U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
General form for registration of securities of small
business issuers Under Section 12(b) or (g) of the
Securities Exchange Act of 1934
Master Communications Corp.
(Name of Small Business Issuer in its charter)
Florida
(State or other jurisdiction of incorporation or
organization)
59-3442557
(I.R.S. Employer Identification No.)
701 Brickell Avenue, Suite 3120
Miami, Florida 33131
(Address of principal executive offices) (Zip Code)
(305)358-3678
(Issuer's telephone number)
Securities to be registered under Section 12(b) of the
Act:
Securities to be registered under Section 12(g) of the
Act: _X_
Title of each class to be so registered: Common
Stock Name of each exchange on which each class is
to be registered: NASDAQ OTC Bulletin Board
To simplify the language in this Registration Statement
Master Communications Corp. is referred to herein as "the
Company" or "We".
Item 1. Description of Business.
- ---------------------------------
Business Development. We were incorporated under the name
Master Communications Corp. in the State of Florida on
May 8, 1997.
We have not been involved in any bankruptcy,
receivership or similar proceeding. We have not been
involved in any material reclassification, merger
consolidation, or purchase or sale of a significant
amount of assets not in the ordinary course of
business.
Business of Issuer. We are a development stage company
which intends to provide telecommunications services in
various markets throughout the United States. The result
is that we will become a provider of local and long
distance telephone services and related services.
Ultimately, we intend to provide local and long distance
services plus Internet access, Personnel Communications
Services ("PCS"), cellular, paging, facsimile, enhanced
calling cards, prepaid phone cards and calling cards and
video communications services. We also intend to qualify
as an "Integrated Communications Provider" ("ICP")
under the Federal Telecommunications Act of 1996 (the
"Telecommunications Act"). Under the Telecommunications
Act, such ICPs can offer cellular, PCS, paging, voice
mail, and a host of other telecommunications services
along with local and long distance service. We intend to
target its services to small and mid-size commercial
end users.
MasterTel Communications Corp. ("MasterTel") is our only
subsidiary. We own 100% of MasterTel. It was
incorporated in Florida on December 16, 1998 and has
authority to do business in New York, Illinois, Texas
and California. Jamee Freeman is the President and
Secretary (the only officer) and its sole director.
Presently, it is applying to operate as a local reseller
in Illinois, Texas and California and has been approved
in New York. All applications have been filed and it
was approved in New York and Texas. Upon approval of such
states, MasterTel intends to apply for local reseller
licenses in other states.
Our marketing strategy will be to provide the consumer or
business with a single source for all of their
telecommunications needs, all billed on a single
invoice. Our customers will receive a "Management
Report Style" invoice, one that is easily read and
understood on an all-in-one-bill. We will format
customer invoices and out-source printing and mailing.
The Company is currently working toward a real time
Internet bill presentation. Online payment works to our
benefit by ensuring prompt payment, no postage expense
and minimal bad debt.
Our current business strategy is to provide
telecommunications services in the following geographical
areas:
New York City, New York
Miami, Florida
Orlando, Florida
San Francisco, California
Los Angeles, California
Dallas,Texas
Las Vegas, Nevada
Chicago, Illinois
We also plan to grow through acquisitions of income
producing telecommunication companies. Acquisitions
will be determined based upon the operating structures
of the target, including the quality or existence of
sales, billing and customer service departments. The
Company intends to consolidate the operations of the
acquired entities into a single operation resulting
in significant cost savings and substantial revenues
within a minimal period of time.
Operational functions such as billing, customer service
and management functions will be centralized, thereby
eliminating redundant systems and functions. We will
utilize the existing billing and customer services
infrastructure of the acquired entities where appropriate,
and expand or contract such infrastructure
as operations dictate. Our acquisition strategy will
also provide us with immediate revenues which will, upon
reaching a certain level, provide the Company with
advantages resulting from economies of scale.
Once we have acquired a reseller, we will contact the
resellers' customers with a view towards marketing to
the customer a host of other telecommunications
services we offer. Management believes that its
ability to customize telecommunications services and
its effective pricing of services, along with the
attractiveness of single invoicing, will attract
customers and expand current usage by existing customers.
The market potential for telecommunications services is
large and growing. Industry sources estimate that in
1996 total revenues from local and long distance
telecommunications services were approximately $222
million, of which approximately $86.9 billion were
derived from local exchange services and approximately
$99.7 billion from toll service revenue. Over the
past few years the long distance segment of the
telecommunications industry has been growing at an
estimated annual rate of approximately 5% in revenues and
12% in usage, while during the same period pricing
and costs have been decreasing at an average annual
rate of 7%. The local phone service market segment
of the overall telecommunications industry is even larger
than the long distance segment, and continues to grow
rapidly as the increasing need for telephone numbers
along with rising demand for PCS cellular, paging and
Internet access services. Based upon information
provided by the FCC, aggregate revenues for local and
long distance services grew at a compounded annual rate
of approximately 5.5% between 1991 and 1996. The
Telecommunications Act, the FCC's issuance of rules
for competition and pro-competitive policies developed by
state regulatory commissions have created opportunities
for new entrants, including the Company, to capture a
portion of the local exchange carrier's dominant, and
historically monopoly controlled, market share of local
services. The development of switched local services
competition, however, is in its early stages, and the
Company believes that competitive local exchange carriers
("CLECs") currently serve fewer than 5% of the total
business lines in the United States.
In each of the markets we intend to serve, we will seek
to become a competitor to the incumbent local exchange
carrier ("I-LEC") for its targeted customers by
providing an integrated package of high quality local,
long distance and enhanced telecommunications services
at competitive prices. The Company will serve as a
competitive local exchange company ("C-LEC") to enter
the local telephone service business. Under the
Telecommunications Act, I-LECs must provide C-LECs
such as the Company with access to their facilities
at a substantial discount thereby enabling C-LECs to
provide local telephone services to the public. We
believe that we will be able to offer telecommunications
services to customers at less than the prices which the
customer can obtain if they purchase the services
directly from the I-LECs.
Competition. The telecommunications industry is
highly competitive. In each of the markets targeted
by the Company, we will compete principally with the ILEC
serving that area. ILECs are established providers of
local telephone services to all or virtually
all telephone subscribers within their respective service
areas. ILECs also have long-standing relationships
with regulatory authorities at the federal and state
levels. While some FCC and state administrative
decisions and initiatives provide business opportunities
to telecommunications providers such as the Company,
they also provide the ILECs with increased pricing
flexibility for their private line and special access
and switched access services.
In addition, with respect to competitive access services
(as opposed to switched local exchange services), the
FCC recently proposed a rule that would provide for
increased ILEC pricing flexibility and deregulation
for such access services either automatically or after
certain competitive levels are reached. If the ILECs
are allowed by regulators to offer discounts to large
customers through contract tariffs, engage in
aggressive volume and term discount pricing practices for
their customers, and/or seek to charge competitors
excessive fees for interconnection to their networks,ILEC
competitors such as the Company could be materially
adversely affected. If future regulatory decisions afford
the ILECs increased access services pricing flexibility
or other regulatory relief, such decisions could also
have a material adverse effect on ILEC competitors such
as the Company.
We expect to face competition from other current and
potential market entrants, including long distance
carriers seeking to enter, re-enter or expand entry into
the local exchange marketplace such as AT&T Corp.
("AT&T"), WorldCom/MCI Communications Corporation
("MCI"), Sprint Corporation ("Sprint"), and from
other CLECs, resellers, competitive access providers
("CAPs"), cable television companies, electric
utilities, microwave carriers, wireless telephone
system operators and private networks built by large
end users. In addition, the development of new
technologies could give rise to significant new
competition for us. We will also compete with
equipment vendors and installers, and
telecommunications management companies with respect
to certain portions of its business. Many of our current
and potential competitors have financial, technical,
marketing, personnel and other resources, including
brand name recognition, substantially greater than
those of the Company, as well as other competitive
advantages over the Company.
The Telecommunications Act includes provisions which
impose certain regulatory requirements on all local
exchange carriers, including ILEC competitors such as
the Company, while granting the FCC expanded
authority to reduce the level of regulation applicable to
any or all telecommunications carriers, including ILECs.
The manner in which these provisions of the
Telecommunications Act are implemented and enforced could
have a material adverse effect on the Company's ability
to successfully compete against ILECs and other
telecommunications service providers.
As a recent entrant in the integrated telecommunications
services industry, we have not achieved and do not
expect to achieve a significant market share for any
of our services. In particular, the ILECs have
long-standing relationships with their customers, have
financial, technical, marketing, personnel and other
resources substantially greater than those of the
Company, have the potential to subsidize competitive
services with revenues from a variety of businesses and
currently benefit from existing regulations that favor
the ILECs over the Company in certain respects. Certain
federal and state laws and regulations allow CLECs such
as us to interconnect with ILEC facilities and provide
increased business opportunities for the Company. Such
interconnection opportunities have been accompanied
by increased pricing flexibility for and relaxation of
regulatory oversight of the ILECS.
To the extent the Company interconnects with and uses
ILEC networks to service its customers, we will be
dependent upon the technology and capabilities of the
ILECs to meet certain telecommunications needs of
the Company's customers and to maintain its service
standards, and the Company must interface with the
ILECs' legacy OSS in order to properly provision new
customers. The Telecommunications Act imposes
interconnection obligations on ILECs, but there can
be no assurance that we will be able to obtain the
interconnection we require at rates, and on terms and
conditions, that permit us to offer switched services
that are both competitive and profitable. In the
event that we experience difficulties in obtaining high
quality, reliable and reasonably priced services from
the ILECs, the attractiveness of our services to our
customers could be impaired.
The long distance telecommunications market has numerous
entities competing for the same customers and a high
average churn rate, as customers frequently change
long distance providers in response to the offering
of lower rates or promotional incentives. Prices in
the long distance market have declined significantly in
recent years and are expected to continue to decline. We
will face competition from large carriers such as
AT&T, MCI and Sprint. Other competitors are likely to
include RBOCs providing out-of-region (and, with the
removal of regulatory barriers, in-region) long distance
services, other CLECs, microwave and satellite
carriers and private networks owned by large end
users. We may also increasingly face competition
from companies offering long distance data and voice
services over the Internet. Such companies could enjoy a
significant cost advantage because they do not currently
pay carrier access charges or universal service fees. In
addition, in June 1998, Sprint announced its intention to
offer voice, data and video services over its nationwide
asynchronous transfer mode network, which Sprint
anticipates will significantly reduce its cost to provide
such services. Sprint plans to bill its customers based
upon the amount of traffic carried, irrespective of the
time required to send the traffic or the traffic's
destination.
The Internet services market is highly competitive and we
expect that competition will continue to intensify. The
Company's competitors in this market include ISPs,
other telecommunications companies, online service
providers and Internet software providers. Many of these
competitors have greater financial, technological,
marketing, personnel and other resources than those
available to the Company.
We believe that the principal competitive factors
affecting our business operations will be pricing
levels and clear pricing policies, reliable customer
service, accurate billing and, to a lesser extent,
variety of services. Our ability to compete effectively
will depend upon our ability to maintain high quality,
market-driven ervices at prices generally equal to or
below those charged by our competitors. To maintain our
competitive posture, we believe that we must be in a
position to reduce our prices in order to meet reductions
in rates, if any, offered by others. Any such reductions
could adversely affect us.
The recent World Trade Organization ("WTO") agreement on
basic telecommunications services could increase the
level of competition faced by us. Under this
agreement, the United States and 72 other members of
the WTO committed themselves to opening their
respective telecommunications markets and/or foreign
ownership and/or to adopting regulatory measures to
protect competitors against anticompetitive behavior by
dominant telecommunications companies, effective in
some cases as early as January 1998. There can be no
assurance that the pro-competitive effects of the WTO
agreement will not have a material adverse effect on our
business, financial condition and results of operations.
A continuing trend toward consolidation, mergers,
acquisitions and strategic alliances in the
telecommunications industry could also increase the
level of competition we face. For example, WorldCom
acquired another CLEC, Brooks Fiber Properties, Inc., and
then merged MCI. In May 1998, SBC Communications Inc.
and Ameritech Corporation agreed to merge. These
types of consolidations and alliances could put us at a
competitive disadvantage.
Government Regulation.
- ----------------------
Our networks and the provision of telecommunications
services are subject to significant regulation at the
federal, state and local levels. Delays in receiving
required regulatory approvals or the enactment of new
adverse regulation or regulatory requirements may
have a material adverse effect upon us.
The FCC exercises jurisdiction over us with respect to
interstate and international services. Additionally,
we file tariffs with the FCC.
On October 29, 1996, the FCC approved an order that
eliminates the tariff filing requirements for
interstate domestic long distance service provided by
non-dominant carriers such as us. On February 13,
1997, the United States Court of Appeals for the
District of Columbia Circuit stayed the FCC order, and we
are required to continue filing tariffs while this stay
remains in effect. If the stay is lifted and the FCC
order becomes effective, telecommunications carriers such
as us will not be able to rely on the filing of tariffs
with the FCC as a means of providing notice to customers
of prices, terms, and conditions on which we offer
interstate services. While tariffs offered a means of
providing notice of prices, terms, and conditions,
we intend to rely primarily on our sales force and
direct marketing to provide such information to our
customers. In addition, we must obtain prior FCC
authorization for installation and operation of
international facilities and the provision (including
resale) of international long distance services.
State regulatory commissions exercise jurisdiction over
us to the extent we provide intrastate services. As
such a provider, we will be required to obtain regulatory
authorization and/or file tariffs at state agencies
in most of the states in which we intend to operate.
If and when we seek to overbuild certain network
segments, local authorities will regulate our access
to municipal rights-of-way. Network buildouts are also
subject to numerous local regulations such as
building codes and licensing. Such regulations vary
on a city by city and county by county basis.
There can be no assurance that the FCC or state
commissions will grant required authority or refrain
from taking action against us if it is found to have
provided services without obtaining the necessary
authorizations. If authority is not obtained or if
tariffs are not filed, or are not updated, or otherwise
do not fully comply with the tariff filing rules of the
FCC or state regulatory agencies, third parties or
regulators could challenge these actions. Such
challenges could cause us to incur substantial legal and
administrative expenses. The Telecommunications Act
provides for a significant deregulation of the domestic
telecommunications industry, including the local
exchange, long distance and cable television industries.
The Telecommunications Act remains subject to judicial
review and additional FCC rule making, and thus it is
difficult to predict what effect the legislation will
have on us and our future operations. There are currently
many regulatory actions underway and being contemplated
by federal and state authorities regarding
interconnection pricing and other issues that could
result in significant changes to the business conditions
in the telecommunications industry. There can be no
assurance that these changes will not have a material
adverse effect upon us.
On December 31, 1997, the U.S. District Court for the
Northern District of Texas issued a decision (the "SBC
Decision") finding that Sections 271 to 275 of the
Telecommunications Act are unconstitutional. These
sections of the Telecommunications Act impose
restrictions on the lines of business in which the RBOCs
may engage, including establishing the conditions they
must satisfy before they may provide in-region interLATA
telecommunications services. The SBC Decision
has been stayed while an appeal is pending before the
United States Court of Appeals for the Fifth Circuit. We
cannot predict the likely outcome of that appeal,
although on May 15, 1998, the Court of Appeals for the
District of Columbia Circuit rejected a very similar
challenge to the constitutionality of Section 274 of the
Telecommunications Act. If the SBC Decision is upheld on
appeal, however, the RBOCs would be able to provide
such in-region services immediately without satisfying
the statutory conditions. This would likely have an
unfavorable effect on our business for at least two
reasons. First, the SBC Decision removes the incentive
RBOCs have to cooperate with entities like the Company to
foster competition within their service areas so that
they can qualify to offer in-region interLATA
services because the decision allows RBOCs to offer
such services immediately. However, the SBC Decision
does not affect other provisions of the
Telecommunications Act which create legal obligations for
all ILECs to offer interconnection and
network access. Second, companies seeking to obtain
licenses and permits will allow such companies to offer
its customers both long distance and local exchange
services, which the RBOCs currently may not do. This
ability to offer "one-stop shopping" gives us a
marketing advantage that it would no longer enjoy if the
SBC Decision were upheld on appeal.
In addition to requirements placed on ILECs, the
Telecommunications Act subjects us to certain federal
regulatory requirements relating to the provision of
local exchange service in a market.
All ILECs and CLECs must interconnect with other
carriers, provide nondiscriminatory access to
rights-of-way, offer reciprocal compensation for
termination of traffic, and provide dialing parity and
telephone number portability. The Telecommunications Act
also requires all telecommunications carriers to ensure
that their services are accessible to and usable by
persons with disabilities.
On May 8, 1997, the FCC released an order establishing a
significantly expanded federal universal service subsidy
regime. For example, the FCC established new subsidies
for telecommunications and information services provided
to qualifying schools and libraries with an annual
cap of $2.3 billion and for services provided to rural
health care providers with an annual cap of $400 million.
The FCC also expanded the federal subsidies for local
exchange telephone service provided to low-income
consumers. Providers of interstate telecommunications
service, such as us, as well as certain other entities,
must pay for these programs. Our share of these federal
subsidy funds will be based on our share of certain
defined telecommunications end-user revenues. Currently,
the FCC is assessing such payments on the basis of a
provider's revenue for the previous year; since we
had no significant revenues in 1998, we will not be
liable for subsidy payments in any material amount during
1999. With respect to subsequent years, however, we are
currently unable to quantify the amount of subsidy
payments that we will be required to make and the
effect that these required payments will have on our
financial condition. In the May 8th order, the FCC also
announced that it will soon revise its rules for
subsidizing service provided to consumers in high cost
areas, which may result in further substantial increases
in the overall cost of the subsidy program. Several
parties have appealed the May 8th order. Such appeals
have been consolidated and transferred to the United
States Court of Appeals for the Fifth Circuit where they
are currently pending. In addition, on July 3,
1997, several ILECs filed a petition for stay of the May
8th order with the FCC. That petition is pending, as well
as several petition for administrative reconsideration of
the order.
To the extent we provide inter-exchange
telecommunications service, we are required to pay access
charges to ILECs when we use the facilities of those
companies to originate or terminate inter-exchange calls.
Also, as a CLEC, we may provide access services to
other inter-exchange service providers. The interstate
access charges of ILECs are subject to extensive
regulation by the FCC, while those of CLECs are
subject to a lesser degree of FCC regulation but remain
subject to the requirement that all charges be just,
reasonable, and not unreasonably discriminatory. In two
orders released on December 24, 1996, and May 16, 1997,
the FCC made major changes in the interstate
access charge structure. In the December 24th order, the
FCC removed restrictions on ILECs' ability to lower
access prices and relaxed the regulation of new switched
access services in those markets where there are other
providers of access services. If this increased
pricing flexibility is not effectively monitored by
federal regulators, it could have a material adverse
effect on our ability to compete in providing interstate
access services. The May 16th order substantially
increased the costs that ILECs subject to the FCC's
price cap rules ("price cap LECs") recover through
monthly, non-traffic-sensitive access charges and
substantially decreased the costs that price cap LECs
recover through traffic-sensitive access
charges. In the May 16th order, the FCC also announced
its plan to bring interstate access rate levels more in
line with cost. The plan will include rules that are
expected to be established sometime in 1998 that may
grant price cap LECs increased pricing flexibility upon
demonstrations of increased competition (or potential
competition) in relevant markets. The manner in which the
FCC implements this approach to lowering access charge
levels could have a material effect on our ability to
compete in providing interstate access services. Several
parties have appealed the May 16th order. Those
appeals have been consolidated and transferred to the
United States Court of Appeals for the Eighth Circuit
where they are currently pending.
The FCC released a report to Congress on April 10, 1998
concerning its implementation of the telecommunications
subsidy provisions of the Telecommunications Act. In that
report, the FCC clarified that entities that provide
transmission capacity to ISPs are providing
telecommunications services subject to contribution
requirements. The FCC indicated that it would address the
issues of whether ISPs would contribute to the universal
service fund based on the utilization of their own
transmission facilities and whether certain ISP services
such as phone-to-phone IP telephony are
telecommunications services subject to universal service
fund contributions and access charges at a later date.
Item 2. Management Discussion and Analysis
<TABLE>
<S> <C> <C>
From May 6,1997
(inception)to
December 31, 1999 to December 31, 1998
Development Stage Revenues $0 $0
Development Stage Expenses (41,254) (20,858)
Deficit Accumulated During
Development Stage (41,254) (20,858)
</TABLE>
Development Stage Revenues
- --------------------------
The Company's operations have been devoted primarily to
raising capital for licensing in five states and
developing a website. MasterTel Communications Corp. is
a subsidiary of Master Communications Corp. MasterTel
was incorporated in Florida on December 16, 1998 and has
authority to do business in New York, Illinois, Texas and
California. Jamee Freeman is the President and only
officer and director of MasterTel. At the present
time, MasterTel is applying to operate as a local
reseller in these states and has already been approved in
New York and Texas. All applications have been filed for
the other states and awaiting approval. Upon approval, we
will apply for long distance reselling in these states
and then move on to other states.
Master Communications Corp. shall remain the parent
company of MasterTel. Master Communications owns
1,000 shares of common stock valued at $.0001 per share.
The ability of the Company to achieve its business
objectives is contingent upon it success in raising
additional capital until adequate revenues are realized
from operations.
Development Stage Expenses
- --------------------------
Development stage expenses increased by $20,396 or 98%
from December 31, 1998. This increase was primarily due to
the hiring of a corporate officer. In addition, we have
utilized funds engaging various consulting and managerial
services in search of licensing, corporate acquisitions
and developing a corporate web site.
<TABLE>
<S> <C> <C>
From May 6,1997
(inception)to
December 31, 1998 December 31, 1997
Development Stage Revenues $0 $0
Development Stage Expenses (11,111) (9,747)
Deficit Accumulated During
Development Stage (11,111) (9,747)
</TABLE>
Development Stage Revenues
- --------------------------
The Company's operations have been devoted primarily to
raising capital for licensing in five states and
developing a website. MasterTel Communications Corp. is
a subsidiary of Master Communications Corp. MasterTel
was incorporated in Florida on December 16, 1998 and has
authority to do business in New York, Illinois, Texas and
California. Jamee Freeman is the President and only
officer and director of MasterTel. At the present
time, MasterTel is applying to operate as a local
reseller in these states and has already been approved in
New York. All applications have been filed for the other
states and awaiting approval. Upon approval, we will
apply for long distance reselling in these states
and then move on to other states.
Master Communications Corp. shall remain the parent
company of MasterTel. Master Communications owns
1,000 shares of common stock valued at $.0001 per share.
The ability of the Company to achieve its business
objectives is contingent upon it success in raising
additional capital until adequate revenues are realized
from operations.
Development Stage Expenses
- --------------------------
Development stage expenses increased by $1,384 or 14%
from the initial short year ended December 31, 1997.
This increase was primarily due to the hiring of a
corporate officer. In addition, we have utilized
funds engaging various consulting and managerial
services in search of licensing, corporate acquisitions
and developing a corporate web site.
Item 3. Description of Property.
- --------------------------------
We currently sublease office space in a building located
at 701 Brickell Avenue, Suite 3120, Miami, Florida.
The facility is leased pursuant to a month to month
lease. The primary tenant is The Farkas Group, Inc., an
affiliated entity. The Farkas Group, Inc. subleases
the facility to Atlas Equity Group, Inc., an affiliated
entity. Atlas Equity Group, Inc. subleases the facility
to us. The landlord is not affiliated with us. The
present monthly rent is $1,000 which includes utilities
and common charges. We believe that this space is
sufficient for us at this time.
Item 4. Security Ownership of Certain Beneficial Owners
and Management.
- -------------------------------------------------------
As of July 30, 1999 there were 4,360,000 shares of our
common stock, $0.0001 par value outstanding. The
following tabulates holdings of our shares of common
stock by each person who, as of July 30, 1999,
holds of record or is known by management to own
beneficially more than 5% of our common shares and, in
addition, by all of our directors and officers
individually and as a group. Each named beneficial owner
has sole voting and investment power with respect to
the shares set forth opposite their name.
I. Security Ownership of Beneficial Owners(1)(2):
<TABLE>
<S> <C> <C> <C>
Title of Class Name & Address Amount Percent
-------------- ------ -------
Common Stock The Farkas Group, Inc. 1,100,000 25.23%
701 Brickell Avenue
Suite 3120
Miami, Florida 33139
Common Stock Atlas Equity Group, Inc. 1,000,000 22.94%
701 Brickell Avenue
Suite 3120
Miami, Florida 33139
Common Stock GSM Communications, Inc. 1,000,000 22.94%
701 Brickell Avenue
Suite 3120
Miami, Florida 33139
</TABLE>
* Michael D. Farkas is principal shareholder of each of
the above referenced companies.
II. Security Ownership of Management(2):
<TABLE>
<S> <C> <C> <C>
Title of Class Name & Address Amount Percent
---------------------- ------- -------
Common Stock Jamee Freeman 50,000 1.15%
3314 Oak Drive
Hollywood, Florida
Common Stock Javier Aguero 0 0
8428 SW 24th Street #125
Miami, FL 33155
All directors and executive 50,000 1.15%
officers as a group (2 persons)
</TABLE>
(1) Pursuant to Rule 13-d-3 under the Securities Exchange
Act of 1934, as amended, beneficial ownership of a
security consists of sole or shared voting power
(including the power to vote or direct the voting) and/or
sole or shared investment power (including the power to
dispose or direct the disposition) with respect to a
security whether through a contract, arrangement,
understanding, relationship or otherwise. Unless
otherwise indicated, each person indicated above has sole
power to vote, or dispose or direct the disposition of
all shares beneficially owned, subject to applicable
unity property laws.
(2) This table is based upon information obtained from
our stock records. Unless otherwise indicated in the
footnotes to the above table and subject to community
property laws where applicable, we believe that each
shareholder named in the above table has sole or
shared voting and investment power with respect to the
shares indicated as beneficially owned.
Item 5. Directors, Executive Officers, Promoters and
Control Persons.
- -----------------------------------------------------
Jamee Freeman, 30 years old, has served as our
President/Secretary/Treasurer and Director since
October, 1998. She is a marketing and telecommunications
expert with a strong ability to create new strategies and
business plans. Ms. Freeman has been heavily involved in
the telecommunications industry since 1990, specializing
in pay per call services and the marketing of such
services. She has an active real estate license in the
State of Florida which was obtained in 1995. Prior to
working for us, she was an assistant to the President of
Atlas Equity Group, Inc. from February 1998 to October
1998. She worked as a Real Estate Sales and
Leasing Manager for Selar Realty from April 1996 to
February 1998 and President of AvJam Communications, Inc.
from January 1994 to April 1996.
Javier Aguero, 30 years old, has served as our Vice
President and Director since May 11, 1999. Prior to such
time, he was the comptroller of Bridgeport Communications,
Inc. located in Davie, Florida from July
1997 to March 1998; and an accountant for Brixton
International, Inc., located in Miami, Florida from
January 1994 to June 1997. He has extensive experience
in accounting, managerial and marketing field. In the
past few years, Mr. Aguero has worked for public
companies in such industries as telecommunications and
import/export. His responsibilities were to control and
maintain all aspects of the financial departments. He
supervised all phases of accounting including the
preparation of general ledgers, financial statements and
participated in the preparation of the companies'
financial audit reports.
Furthermore, Mr. Aguero managed and controlled all
marketing, sales, advertising, administrative and
customer service functions with profit and loss
responsibility. Assisted in the development of and
implementation of a comprehensive business plan that
encompassed direct sales delivery, key account sales and
training programs. He has a Bachelor's Degree in
Accounting from San Marcos University, Lima, Peru, 1993.
All officers and directors listed above will remain in
office until the next annual meeting of our stockholders,
and until their successors have been duly elected and
qualified. There are no agreements with respect to the
election of Directors.
We have not compensated our Directors for service on our
Board of Directors, any committee thereof, or reimbursed
for expenses incurred for attendance at meetings of our
Board of Directors and/or any committee of our Board of
Directors. Officers are appointed annually by
our Board of Directors and each Executive Officer serves
at the discretion of our Board of Directors. We do not
have any standing committees. Our Board of Directors may
in the future determine to pay Director's fees and
reimburse Directors for expenses related to their
activities.
None of our Officers and/or Directors have filed any
bankruptcy petition, been convicted of or been the
subject of any criminal proceedings or the subject of any
order, judgment or decree involving the violation of any
state or federal securities laws within the past five (5)
years.
Item 6. Executive Compensation.
- -------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Name Position Year Salary Bonus Other Stock Options
---------- ---- ------ ----- ----- ----- -------
Jamee Freeman President 1999 $49,000 0 0 50,000 0
</TABLE>
Item 7. Certain Relationships and Related Transactions.
- -------------------------------------------------------
We currently sublease office space in a building located
at 701 Brickell Avenue, Suite 3120, Miami, Florida.
The facility is leased pursuant to a month to month
lease. The primary tenant is The Farkas Group, Inc., an
affiliated entity. The Farkas Group, Inc. subleases
the facility to Atlas Equity Group, Inc., an affiliated
entity. Atlas Equity Group, Inc. subleases the facility
to us. The landlord is not affiliated with us. The
present monthly rent is $1,000 which includes utilities
and common charges.
In January 1999, we sold to each of the following affiliated
entities 1,000,000 of our common shares at a purchase price
of the par value of $.0001 (aggregating $300): GSM
Communications Inc., Atlas Equity Group, Inc. and the Farkas
Group, Inc.
We have not and do not intend to enter into any
additional transactions with our management or any
nominees for such positions. We have not and do not
intend to enter into any transactions with our
beneficial owners. We are not a subsidiary of any parent
company. Since inception, we have not entered into any
transactions with promoters.
Our management is involved in other business activities
and may, in the future become involved in other business
opportunities. If a specific business opportunity becomes
available, such persons may face a conflict in selecting
between our business and their other business interests.
We have not and do not intend in the future to
formulate a policy for the resolution of such conflicts.
Item 8. Legal Proceedings.
- --------------------------
We are not a party to any pending legal proceeding, and
we are not aware of any contemplated legal proceeding by
a governmental authority involving us.
Item 9. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters.
- -------------------------------------------------------
There is no established public trading market for our
securities. After this document is declared effective by
the Securities and Exchange Commission, we currently
intend to seek a listing on the OTC Electronic Bulletin
Board in the United States. Our shares are not and have
not been listed or quoted on any exchange or quotation
system.
At July 30, 1999, there were 4,360,000 shares of our
common stock issued and outstanding. We have never paid
dividends on our shares. We currently intend to retain
earnings for use in our business and do not anticipate
paying any dividends in the foreseeable future.
As of the date of this registration, we had forty (40)
holders of record of our common stock. We currently have
one class of common stock outstanding.
Certain securities herein are restricted securities as
defined under Rule 144 of the Securities Act of 1933 and
may only be sold under Rule 144 or otherwise under an
effective registration statement or an exemption from
registration, if available. Rule 144 generally
provides that a person who has satisfied a one year
holding period for the restricted securities and is not
an affiliate of us may sell such securities subject to
the Rule 144 provisions. Under Rule 144, directors,
executive officers, and persons or entities they control
or who control them may sell shares that have satisfied
the one year holding period for the restricted securities
in an amount limited to, in any three-month period, the
greater of 1% of our outstanding shares of common stock
or the average of the weekly trading volume in
our common stock during the four calendar weeks
preceding a sale. All sales under Rule 144 must also be
made without violating the manner-of-sale provisions,
notice requirements, and the availability of public
information about us. A sale of shares by such security
holders, whether under Rule 144 or otherwise, may have a
depressing effect upon the price of our common stock in
any market that might develop.
Penny Stock Considerations.
- ---------------------------
Broker-dealer practices in connection with transactions
in "penny stocks" 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. 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 disclosure document that provides
information about penny stocks and the 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 penny stock rules
generally require that prior to a transaction in a penny
stock, the broker-dealer 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 disclosure requirements may have the effect of
reducing the level of trading activity in the secondary
market for a stock that becomes subject to the penny
stock rules. Our shares will likely be subject to such
penny stock rules, and our shareholders will, in all
likelihood, find it difficult to sell their securities.
No market exists for our securities and there is no
assurance that a regular trading market will develop, or
if developed will be sustained. A shareholder, in all
likelihood, therefore, will not be able to resell the
securities referred to herein should he or she
desire to do so. Furthermore, it is unlikely that a
lending institution will accept our securities as pledged
collateral for loans unless a regular trading market
develops. There are no plans, proposals, arrangements or
understandings with any person in regard to the
development of a trading market in any of our
securities.
Item 10. Recent Sales of Unregistered Securities.
- -------------------------------------------------
The following sets forth information relating to all of
our previous sales of securities which were not
registered under the Securities Act of 1933.
In August, 1997, we completed a Regulation D, Rule 504
Offering in which we issued a total of 625,000 shares of
our common stock to 6 shareholders for an aggregate
offering price of $25,000.
In January 1999, we sold to each of the following affiliated
entities 1,000,000 of our common shares at a purchase price
of the par value of $.0001 (aggregating $300): GSM
Communications Inc., Atlas Equity Group, Inc. and the Farkas
Group, Inc.
In April, 1999, we completed another Regulation D, Rule
504 Offering in which we issued a total of 535,000 shares
of our common stock to 28 stockholders for an aggregate
offering price of $53,500.
We have never utilized an underwriter for an offering of
our securities. Other than the securities mentioned
above, we have not issued or sold any securities.
Item 11. Description of Securities.
- -----------------------------------
Qualification.
The following statements constitute brief summaries of
our Articles of Incorporation and Bylaws, as amended.
Such summaries do not purport to be complete and are
qualified in their entirety by reference to the
full text of our Articles of Incorporation and Bylaws.
Common Stock.
Our amended Articles of Incorporation authorize us to
issue up to 50,000,000 Common Shares, $0.0001 par value
per common share and 10,000,000 Preferred Shares, $0.0001
par value per preferred share. As of July 30, 1999,
there are 4,360,000 shares of our common stock
outstanding. All outstanding Common Shares are legally
issued, fully paid and non-assessable.
Liquidation Rights.
Upon our liquidation or dissolution, each outstanding
Common Share will be entitled to share equally in our
assets legally available for distribution to shareholders
after the payment of all debts and other liabilities.
Dividend Rights.
We do not have limitations or restrictions upon the
rights of our Board of Directors to declare dividends,
and we may pay dividends on our shares of stock in cash,
property, or our own shares, except when we are insolvent
or when the payment thereof would render us
insolvent subject to the provisions of the Florida
Statutes. We have not paid dividends to date, and we do not anticipate
that we will pay any dividends in the foreseeable future.
Voting Rights.
Holders of our Common Shares are entitled to cast one
vote for each share held of record at all shareholders
meetings for all purposes.
Other Rights.
Common Shares are not redeemable, have no conversion
rights and carry no preemptive or other rights to
subscribe to or purchase additional Common Shares in the
event of a subsequent offering.
There are no other material rights of the common or
preferred shareholders not included herein. There is no
provision in our charter or by-laws that would delay,
defer or prevent a change in control of us. We have not
issued debt securities.
Item 12. Indemnification of Directors and Officers.
- ---------------------------------------------------
Our Articles of Incorporation provide that, to the
fullest extent permitted by law, none of our directors or
officers shall be personally liable to us or our
shareholders for damages for breach of any duty owed to
us or our shareholders. In addition, we shall have
the power, by our by-laws or in any resolution of our
stockholders or directors, to undertake to indemnify the
officers and directors of ours against any contingency or
peril as may be determined to be in our best interest and
in conjunction therewith, to procure, at our expense,
policies of insurance.
At this time, no statute or provision of the by-laws, any
contract or other arrangement provides for insurance or
indemnification of any of our controlling persons,
directors or officers which would affect his or her
liability in that capacity.
Item 13. Financial Statements
- -----------------------------
See Item 15(a) below.
Item 14. Changes in and Disagreements with Accountants.
- -------------------------------------------------------
During the two most recent fiscal years and the
subsequent interim period, we have had no disagreement,
resignation or dismissal of the principal independent
accountant for the Company. Our accountant at
this time is John Abitante of Berenfeld, Spritzer,
Shechter & Sheer.
Item 15(a) Financial Statements
- -------------------------------
MASTER COMMUNICATIONS CORP.
TABLE OF CONTENTS
INDEPENDENT AUDITORS REPORT JUNE 17, 1999
BALANCE SHEET MAY 31, 1999
STATEMENT OF CASH FLOWS 1999
STATEMENT OF OPERATION 1999
STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY 1999
INDEPENDENT AUDITORS REPORT MAY 24, 1999
BALANCE SHEET DECEMBER 31, 1998
STATEMENT OF CASH FLOWS 1998
STATEMENT OF OPERATION 1998
STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY 1998
NOTES TO FINANCIAL STATEMENTS
To the Board of Directors
Master Communications Corp.
Miami, Florida
We have compiled the accompanying balance sheet of Master
Communications Corp. (a development stage company) as
of May 31, 1999 and the related statements of operation,
changes in stockholders' equity and cash flows for the
five months then ended and for the period from May 5,
1997 (inception) to May 31, 1999 in accordance
with Statements on Standards for Accounting and Review
Services issued by the American Institute of Certified
Public Accountants.
A compilation is limited to presenting in the form of
financial statements information that is the
representation of management. We have not audited or
reviewed the accompanying financial statements
and, accordingly, do not express an opinion or any other
form of assurance on them.
Management has elected to omit substantially all of the
disclosures required by generally accepted accounting
principles. If the omitted disclosures were included in
the financial statements, they might influence the user's
conclusions about the Company's financial position,
results of operations, and cash flows. Accordingly,
these financial statements are not designed for those who
are not informed about such matters.
BERENFELD, SPRITZER, SHECHTER & SHEER
June 17, 1999
MASTER COMMUNICATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
MAY 31, 1999
ASSETS
------
<TABLE>
<S> <C> <C>
CURRENT ASSETS:
Cash $27,731
Stock subscriptions receivable 300
-------
TOTAL ASSETS $28,031
-------
-------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 420
Payroll taxes payable 343
Accrued expenses 5,580
-------
Total Current Liabilities $ 6,343
STOCKHOLDERS' EQUITY:
Preferred stock $.0001 par value,
1,000,000 shares authorized,
0 shares issued and outstanding 0
Common stock, $.0001 par value,
50,000,000 shares authorized,
4,360,000 shares issued and
outstanding 437
Additional paid-in-capital 83,363
Deficit accumulated during
the development stage (62,112)
--------
Total Stockholders' Equity 21,688
------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $28,031
-------
-------
MASTER COMMUNICATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH
---------------------------
For the Five From May 5, 1997
Months (Inception)to
Ended May 31, 1999 May 31, 1999
------------------ ------------
OPERATING ACTIVITIES:
Deficit accumulated during the
development stage $(41,254) $(62,112)
Increase in accounts payable 140 420
Increase in payroll taxes payable 130 343
Increase in accrued expenses 3,080 5,580
-------- --------
Net Cash Used by
Operating Activities (37,904) (55,769)
-------- --------
FINANCING ACTIVITIES:
Proceeds from the issuance of
common stock 53,500 78,500
Common stock issued for
consulting and legal services 1,000 5,000
------ -------
Net Cash Provided by
Financing Activities 54,500 83,500
------- -------
INCREASE IN CASH 16,596 27,731
CASH, BEGINNING 11,135 0
CASH, ENDING $ 27,731 $ 27,731
-------- ---------
-------- ---------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
NON-CASH FINANCING ACTIVITIES:
COMMON STOCK ISSUED FOR CONSULTING AND LEGAL SERVICES $ 5,000
-------
-------
MASTER COMMUNICATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATION
For the Five From May 5, 1997
Months (Inception)to
Ended May 31, 1999 May 31,1999
------------------ ---------------
DEVELOPMENT STAGE REVENUES $ 0 $ 0
------- --------
DEVELOPMENT STAGE EXPENSES:
Consulting fees 9,000 10,660
Licenses and taxes 701 1,460
Management fees 500 4,500
Office expenses 5,457 6,437
Officers' salaries 15,368 16,688
Payroll taxes 1,444 1,556
Professional fees 8,255 16,437
Registration fees 0 3,627
Telephone 529 747
----- -------
Total Development
Stage Expenses 41,254 62,112
------ ------
DEFICIT ACCUMULATED DURING
THE DEVELOPMENT STAGE $41,254 $62,112
------- -------
------- -------
</TABLE>
<TABLE>
MASTER COMMUNICATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD MAY 5, 1997 (INCEPTION) THROUGH MAY 31, 1999
<S> <C> <C> <C> <C> <C>
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN- DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
------ ------ ---------- ----------- ----
Balance, May 5, 1997
(inception) 0 $ 0 $ 0 $ 0 $ 0
Common stock issued
to related
parties for
consulting fees 100,000 10 3,990 0 4,000
Common stock issued
to third parties 625,000 63 24,937 0 25,000
Deficit accumulated during the
development stage for the
period May 5, 1997
(inception)through
December 31, 1997 0 0 0 ( 9,747) ( 9,747)
------- ---- ------- -------- -------
Balance,
December 31, 1997 725,000 73 28,927 ( 9,747) 19,253
-------- ---- ------ -------- ------
Deficit accumulated during the
development stage
for the year ended
December 31, 1998 0 0 0 (11,111) (11,111)
------ -- -------- -------
Balance,
December 31, 1998 725,000 $ 73 $28,927 $(20,858) $ 8,142
------- ------ ------- --------- ----
</TABLE>
<TABLE>
MASTER COMMUNICATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD MAY 5, 1997 (INCEPTION) THROUGH MAY 31, 1999 (CONT'D)
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN- DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
------ ------ ---------- ----------- ------
Common stock issued
to third parties 535,000 $ 54 $53,446 $ 0 $ 53,500
Common stock issued
To related
parties 3,000,000 300 0 0 300
Common stock issued to
related party
for managerial
services 50,000 5 495 0 500
Common stock issued in
consideration for
legal services 50,000 5 495 0 500
Deficit accumulated during the
development stage for
the five months ended
May 31, 1999 0 0 0 (41,254) (41,254)
------- -------- --------
Balance,
May 31, 1999 4,360,000 $ 437 $83,363 $(62,112) $ 21,688
--------- ---- ------- --------- --------
--------- ---- ------- --------- --------
</TABLE>
Independent Auditors' Report
To the Stockholders and
Board of Directors
Master Communications Corp.
Miami, Florida
We have audited the accompanying balance sheet of Master
Communications Corp. (a development stage company) as of
December 31, 1998 and the related statements of
operations, changes in stockholders' equity and cash
flows for the year then ended and for the cumulative
period May 5, 1997 (inception) to December 31, 1998.
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 the 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 Master Communications Corp. as of December 31,
1998, and the results of its operations and its cash flows
for the year then ended and for the cumulative period May 5,
1997 (inception ) to December 31, 1998 in conformity with
generally accepted accounting principles.
BERENFELD, SPRITZER, SHECHTER & SHEER
May 24, 1999
<TABLE>
MASTER COMMUNICATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1998
ASSETS
------
<S> <C> <C>
CURRENT ASSETS:
Cash $11,135
-------
TOTAL ASSETS $11,135
-------
-------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 280
Payroll taxes payable 213
Accrued expenses payable 2,500
-----
Total Current Liabilities $ 2,993
STOCKHOLDERS' EQUITY:
Preferred stock $.0001 par value,
1,000,000 shares authorized,
0 shares issued and outstanding 0
Common stock, $.0001 par value,
50,000,000 shares authorized,
725,000 shares issued and
outstanding 73
Additional paid-in-capital 28,927
Deficit accumulated during
the development stage (20,858)
--------
Total Stockholders' Equity 8,142
------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $11,135
-------
-------
</TABLE>
<TABLE>
MASTER COMMUNICATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH
----------------------------
<S> <C> <C>
For the Year From May 5,1997
Ended (Inception)to
December 31, 1998 December 31, 1998
------------------ -----------------
OPERATING ACTIVITIES:
Deficit accumulated during the
development stage $(11,111) $(20,858)
Increase in accounts payable 280 280
Increase in payroll taxes payable 213 213
Increase in accrued expenses 2,500 2,500
Decrease in advances receivable 15,000 0
-------- -------
Net Cash Used by
Operating Activities ( 6,882) (17,865)
-------- --------
FINANCING ACTIVITIES:
Proceeds from the issuance of
common stock 0 25,000
Common stock issued for
consulting services 0 4,000
------- ------
Net Cash Provided by
Financing Activities 0 29,000
------ ------
INCREASE IN CASH 6,882 11,135
CASH, BEGINNING 4,253 0
CASH, ENDING $ 11,135 $ 11,135
-------- --------
-------- --------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
NON-CASH FINANCING ACTIVITIES:
COMMON STOCK ISSUED FOR CONSULTING SERVICES $ 4,000
--------
--------
MASTER COMMUNICATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATION
<S> <C> <C>
For the Year From May 5,1997
Ended (Inception)to
December 31, 1998 December 31, 1998
------------------ -----------------
DEVELOPMENT STAGE REVENUES: $ 0 $ 0
------------ ----------
DEVELOPMENT STAGE EXPENSES:
Consulting fees 1,660 1,660
Licenses and taxes 759 759
Management fees 0 4,000
Office expenses 815 980
Officers' salaries 1,320 1,320
Payroll taxes 112 112
Professional fees 2,682 8,182
Registration fees 3,627 3,627
Telephone 136 218
------ -----
Total Development
Stage Expenses 11,111 20,858
------ -------
DEFICIT ACCUMULATED DURING
THE DEVELOPMENT STAGE $11,111 $20,858
------- -------
------- -------
</TABLE>
<TABLE>
MASTER COMMUNICATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD MAY 5, 1997 (INCEPTION) THROUGH MAY 31, 1998
<S> <C> <C> <C> <C> <C>
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN- DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
------ ------ ---------- ----------- ------
Balance, May 5, 1997
(inception) 0 $ 0 $ 0 $ 0 $ 0
Common stock issued
to related
parties for
consulting fees 100,000 10 3,990 0 4,000
Common stock issued
to third parties 625,000 63 24,937 0 25,000
Deficit accumulated during the
development stage for the
period May 5, 1997
(inception)through
December 31, 1997 0 0 0 ( 9,747) ( 9,747)
------- ---- ------- -------- -------
Balance,
December 31, 1997 725,000 73 28,927 ( 9,747) 19,253
-------- ---- ------ -------- ------
Deficit accumulated during the
development stage
for the year ended
December 31, 1998 0 0 0 (11,111) (11,111)
------ -- -------- -------
Balance,
December 31, 1998 725,000 $ 73 $28,927 $(20,858) $ 8,142
------- ------ ------- --------- ---------
</TABLE>
MASTER COMMUNICATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
------------------
NOTE 1 - NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
- -----------------------------------------------------------
Organization
Master Communications Corp. ("the Company") was
incorporated on May 5, 1997 under the laws of the State of
Florida. The Company's operations have been devoted
primarily to structuring and positioning itself to take
advantage of opportunities available in the telecommunications industry. The
Company intends to grow through internal development, strategic alliances and
acquisitions of existing businesses.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of
contingent assets and liabilities as of the date of the
financial statements, and the reported amounts of revenues
and expenses during the reporting period. Accordingly,
actual results could differ from those estimates.
NOTE 2 - DEVELOPMENT STAGE OPERATIONS
- --------------------------------------
The Company's operations have been devoted primarily to
raising capital for future operations and administrative
functions.
The ability of the Company to achieve its business objective
is contingent upon its success in raising additional capital
until adequate revenues are realized from operations.
MASTER COMMUNICATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
------------------
NOTE 3 - INCOME TAXES
- ----------------------
The Company has a carryforward loss for income tax purposes
of $12,646 that may be offset against future taxable income.
The carryfoward loss expires in the year 2014. Management
has elected not to recognize any future income tax benefits
that may arise from the utilization of the carryforward due
to the uncertainty regarding the success of future
operations.
NOTE 4 - STOCKHOLDERS' EQUITY
- -------------------------------
The Company issued 100,000 common shares upon incorporation
to James F. Lee (President), the Company's sole officer and
director, in consideration for management services valued at
$4,000. In addition, it issued 200,000 common shares to GSM
Communications Inc., an affiliated company. These investors
are deemed to be founders and affiliates of the Company.
Concurrently, the Company entered into a private offering of
securities pursuant to Regulation D, Rule 504, promulgated
under the Securities Act of 1933. Common shares were
offered to non-accredited investors for cash consideration
of 4 cents per share for which 425,000 shares were issued to
5 unaffiliated shareholders. That offering is now closed.
On March 20, 1998, Mr. Lee sold his ownership interest in
the Company, consisting of 100,000 shares, to The Farkas
Group, Inc., in a private transaction subject to Section
4(2) of the Securities Act of 1933. The Farkas Group, Inc.
is a privately-held corporation owned primarily by Mr.
Michael D. Farkas.
On December 28, 1998, GSM Communications sold its stock to
Congregation Beth Harredresh Rachnary Haub for $8,000.
MASTER COMMUNICATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
-----------------
NOTE 5 - SUBSEQUENT EVENTS AND RELATED PARTY TRANSACTIONS
OFFICERS AND BOARD OF DIRECTORS
- ---------------------------------------------------------
Subsequent to year end, the shareholders elected two members
to the Board of Directors:
Javier Aguero - Director
Jamee Freeman - Director
The Board of Directors elected the following officers:
Jamee Freeman - President and
Chief Executive
Officer
Javier Aguero - Executive Vice
President and
Chief Financial
Officer
Javier Aguero - Secretary/
Treasurer
EMPLOYMENT AGREEMENT
Subsequent to December 31, 1998 the Company agreed in
principle to an employment agreement for Jamee Freeman. The
significant terms of this agreement are as follows:
TERM
1 year term, automatically renewable for a period of 1
year each consecutive year thereafter, unless prior notice
is given by either the Company or the employee 90 days
prior to the expiration of the contract term.
COMPENSATION
Compensation will be at an annual rate of $49,000.
MASTER COMMUNICATIONS CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
-----------------
NOTE 5 - SUBSEQUENT EVENTS AND RELATED PARTY TRANSACTIONS
(Cont'd)
- ----------------------------------------------------------
RELATED PARTY TRANSACTIONS
The Company paid The Farkas Group, Inc. $5,000 for assisting
in creating a private placement offering document. The
Farkas Group, Inc. owns 100,000 shares of the Company's
common stock and is deemed to be a related party. The
Farkas Group is primarily owned by Michael D. Farkas.
The Company engaged Berger & Assoc. for various consulting
services. Berger & Assoc. is owned by a family member of
Michael D. Farkas and is deemed to be a related party.
Item 15(b) Exhibits
EXHIBIT # DESCRIPTION
- --------- -----------
3(i) ARTICLES OF INCORPORATION OF
MASTER COMMUNICATIONS CORP.
3(ii) BY-LAWS OF MASTER COMMUNICATIONS
CORP.
3(iii) ARTICLES OF INCORPORATION OF
MASTERTEL COMMUNICATIONS CORP.
3(iv) BY-LAWS OF MASTERTEL
COMMUNICATIONS CORP.
Signatures
In accordance with Section 12 of the Securities Exchange
Act of 1934, the registrant caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized.
/S/JAMEE FREEMAN
-----------------
JAMEE FREEMAN
Title: President,Secretary,
Treasurer and Director
Date: August 5, 1999
INDEX TO EXHIBITS
EXHIBIT # DESCRIPTION
- --------- -----------
3(i) ARTICLES OF INCORPORATION OF
MASTER COMMUNICATIONS CORP.
3(ii) BY-LAWS OF MASTER COMMUNICATIONS
CORP.
3(iii) ARTICLES OF INCORPORATION OF
MASTERTEL COMMUNICATIONS CORP.
3(iv) BY-LAWS OF MASTERTEL
COMMUNICATIONS CORP.
EXHIBIT 3(i) - ARTICLES OF INCORPORATION
- -------------------------------------
ARTICLES OF INCORPORATION
OF
MASTER COMMUNICATIONS CORP.
The undersigned subscriber to these Articles of
Incorporation, a natural person competent to contract,
hereby forms a corporation under the laws of the State of
Florida.
ARTICLE I. NAME
----------------
The name of the corporation shall be: MASTER
COMMUNICATIONS CORP. The principal place of business of
this corporation shall be 265 Sunrise Avenue, Suite 204,
Palm Beach, Florida 33480.
ARTICLE II. NATURE OF BUSINESS
-------------------------------
This corporation may engage or transact in any or all
lawful activities or business permitted under the laws of
the United States, the State of Florida or any other state,
country, territory or nation.
ARTICLE III. CAPITAL STOCK
---------------------------
The maximum number of shares of stock that this
corporation is authorized to have outstanding at any one
time is 50,000,000 shares of common stock having $.0001 par
value per share and 10,000,000 shares of preferred stock
having $.0001 par value per share.
ARTICLE IV. ADDRESS
--------------------
The street address of the initial registered office of
the corporation shall be 265 Sunrise Avenue, Suite 204, Palm Beach, FL 33480,
and the name of the registered agent of the corporation at that address is
Donald F. Mintmire.
ARTICLE V. TERM OF EXISTENCE
-----------------------------
This corporation is to exist perpetually.
ARTICLE VI. DIRECTORS
----------------------
This corporation shall have no Directors, initially.
The affairs of the Corporation will be managed by the
shareholders until such time Directors are designated as
provided by the By-Laws.
ARTICLE VII. INCORPORATOR
--------------------------
The name and street address of the incorporator to
these Articles of Incorporation is:
Donald F. Minmire, Esq.
Mintmire & Associates
265 Sunrise Avenue
Suite 204
Palm Beach, Florida 33480
ARTICLE VIII. EFFECTIVE DATE
-----------------------------
The corporation shall commence its existence on May 5,
1997.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand and seal on this 6th day of May, 1997.
/s/ Donald F. Mintmire
----------------------
DONALD F. MINMIRE
STATE OF FLORIDA )
SS:
COUNTY OF PALM BEACH )
The foregoing instrument was acknowledged before me
this 6th day of May, 1997 by Donald F. Mintmire, who is
personally known to me and who (did/did not) take an oath.
/s/ Lisa R. Coppa
------------------
Notary Public
Donald F. Mintmire, having been designated to act as
Registered Agent, hereby agree to act in this capacity.
/s/ Donald F. Mintmire
------------------------
Donald F. Mintmire
EXHIBIT 3(ii)
BYLAWS
OF
MASTER COMMUNICATIONS CORP.
ARTICLE I
SHAREHOLDERS
1. SHARE CERTIFICATES. Certificates evidencing fully-paid
shares of the corporation shall set forth thereon the
statements prescribed by Section 607.0625 of the Florida
Business Corporation Act ("Business Corporation Act") and by
any other applicable provision of law, must be signed,
either manually or in facsimile, by any one of the following
officers: the President, a Vice President, the Secretary,
an Assistant Secretary, the Treasurer, an Assistant
Secretary, or by an officer designated by the Board of
Directors, and may bear the corporate seal or its facsimile.
If the person who signed, either manually or in facsimile, a
share certificate no longer holds office when the
certificate is issued, the certificate is nevertheless
valid.
2. FRACTIONAL SHARES OR SCRIP. The corporation may: issue
fractions of a share or pay in money the fair value of
fractions of share: make arrangements, or provide reasonable
opportunity, for any person entitled to or holding a
fractional interest in a share to sell such fractional
interest or to purchase such additional fractional interests
as may be necessary to acquire a full share; and issue
scrip in registered or bearer form, over the manual or
facsimile signature of an officer of the corporation or its
agent, entitling the holder to receive a full share upon
surrendering enough scrip to equal a full share. Each
certificate representing scrip must be conspicuously labeled
"scrip" and must contain the information required by of
Section 607.0625 of the Business Corporation Act. The
holder of a fractional share is entitled to exercise the
rights of a shareholder, including the right to vote, to
receive dividends, and to participate in the assets of the
corporation upon liquidation. The holder of scrip is not
entitled to any of these rights unless the scrip provides
for them. The Board of Directors may authorize the issuance
of scrip subject to any condition considered desirable,
including (a) that the scrip will become void if not
exchanged for full shares before a specified date; and (b)
that the shares for which the scrip is exchangeable may be
sold and the proceeds paid to the scripholders.
3. SHARE TRANSFERS. Upon compliance with any provisions
restricting the transferability of shares that may be set
forth in the articles of incorporation, these Bylaws, or any
written agreement in respect thereof, transfers of shares of
the corporation shall be made only on the books of the
corporation by the registered holder thereof, or by his
attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the corporation, or
with a agent or a registrar and on surrender of the
certificate or certificates for such shares properly
endorsed and the payment of all taxes thereon, if any.
Except as may be otherwise provided by law or these Bylaws,
the person in whose name shares stand on the books of the
corporation shall be deemed the owner thereof for all
purposes as regards the corporation; provided that whenever
any transfer of shares shall be made for collateral
security, and not absolutely, such fact, if known to the
Secretary of the corporation shall be so expressed in the
entry of transfer.
4. RECORD DATE FOR SHAREHOLDERS. For the purpose of
determining shareholders entitled to notice of or to vote
any meeting of shareholders to demand a special meeting, or
to take any other action, the Board of Directors, of the
corporation may fix a date as the record date for any such
determination of shareholders, such date in any case to be
not more than seventy days before the meeting or action
requiring such determination of shareholders. A
determination of shareholders entitled to notice of or to
vote at a shareholders' meeting is effective for any
adjournment of the meeting unless the Board of Directors
fixes a new record date, which it must do if the meeting is
adjourned to a date more than one hundred twenty days (120)
days after the date fixed for the original meeting.
5. MEANING OF CERTAIN TERMS. As used herein in respect of
the right to notice of a meeting of shareholders or a waiver
thereof or to participate or vote thereat or to consent or
dissent in writing in lieu of a meeting, as the case may be,
the term "share" or "shares" or "shareholder" or
"shareholders" refers to an outstanding share or shares and
to a holder or holder of record of outstanding shares when
the corporation is authorized to issue only on a class of
shares, and said reference is also intended to include any
outstanding share or shares and any holder or holders of
record of outstanding shares of any class upon which or upon
whom the articles of incorporation confer such rights where
there are two or more classes or series of shares or upon
whom the Business Corporation Act confers such rights
notwithstanding that the articles of incorporation may
provide for more than one class or series of shares, one or
more of which are limited or denied such rights thereunder.
6.SHAREHOLDER MEETING.
-TIME. The annual meeting shall be held on the date
fixed from time to time by the directors. A special meeting
shall be held on the date fixed from time to time by the
directors except when the Business Corporation Act confers
the right to call a special meeting upon the shareholders.
-PLACE. Annual meetings and special meetings shall be
held at such place in or out of the State of Florida as the
directors shall from time to time fix.
-CALL. Annual meetings may be called by the directors
or the Chairman of the Board of Directors, the Vice Chairman
of the Board of Directors, the President , or the Secretary
or by an officer instructed by the directors or the
President to call the meeting. Special meetings may
be called in like manner.
-NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF
NOTICE . The corporation shall notify shareholders of the
date, time, and place of each annual and special
shareholders' meeting. Such notice shall be no fewer than
ten or more than sixty days before the meeting date. Unless
the Business Corporation Act or the articles of
incorporation require otherwise, notice of an annual meeting
need not include a description of the purpose or purposes
for which the meeting need not include a description of the
purpose or purposes for which the meeting is called.
Notice shall be given in the manner provided in Section
607.0141 of the Business Corporation Act, by or at the
direction of the President, the Secretary, or the officer or
persons calling the meeting. Notice of a special meeting
must include a description of the purpose or purposes for
which the meeting is called. Unless the Business
Corporation Act or the articles of incorporation require
otherwise, the corporation is required to give notice only
to shareholders entitled to vote at the meeting. A
shareholder may waive any notice required by the Business
Corporation Act, the articles of incorporation, or the
Bylaws before or after the date and time stated in the
notice. The waiver must be in writing, be signed by the
shareholder entitled to the notice, and be delivered to the
corporation for inclusion in the objection to lack of notice
or defective notice of the meeting, unless the shareholder
at the beginning of the meeting objects to holding the
meeting or transacting business at the meeting; or waives
objection to consideration of a particular matter at the
meeting that is not within the purpose or purposes described
in the meeting notice, unless the shareholder objects to
considering the matter when it is presented.
-VOTING LIST FOR MEETING. After fixing a record date
for a meeting, the corporation shall prepare an alphabetical
list of the names of all its shareholders who are entitled
to notice of a shareholders' meeting, arranged by voting
group, with the address of and number and class and series,
if any of shares held by each shareholder. The
shareholders' list must be available for inspection by any
shareholder, for a period of ten days prior to the meeting
or such sorter time as exists between the record date and
the meeting and continuing through the meeting at the
corporation's principal office, or at a place identified in
the meeting notice in the city where the meeting will be
held, or at the office, of the corporation's transfer agent
or registrar. A shareholder, his agent or attorney is
entitled on written demand to inspect the list subject to
the requirements of Section 607.1602(3) of the Business
Corporation Act, to copy the list, during regular business
hours and at his expense, during the period it is available
for inspection. The corporation shall make the
shareholders' list available at the meeting, and any
shareholder, or his agent or attorney is entitled to inspect
the list at any time during the meeting or any adjournment.
-CONDUCT OF MEETING. Meetings of the shareholders
shall be presided over by one of the following officers in
the order of seniority and if present and acting - the
Chairman of the Board, if any, the Vice Chairman of the
Board, if any, the President, a Vice President, if any, or,
if none of the foregoing is in office and present and
acting, by a chairman to be chosen by the shareholders. The
Secretary of the corporation, or his absence, an Assistant
Secretary, shall act as secretary of every meeting, but, if
neither the Secretary nor an Assistant Secretary is present,
the chairman of the meeting shall appoint a secretary of he
meeting.
-PROXY REPRESENTATION. A shareholder may appoint a
proxy to vote or otherwise act for him by signing an
appointment from, either personally or his attorney-in-fact.
An appointment of a proxy is effective when received by the
Secretary or other officer or agent authorized to tabulate
votes. An appointment is valid for up to eleven months,
unless a longer period is expressly provided in the
appointment form. An appointment of a proxy is revocable by
the shareholder unless the anointment form conspicuously
states that it is irrevocable and the appointment is coupled
with an interest.
-SHARES HELD BY NOMINEES. The corporation may
establish a procedure by which the beneficial owner of
shares that are registered in the name of a nominee is
recognized by the corporation as the shareholder. The
extent of this recognition may be determined in the
procedure.
-QUORUM . Unless the articles of incorporation or the
Business Corporation Act provides otherwise, a majority of
the votes entitled to be cast on a matter by a voting a
group constitutes a quorum o that voting group for action on
that matter. Shares entitled to vote as a
separate voting group may take action on a matter at a
meeting only if a quorum of those shares exists with respect
to that matter. Once a share is represented for any purpose
at a meeting, it is deemed present for quorum purposes for
the remainder of the meeting and for any adjournment of
that meeting unless a new record date is or must be set for
that adjourned meeting.
-VOTING. Directors are elected by a plurality of the
votes cast by the shares entitled to vote in the election at
a meeting at which a quorum is present. If a quorum exists,
action on a matter, other than the election of directors, by
a voting group is approved if the votes cast within the
voting group favoring the action exceed the votes cast
opposing the action, unless the articles of
incorporation or the Business Corporation Act requires a
greater number of affirmative votes.
7. ACTION WITHOUT MEETING. Unless otherwise provided in
the articles of incorporation action required or permitted
by the provisions of the Business Corporation Act to be
taken at an annual or special meeting of shareholders may be
taken without a meeting, without prior notice, and without a
vote if the action is taken by the holders of outstanding
stock of each voting group entitled to vote thereon having
not less than the minimum number of votes with respect to
each voting group that would be necessary to authorize or
take such action at a meeting at which all voting groups and
shares entitled to vote hereon were present and voted. In
order to be effective the action must be evidenced by one or
more written consents describing the action taken , dated
and signed by approving shareholders having the requisite
number of each voting group entitled to vote thereon, and
delivered to the corporation by delivery to its principal
office in State of Florida, its principal place of business,
the corporate Secretary, or another officer or agent of the
corporation having custody of the book in which proceedings
of meetings of shareholders are recorded. No written
consent shall be effective to take the corporate action
referred to therein, unless within sixty days of the date of
the earliest dated consent delivered in the manner require
by Section 607.0704 of the Business Corporation Act, written
consents signed by holders of shares having the number of
votes required to take action are delivered to the
corporation by delivery as set forth in Section
607.0704 of the Florida Business Corporation Act. Action
under thus paragraph be subject to the requirements of
Section 607.0704 of the Business Corporation Act.
ARTICLE II
BOARD OF DIRECTORS
1. FUNCTIONS GENERALLY - COMPENSATION. All corporate
powers shall be exercised by or under the authority of, and
the business and affairs of the corporation managed under
the direction of, a Board of Directors. The Board may fix
the compensation of directors.
2. QUALIFICATIONS AND NUMBER. A director need not be a
shareholder, a citizen of the United States, or a resident
of the State of Florida. The initial Board of Directors
shall consist of one person, which shall be the number of
directors until changed. Thereafter, the number of
directors shall not be less than one (1) nor more than ten
(10). The number of directors may be fixed or changed from
time to time by the shareholders. The number shall never be
less than one.
3. TERMS AND VACANCIES. The Terms of the initial directors
of the corporation expire at the first shareholders' meeting
at which directors are elected. The terms of all other
directors expire at the next annual shareholders' meeting
following their election. A decrease in the number of
directors does not shorten an incumbent director's term.
The term of a director elected to fill a vacancy expires at
the next shareholders' meeting at which directors are
elected. Despite the expiration of a director's term, the
director continues to serve until his successor is elected
and qualifies or until there is a decrease in the number of
directors. Whenever a vacancy occurs on the Board of
Directors, including a vacancy resulting from an increase in
the numbers of directors, it may be filled by the
affirmative vote of a majority of the remaining directors,
through less than a quorum of the Board of Directors, or by
the shareholders, unless the articles of incorporation
provide otherwise.
4.MEETINGS.
-TIME. Meetings shall be held at such time as the
Board shall fix, except that the first meeting of a newly
elected Board shall be held as soon after its election as
the directors may conveniently assemble.
-PLACE. The Board of Directors may hold regular or
special meetings in or out of the State of Florida at such
place as shall be fixed by the Board.
-CALL. No call shall be required for regular meetings
for which time and place have been fixed. Special meetings
may be called by or at the direction of the Chairman of the
Board, if any, the Vice Chairman of the Board, if any, of
the President, or of a unanimous decision by all of
the directors in office.
-NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. Regular
meetings of the Board of Directors may be held without
notice of the date, time, place, or purpose of the meeting.
Written, or oral, notice of the time and place shall be
given for special meetings in sufficient time for the
convenient assembly of the directors thereat. The notice of
a special meeting need not describe the purpose of the
meeting. Notice of a meeting of the Board of Directors need
not given to any director who signs a waiver of notice of
such meeting and a waiver of any and all objection to the
place of the meeting, the time of the meeting, or the manner
in which it has been called or convened, except when a
director states, at the beginning of the meeting or promptly
upon arrival at the meeting, any objection to the
transaction of business because the meeting is not lawfully
called or convened.
-QUORUM AND ACTION. A quorum of the Board of Directors
consists of a majority of the number of directors prescribed
in or fixed in accordance with these Bylaws. If a
quorum is present when a vote is taken, the affirmative vote
of a unanmious vote of directors present is the act of the
Board of Directors. The Board of Directors may permit any
or all directors to participate in a regular or special
meeting by, or conduct the meeting through use of, any means
of communication by which all directors participating may
simultaneously hear each other during the
meeting. A director participating in a meeting by this
means is deemed to be present in person at the meeting.
-CHAIRMAN OF THE MEETING. Meetings of the Board of
Directors shall be presided over by the following directors
in the order of seniority and if present and acting the
Chairman of the Board, if any, the Vice Chairman of the
Board, if any, the President, or by other director chosen by
the Board.
5. REMOVAL OF DIRECTORS . The shareholders may remove one
or more directors with or without cause pursuant to the
provisions of Section 607.0808 of the Business
Corporation Act.
6. COMMITTEES. The Board of Directors by resolution
adopted by a majority of the full Board of Directors, may
designate from among its members an executive committee and
one or more other committees each of which, to the extent
provided in such resolution or in the articles of
incorporation or the Bylaws, shall have and may exercise all
the authority of the Board of Directors, except such
authority as may not be delegated under the Business
Corporation Act. Each committee may have two or more
members, who serve at the pleasure of the Board of
Directors. The provisions of Sections 607.082, 607.0823,
and 607.0824 of the Business Corporation Act, which
govern meetings, notice and waiver of notice, and quorum and
voting requirements, apply to committees and their members
as well.
7. ACTION WITHOUT MEETING. Action required or permitted
by the Business Corporation Act to be taken at a Board of
Directors' meeting or committee meeting may be taken
without a meeting if the action is taken by all members of
the Board or of the committee. The action must be evidenced
by one or more written consents describing the action taken,
signed by each director or committee member. Action taken
under this paragraph is effective when the last director
signs the consent, unless the consent specifies a different
effective date.
ARTICLE III
OFFICERS
The corporation shall have a President, and a Secretary, and
such other officers as may be deemed necessary, who may be
appointed by the directors. The same individual may
simultaneously hold more than one office in the corporation.
A duly appointed officer may appoint one or more officers or
assistant officers is authorized by the Board of Directors.
Each officer of the corporation has the authority and shall
perform the duties prescribed by the Board of Directors or
by direction of an officer authorized by the Board of
Directors to prescribe the duties of other officers;
provided, that the Secretary shall have the responsibility
for preparation and custody of minutes of the directors' and
shareholders' meetings and for authenticating records of the
corporation.
The Board of Directors may remove any officer at any time
with or without cause.
ARTICLE IV
REGISTERED OFFICE AND AGENT
The address of the initial registered office of the
corporation and the name of the initial registered agent of
the corporation are set forth in the original articles of
incorporation.
3(iii) ARTICLES OF INCORPORATION OF MASTERTEL COMMUNICATIONS
CORP.
- -----------------------------------------------------------
ARTICLES OF INCORPORATION
Article I. Name
- --------------------
The name of this Florida corporation is:
MasterTel Communications Corp.
Article II. Address
- --------------------
The mailing address of the Corporation is:
MasterTel Communications Corp.
701 Brickell Ave Suite 3120
Miami FL 33131
Article III. Registered Agent
- ------------------------------
The name and address of the registered agent of the Corporation is:
Corporate Creations Enterprises Inc.
4521 PGA Boulevard #211
Palm Beach Gardens, FL 33418
Article IV. Board of Directors
- -------------------------------
The name of each member of the Corporation's Board of Directors is:
Jamee Freeman
The affairs of the Corporation shall be managed by a Board of Directors
consisting of no less than one director. The number of directors may be
increased or decreased from time to time in accordance with the Bylaws of
the Corporation. The election of directors shall be done in accordance with
the Bylaws. The directors shall be protected from personal liability to the
fullest extent permitted by applicable law.
Article V. Capital Stock
- -------------------------
The Corporation shall have the authority to issue 10,000 shares of common
stock, par value $.0001 per share.
Article VI. Incorporator
- -------------------------
The name and address of the Incorporator is:
Corporate Creations International Inc.
941 Fourth Street #200
Miami Beach, FL 33139
Article VII. Corporate Existence
- ----------------------------------
These Articles of Incorporation shall become effective and the corporate
existence will begin on December 16, 1998.
The undersigned incorporator executed these Articles of Incorporation on
December 17, 1998.
/s/ Greg K. Kuroda
- --------------------
CORPORATE CREATIONS INTERNATIONAL INC.
Greg K. Kuroda Vice President
EXHIBIT 3(iv) BYLAWS OF MASTERTEL COMMUNICATIONS CORP.
- ------------------------------------------------------
BYLAWS
OF
MASTERTEL COMMUNICATIONS CORP.
ARTICLE I
SHAREHOLDERS
1. SHARE CERTIFICATES. Certificates evidencing fully-paid
shares of the corporation shall set forth thereon the
statements prescribed by Section 607.0625 of the Florida
Business Corporation Act ("Business Corporation Act") and by
any other applicable provision of law, must be signed,
either manually or in facsimile, by any one of the following
officers: the President, a Vice President, the Secretary,
an Assistant Secretary, the Treasurer, an Assistant
Secretary, or by an officer designated by the Board of
Directors, and may bear the corporate seal or its facsimile.
If the person who signed, either manually or in facsimile, a
share certificate no longer holds office when the
certificate is issued, the certificate is nevertheless
valid.
2. FRACTIONAL SHARES OR SCRIP. The corporation may: issue
fractions of a share or pay in money the fair value of
fractions of share: make arrangements, or provide reasonable
opportunity, for any person entitled to or holding a
fractional interest in a share to sell such fractional
interest or to purchase such additional fractional interests
as may be necessary to acquire a full share; and issue
scrip in registered or bearer form, over the manual or
facsimile signature of an officer of the corporation or its
agent, entitling the holder to receive a full share upon
surrendering enough scrip to equal a full share. Each
certificate representing scrip must be conspicuously labeled
"scrip" and must contain the information required by of
Section 607.0625 of the Business Corporation Act. The
holder of a fractional share is entitled to exercise the
rights of a shareholder, including the right to vote, to
receive dividends, and to participate in the assets of the
corporation upon liquidation. The holder of scrip is not
entitled to any of these rights unless the scrip provides
for them. The Board of Directors may authorize the issuance
of scrip subject to any condition considered desirable,
including (a) that the scrip will become void if not
exchanged for full shares before a specified date; and (b)
that the shares for which the scrip is exchangeable may be
sold and the proceeds paid to the scripholders.
3. SHARE TRANSFERS. Upon compliance with any provisions
restricting the transferability of shares that may be set
forth in the articles of incorporation, these Bylaws, or any
written agreement in respect thereof, transfers of shares of
the corporation shall be made only on the books of the
corporation by the registered holder thereof, or by his
attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the corporation, or
with a agent or a registrar and on surrender of the
certificate or certificates for such shares properly
endorsed and the payment of all taxes thereon, if any.
Except as may be otherwise provided by law or these Bylaws,
the person in whose name shares stand on the books of the
corporation shall be deemed the owner thereof for all
purposes as regards the corporation; provided that whenever
any transfer of shares shall be made for collateral
security, and not absolutely, such fact, if known to the
Secretary of the corporation shall be so expressed in the
entry of transfer.
4. RECORD DATE FOR SHAREHOLDERS. For the purpose of
determining shareholders entitled to notice of or to vote
any meeting of shareholders to demand a special meeting, or
to take any other action, the Board of Directors, of the
corporation may fix a date as the record date for any such
determination of shareholders, such date in any case to be
not more than seventy days before the meeting or action
requiring such determination of shareholders. A
determination of shareholders entitled to notice of or to
vote at a shareholders' meeting is effective for any
adjournment of the meeting unless the Board of Directors
fixes a new record date, which it must do if the meeting is
adjourned to a date more than one hundred twenty days (120)
days after the date fixed for the original meeting.
5. MEANING OF CERTAIN TERMS. As used herein in respect of
the right to notice of a meeting of shareholders or a waiver
thereof or to participate or vote thereat or to consent or
dissent in writing in lieu of a meeting, as the case may be,
the term "share" or "shares" or "shareholder" or
"shareholders" refers to an outstanding share or shares and
to a holder or holder of record of outstanding shares when
the corporation is authorized to issue only on a class of
shares, and said reference is also intended to include any
outstanding share or shares and any holder or holders of
record of outstanding shares of any class upon which or upon
whom the articles of incorporation confer such rights where
there are two or more classes or series of shares or upon
whom the Business Corporation Act confers such rights
notwithstanding that the articles of incorporation may
provide for more than one class or series of shares, one or
more of which are limited or denied such rights thereunder.
6.SHAREHOLDER MEETING.
-TIME. The annual meeting shall be held on the date
fixed from time to time by the directors. A special meeting
shall be held on the date fixed from time to time by the
directors except when the Business Corporation Act confers
the right to call a special meeting upon the shareholders.
-PLACE. Annual meetings and special meetings shall be
held at such place in or out of the State of Florida as the
directors shall from time to time fix.
-CALL. Annual meetings may be called by the directors
or the Chairman of the Board of Directors, the Vice Chairman
of the Board of Directors, the President , or the Secretary
or by an officer instructed by the directors or the
President to call the meeting. Special meetings may
be called in like manner.
-NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF
NOTICE . The corporation shall notify shareholders of the
date, time, and place of each annual and special
shareholders' meeting. Such notice shall be no fewer than
ten or more than sixty days before the meeting date. Unless
the Business Corporation Act or the articles of
incorporation require otherwise, notice of an annual meeting
need not include a description of the purpose or purposes
for which the meeting need not include a description of the
purpose or purposes for which the meeting is called.
Notice shall be given in the manner provided in Section
607.0141 of the Business Corporation Act, by or at the
direction of the President, the Secretary, or the officer or
persons calling the meeting. Notice of a special meeting
must include a description of the purpose or purposes for
which the meeting is called. Unless the Business
Corporation Act or the articles of incorporation require
otherwise, the corporation is required to give notice only
to shareholders entitled to vote at the meeting. A
shareholder may waive any notice required by the Business
Corporation Act, the articles of incorporation, or the
Bylaws before or after the date and time stated in the
notice. The waiver must be in writing, be signed by the
shareholder entitled to the notice, and be delivered to the
corporation for inclusion in the objection to lack of notice
or defective notice of the meeting, unless the shareholder
at the beginning of the meeting objects to holding the
meeting or transacting business at the meeting; or waives
objection to consideration of a particular matter at the
meeting that is not within the purpose or purposes described
in the meeting notice, unless the shareholder objects to
considering the matter when it is presented.
-VOTING LIST FOR MEETING. After fixing a record date
for a meeting, the corporation shall prepare an alphabetical
list of the names of all its shareholders who are entitled
to notice of a shareholders' meeting, arranged by voting
group, with the address of and number and class and series,
if any of shares held by each shareholder. The
shareholders' list must be available for inspection by any
shareholder, for a period of ten days prior to the meeting
or such sorter time as exists between the record date and
the meeting and continuing through the meeting at the
corporation's principal office, or at a place identified in
the meeting notice in the city where the meeting will be
held, or at the office, of the corporation's transfer agent
or registrar. A shareholder, his agent or attorney is
entitled on written demand to inspect the list subject to
the requirements of Section 607.1602(3) of the Business
Corporation Act, to copy the list, during regular business
hours and at his expense, during the period it is available
for inspection. The corporation shall make the
shareholders' list available at the meeting, and any
shareholder, or his agent or attorney is entitled to inspect
the list at any time during the meeting or any adjournment.
-CONDUCT OF MEETING. Meetings of the shareholders
shall be presided over by one of the following officers in
the order of seniority and if present and acting - the
Chairman of the Board, if any, the Vice Chairman of the
Board, if any, the President, a Vice President, if any, or,
if none of the foregoing is in office and present and
acting, by a chairman to be chosen by the shareholders. The
Secretary of the corporation, or his absence, an Assistant
Secretary, shall act as secretary of every meeting, but, if
neither the Secretary nor an Assistant Secretary is present,
the chairman of the meeting shall appoint a secretary of he
meeting.
-PROXY REPRESENTATION. A shareholder may appoint a
proxy to vote or otherwise act for him by signing an
appointment from, either personally or his attorney-in-fact.
An appointment of a proxy is effective when received by the
Secretary or other officer or agent authorized to tabulate
votes. An appointment is valid for up to eleven months,
unless a longer period is expressly provided in the
appointment form. An appointment of a proxy is revocable by
the shareholder unless the anointment form conspicuously
states that it is irrevocable and the appointment is coupled
with an interest.
-SHARES HELD BY NOMINEES. The corporation may
establish a procedure by which the beneficial owner of
shares that are registered in the name of a nominee is
recognized by the corporation as the shareholder. The
extent of this recognition may be determined in the
procedure.
-QUORUM . Unless the articles of incorporation or the
Business Corporation Act provides otherwise, a majority of
the votes entitled to be cast on a matter by a voting a
group constitutes a quorum o that voting group for action on
that matter. Shares entitled to vote as a
separate voting group may take action on a matter at a
meeting only if a quorum of those shares exists with respect
to that matter. Once a share is represented for any purpose
at a meeting, it is deemed present for quorum purposes for
the remainder of the meeting and for any adjournment of
that meeting unless a new record date is or must be set for
that adjourned meeting.
-VOTING. Directors are elected by a plurality of the
votes cast by the shares entitled to vote in the election at
a meeting at which a quorum is present. If a quorum exists,
action on a matter, other than the election of directors, by
a voting group is approved if the votes cast within the
voting group favoring the action exceed the votes cast
opposing the action, unless the articles of
incorporation or the Business Corporation Act requires a
greater number of affirmative votes.
7. ACTION WITHOUT MEETING. Unless otherwise provided in
the articles of incorporation action required or permitted
by the provisions of the Business Corporation Act to be
taken at an annual or special meeting of shareholders may be
taken without a meeting, without prior notice, and without a
vote if the action is taken by the holders of outstanding
stock of each voting group entitled to vote thereon having
not less than the minimum number of votes with respect to
each voting group that would be necessary to authorize or
take such action at a meeting at which all voting groups and
shares entitled to vote hereon were present and voted. In
order to be effective the action must be evidenced by one or
more written consents describing the action taken , dated
and signed by approving shareholders having the requisite
number of each voting group entitled to vote thereon, and
delivered to the corporation by delivery to its principal
office in State of Florida, its principal place of business,
the corporate Secretary, or another officer or agent of the
corporation having custody of the book in which proceedings
of meetings of shareholders are recorded. No written
consent shall be effective to take the corporate action
referred to therein, unless within sixty days of the date of
the earliest dated consent delivered in the manner require
by Section 607.0704 of the Business Corporation Act, written
consents signed by holders of shares having the number of
votes required to take action are delivered to the
corporation by delivery as set forth in Section
607.0704 of the Florida Business Corporation Act. Action
under thus paragraph be subject to the requirements of
Section 607.0704 of the Business Corporation Act.
ARTICLE II
BOARD OF DIRECTORS
1. FUNCTIONS GENERALLY - COMPENSATION. All corporate
powers shall be exercised by or under the authority of, and
the business and affairs of the corporation managed under
the direction of, a Board of Directors. The Board may fix
the compensation of directors.
2. QUALIFICATIONS AND NUMBER. A director need not be a
shareholder, a citizen of the United States, or a resident
of the State of Florida. The initial Board of Directors
shall consist of one person, which shall be the number of
directors until changed. Thereafter, the number of
directors shall not be less than one (1) nor more than ten
(10). The number of directors may be fixed or changed from
time to time by the shareholders. The number shall never be
less than one.
3. TERMS AND VACANCIES. The Terms of the initial directors
of the corporation expire at the first shareholders' meeting
at which directors are elected. The terms of all other
directors expire at the next annual shareholders' meeting
following their election. A decrease in the number of
directors does not shorten an incumbent director's term.
The term of a director elected to fill a vacancy expires at
the next shareholders' meeting at which directors are
elected. Despite the expiration of a director's term, the
director continues to serve until his successor is elected
and qualifies or until there is a decrease in the number of
directors. Whenever a vacancy occurs on the Board of
Directors, including a vacancy resulting from an increase in
the numbers of directors, it may be filled by the
affirmative vote of a majority of the remaining directors,
through less than a quorum of the Board of Directors, or by
the shareholders, unless the articles of incorporation
provide otherwise.
4.MEETINGS.
-TIME. Meetings shall be held at such time as the
Board shall fix, except that the first meeting of a newly
elected Board shall be held as soon after its election as
the directors may conveniently assemble.
-PLACE. The Board of Directors may hold regular or
special meetings in or out of the State of Florida at such
place as shall be fixed by the Board.
-CALL. No call shall be required for regular meetings
for which time and place have been fixed. Special meetings
may be called by or at the direction of the Chairman of the
Board, if any, the Vice Chairman of the Board, if any, of
the President, or of a unanimous decision by all of
the directors in office.
-NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. Regular
meetings of the Board of Directors may be held without
notice of the date, time, place, or purpose of the meeting.
Written, or oral, notice of the time and place shall be
given for special meetings in sufficient time for the
convenient assembly of the directors thereat. The notice of
a special meeting need not describe the purpose of the
meeting. Notice of a meeting of the Board of Directors need
not given to any director who signs a waiver of notice of
such meeting and a waiver of any and all objection to the
place of the meeting, the time of the meeting, or the manner
in which it has been called or convened, except when a
director states, at the beginning of the meeting or promptly
upon arrival at the meeting, any objection to the
transaction of business because the meeting is not lawfully
called or convened.
-QUORUM AND ACTION. A quorum of the Board of Directors
consists of a majority of the number of directors prescribed
in or fixed in accordance with these Bylaws. If a
quorum is present when a vote is taken, the affirmative vote
of a unanmious vote of directors present is the act of the
Board of Directors. The Board of Directors may permit any
or all directors to participate in a regular or special
meeting by, or conduct the meeting through use of, any means
of communication by which all directors participating may
simultaneously hear each other during the
meeting. A director participating in a meeting by this
means is deemed to be present in person at the meeting.
-CHAIRMAN OF THE MEETING. Meetings of the Board of
Directors shall be presided over by the following directors
in the order of seniority and if present and acting the
Chairman of the Board, if any, the Vice Chairman of the
Board, if any, the President, or by other director chosen by
the Board.
5. REMOVAL OF DIRECTORS . The shareholders may remove one
or more directors with or without cause pursuant to the
provisions of Section 607.0808 of the Business
Corporation Act.
6. COMMITTEES. The Board of Directors by resolution
adopted by a majority of the full Board of Directors, may
designate from among its members an executive committee and
one or more other committees each of which, to the extent
provided in such resolution or in the articles of
incorporation or the Bylaws, shall have and may exercise all
the authority of the Board of Directors, except such
authority as may not be delegated under the Business
Corporation Act. Each committee may have two or more
members, who serve at the pleasure of the Board of
Directors. The provisions of Sections 607.082, 607.0823,
and 607.0824 of the Business Corporation Act, which
govern meetings, notice and waiver of notice, and quorum and
voting requirements, apply to committees and their members
as well.
7. ACTION WITHOUT MEETING. Action required or permitted
by the Business Corporation Act to be taken at a Board of
Directors' meeting or committee meeting may be taken
without a meeting if the action is taken by all members of
the Board or of the committee. The action must be evidenced
by one or more written consents describing the action taken,
signed by each director or committee member. Action taken
under this paragraph is effective when the last director
signs the consent, unless the consent specifies a different
effective date.
ARTICLE III
OFFICERS
The corporation shall have a President, and a Secretary, and
such other officers as may be deemed necessary, who may be
appointed by the directors. The same individual may
simultaneously hold more than one office in the corporation.
A duly appointed officer may appoint one or more officers or
assistant officers is authorized by the Board of Directors.
Each officer of the corporation has the authority and shall
perform the duties prescribed by the Board of Directors or
by direction of an officer authorized by the Board of
Directors to prescribe the duties of other officers;
provided, that the Secretary shall have the responsibility
for preparation and custody of minutes of the directors' and
shareholders' meetings and for authenticating records of the
corporation.
The Board of Directors may remove any officer at any time
with or without cause.
ARTICLE IV
REGISTERED OFFICE AND AGENT
The address of the initial registered office of the
corporation and the name of the initial registered agent of
the corporation are set forth in the original articles of
incorporation.
EXHIBIT 27 FINANCIAL DATA SCHEDULE
- ----------------------------------
MASTER COMMUNICATIONS CORP.
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE MAY 31, 1999 BALANCE SHEET
AND THE STATEMENTS OF OPERATIONS FOR FISCAL YEAR
ENDED MAY 31, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<TABLE>
<S> <C>
[PERIOD-TYPE] 5-MOS
[FISCAL-YEAR-END] DEC-31-1999
[PERIOD-END] MAY-31-1999
[CASH] 27,731
[SECURITIES] 0
[RECEIVABLES] 300
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 28,031
[PP&E] 0
[DEPRECIATION] 0
[TOTAL-ASSETS] 28,031
[CURRENT-LIABILITIES] 6,343
[BONDS] 0
[COMMON] 437
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] < 21,251>
[TOTAL-LIABILITY-AND-EQUITY] 28,031
[SALES] 0
[TOTAL-REVENUES] 0
[CGS] 0
[TOTAL-COSTS] 41,254
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] < 41,254>
[INCOME-TAX] < 41,254>
[INCOME-CONTINUING] < 41,254>
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] < 41,254>
[EPS-BASIC] 0
[EPS-DILUTED] 0
</TABLE>
