for determining shareholders entitled to consent to
action in writing without a meeting shall be at the close of business on the
date which the Board of Directors adopts a resolution taking such prior action.
Section 7. List of Shareholders. The officer or agent of the
Corporation having charge of the share transfer records for shares of the
Corporation shall make, at least ten days before each meeting of the
share-
<PAGE> 4
holders, a complete list of the shareholders entitled to vote at such
meeting or any adjournment thereof, arranged in alphabetical order, with the
address of and the number of voting shares held by each, such list, for a period
of ten days prior to such meeting, shall be kept on file at the registered
office or principal place of business of the Corporation and shall be subject to
inspection by any shareholder at any time during the usual business hours of the
Corporation. Such list shall also be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting. The original share transfer records shall
be prima facie evidence as to who are the shareholders entitled to examine such
list or transfer records or to vote at any meeting of shareholders. Failure to
comply with the requirements of this Section shall not affect the validity of
any action taken at such meeting.
Section 8. Quorum. A quorum shall be present at a meeting of
shareholders if the holders of shares having a majority of the voting power
represented by all issued and outstanding share entitled to vote at the meeting
are present in person or represented by proxy at such meeting, unless otherwise
provided by the Articles of Incorporation in accordance with the Act. Once a
quorum is present at a meeting of shareholders, the shareholders represented in
person or by proxy at the meeting may conduct such business as may properly be
brought before the meeting until it is adjourned, and the subsequent withdrawal
from the meeting of any shareholder or the refusal of any shareholder
represented in person or by proxy to vote shall not affect the presence of a
quorum at the meeting. If, however, a quorum shall not be present at any meeting
of shareholders, the shareholders entitled to vote, present in person or
represented by proxy, shall have power to adjourn the meeting, without notice
other than announcement at the meeting, until such time and to such place as may
be determined by a vote of the holders of a majority of the share represented in
person or by proxy at such meeting until a quorum shall be present. At such
adjourned meeting at which a quorum is present, any business may be transacted
which might have been transacted at the meeting as originally noticed.
Section 9. Voting. When a quorum is present at any meeting, the vote of
the holders of a majority of the shares entitled to vote, present in person or
represented by proxy at such meeting, shall decide any matter brought before
such meeting, other than the election of directors or a matter for which the
affirmative vote of the holders of a specified portion of the shares entitled to
vote is required by the Act, and shall be the act of the shareholders, unless
otherwise provided by the Articles of Incorporation or these Bylaws in
accordance with the Act.
Unless otherwise provided in the Articles of Incorporation or these
Bylaws in accordance with the Act, directors of the Corporation shall be elected
by a plurality of the votes cast by the holders of shares entitled to vote in
the election of directors at a meeting of shareholders at which a quorum is
present.
At every meeting of the shareholders, each shareholder shall be
entitled to such number of votes, in person or by proxy, for each share having
voting power held by such shareholder, as is specified in the Articles of
Incorporation (including the resolution of the Board of Directors (or a
committee thereof) creating such shares), except to the extent that the voting
rights of the shares of any class or series are limited or denied by the
Articles of Incorporation. At each election of directors, every shareholder
shall be entitled to cast, in person or by proxy, the number of votes to which
the shares owned by him are entitled for as many persons as there are directors
to be elected and for whose election he has a right to vote. Cumulative voting
is prohibited by the Articles of Incorporation. Every proxy must be executed in
writing by the shareholder. A telegram, telex, cablegram, or similar
transmission by the shareholder, or a photographic, facsimile, or similar
reproduction of a writing executed by the shareholder, shall be treated as an
execution in writing for the purposes of this Section 9. No proxy shall be valid
after 11 months from the date of its execution unless otherwise provided
therein. Each proxy shall be revocable unless (i) the proxy form conspicuously
states that the proxy is irrevocable, and (ii) the proxy is coupled with an
interest, as defined in the Act and other Florida law.
Shares standing in the name of another corporation may be voted by such
officer, agent or proxy as the bylaws of such corporation may prescribe or, in
the absence of such provision, as the board of directors of such corporation may
determine.
Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be
<PAGE> 5
voted by him, either in person or by proxy, but no trustee shall be entitled to
vote shares held by him without a transfer of such shares into his name as
trustee.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without being transferred into his name, if such authority is
contained in an appropriate order of the court that appointed the receiver.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Treasury shares, shares of the Corporation's stock owned by another
corporation the majority of the voting stock of which is owned or controlled by
the Corporation, and shares of its own stock held by the Corporation in a
fiduciary capacity (including any shares held for any employee benefits plan)
shall not be voted, directly or indirectly, at any meeting, and shall not be
counted in determining the total number of outstanding shares at any given time.
Conditionally assigned shares (such as shares pledged to employees or
others with certain performance standards which have not been fulfilled) are not
counted nor voted in the total number of outstanding shares at any given time.
Section 10. Action by Consent. Any action required or permitted to be
taken at a meeting of the shareholders may be taken without a meeting, without
prior notice, and without a vote if a consent in writing, setting forth the
action so taken, shall be signed by a majority of all the shareholders entitled
to vote with respect to the action that is the subject of the consent.
In addition, if the Articles of Incorporation so provide, any action
required or permitted to be taken at a meeting of the shareholders may be taken
without a meeting, without prior notice, and without a vote if a consent or
consents in writing, setting forth the action so taken, shall be signed by the
holder or holders of shares having not less than the minimum number of votes
that would be necessary to take such action at a meeting at which the holders of
all shares entitled to vote on the action were present and voted. Prompt notice
of the taking of any action by shareholders without a meeting by less than
unanimous written consent shall be given to those shareholders who did not
consent in writing to the action.
Every written consent shall bear the date of signature of each
shareholder who signs the consent. No written consent shall be effective to take
the action that is the subject of the consent unless, within 60 days after the
date of the earliest dated consent delivered to the Corporation and set forth
below in this Section 10, the consent or consents signed by the holder or
holders of shares having not less than the minimum number of votes that would be
necessary to take the action that is the subject of the consent are delivered to
the Corporation by delivery to its registered office, its principal place of
business, or an officer or agent of the Corporation having custody of the
records in which proceedings of meetings of shareholders are recorded. Delivery
shall be by hand or certified or registered mail, return receipt requested.
Delivery to the Corporation's principal place of business shall be addressed to
the President or the Chief Executive Officer of the Corporation. A telegram,
telex, cablegram, or similar transmission by a shareholder, or a photographic,
facsimile, or similar reproduction of a writing signed by a shareholder, shall
be regarded as signed by a shareholder for the purposes of this Section 10.
Section 11. Presence at Meetings by Means of Communications Equipment.
Shareholders may participate in and hold a meeting of the shareholders by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and participation
in a meeting pursuant to this Section 11 shall constitute present in person at
such meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
<PAGE> 6
ARTICLE III
DIRECTORS
Section 1. Number of Directors. The number of directors of the
Corporation shall be fixed from time to time by resolution of the Board of
Directors, but in no case shall the number of directors be less than one. Until
otherwise fixed by resolution of the Board of Directors, the number of directors
shall be the number stated in the Articles of Incorporation. No decreases in the
number of directors shall have the effect of reducing the term of any incumbent
director. Directors shall be elected at each annual meeting of the shareholders
by the holders of shares entitled to vote in the election of directors, except
as provided in Section 2 of this Article III, and each director shall hold
office until the annual meeting of shareholders following his election or until
his successor is elected and qualified. Directors need not be residents of the
State of Florida or shareholders of the Corporation.
Section 2. Vacancies. Subject to other provisions of this Section 2,
any vacancy occurring in the Board of Directors may be filled by election at an
annual or special meeting of the shareholders called for that purpose or by the
affirmative vote of a majority of the remaining directors, though the remaining
directors may constitute less than a quorum of the Board of Directors as fixed
by Section 8 of this Article III. A director elected to fill a vacancy shall be
elected for the unexpired term of his predecessor in office. Any directorship to
be filled by reason of an increase in the number of directors shall be filled by
election at an annual meeting or at a special meeting of shareholders called for
that purpose or may be filled by the Board of Directors for a term of office
continuing only until the next election of one or more directors by the
shareholders; provided that the Board of Directors may not fill more than two
such directorships during the period between any two successive annual meetings
of shareholders. Shareholders holding a majority of shares then entitled to vote
at an election of directors may, at any time and with or without cause,
terminate the term of office of all or any of the directors by a vote at any
annual or special meeting called for that purpose. Such removal shall be
effective immediately upon such shareholder action even if successors are not
elected simultaneously, and the vacancies on the Board of Directors caused by
such action shall be filled only by election by the shareholders.
Notwithstanding the foregoing, whenever the holders of any class or
series of shares are entitled to elect one or more directors by the provisions
of the Articles of Incorporation, only the holders of shares of that class or
series shall be entitled to vote for or against the removal of any director
elected by the holders of shares of that class or series; and any vacancies in
such directorships and any newly created directorships of such class or series
to be filled by reason of an increase in the number of such directors may be
filled by the affirmative vote of a majority of the directors elected by such
class or series then in office or by a sole remaining director so elected, or by
the vote of the holders of the outstanding shares of such class or series, and
such directorships shall not in any case be filled by the vote of the remaining
directors or the holders of the outstanding shares as a whole unless otherwise
provided in the Articles of Incorporation.
Section 3. General Powers. The powers of the Corporation shall be
exercised by or under the authority of, and the business and affairs of the
Corporation shall be managed under the direction of its Board of Directors,
which may do or cause to be done all such lawful acts and things, as are not by
the Act, the Articles of Incorporation or these Bylaws directed or required to
be exercised or done by the shareholders.
Section 4. Place of Meetings. The Board of Directors of the Corporation
may hold meetings, both regular and special, either within or without the State
of Florida.
Section 5. Annual Meetings. The first meeting of each newly elected
Board of Directors shall be held, without further notice, immediately following
the annual meeting of shareholders at the same place, unless by the majority
vote or unanimous consent of the directors then elected and serving, such time
or place shall be changed.
Section 6. Regular Meetings. Regular meetings of the Board of Directors
may be held with or without notice at such time and place as the Board of
Directors may determine by resolution.
<PAGE> 7
Section 7. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the Chief Executive Officer and shall be
called by the Secretary on the written request of a majority of the incumbent
directors. The person or persons authorized to call special meetings of the
Board of Directors may fix the place for holding any special meeting of the
Board of Directors called by such person or persons. Notice of any special
meeting shall be given at least 24 hours previous thereto if given either
personally (including written notice delivered personally or telephone notice)
or by facsimile, telegram or other means of immediate communication, and at
least 72 hours previous thereto if given by written notice mailed or otherwise
transmitted to each director at the address of his business or residence.
Neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the Board of Directors need be specified in the notice or
waiver of notice of such meeting. Any director may waive notice of any meeting,
as provided in Section 2 of Article IV of these Bylaws. The attendance of a
director at a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose of objecting
to the transaction of any business on the ground that the meeting is not
lawfully called or convened.
Section 8. Quorum and Voting. At all meetings of the Board of
Directors, the presence of a majority of the number of directors fixed in the
manner provided in Section 1 of this Article III shall constitute a quorum for
the transaction of business. At all meetings of committees of the Board of
Directors (if one or more be designated in the manner described in Section 9 of
this Article III), the presence of a majority of the number of directors fixed
from time to time by resolution of the Board of Directors to serve as members of
such committees shall constitute a quorum for the transaction of business. The
affirmative vote of at least a majority of the directors present and entitled to
vote at any meeting of the Board of Directors or a committee of the Board of
Directors at which there is a quorum shall be the act of the Board of Directors
or the Committee, except as may be otherwise specifically provided by the Act,
the Articles of Incorporation or these Bylaws. Directors with an interest in a
business transaction of the Corporation and directors who are directors or
officers or have a financial interest in any other corporation, partnership,
association or other organization with which the Corporation is transacting
business may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or of a committee of the Board of Directors to authorize
such business transaction. If a quorum shall not be present at any meeting of
the Board of Directors or a committee thereof, a majority of the directors
present there at may adjourn the meeting, without notice other than announcement
at the meeting, until such time and to such place as may be determined by such
majority of directors, until a quorum shall be present.
Section 9. Committees of the Board of Directors. The Board of Directors
may, by resolution passed by a majority of the whole Board of Directors,
designate from among its members one or more committees, each of which shall be
composed of one or more of its members, and may designate one or more of its
members as alternate members of any committee, who may, subject to any
limitations imposed by the Board of Directors, replace absent or disqualified
members at any meeting of that committee. Any such committee, to the extent
provided in the resolution of the Board of Directors designating the committee
or in the Articles of Incorporation or these Bylaws, shall have and may exercise
all of the authority of the Board of Directors of the Corporation, except where
action of the Board of Directors is required by the Act or by the Articles of
Incorporation. Any member of a committee of the Board of Directors may be
removed, for or without cause, by the affirmative vote of a majority or the
whole Board of Directors. If any vacancy or vacancies occur in a committee of
the Board of Directors caused by death, resignation, retirement,
disqualification, removal from office or otherwise, the vacancy or vacancies
shall be filled by the affirmative vote of a majority of the whole Board of
Directors. Such committee or committees shall have such name or names as may be
designated by the Board of Directors and shall keep regular minutes of their
proceedings and report the same to the Board of Directors when required.
Section 10. Compensation of Directors. Unless otherwise provided by
resolution of the Board of Directors, directors, as members of the Board of
Directors or of any committee thereof, shall not be entitled to receive any
stated salary for their services. Nothing herein contained, however, shall be
construed to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefore.
Section 11. Action by Unanimous Consent. Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if a written consent, setting
<PAGE> 8
forth the action so taken, is signed by all the members of the Board of
Directors or the committee, as the case may be, and such written consent shall
have the same force and effect as a unanimous vote at a meeting of the Board of
Directors.
Section 12. Presence at Meetings by Means of Communications Equipment.
Members of the Board of Directors of the Corporation or any committee designated
by the Board of Directors, may participate in and hold a meeting of such board
or committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to the Section 12 shall
constitute presence in person at such meeting, except where a person
participated in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or conceived.
ARTICLES IV
NOTICES
Section 1. Form of Notice. Whenever under the provisions of the Act,
the Articles of Incorporation or these Bylaws, notice is required to be given to
any director or shareholder, and no provision is made as to how such notice
shall be given, it shall not be construed to mean personal notice exclusively,
but any such notice may be given in writing, by mail, postage prepaid, or by
facsimile telegram, or other means of immediate communication, addressed or
transmitted to such director or shareholder at such address as appears on the
books of the Corporation. Any notice required or permitted to be given by mail
shall be deemed to be given at the time when the same be thus deposited, postage
prepaid, in the United States mail as aforesaid. Any notice required or
permitted to be given by facsimile, telegram, or other means of immediate
communication shall be deemed to be given at the time of actual delivery.
Section 2. Waiver. Whenever under the provisions of the Act, the
Articles of Incorporation or these, Bylaws, any notice is required to be given
to any director or shareholder of the Corporation, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before or after
the time stated in such notice, shall be equivalent to the giving of such
notice.
Section 3. When Notice Unnecessary. Whenever under provisions of the
Act, the Articles of Incorporation or these Bylaws, any notice is required to be
given to any shareholder, such notice need not be given to the shareholder if
(1) notice of two consecutive annual meetings and all notices of meetings held
during the period between those annual meetings, if any, or (2) all (but in no
event less than two) payments (if sent by first class mail) of distributions or
interest on securities during a 12-month period have been mailed to that person,
addressed at his address as shown on the records of the Corporation, and have
been returned undeliverable. Any action or meeting taken or held without notice
to such a person shall have the same force and effect as if the notice had been
duly given. If such a person delivers to the Corporation a written notice
setting forth his then current address, the requirement that notice be given to
that person shall be reinstated.
ARTICLE V
OFFICERS
Section 1. General. The officers of the Corporation shall be elected by
the Board of Directors which may also elect or appoint a Chairman of the Board.
Two or more offices may be held by the same person. Section (3) through (10) of
Article (V) describes the responsibilities of each officer which the Board of
Directors may from time to time modify.
Section 2. Election. The Board of Directors shall elect the officers of
the Corporation at each annual or any regular meeting of the Board of Directors.
The Board of Directors may appoint such other officers and agents as it shall
deem necessary and shall determine the salaries of all officers and agents from
time to time. The officers shall hold office until their successors are chosen
and qualified. No officer need be a member of the Board of Directors except the
Chairman of the Board, if one be elected. Any officer elected or appointed by
the Board of Di-
<PAGE> 9
rectors may be removed, with or without cause, at any time by a
majority vote of the whole Board. Election or appointment of an officer or agent
shall not of itself create contract rights.
Section 3. Chairman of the Board. The Chairman of the Board, if any,
shall be the Chief Executive Officer of the Corporation and, subject to the
provisions of these Bylaws, shall have general supervision of the affairs of the
Corporation and shall have general and active control of all its business. The
Chairman shall preside, when present, at all meetings of shareholders and at all
meetings of the Board of Directors. He shall see that all orders and resolutions
of the Board of Directors and the shareholders are carried into effect. He shall
have general authority to execute bonds, deeds and contracts in the name of the
Corporation and affix the corporate seal thereto; to sign stock certificates; to
sign all corporate checks, and negotiate all bank transfers of funds on behalf
of the Corporation; to borrow money on behalf of the Corporation; to make loans
from the Corporation to any corporate officer, director, employee, subsidiary,
or any other entity, as is reasonable and prudent under the prevailing
circumstances; to cause the employment or appointment of such officers,
employees and agents of the Corporation as the proper conduct of operations may
require, and to fix their compensation, subject to the provisions of these
Bylaws, to remove or suspend any officer, employee or agent who shall have been
employed or appointed under the authority of the Board of Directors, his
authority or under authority of an officer subordinate to him; and in general,
to exercise all the powers and authority usually appertaining to the chief
executive officer of a corporation, except as otherwise provided in these
Bylaws.
Section 4. President. In the absence of the Chairman of the Board, the
President shall be the ranking and Chief Executive Officer of the Corporation,
and shall have the duties and responsibilities, and the authority and power, of
the Chairman of the Board. The President shall be the Chief Operating Officer of
the Corporation and as such shall have, subject to review and approval of the
Chairman of the Board, if one be elected, the responsibility for the operation
of the Corporation and the authority to carry out the directives of the Chairman
of the Board.
Section 5. Vice Presidents. In the absence of the President or in the
event of his inability or refusal to act, the Vice President, if any (in the
event there be more than one, the Vice Presidents in the order designated or, in
the absence of any designation, then in the order of their election), shall
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. The Vice
President shall perform such other duties and have such other powers as the
Board of Directors, the Chief Executive Officer or the Chief Operating Officer
may from time to time prescribe. The Vice President in charge of finance, if
any, may at the discretion of the Board, also perform the duties and assume the
responsibilities described in Section 9 of this Article for the Treasurer, and
shall report directly to the Chief Executive Officer of the Corporation.
Section 6. Assistant Vice Presidents. In the absence of a Vice
President or in the event of his inability or refusal to act, the Assistant Vice
President, if any (or, if there be more than one, the Assistant Vice Presidents
in the order designated or, in the absence of any designation, then in the order
of their election), shall perform the duties and exercise the powers of that
Vice President, and shall perform such other duties and have such other powers
as the Board of Directors, the Chief Executive Officer, the Chief Operating
Officer or the Vice President under whose supervision he is appointed may from
time to time prescribe.
Section 7. Secretary. The Secretary shall attend and record minutes of
the proceedings of all meetings of the Board of Directors and any committees
thereof and all meetings of the shareholders. He shall file the records of such
meetings in one or more books to be kept by him for that purpose. Unless the
Corporation has appointed a transfer agent or other agent to keep such a record,
the secretary shall also keep at the Corporation's registered office or
principal place of business, records of the original issuance of shares issued
by the Corporation and a record of each transfer of those shares that have been
presented to the Corporation for registration or transfer. He shall give or
cause to be given, notice of all meetings of the shareholders and special
meetings of the Board of Directors, and shall perform such other duties as may
be prescribed by the Board of Directors or the Chief Executive Officer, under
whose supervision he shall be. He shall have custody of the corporate seal of
the Corporation and he, or an Assistant Secretary, shall have authority to affix
the same to any instrument requiring it, and when so affixed, it may be attested
by his signature or by the signature of such Assistant Secretary. The Board of
Directors
<PAGE> 10
may give general authority to any other officer to affix the seal of the
Corporation and to attest the affixing by his signature. The Secretary shall
keep and account for all books, documents, papers and records of the Corporation
except those for which some other officer or agent is properly accountable. He
shall have authority to sign stock certificates and shall generally perform all
the duties usually appertaining to the office of the secretary of a corporation.
Section 8. Assistant Secretaries. In the absence of a Secretary or in
the event of his inability or refusal to act, the Assistant Secretary, if any
(or, if there be more than one, the Assistant Secretary in the order designated
or, in the absence of any designation, then in the order of their election),
shall perform the duties and exercise the powers of the Secretary, and shall
perform such other duties and have such other powers as the Board of Directors,
the Chief Executive Officer, the Chief Operating Officer or the Secretary may
from time to time prescribe.
Section 9. Treasurer. The Treasurer, if any (or the Vice President in
charge of finance, if one be elected), shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors. He shall
disburse the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the Executive Officer and the Board of Directors, at its regular meetings, or
when the Board of Directors so requires an account of all his transactions as
Treasurer and of the financial condition of the Corporation. If required by the
Board of Directors, he shall give the Corporation a bond (which shall be renewed
and kept in full force) in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration of the Corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the Corporation. The Treasurer shall be under the
supervision of the Vice President in charge of finance, if any, and he shall
perform such other duties as may be prescribed by the Board of Directors, the
Chief Executive Officer or any such Vice President in charge of finance.
Section 10. Assistant Treasurers. In the absence of the Treasurer or in
the event of his inability or refusal to act, the Assistant Treasurer, if one be
elected (or, if there shall be more than one, the Assistant Treasurer in the
order designated or, in the absence of any designation, then in the order of
their election), shall perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such other powers as the
Board of Directors, the Chief Executive Officer or the Treasurer may from time
to time prescribe.
Section 11. Bonding. If required by the Board of Directors, all or
certain of the officers shall give the Corporation a bond, in such form, in such
sum and with such surety or sureties as shall be satisfactory to the Board, for
the faithful performance of the duties of their office and for the restoration
to the Corporation, in case of their death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in their possession or under their control belonging to the
Corporation.
ARTICLE VI
CERTIFICATES REPRESENTING SHARES
Section 1. Form of Certificates. The Corporation shall deliver
Certificates representing all shares to which shareholders are entitled.
Certificates representing shares of the Corporation shall be in such form as
shall be approved and adopted by the Board of Directors and shall be numbered
consecutively and entered in the share transfer records of the Corporation as
they are issued. Each certificate shall state on the face thereof that the
Corporation is organized under the laws of the State of Florida, the name of the
registered holder, the number and class of shares, and the designation of the
series, if any, which said certificate represents, and either the par value of
the shares or a statement that the shares are without par value. Each
certificate shall also set forth on the back thereof a full summary statement of
matters described on certificates representing shares, and shall contain a
conspicuous statement on the face thereof referring to the matters set forth on
the back thereof. Certificates shall be signed by the Chairman of the Board,
President or any Vice President and the Secretary or any Assistant Secretary,
and may be sealed with the seal of the Corporation. Either the seal of the
Corporation or the signatures of the
<PAGE> 11
Corporation's officers or both may be facsimiles. In case any officer or
officers who have signed, or whose facsimile signature or signatures have been
used on such certificate or certificates, shall cease to be such officer or
officers of the Corporation, whether because of death, resignation or otherwise,
before such certificate or certificates have been delivered by the Corporation
or its agents, such certificate or certificates may nevertheless be issued and
delivered as though the person or persons who signed the certificate or
certificates or whose facsimile signature or signatures have been used thereon
had not ceased to be such officer or officers of the Corporation.
Section 2. Lost Certificates. The Corporation may direct that a new
certificate be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate to be lost or
destroyed. When authorizing the issue of a new certificate, the Board of
Directors, in its discretion and as a condition precedent to the issuance
thereof, may require the owner of the lost or destroyed certificate, or his
legal representative, to advertise the same in such manner as it shall require
and/or give the Corporation a bond in such form, in such sum, and with such
surety or sureties as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
Section 3. Transfer of Shares. Shares of stock shall be transferable
only on the share transfer records of the Corporation by the holder thereof in
person or by his duly authorized attorney. Subject to any restrictions on
transfer set forth in the Articles of Incorporation, these Bylaws or any
agreement among shareholders to which this Corporation is a party or has notice,
upon surrender to the Corporation or to the transfer agent of the Corporation of
a certificate representing shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the Corporation or the transfer agent of the Corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
Section 4. Registered Shareholders. Except as otherwise provided in the
Act or other Florida law, the Corporation shall be entitled to regard the person
in whose name any shares issued by the Corporation are registered in the share
transfer records of the Corporation at any particular time (including, without
limitation, as of the record date fixed pursuant to Section 5 or Section 6 of
Article II hereof) as the owner of those shares and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof.
ARTICLE VII
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1. General. The Corporation may indemnify persons who are or
were a director, officer, employee or agent of the Corporation, or persons who
are not or were not directors, officers, employees or agents of the Corporation
but who are or were serving at the request of the Corporation as a director,
officer, trustee, employee, agent or similar functionary of another foreign or
domestic corporation, trust, partnership, joint venture, sole proprietorship,
employee benefit plan or other enterprise (such persons collectively referred to
herein as "Corporate Functionaries") against any and all liability and
reasonable expense that may be incurred by them in connection with or resulting
from (a) any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative, arbitrative or investigative, (b) an
appeal in such an action, suit or proceeding, all to the full extent permitted
by the Florida Business Corporation Act. The rights of indemnification provided
for in this Article VII may be in addition to all rights to which any Corporate
Functionary may be entitled under any agreement or vote of shareholders or as a
matter of law or otherwise.
Section 2. Insurance. The Corporation may purchase or maintain
insurance on behalf of any Corporate Functionary against any liability asserted
against him and incurred by him in such a capacity or arising out of his status
as a Corporate Functionary, whether or not the Corporation would have the power
to indemnify him or her against the liability under the Act or these Bylaws;
provided, however, that if the insurance or other arrangement is with a person
or entity that is not regularly engaged in the business of providing insurance
coverage, the insurance or arrangement may provide for payment of a liability
with respect to which the Corporation would not have the power to indemnify the
person only if including coverage for the additional liability has been approved
by the
<PAGE> 12
Board of Directors of the Corporation. Without limiting the power of the
Corporation to procure or maintain any kind of insurance or arrangement, the
Corporation may, for the benefit of persons indemnified by the Corporation, (i)
create a trust fund, (ii) establish any form of self-insurance, (iii) secure its
indemnification obligation by grant of any security interest or other lien on
the assets of the Corporation, or (iv) establish a letter of credit, guaranty of
surety arrangement. Any such insurance or other arrangement may be procured,
maintained or established within the Corporation or its affiliates or with any
insurer or other person deemed appropriate by the Board of Directors of the
Corporation regardless of whether all or part of the stock or other securities
thereof are owned in whole or in part by the Corporation. In the absence of
fraud, the judgment of the Board of Directors of the Corporation as to the terms
and conditions of such insurance or other arrangement and the identity of the
insurer or other person participating in an arrangement shall be conclusive, and
the insurance or arrangement shall not be voidable and shall not subject the
directors approving the insurance or arrangement to liability, on any ground,
regardless of whether directors participating in approving such insurance or
other arrangement shall be beneficiaries thereof.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Distributions and Share Dividends. Distributions or share
dividends to the shareholders of the Corporation, subject to the provisions of
the Act and the Articles of Incorporation, if any, may be declared by the Board
of Directors at any regular or special meeting. Distributions may be declared
and paid in cash or in property (including shares or rights to acquire shares of
the Corporation) provided that all such declarations and payments of
distributions, and all declarations and issuance's of share dividends, shall be
in strict compliance with all applicable laws and the Articles of Incorporation.
Section 2. Reserves. There may be created by resolution of the Board of
Directors out of the surplus of the Corporation such reserve or reserves as the
Board of Directors from time to time, in its discretion, deems proper to provide
for contingencies, or to equalize distributions or share dividends, or to repair
or maintain any property of the Corporation, or for such other proper purpose as
the Board shall deem beneficial to the Corporation, and the Board may increase,
decrease or abolish any reserve in the same manner in which it was created.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be
determined by the Board of Directors.
Section 4. Seal. The Corporation may have a seal which may be used by
causing it or a facsimile thereof to be impressed or affixed or in any manner
reproduced. Any officer of the Corporation so designated by the Board of
Directors shall have authority to affix the seal to any document requiring it.
Section 5. Resignation. Any director, officer or agent of the
Corporation may resign by giving written notice to the President or the
Secretary. The resignation shall take effect at the time specified therein, or
immediately if no time is specified therein. Unless specified in such notice,
the acceptance of such resignation shall not be necessary to make it effective.
ARTICLE IX
AMENDMENT TO BYLAWS
Unless otherwise provided by the Articles of Incorporation or a bylaw
adopted by the shareholders of the Corporation, these Bylaws may be amended or
repealed, or new Bylaws may be adopted, at any meeting of the shareholders of
the Corporation or of the Board of Directors at which a quorum is present, by
the affirmative vote of the holders of a majority of the shares or the
directors, as the case may be, present at such meeting.
CERTIFICATION
<PAGE> 13
I, James R. Leone Secretary of the Corporation, hereby certify that the
foregoing is a true, accurate and complete copy of the Bylaws of MOBILE AREA
NETWORKS, INC. adopted by its Board of Directors as of November 11, 1997.
/s/ James R. Leone
-------------------------------
Secretary
<PAGE> 1
EXHIBIT 5
JAMES R. LEONE, P.A. (LETTERHEAD) February 2, 1998
Mobile Area Networks, Inc.
1275 Lake Heathrow Lane, Suite 115
Heathrow, Florida 32746
RE: Mobile Area Networks, Inc.
Registration Statement on Form SB-2, No. 333-18439
Gentlemen:
My Activities As Legal Counsel For The Company
I have acted as legal counsel to Mobile Area Networks, Inc.(the
"Company"). I have provided legal services in connection with the Company's
proposed distribution of 5,000,000 shares of the Company's no par value Common
Stock (the "Common Stock"). The Common Stock is more particularly described in
the Prospectus in the Registration Statement (No. 333-18439) on Form SB-2 (the
"Registration Statement"), filed by the Company under the Securities Act of
1933, as amended. In such capacity, I have examined the corporate records of the
Company, including its Articles of Incorporation, Bylaws, and Minutes of
Meetings and Consents of its Directors. I also have examined and participated in
the preparation of the Registration Statement.
My Opinion Relating To The Securities Offering
Based upon the foregoing investigations and examinations, I am of the
opinion that:
1. Valid Corporation. The Company is duly incorporated and existing under
the laws of Florida.
2. Authorized Stock. The Company has authorized 50,000,000 shares of
Common Stock, no par value.
3. Validity and Nonassessibility of Stock Being Sold. The Common Stock
being sold upon receipt of the consideration therefore (there being no
par value) and satisfaction of any other specified conditions
(including compliance with federal and state securities laws), when
issued, will be duly authorized and issued, fully paid and
nonassessable.
Very truly yours,
/s/ James R. Leone
-------------------
James R. Leone
<PAGE> 1
EXHIBIT 23a.
Consent of Parks, Tschopp & Whitcomb, P.A.
(PARKS, TSCHOPP & WHITCOMB, P.A. LETTERHEAD)
The Board of Directors
Mobile Area Networks, Inc.:
We consent to the use of our reports included herein and to the references to
our firm under the heading "Experts" in the Prospectus.
/s/ Parks, Tschopp & Whitcomb, P.A.
Maitland, Florida
January 30, 1998
<PAGE> 1
EXHIBIT 23b.
JAMES R. LEONE, P.A. (LETTERHEAD) February 2, 1998
Mobile Area Networks, Inc.
1275 Lake Heathrow Lane, Suite 115
Heathrow, Florida 32746
RE: Mobile Area Networks, Inc.
Registration Statement on Form SB-2, No. 333-18439
Consent To Use of Opinion And To References In Prospectus
I consent to the filing of this opinion with the U.S. Securities and
Exchange Commission as an Exhibit to the Registration Statement, as amended, and
with any state or self regulatory agencies for qualification or registration for
sale. I also consent to the reference to me under the caption "Legal Matters" in
the Prospectus contained in the Registration Statement, as amended.
Very truly yours,
/s/ James R. Leone
-------------------
James R. Leone
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