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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
COMMUNITRONICS OF AMERICA, INC.
----------------------------------------------
(Name of Small Business Issuer in its charter)
UTAH 86-0285684B
---- -----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
27955 HIGHWAY 98, SUITE WWX
DAPHNE, ALABAMA 36526
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(Address of principal executive offices) (Zip Code)
ISSUER'S TELEPHONE NUMBER: (334) 626-7650
SECURITIES TO BE REGISTERED UNDER SECTION 12(b) OF THE ACT: NOT APPLICABLE
SECURITIES TO BE REGISTERED UNDER SECTION 12(g) OF THE ACT: COMMON STOCK, $.01
PAR VALUE
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PART I
Communitronics of America, Inc. (the " Company") is including the
following cautionary statement to make applicable and take advantage of the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995 for
any forward-looking statements made by, or on behalf of, the Company.
Forward-looking statements include statements concerning plans, objectives,
goals, strategies, expectations, future events or performance and underlying
assumptions and other statements which are other than statements of historical
facts. Certain statements contained herein are forward- looking statements and,
accordingly, involve risks and uncertainties which could cause actual results or
outcomes to differ materially from those expressed in the forward-looking
statements. The Company's expectations, beliefs and projections are expressed in
good faith and are believed by the Company to have a reasonable basis, including
without limitations, management's examination of historical operating trends,
data contained in the Company's records and other data available from third
parties, but there can be no assurance that management's expectations, beliefs
or projections will result or be achieved or accomplished. In addition to other
factors and matters discussed elsewhere herein, the following are important
factors that, in the view of the Company, could cause actual results to differ
materially from those discussed in the forward-looking statements: the ability
of the Company to maintain its rights in its intellectual property; the ability
of the Company to obtain acceptable forms and amounts of financing to fund
planned acquisitions and operations, technology development, marketing and other
expansion efforts; and the global market for its products and communications
services. The Company has no obligation to update or revise these
forward-looking statements to reflect the occurrence of future events or
circumstances.
ITEM 1. DESCRIPTION OF BUSINESS.
GENERAL BACKGROUND
Communitronics of America, Inc. (formerly called Oneida General
Corporation) (the "Company"), is a Utah corporation incorporated on September
21, 1970. The name of the corporation was changed to Communitronics of America,
Inc. on October 26, 1998, and had been previously changed from Industrial Sales
and Marketing Corporation on February 16, 1979.
In October 1998, the Company acquired 100% of the issued and
outstanding stock of Communitronics Inc. and its wholly owned subsidiaries,
Crescent Paging, Inc. and Radio Systems, Inc. in exchange for 5,500,000 shares
of restricted Common Stock of the Company. In connection with the transaction,
the previous directors and officers of the Company canceled 3,000,000 of their
shares without consideration. Following the acquisition, the directors and
officers of the Company completely changed to its present management, and the
Company commenced its current business as a provider of wireless message paging
systems and information delivery systems. Prior to acquiring Communitronics,
Inc. and its subsidiaries, the Company had not conducted any material operations
since 1985.
In December 1998, the Company acquired all of the issued and
outstanding stock of Data Paging, Inc. in exchange for 250,000 shares of
restricted Common Stock of the Company.
OPERATIONS
The Company is a provider of wireless message paging and information
delivery services. The Company has a network of 14 radio towers (one tower is
owned by the Company and 13 towers are leased) to deliver wireless messaging
services in the costal regions of Alabama, Louisiana, Mississippi and the
Florida panhandle. The Company owns seven Certificates of Public Convenience and
Necessity issued by the Alabama Public Service Commission and 34 frequencies
licensed by the Federal Communications Commission. These certificates and
licenses allow the
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Company to provide wireless messaging services in these geographic areas.
The Company supports its operations from its executive offices in
Daphne, Alabama, and from its operation offices located in Foley, Alabama;
Metaerie, Louisiana; Gulfport, Mississippi; and Pascagoula, Mississippi.
The geographic areas served by the Company covers approximately
10,000,000 persons. In its message paging markets, the Company presently serves
approximately 5,000 subscribers at June 30, 1999.
STRATEGY
Historically, the Company has focused on the acquisition and operation
of message paging systems in RSAs and small MSAs in the southeastern United
States. The Company's acquisition of licenses enables it to significantly expand
both its customer base and geographic coverage and to offer enhanced paging and
communications services. The Company's initial focus with its licenses has been,
and will continue to be, to commence operations in the most densely populated
areas within its systems. The Company believes that it is the optimum technology
for rural, less densely populated areas because they are less susceptible to
competition and have greater capacity for future growth than most major markets,
and that equipment has the optimum technology for more densely populated urban
areas where analog systems are more expensive to deploy and face potential
capacity constraints. The Company has entered its markets at a relatively low
cost.
In December 1998, the Company acquired all of the issued and
outstanding shares of capital stock of Data Paging, Inc., a Mississippi
corporation, in exchange for 250,000 restricted shares of Common Stock of the
Company at an agreed upon value of $500,000. Data Paging, Inc. retained a
security interest in the stock until such times as it sells the Common Stock of
the Company for a minimum of $500,000 ($2.00 per share) in reliance upon Rule
144 under the Securities Act of 1933 after a one-year holding period or
registration of such securities, whichever first occurs. In the event the stock
is sold for less than $500,000, the Company is obligated to pay the difference
in cash or stock to the former stockholders.
The Company's operating strategy has been to (i) achieve a critical
time-to-market advantage by rapidly constructing and commencing operations of
tower systems in urban areas within selected markets; (ii) continue to expand
its operations through increased subscriber growth and usage; (iii) utilize its
centralized management and back office functions to support the needs of its
subscribers, thereby further improving operating efficiencies and generating
greater economies of scale; and (iv) selectively acquire cellular properties
primarily in contiguous markets. The Company is implementing its strategy by
continuing to build its systems, offer a wide range of products and services at
competitive prices, continually upgrade the quality of its network, establish
strong brand recognition, create a strong sales and marketing program tailored
to local markets and provide a superior level of customer service.
PAGING SERVICES
Wireless communications systems use a variety of radio frequencies to
transmit voice and data. Broadly defined, the wireless communications industry
includes one-way radio applications, such as paging or beeper services, and
two-way radio applications, such as cellular telephone, PCS and Enhanced
Specialized Mobilized Radio ("ESMR") networks. Historically, each application
has been licensed and operates in a distinct radio frequency block.
The Company's paging systems are primarily digital based systems.
Digital technology has been introduced in numerous markets. Analog technology
currently has several limitations, including lack of privacy and limited
capacity. Digital systems convert voice or data signals into a stream of digits
that is compressed before transmission,
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enabling a single radio channel to carry multiple simultaneous signal
transmissions. This enhanced capacity, along with improvements in digital
signaling, allows digital-based wireless technologies to offer new and enhanced
services, such as greater call privacy, and robust data transmission features,
such as "mobile office" applications (including facsimile, electronic mail and
wireless connections to computer/data networks, including the Internet).
The Company competes directly with existing paging and specialized
mobile radio services. The Company's services are not generally offered by
cellular providers, such as data transmissions to and from portable computers,
advanced paging services, e-mail and facsimile services. The Company may also
offer mass market wireless local loop applications in competition with wired
local communications services in the future.
The Company, and the wireless communications industry in general, have
historically experienced significant subscriber growth during the fourth
calendar quarter. The Company has historically experienced highest usage and
revenue per subscriber during the fall and winter months. The Company expects
these trends to continue.
OPERATION OF WIRELESS COMMUNICATION SYSTEMS
Wireless communication system service areas are divided into multiple
cells. Due to the frequencies in which they operate, cellular cells generally
have a wider transmission radius than PCS cells. Each cell contains a
transmitter, a receiver and signaling equipment (the "Paging Site"). The Paging
Site is connected by microwave or land line telephone lines to a switch that
uses computers to control the operation of the communications system for the
entire service area. The system controls the transfer of messages from cell to
cell as a subscriber's pager travels. Wireless communications providers
establish interconnection agreements with local exchange carriers and
interexchange carriers, thereby integrating their system with the existing
landline communications system.
When the signal strength of a page declines to a predetermined level,
the page is transferred to another Paging Site where the signal strength is
stronger. If the page leaves the service area of a system, the page is
disconnected unless there is a technical connection with the adjacent system.
Analog cellular pagers are functionally compatible with digital systems
in all markets within the United States. As a result, analog cellular handsets
may be used wherever a subscriber is located, as long as a the system is
operational in the area. Paging system operators normally agree to provide
service to subscribers from other paging systems who are temporarily located in
or traveling through their service areas. Agreements among system operators
provide that the carrier that normally provides services to the roaming
subscriber pays the serving carrier at rates prescribed by the serving carrier.
Although different systems utilize similar technologies and hardware,
they operate on different frequencies and use different technical and network
standards. As a result, it currently is not possible for users of one type of
system to "roam" on a different type of system outside their service area, or to
hand off calls from one type of system to another. This will also be true for
pager subscribers seeking to roam in a service area served by operators using
different technical standards.
PAGING OPERATIONS
The Company generally owns 100% of each of its frequency licenses. In
its coastal markets, the Company's systems cover large contiguous geographic
areas with relatively few Paging Sites, incorporating cost efficient technology.
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The Company's experience is that several inherent attributes of RSA's
and small MSA's make such markets attractive. Such attributes include high
subscriber growth rates, population bases of customers with substantial needs
for wireless communications, the ability to cover larger geographic areas with
fewer Paging Sites than is possible in urban areas, less intense competitive
environments and less vulnerability to competition.
PAGING MARKETS AND SYSTEMS
The Company presently owns 37 FCC-licensed frequencies for its
wireless message paging services in the southeast and Gulf Coastal areas of the
United States. The Company intends to focus on the national frequency of
152.630. However, it also uses several other frequencies wherever necessary in
Alabama, Florida, Louisiana and Mississippi. The 152.630 frequency is a
nationally licensed frequency. The Company intends to expand its operations in
these and other states, and to install new state-of-the-art paging equipment
with e-mail capabilities. The Company recently purchased equipment with e-mail
capabilities at a cost of approximately $150,000 which is being deployed in its
New Orleans and Baton Rouge, Louisiana markets.
The Company also has traffic passing agreements with other paging
companies that own the 152.630 license for Tennessee, and for parts of Alabama
and Mississippi not owned by the Company.
The Company's goal is to achieve significant market penetration by
aggressively marketing competitively priced wireless messaging services under
its proprietary brand names, offering enhanced services not generally provided
by other paging operators and providing superior customer service. In addition,
the Company is structured to be a low-cost provider of paging services by taking
advantage of the existing business infrastructure and business experience
established in connection with its other operations, including centralized
management, marketing, billing and customer service functions, and by focusing
on efficient customer acquisition and retention.
SPECIALIZED MOBILE RADIO LTR TRUNKING
Specialized mobile radio (SMR) transmissions are broadcast over either
400 MHZ, 800 MHZ or 900 MHZ frequencies. These frequencies have limited spectrum
which means a limited number of customers can be served using the available
frequencies. A majority of the 800 MHZ channels in New Orleans, Louisiana have
been acquired by Nextel which places them in a unique position to control the
SMR market and telephone interconnect.
During 1998, Nextel announced the discontinuance of providing analog
transmission (5 KHz). For their customers who currently use analog equipment,
this decision will require them to purchase new digital equipment at a
substantial cost and will raise their monthly recurring fee.
The Company has recently acquired eleven 800 MHZ channels. These
channels will allow the Company to provide the best quality in dispatch and
telephone interconnect communications to commercial and industrial users. The
advantage of the 800 MHZ over the newly granted 900 MHZ spectrum is full 5 KHz
deviation which translates into better quality and increased range. These eleven
channels can support approximately 2000 to 2500 users with many options not
available in conventional dispatch systems.
In addition to the 800 MHZ channels, the Company controls eight UHF
(450 MHZ) dispatch channels. These channels are presently conventional. Over the
next 3 to 4 months, the Company will convert these channels into LTR trunking
format. The conversion will allow the Company to provide existing as well as
future customers with the best quality communication available today.
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The Company plans to exploit these channels in New Orleans by offering
to customers the choice of continuing analog transmission. These customers'
equipment can easily be re-fitted to operate on the Company's channels thereby
eliminating the need to replace equipment. Because of limited spectrum, these
channels become more valuable as time passes.
TWO-WAY RADIO SALES AND SERVICE
The Company is an authorized dealer for Kenwood, ICOM, and
Yeasu/Standard. As a dealer, the Company is authorized to sell and service these
manufacturers two-way radios. The Company targets organizations that have their
own frequencies, such as governmental agencies, hospitals, etc., for two-way
radio sales. In addition, the Company has a fully-staffed service department
that repairs and maintains equipment sold.
MARKETING, SALES AND CUSTOMER SERVICE
The Company's sales and marketing strategy is to generate continued net
subscriber growth and increased subscriber revenues. In addition, the Company
targets a customer base which it believes is likely to generate higher monthly
service revenues, while attempting to achieve a low cost of adding new
subscribers. The Company markets its services under its proprietary brand names,
and sells its products and services through a combination of direct and indirect
distribution channels.
The Company markets its message paging services and products primarily
in the southeastern United States.
Initially, the Company intends to concentrate its marketing efforts
primarily on businesses and individuals "on- the-go", which would benefit from
integrated mobile voice, message and wireless data transmission capabilities,
who would most benefit from enhanced features and services.
SALES
The Company sells its products and services through a combination of
direct and indirect channels. The Company operates four sales offices (which
also serve as retail sales locations). The Company utilizes a direct sales force
of 12 persons based out of these offices, who are trained to educate new
customers on the features of its products. Sales commissions generally are
linked both to subscriber revenue and subscriber retention, as well as
activation levels.
The Company believes that its sales offices provide the physical
presence in local markets necessary to position the Company as a quality local
service provider, and give the Company greater control over both its costs and
the sales process. The Company also intends to utilize indirect sales through a
network of local merchant and specialty retailers. The Company intends to
continue to use a combination of direct and indirect sales channels, with the
mix depending on the demographics of each particular market.
In addition, the Company acts as a retail distributor of pagers and
radios, and maintains inventories. Although subscribers generally are
responsible for purchasing or otherwise obtaining their own pagers and radios,
the Company has historically sold them below cost from time to time to respond
to competition and in accordance with general industry practice.
CUSTOMER SERVICE
Customer service is a significant element of the Company's operating
philosophy. The Company is committed
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to attracting and retaining subscribers by providing consistently superior
customer service. At its headquarters in Daphne, Alabama, the Company maintains
a sophisticated monitoring and control system, a staff of customer service
personnel and a well-trained technical staff to handle both routine and complex
questions as they arise.
The Company believes that it helps manage its churn through an outreach
program by its sales force and customer service personnel. This program not only
enhances subscriber loyalty, but also increases add-on sales and customer
referrals. The outreach program allows the sales staff to check customer
satisfaction, as well as to offer additional services.
SUPPLIERS AND EQUIPMENT VENDORS
The Company does not manufacture any of the pagers or equipment used in
the Company's operations. The high degree of compatibility among different
manufacturer's models of pagers and Paging Site equipment allows the Company to
design, supply and operate its systems without being dependent upon any single
source of such equipment. The pagers and Paging Site equipment used in the
Company's operations are available for purchase from multiple sources, and the
Company anticipates that such equipment will continue to be available in the
foreseeable future. The Company currently purchases pagers primarily from
Motorola, Inc. and Ericsson Inc. The Company currently purchases Paging Site and
switching equipment primarily from Motorola, Inc. and Glenayre, Inc.
COMPETITION
Competition for subscribers among wireless licensees is based
principally upon the services and features offered, the technical quality of the
wireless system, customer service, system coverage, capacity and price. Such
competition may increase to the extent that licenses are transferred from
smaller, stand-along operators to larger, better capitalized and more
experienced wireless communications operators who may be able to offer
subscribers certain network advantages similar to those offered by the Company.
The Company's business will directly competes with existing service
providers in its markets, many of which have been operational for a longer
period of time and have significantly greater financial technical resources than
those available to the Company and who may upgrade their systems to provide
comparable services in competition with the Company's systems.
In the future, in its markets the Company expects to face increased
competition from entities providing other communications technologies and
services. Although some of these technologies and services are currently
operational, others are being developed or may be developed in the future.
Continuing technological advances in communications and FCC policies
that encourage the development of new technologies may result in additional
competition.
GOVERNMENTAL REGULATION
The FCC regulates the licensing, construction, operation, acquisition
and sale of message paging systems in the United States pursuant to the
Communications Act of 1934 (the "Communications Act"), as amended from time to
time, and the rules, regulations and policies promulgated by the FCC thereunder.
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LICENSING OF PCS SYSTEMS
Under the FCC's current rules specifying spectrum aggregation limits
affecting broadband PCS licensees, o entity may hold licenses for more than 45
MHZ of PCS, cellular and SMR services regulated as CMRS where there is
significant overlap in any geographic area (significant overlap will occur when
at least 10 percent of the population of the PCS licensed service area is within
the CGSA(s) and/or SMR service area(s)).
All paging licenses will be granted for a 10-year period, at the end of
which they must be renewed.
TRANSFERS AND ASSIGNMENTS OF LICENSES
The Communications Act and FCC rules require the FCC's prior approval
of the assignment or transfer of control of a license for a system. In addition,
the FCC has established transfer disclosure requirements that require licensees
who transfer control of or assign a license within the first three years of
their license term to file associated contracts for sale, option agreements,
management agreements or other documents disclosing the total consideration that
the licensee would receive in return for the transfer or assignment of its
license. Non-controlling interests in an entity that holds a PCS license or PCS
system generally may be bought or sold without FCC approval. Certain
acquisitions or sales by the Company of its interests may also require the prior
approval of federal, state or local regulatory authorities having competent
jurisdiction.
FOREIGN OWNERSHIP
Under existing law, no more than 20% of an FCC licensee's capital stock
may be owned, directly or indirectly, or voted by non-US citizens or their
representatives, by a foreign government or its representatives or by a foreign
corporation. Because the Company itself does not hold any FCC license but
instead controls other companies which themselves hold the licenses (which is
the current and intended structure), up to 25% of the Company's capital stock
may be owned or voted by non-US citizens or their representatives, by a foreign
government or its representatives or by a foreign corporation. Alien ownership
above the 25% level may be allowed should the FCC find such higher levels not
inconsistent with the public interest. If foreign ownership of the Company were
to exceed the 25% level, the FCC could revoke the company's FCC licenses,
although the Company could seek a declaratory ruling from the FCC allowing the
foreign ownership or take other actions to reduce the Company's foreign
ownership percentage in order to avoid the loss of its licenses. The Company has
no knowledge of any percent foreign ownership in violation of these
restrictions.
TELECOMMUNICATIONS ACT OF 1996 AND OTHER INDUSTRY DEVELOPMENTS
On February 8, 1996, the Telecommunications Act of 1996 (the
"Telecommunications Act") was signed into law, substantially revising the
regulation of communications. The goal of the Telecommunications Act is to
enhance competition and remove barriers to market entry, while deregulating the
communications industry to the greatest extent possible. To this end, local and
long-distance communications providers and paging companies will, for the first
time, be able to compete in other's market, and telephone and cable companies
will likewise be able to compete. To facilitate the entry of new carriers into
existing markets, the Telecommunications Act imposes certain interconnection and
equal access requirements on incumbent carriers. Additionally, all
communications carriers providing interstate communications services must
contribute to the federal universal service support mechanisms that the FCC will
establish. The Company cannot predict the outcome of the FCC's rulemaking
proceedings to promulgate regulations to implement the new law or the effect of
the new regulations and there can be no assurance that such regulations will not
adversely affect the Company's business or financial condition.
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At present, cellular providers, other than the regional Bell operating
companies, have the option of using only one designated long distance carrier.
The Telecommunications Act codifies the policy that CMRS providers will not be
required to provide equal access to long distance carriers. The FCC, however,
may require CMRS carriers to offer unblocked access (i.e., implemented by the
subscriber's use of a carrier identification code or other mechanisms at the
time of placing a call) to the long distance provider of a subscriber's choice.
The FCC has terminated its inquiry into the imposition of equal access
requirements on CMRS providers.
On August 1, 1996, the FCC released a Report and Order expanding the
flexibility of cellular, PCS and other CMRS providers to provide fixed as well
as mobile services. Such fixed services include, but need not be limited to,
"Wireless local loop" services, e.g., to apartment and office buildings, and
wireless backup to PVXs and local area networks, to be used in the event of
interruptions due to weather or other emergencies. The FCC has not yet decided
whether such fixed services should be subjected to universal service
obligations, or how they should be regulated, but it has proposed a presumption
that they be regulated as CMRS services.
On August 8, 1996, the FCC released its order implementing the
interconnection provisions of the Telecommunications Act of 1996. The FCC's
decision is lengthy and complex and is subject to petitions for reconsideration
and judicial review (as described below), and its precise impact is difficult to
predict with certainty. However, the FCC's order concludes that CMRS providers
are entitled to reciprocal compensation arrangements with local exchange
carriers ("LECs") and prohibits LECs from charging CMRS providers for
terminating LEC-originated traffic. The FCC's decision gives it broad authority
to regulate on the intrastate level, but states may impose additional
procompetitive rules beyond the minimum federal guidelines. Under these
guidelines, states must set arbitrated rates for interconnection and access to
unbundled elements based upon the LECs' long run incremental costs, plus a
reasonable share of forward-looking joint and common costs. In lieu of such
cost-based rates, the FCC has also established for use by states a benchmark
maximum range of 0.1-0.4 cents per minute for end office termination pending
further cost-based studies, and subject to a possible "true-up" payment later.
The FCC has also permitted states to impose "bill and keep" arrangements, under
which CMRS providers would make no payments for LEC termination of calls where
LECs and CMRS providers have symmetrical termination costs and roughly balanced
traffic flows. However, the FCC has found no evidence that these conditions
presently exist. The relationship of these charges to the payment of access
charges and universal service contributions has not yet been resolved by the
FCC. LECs and state regulators filed appeals of the interconnection order, which
have been consolidated in the US Court of Appeals for the Eight Circuit. The
Court has temporarily stayed the effective date of the pricing rules (including
the benchmark maximum of 0.2-0.4 cents described above) until more permanent
relief can be fashioned.
EMPLOYEES AND LABOR RELATIONS
The Company considers its labor relations to be good and, to the
Company's knowledge, none of its employees is covered by a collective bargaining
agreement. As of June 30, 1999, the Company employed a total of approximately 17
people in the following areas:
<TABLE>
<CAPTION>
Category Number of Employees
-------- -------------------
<S> <C>
Sales and marketing ....................... 10
Engineering ............................... 4
General and administration, including
customer service ..................... 3
</TABLE>
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ITEM 2. PROPERTIES
The Company leases its principal executive offices (consisting of
approximately 3,000 square feet) located in Daphne, Alabama. The Company and its
subsidiaries and affiliates also lease three additional locations for local
operations and inventory storage, switching equipment and local sales and
administrative offices. The Company does not own any real property.
ANTICIPATED ACQUISITIONS
Given the size and highly fragmented composition of the industry, the
Company has identified the potential to carry out a market roll-up within the
systems integration marketplace. Initially, the Company intends to expand its
business through selective, strategic acquisitions of other companies with
complementary businesses in a revenue range of $1 million to $3 million.
Management believes that companies in this range of revenues may be receptive to
the Company's acquisition program since often they are too small to be
identified as acquisition targets of larger public companies or to independently
attempt their own public offering. In particular, the Company intends to focus
its acquisition strategy on candidates which have a proven record of delivering
high-quality technical services and a customer base of mid-sized companies that
could benefit from the Company's access to anticipated sources of financing and
long-term growth strategy.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS.
RESULTS OF OPERATIONS
The following table sets forth certain operating information regarding
the Company:
<TABLE>
<CAPTION>
THREE MONTH
PERIOD ENDED
MARCH 31, 1999 YEAR ENDED YEAR ENDED
(UNAUDITED) DECEMBER 31, 1998 DECEMBER 31, 1997
-------------- ----------------- -----------------
<S> <C> <C> <C>
Revenues $332,391 $1,156,731 $ -0-
Cost of Goods Sold $ 62,281 $ 256,790 $ -0-
Net Earnings (Loss) $ (5,324) $ (29,372) $37,719
Net Earnings (Loss) Per Share $ (.01) $ (.01) $ (.03)
</TABLE>
The following summary table presents comparative cash flows of the
Company for the fiscal years ended December 31, 1997 and December 31, 1998, and
for the three months ended March 31, 1999.
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<TABLE>
<CAPTION>
THREE MONTH
PERIOD ENDED
MARCH 31, 1999 YEAR ENDED YEAR ENDED
(UNAUDITED) DECEMBER 31, 1998 DECEMBER 31, 1997
----------- ----------------- -----------------
<S> <C> <C> <C>
Net cash used in operating
activities $ 55,490 $ 132,179 $ 30,000
Net cash used in investing
activities $ 226,701 $ 143,792 $ 30,000
Net cash provided by financing
activities $ 182,217 $ 26,714 $ -0-
</TABLE>
The Company had cash balances totaling $31,865 at December 31, 1998,
and $42,871 at March 31, 1999.
CAPITAL EXPENDITURES
The Company has incurred capital expenditures for radio towers,
equipment and office furniture used in its operations. Capital expenditures at
December 31, 1998, totaled $661,069, net of accumulated depreciation.
CAPITAL RESOURCES
The Company's capital resources have been provided primarily by its
revenues from operations, and also from capital contributions and loans from its
stockholders. During fiscal 1998, the Company made an offering of its Common
Stock under Rule 504 of Regulation D under the Securities Act of 1933 which
realized $15,000 in subscriptions.
LIQUIDITY
The ability of Company to satisfy its obligations depend in part upon
its ability to reach a profitable level of operations.
ITEM 3. DESCRIPTION OF PROPERTY.
CORPORATE OFFICES
The Company currently leases its corporate offices located at 27955
Highway 98, Suite WW-X, Daphne, Alabama 36526. The lease agreement is for a five
year term and covers approximately 3,000 square feet. The monthly payments are
$1,650 which will increase 5% during the second and fifth year of the lease.
The Company also leases offices for three operation offices. In Foley,
Alabama, the Company leases approximately 600 square feet at $500 per month for
a two-year term. In Gulfport, Mississippi, the Company leases approximately 900
square feet at $675 per month for a two-year term. In New Metairie, Louisiana,
the Company leases approximately 2,000 square feet at $1,825 per month for a
three year term.
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ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The total number of shares of Common Stock of the Company beneficially
owned by each of the officers and directors of the Company, and all of such
directors and officers as a group, and their percentage ownership of the
outstanding Common Stock of the Company as of June 30, 1999, are as follows:
<TABLE>
<CAPTION>
SHARES PERCENT OF
MANAGEMENT BENEFICIALLY COMMON
SHAREHOLDERS(1) OWNED(1) STOCK (1)
--------------- ------------ ----------
<S> <C> <C>
David R. Pressler.................................................. 5,240,500 (2) 66.9%
27955 Highway 98, Suite WW-X
Daphne, Alabama 36526
Samuel Mastrull.................................................... 286,000 (3) 3.7%
1118 Hatteras Circle
West Palm Beach, Florida 33413
James H. Flanagan.................................................. 5,000 .06%
3009 Artimese Avenue
Pascagoula, Mississippi
Charles H. Hillman................................................. 4,000 .01%
7190 Pullman Place
Mobile, Alabama 3669
Directors and officers as a group
(4 persons, including the above)................................ 5,535,500 70.7%
</TABLE>
- --------------------------------------
(1) Except as otherwise noted, it is believed by the Company that all
persons have full voting and investment power with respect to the
shares indicated. Under the rules of the Securities and Exchange
Commission, a person (or group of persons) is deemed to be a
"beneficial owner" of a security if he or she, directly or indirectly,
has or shares the power to vote or to direct the voting of such
security, or the power to dispose of or to direct the disposition of
such security. Accordingly, more than one person may be deemed to be a
beneficial owner of the same security. A person is also deemed to be a
beneficial owner of any security which that person has the right to
acquire within 60 days, such as options or warrants to purchase the
Common Stock of the Company.
(2) Includes 500,000 shares of Common Stock of the Company held by his wife
and his sons.
(3) Includes 1,000 shares of Common Stock of the Company owned by his wife
and 10,000 shares held as custodian for his grandchildren.
12
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to
the beneficial ownership of the Company's Common Stock by each shareholder
who beneficially owns more than five percent (5%) of the Company's Common
Stock, the number of shares beneficially owned by each and the percent of
outstanding Common Stock so owned of record as of June 30, 1999. It is
believed by the Company that all persons listed have sole voting and
investment power with respect to their shares, except as otherwise indicated.
<TABLE>
<CAPTION>
SHARES PERCENT OF
NAME AND ADDRESS BENEFICIALLY OUTSTANDING
OF BENEFICIAL OWNER TITLE OF CLASS OWNED COMMON STOCK
------------------- -------------- ------------ ------------
<S> <C> <C> <C>
David R. Pressler Common Stock 5,240,500 (2) 66.9%
27955 Highway 98, Suite WW-X
Daphne, Alabama 36526
Cede & Co. Common Stock 997,724 12.7%
P.O. Box 222, Bowling Green Station
New York, New York 10274
</TABLE>
- --------------------------------------
(1) Except as otherwise noted, it is believed by the Company that all
persons have full voting and investment power with respect to the
shares indicated. Under the rules of the Securities and Exchange
Commission, a person (or group of persons) is deemed to be a
"beneficial owner" of a security if he or she, directly or indirectly,
has or shares the power to vote or to direct the voting of such
security, or the power to dispose of or to direct the disposition of
such security. Accordingly, more than one person may be deemed to be a
beneficial owner of the same security. A person is also deemed to be a
beneficial owner of any security which that person has the right to
acquire within 60 days, such as options or warrants to purchase the
Common Stock of the Company.
(2) Includes 500,000 shares of Common Stock of the Company held by his wife
and his sons.
(3) Cede & Co. Is a nominee holder of shares of Common Stock of the Company
as a depository for brokerage firms and others.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- --- --- --------
<S> <C> <C>
David R. Pressler 54 Chairman of the Board, Director, Chief Executive Officer and President
Samuel Mastrull 71 Director, Chief Financial Officer and Secretary
James H. Flanagan 70 Director
Charles H. Hillman 39 Director
</TABLE>
13
<PAGE>
There is no family relationship between or among the above directors
and officers.
Mr. Pressler became Chairman of the Board, Chief Executive Officer,
and President of the Company on October 26, 1998, following the Company's
acquisition of all of the issued and outstanding stock of Communitronics,
Inc. He founded and was the President of Communitronics, Inc. from 1975 until
its acquisition by the Company. Mr. Pressler holds an FCC Master Radio
Engineer Rating with radar endorsement. He is a certified engineer (EI-0216),
and is a senior member of the National Association of Radio and
Telecommunications Engineers.
Mr. Mastrull became a director and the Chief Financial Officer and
Secretary of the Company on October 26, 1998. From 1995 to 1997, he was a
registered representative with the securities firm of Joseph Charles
Investment Bankers. From 1987 to 1995, he was the owner and President of
Compliance Technology, Inc. which assisted companies seeking financing from
lending institutions. From 1976 to 1987, Mr. Mastrull was an ombudsman
employed by the State of News Jersey. From 1962 to 1976, Mr. Mastrull was a
registered representative employed by several securities brokerage firms. Mr.
Mastrull received a business administration degree from Drake College in
1995.
Mr. Flanagan became a director of the Company on October 26, 1998.
He is presently retired. From 1957 to 1997, he was the President and co-owner
of Pascagoula Drug Company, a pharmacy company in Pascagoula, Mississippi.
Mr. Flanagan received a pharmacy degree from the University of Mississippi in
1955.
Mr. Hillman became a director of the Company on October 26, 1998.
From July 1995 to the present, he has been a partner in the law firm of
Ulmer, Hilman, Ballard and Nikolakis, P.G., in Mobile, Alabama. From 1990 to
July 1995, he was an attorney in the law firm of Brown Hudgens P.C. From 1984
to 1990, Mr. Hillman was an attorney in the Judge Advocates General division
of the U.S. Army. Mr. Hillman graduated from Mississippi State University
with a B.S. degree in 1981, and graduated from the University of Mississippi
School of Law in 1984.
ITEM 6. EXECUTIVE COMPENSATION.
No executive officer or director of the Company received compensation
in excess of $100,000 during its fiscal year ended December 31, 1998. David R.
Pressler, the President of the Company, presently receives compensation of
approximately $21,000 per year.
The Company does not presently have any pension plan, profit sharing
plan, or similar plans for the benefit of its officers, directors or employees.
However, the Company reserves the right to establish any such plans in the
future.
Directors of the Company who do not serve as officers thereof are not
currently compensated by the Company for meeting attendance or otherwise, but
are entitled to reimbursement for their travel expenses. The Company does not
pay additional amounts for committee participation or special assignments of the
Board of Directors.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In connection with the reorganization of the Company in October 1998
and the acquisition of Communitronics, Inc. and its subsidiaries, David R.
Pressler, a director and President of the Company, received 5,240,500 shares of
Common Stock of the Company; and Sam Mastrull, a director and Chief Financial
Officer of the Company, received 286,000 shares of Common Stock of the Company.
14
<PAGE>
ITEM 8. DESCRIPTION OF SECURITIES.
The Company is authorized to issue 50,000,000 shares of Common
Stock, $.01 par value. At June 30, 1999, there were 7,829,936 shares of
Common Stock issued and outstanding.
There were 488 stockholders of record of the Common Stock of the
Company as of June 30, 1999.
COMMON STOCK
Holders of Common Stock are entitled to receive ratably such
dividends as may be declared by the Board of Directors, out of funds legally
available, without any preference. Holders of Common Stock are entitled to
one vote per share. Cumulative voting is not allowed for purposes of the
election of directors. Thus, the holders of more than 50% of the shares
voting for directors can elect all directors. The holders of the Common Stock
of the Company have no preemptive rights to purchase new issues of the
securities of the Company. There are no redemption or conversion features
attached to the Common Stock.
At the present time, the Company does not intend to pay any
dividends on its Common Stock.
Upon liquidation or dissolution of the Company, holders of Common
Stock are entitled to receive pro rata, either in cash or in kind, all of the
assets of the Company after payment of debts.
WARRANTS AND OPTIONS
As of July 31, 1999, there were no outstanding warrants or options
to purchase shares of Common Stock of the Company.
UTAH CORPORATE LAW
The Company is a Utah corporation, and may become subject to the
anti-takeover provisions of the Utah Revised Business Corporation Act (the
"Utah Law"). In general, Utah Law prevents take-over offers to acquire equity
securities of a Utah corporation if the offeror would become a beneficial
owner of more than 20% of any class of outstanding equity securities, and
other similar provisions, subject to certain exceptions such as the written
approval of the board of directors. The existence of these provisions would
be expected to have an anti-takeover effect, including attempts that might
result in a premium over the market price for the shares of Common Stock held
by stockholders.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock of the Company
is Progressive Transfer Company, 1981 East Murray-Holladay Road, Suite 100,
Salt Lake City, Utah 84117-5126; telephone (801) 272-9294.
15
<PAGE>
REPORTS TO STOCKHOLDERS
The Company will furnish its shareholders with annual reports
containing the consolidated financial statements of the Company examined by
independent certified public accountants. The Company presently intends to
issue unaudited quarterly reports and may distribute other reports to the
stockholders as it deems appropriate.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS.
GENERAL
The Common Stock of the Company is traded on the Electronic Bulletin
Board over-the-counter market, and is quoted under the symbol BEEPE.
MARKET PRICE
When the trading price of the Company's Common Stock is below $5.00
per share, the Common Stock is considered to be "penny stocks" that are
subject to rules promulgated by the Securities and Exchange Commission (Rule
15g-1 through 15g-9) under the Securities Exchange Act of 1934. These rules
impose significant requirements on brokers under these circumstances,
including: (a) delivering to customers the Commission's standardized risk
disclosure document; (b) providing to customers current bid and offers; (c)
disclosing to customers the brokers-dealer and sales representatives
compensation; and (d) providing to customers monthly account statements.
The following table sets forth the range of high and low closing bid
prices per share of the Common Stock of the Company as reported by National
Quotation Bureau, L.L.C. for the periods indicateded.
<TABLE>
<CAPTION>
Year Ended December 31, 1998 High Bid(1) Low Bid(1)
- ---------------------------- -------- -------
<S> <C> <C>
3rd Quarter.......................... Unpriced Unpriced
4th Quarter.......................... $3.0625 $2.00
Year Ending December 31, 1999
- -----------------------------
1st Quarter (1)...................... $3.00 $1.50
2nd Quarter.......................... $2.75 $.8125
</TABLE>
- -------------------------------------------
(1) The Company is unaware of the factors which resulted in the significant
fluctuations in the prices per share during the periods being
presented, although it is aware that there is a thin market for the
Common Stock, that there are frequently few shares being traded and
that any sales activity significantly impacts the market.
The closing bid and ask prices of the Common Stock of the Company on
August 11, 1999, were $.562 and $1.125, respectively.
16
<PAGE>
DIVIDENDS
The Company has not paid any dividends on its Common Stock and does
not expect to do so in the foreseeable future. The Company intends to apply
its earnings, if any, in expanding its operations and related activities.
The payment of cash dividends in the future will be at the
discretion of the Board of Directors and will depend upon such factors as
earnings levels, capital requirements, the Company's financial condition and
other factors deemed relevant to the Board of Directors. In addition, the
Company's ability to pay dividends may become limited under future loan
agreements of the Company which may restrict or prohibit the payment of
dividends.
ITEM 2. LEGAL PROCEEDINGS.
The Company may become subject to legal proceedings and claims which
arise in the ordinary course of business. The Company's management does not
expect that the results in any of these legal proceedings will have a
material adverse effect on the Company's financial condition or results of
operations.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
None.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
In October 1998, the Company issued 5,500,000 shares of its Common
Stock to the stockholders of Communitronics Inc. and its subsidiaries in
exchange for all of its issued and outstanding stock and its assets in
reliance upon Section 4(2) of the Securities Act of 1933.
In December 1998 and 1999, the Company issued 250,000 shares of its
Common Stock to the stockholders of Data Paging, Inc. for all of its issued
and outstanding stock and its assets in reliance upon Section 4(2) of the
Securities Act of 1933.
In fiscal 1998, the Company issued 150,000 shares of its Common
Stock for $ 15,000 in a limited offering made in reliance upon Rule 504 of
Regulation D under the Securities Act of 1933.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The provisions of the Utah Revised Business Corporation Act provides
for the indemnification of the directors and officers of the Company. These
provisions generally permit indemnification of directors and officers against
certain costs, liabilities and expenses of any threatened, pending or
completed action, suit or proceeding that any such person may incur by reason
of serving in such positions if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such persona had been
adjudged to be liable to the corporation, unless and only to the extent that
the court in which such action or suit was brought shall determine upon
application
17
<PAGE>
that, despite the adjudication of liability but in view of all the
circumstance of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which a court shall deem proper. Any
determination that indemnification of a director or an officer, unless
ordered by the court, must be made by a majority vote of the directors who
are not parties to such action, suit or proceeding, even though less than a
quorum; or by a committee of such directors designated by majority vote of
such directors even though less than a quorum; or if there are no such
directors, or if such directors so direct, by independent legal counsel in a
written opinion; or by the stockholders.
18
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
- -------
<S> <C> <C>
2 Reorganization Agreement....................... Reorganization Agreement dated October
1, 1998, between Oneida General
Corporation and Communitronics, Inc.
3(i) Articles of Incorporation of the Registrant
3(ii) Amendments to Articles of Incorporation
3(iii) By-Laws of the Registrant
10 Material Contracts
10(a).......................................... Purchase Agreement dated November 23,
1998, to acquire Data Paging, Inc.
11 Statement re: computation of per share earnings. Reference is made to the Consolidated
Statements of Operations of the Registrant
for its fiscal years ended December 31,
1998, and 1997, which are incorporated
herein by reference.
21 A description of the subsidiaries of the Registrant
23 Consent of Accountants
27 Financial Data Schedule
</TABLE>
19
<PAGE>
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Consolidated Financial Statements
and
Accompanying Information
for the year ended
December 31, 1998
and
for the three months ended
March 31, 1999
<PAGE>
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report F-2
Consolidated Balance Sheets F-3 - 4
Consolidated Statements of Operations F-5
Consolidated Statements of Stockholders' Equity F-6
Consolidated Statements of Cash Flows F-7
Notes to Consolidated Financial Statements F-8 - F-15
Accompanying Information
Independent Auditors' Report on Accompanying Information F-17
Schedule 1 - Consolidated Services, Rent and Maintenance Expenses F-18
Schedule 2 - Consolidated General and Administrative Expenses F-19
</TABLE>
F-1
<PAGE>
[LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Stockholders
Communitronics of America, Inc.
Daphne, Alabama
We have audited the accompanying consolidated balance sheet of Communitronics of
America, Inc. (formerly Oneida General Corporation) as of December 31, 1998, and
the related consolidated statements of income, stockholders' equity and cash
flows for the year then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted audited standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatements. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Communitronics of
America, Inc. as of December 31, 1998, and the results of its operations and its
cash flows for the eight months then ended in conformity with generally accepted
accounting principles.
GARNER PRICHARD & MIDDLETON, P.C.
February 26, 1999
F-2
<PAGE>
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Consolidated Balance Sheet
<TABLE>
<CAPTION>
(Unaudited)
December 31 July 31
1998 1999
-------------- -------------
Assets
<S> <C> <C>
Current assets
Cash $ 34,205 $ 42,871
Accounts receivable - trade, less allowance
for doubtful accounts of $1,045 (note 2) 130,778 109,609
Inventory 70,524 124,304
Due from stockholder 45,857 -
-------------- -------------
Total current assets 279,024 276,784
Property and equipment, at cost, net of
accumulated depreciation (note 3) 661,069 789,167
Acquisition earnest deposits - 336,305
Deposits 4,054 4,054
-------------- -------------
$ 944,147 $ 1,406,310
============== =============
Liabilities and Stockholders' Equity
Current liabilities
Current maturities of long-term debt (note 5) $ 53,942 $ 49,419
Accounts payable - trade 42,796 122,995
Payroll and sales taxes payable 9,790 3,638
Acquisition purchase price liability 15,000 -
Due to officer 7,500 -
------------- -------------
Total current liabilities 129,028 176,052
Long-term debt, less current maturities (note 5) 37,473 231,713
Note payable to stockholder - 226,223
------------- -------------
Total liabilities 166,501 633,988
------------- -------------
Commitments and contingencies (note 5,6 and 12)
</TABLE>
(continued)
F-3
<PAGE>
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Consolidated Balance Sheet (continued)
<TABLE>
<CAPTION>
(Unaudited)
December 31 July 31
1998 1999
------------- -------------
Liabilities and Stockholders' Equity (continued)
<S> <C> <C>
Stockholders' equity
Common stock, $.01 par value; 50,000,000 shares authorized, 6,987,936
shares issued and outstanding at December 31, 1998 and 7,705,236 shares
issued and outstanding at March 31, 1999 69,879 77,052
Common stock subscribed, $.01 par value; 717,300
shares pending issuance 7,173 -
Additional paid-in capital 551,592 551,592
Retained earnings (note 7) 149,002 143,678
------------- -------------
Total stockholders' equity 777,646 772,322
------------- -------------
$ 944,147 $ 1,406,310
============= =============
</TABLE>
See accompanying notes to consolidated financial statements
F-4
<PAGE>
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Consolidated Statement of Operations
<TABLE>
<CAPTION>
(Unaudited)
Year Ended Seven Months
December 31 Ended July 31
1998 1999
------------- --------------
<S> <C> <C>
Services, rent and maintenance revenues $ 761,980 $ 254,540
Product sales 394,751 77,851
------------- --------------
Total revenues 1,156,731 332,391
Less cost of product sales 256,790 62,281
------------- --------------
Net revenues 899,941 270,110
------------- --------------
Operating expenses
Services, rent and maintenance 252,642 102,905
General and administrative 409,926 118,785
Depreciation 62,019 19,378
------------- --------------
Total operating expenses 724,587 241,068
------------- --------------
Operating income 175,354 29,042
------------- --------------
Other expenses
Non-recurring charges (note 9) 200,354 31,887
Interest expense 4,372 2,479
------------- --------------
Total other expenses 204,726 34,366
------------- --------------
Net loss $ (29,372) $ (5,324)
============= ==============
Net loss per share (note 10) $ (0.01) $ (0.0001)
============= ==============
</TABLE>
See accompanying notes to consolidated financial statements
F-5
<PAGE>
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Consolidated Statement of Stockholders' Equity
For the Year Ended December 31, 1998
and
Seven Months Ended July 31, 1999
<TABLE>
<CAPTION>
Common Additional Retained
Common Stock Paid-in Earnings Stockholders'
Stock Subscribed Capital (Deficit) Equity
--------- ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1998 $ 31,844 $ - $ 538,723 $ (166,354) $ 404,213
Quasi-reorganization (note 7) - - ( 344,728) 344,728 -
Issuance of 1,303,500 shares of
common stock 13,035 - 117,315 - 130,350
Issuance of 5,500,000 shares of
common stock in connection
with acquisitions 55,000 - - - 55,000
Cancellation of 3,000,000 shares
of common stock (30,000) - - - (30,000)
Common stock subscribed - 7,173 240,282 - 247,455
Net loss - - - (29,372) (29,372)
--------- ------------- ------------ ------------ -------------
Balance, December 31, 1998 69,879 7,173 551,592 149,002 777,646
Issuance of 717,300 shares of
common stock 7,173 (7,173) - - -
Net loss - - - (5,324) (5,324)
--------- ------------- ------------ ------------ -------------
Balance, July 31, 1999 $ 77,052 $ - $ 551,592 $ 143,678 $ 772,322
========= ============= ============ ============ =============
</TABLE>
See accompanying notes to consolidated financial statements
F-6
<PAGE>
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>
(Unaudited)
Year Ended Seven Months
December 31 Ended July 31
1998 1999
------------ ------------
<S> <C> <C>
Operating activities
Net loss $ (29,372) $ (5,324)
------------ ------------
Adjustments to reconcile net loss to net
cash used by operating activities
Depreciation 62,019 19,378
Extinguishment of debt (35,748) -
(Increase) decrease in
Accounts receivable (78,050) 21,169
Inventory (16,577) (53,780)
Increase (decrease) in
Bank overdraft (19,416) -
Accounts payable (21,099) 80,199
Accrued expenses 6,064 (6,152)
------------ ------------
Total adjustments (102,807) 60,814
------------ ------------
Net cash provided (used) by operating activities (132,179) 55,490
------------ ------------
Investing activities
Purchase of property and equipment (112,935) (147,476)
Acquisition liability 15,000 (15,000)
Increase in amounts due from stockholder (45,857) (64,225)
------------ ------------
Net cash used by investing activities (143,792) (226,701)
------------ ------------
Financing activities
Proceeds (repayments) from officer loans 7,500 (7,500)
Proceeds from sale of common stock 244,805 -
Borrowing of long-term debt 60,598 199,935
Repayments of long-term debt (10,218) (10,218)
------------ ------------
Net cash provided by financing activities 302,685 182,217
------------ ------------
Increase in cash 26,714 11,006
Cash
Beginning of period 5,151 31,865
------------ ------------
End of period $ 31,865 $ 42,871
============ ============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 4,372 $ 2,479
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
F-7
<PAGE>
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1998
NOTE 1 - THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES
Communitronics of America, Inc. (formerly Oneida General Corporation) (the
Company) is a provider of wireless messaging and information delivery services.
The Company maintains an extensive network of radio towers positioned to deliver
wireless messaging services throughout the coastal regions of Alabama,
Louisiana, Mississippi and the Florida Panhandle. The consolidated financial
statements include the accounts of all the Company's wholly-owned subsidiaries.
All intercompany transactions have been eliminated.
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 disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
STATEMENT OF CASH FLOWS
The Company defines cash and cash equivalents as cash on hand, demand deposits
and short-term (three months or less) highly liquid investments.
ACCOUNTS RECEIVABLE
An allowance for doubtful accounts is computed based on specific receivables
deemed uncollectible by management of the Company and historical experience.
INVENTORY
Inventory, consisting primarily of certain types and brands pagers held for
resale, is carried at the lower of cost or market.
F-8
<PAGE>
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
December 31, 1998
NOTE 1 - THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost. When retired or otherwise disposed
of, the related carrying value and accumulated depreciation are removed from
the respective accounts and the net difference, less any amount realized from
the disposition, is recorded as earnings. Maintenance and repairs are charged
to operating expenses. Costs of significant improvements and renewals are
capitalized.
DEPRECIATION
Property and equipment are being depreciated over their estimated useful
lives using straight-line method. The estimated useful lives of significant
assets are as follows: radio towers, 30 years; transmission equipment, 7
years; computer equipment, 5 years; and, furniture and fixtures, 7 years.
REVENUE RECOGNITION
Services, rent and maintenance revenues are recognized in the month the related
services are performed. Product sales are recognized upon delivery of product to
the customer.
INCOME TAXES
In accordance with Statement of Financial Accounting Standards No. 109,
ACCOUNTING FOR INCOME TAXES, income taxes are provided for the tax effects of
transactions reported in the financial statements and consist of taxes currently
due plus deferred taxes resulting primarily from the use of accelerated
depreciation methods for tax purposes.
NOTE 2 - CONCENTRATION OF CREDIT RISK
The Company operates from locations in Daphne and Foley, Alabama, Metaerie
Louisiana and Gulfport and Pascagoula, Mississippi. The Company grants credit
(accounts receivable) to customers, substantially all of whom are individuals,
located in the vicinity of the operating locations. In order to reduce the
credit risk relative to subscriber services, the Company requires all
subscribers to execute a one-year service contract which allows the Company to
charge a $200 fee upon early cancellation of service.
F-9
<PAGE>
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
December 31, 1998
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following at December 31, 1998:
<TABLE>
<S> <C>
Radio towers $ 464,003
Transmission equipment 643,512
Computer equipment 99,535
Vehicles 45,269
Furniture and fixtures 39,797
-----------
1,292,116
Less accumulated depreciation 631,047
-----------
Net property and equipment $ 661,069
===========
</TABLE>
NOTE 4 - INTANGIBLE ASSETS
The Company owns seven Certificates of Public Convenience and Necessity
issued by the Alabama Public Service Commission and thirty-four frequencies
licensed by the Federal Communications Commission. These certificates and
licenses allow the Company to provide wireless messaging services in certain
cities in Alabama, Florida, Mississippi, Louisiana, Georgia, Tennessee,
Arkansas and Texas.
At December 31, 1998 the original costs of intangible assets were fully
amortized. The information relative to original costs and accumulated
amortization at August 31, 1998 was not available. Based on appraisals, the
approximate fair market value of the certificates and licenses is in excess
of $10,000,000.
NOTE 5 - LONG-TERM DEBT
The Company's long-term debt consists of the following at December 31, 1998:
<TABLE>
<S> <C>
Union Planters Bank, 10%, due in equal monthly
principal and interest installments of $270 through
May 1999 and a final payment of $17,846 due
June 1999, secured by real property $ 18,280
</TABLE>
F-10
<PAGE>
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
December 31, 1998
NOTE 5 - LONG-TERM DEBT (CONTINUED)
<TABLE>
<CAPTION>
<S> <C>
Union Planters Bank, 10%, due in equal monthly
principal and interest installments of $233 through
August 2000, unsecured 4,265
Union Planters Bank, 7%, 180-day note, principal and interest due
January 8, 1999, secured by personal property 20,035
Union Planters Bank, 7.8%, due in equal monthly
principal and interest installments of $708 through
December 2003, secured by vehicle 35,035
Non-interest bearing note payable to a stockholder of Crescent Radio
Electronics, Inc. (the predecessor company of Crescent Paging, Inc., a
wholly-owned subsidiary of the Company), due in equal monthly principal
installments of $600 through February 2005, unsecured 13,800
-----------
Total long-term debt 91,415
Less current maturities 53,942
-----------
Long-term debt, less current maturities $ 37,473
===========
</TABLE>
Maturities of long-term debt at December 31, 1998, are as follows:
<TABLE>
<S> <C>
Year ending December 31,
1999 (included in current liabilities) $ 53,942
2000 14,836
2001 6,964
2002 7,531
2003 8,142
------------
$ 91,415
============
</TABLE>
F-11
<PAGE>
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
December 31, 1998
NOTE 6 - COMMITMENTS
The Company is committed to several operating leases of radio towers and office
facilities. Approximate future minimum lease payments of all non-cancelable
operating leases for the next five years are as follows:
<TABLE>
<CAPTION>
<S> <C>
For the year ending December 31,
1999 $ 90,257
2000 46,388
2001 27,327
2002 12,750
2003 10,417
Thereafter 16,800
-----------
$ 203,939
===========
</TABLE>
NOTE 7 - RETAINED EARNINGS
On October 26, 1998, the Company merged with Communitronics, Inc. (as more
fully discussed in note 11 below). As of the date of the merger, the Company
had an accumulated deficit in the amount of $344,728 which resulted from
losses incurred during its years of active operations between 1970 and 1985.
From 1985 to the date of merger, the Company has had no material operations
or assets.
With the majority consent of the shareholders subsequent to the date of
merger, management has elected to eliminate the Company's accumulated deficit
as of January 1, 1998, by reducing additional paid-in capital. Management
believes that the elimination is necessary in order to 1) fairly present the
accumulated results of operations of the active subsidiaries of the Company
and 2) eliminate the accumulated deficit resulting from operations unrelated
to the Company's current operations. The adjustment had no effect on the
results of operations for the year ended December 31, 1998.
NOTE 8 - INCOME TAXES
For the year ended December 31, 1998, the Company had no provision or benefit
for income taxes because the deferred tax liability was offset by an increase
in the valuation allowance of $5,655.
F-12
<PAGE>
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
December 31, 1998
NOTE 8 - INCOME TAXES (CONTINUED)
Significant components of the Company's deferred tax assets and liabilities at
December 31, 1998 are as follows:
<TABLE>
<CAPTION>
<S> <C>
Deferred tax asset
Net operating loss carryforwards $ 46,269
----------
Deferred tax liabilities
Depreciation (77,245)
Valuation allowance 30,976
Net deferred tax liabilities (46,269)
$ -
==========
</TABLE>
At December 31, 1998, the Company has a net operating loss carryforward of
approximately $30,000 that will expire 2014.
NOTE 9 - NON-RECURRING CHARGES
During the year ended December 31, 1998, Communitronics, Inc., one of the
Company's wholly-owned subsidiaries, incurred significant costs (i.e.,
professional fees, travel, etc.) in connection with its "going public"
efforts. Such costs, amounting to approximately $200,000 have been charged to
operations in the period incurred.
NOTE 10 - NET LOSS PER SHARE
Net loss per share amounts are computed based on the weighted-average number of
common shares outstanding. The number of shares used to compute per share
amounts for the year ended December 31, 1998 was 3,968,615.
NOTE 11 - BUSINESS COMBINATIONS
On September 28, 1998, the Company entered into a letter of intent for the
acquisition of 100% of the issued and outstanding shares of Communitronics,
Inc. and its wholly-owned subsidiaries, Crescent Paging, Inc. and Radio
Systems, Inc. (the Acquisition). As part of the transaction, the Company
agreed to issue to the shareholders of the Acquisition 5,500,000 shares of
its restricted common stock. The Acquisition was accounted for under the
requirements of Accounting Principles
F-13
<PAGE>
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
December 31, 1998
NOTE 11 - BUSINESS COMBINATIONS (CONTINUED)
Board Opinion No. 16, whereby the Acquisition was treated as a pooling of
interest. Accordingly, all assets and liabilities of the Acquisition were
recognized at historical cost and the historical financial statements of the
Acquisition became a component of the historical financial statements of the
Company. The current directors of the Company agreed to cancel an aggregate
3,000,000 shares of the Company's restricted common stock owned by them. The
acquisition became effective October 26, 1998. At closing, the current board
of directors of the Company, consisting of Mr. Ken Kurtz, Ms. Carrie Kurtz
and Ms. Tammy Gehring, resigned and were replaced by a board consisting of
Mr. David R. Pressler, Mr. Samuel Mastrull, Mr. James H. Flanagan and Mr.
Charles H. Hillman. In addition, Mr. Kurtz has resigned as President of the
Company and has been replaced by Mr. Pressler. Ms. Kurtz has resigned as
Vice-president and Ms. Gehring has resigned as Secretary and Treasurer. All
of these positions have been replaced by Mr. Mastrull.
On December 22, 1998, the Company acquired all of the outstanding common stock
of Data Paging, Inc. in a stock-for-stock, tax free exchange. The acquisition
was accounted for under the requirements of Accounting Principles Board Opinion
No. 16, whereby the acquisition was treated as a pooling of interest.
Accordingly, all assets and liabilities of the acquisition were recognized at
historical cost and the historical financial statements of the acquisition
became a component of the historical financial statements of the Company.
Details of the results of operations of the previously separate companies for
the year ended December 31, 1998 (period before consummation of combination)
that are included in the current combined net income are as follows:
<TABLE>
<CAPTION>
Crescent Radio Data
Communitronics, Paging, Systems, Paging,
Inc. Inc. Inc. Inc.
--------------- --------------- ---------------- ------------
<S> <C> <C> <C> <C>
Revenue $ 436,516 $ 359,775 $ 38,514 $ 321,926
Expenses 362,854 356,238 21,832 228,579
--------------- --------------- ---------------- ------------
Operating income 73,662 3,537 16,682 93,347
Other expenses (204,726) - - -
--------------- ---------------- --------------- ------------
Net income (loss) $ (131,064) $ 3,537 $ 16,682 $ 93,347
=============== ================ =============== ============
</TABLE>
F-14
<PAGE>
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
December 31, 1998
NOTE 12 - YEAR 2000 ISSUE
The year 2000 issue is the result of shortcomings in many electronic data
processing systems and other equipment that may adversely affect the
Company's operations beginning January 1, 2000. The Company has conducted an
inventory of computer systems and other equipment necessary to conducting
Company operations. Management has contacted the manufacturers of such
systems and equipment and has received assurances that the Company's systems
and equipment are year 2000 compatible.
Because of the unprecedented nature of the year 2000 issue, its effects will
not be fully determinable until the year 2000 and thereafter. Management
cannot assure that parties with whom the Company does business will be year
2000 ready.
F-15-
<PAGE>
Accompanying Information
F-16
<PAGE>
INDEPENDENT AUDITORS' REPORT
ON ACCOMPANYING INFORMATION
The Stockholders
Communitronics of America, Inc.
Daphne, Alabama
Our report on our audit of the basic consolidated financial statements of
Communitronics of America, Inc. (formerly Oneida General Corporation) for the
year ended December 31, 1998 appears on page 2. That audit was conducted for
the purpose of forming an opinion on the basic consolidated financial
statements taken as a whole. The accompanying information on pages 17-19 is
presented for purposes of additional analysis and is not a required part of
the basic consolidated financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
consolidated financial statements, and, in our opinion, the information is
fairly stated in all material respects in relation to the basic consolidated
financial statements taken as a whole.
February 26, 1999
F-17
<PAGE>
Schedule 1
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
and Subsidiaries
Consolidated Services, Rent and Maintenance Expenses
For the Year Ended December 31, 1998
<TABLE>
<S> <C>
Airtime charges $ 30,933
Freight 2,965
General insurance 31,571
Licenses 2,091
Repairs and maintenance 24,914
Telephone 111,359
Tower rent 48,809
--------
$252,642
========
</TABLE>
F-18
<PAGE>
Schedule 2
COMMUNITRONICS OF AMERICA, INC.
(Formerly Oneida General Corporation)
And Subsidiaries
Consolidated General and Administrative Expenses
For the Year Ended December 31, 1998
<TABLE>
<S> <C>
Advertising $ 9,487
Auto 9,672
Bank charges 2,034
Contract labor 10,304
Dues and subscriptions 638
Insurance - group 7,895
Legal and accounting 38,670
Licenses 9,336
Office expense 14,830
Office rent 43,822
Outside services 939
Postage 7,769
Salaries 205,067
Supplies 8,354
Taxes - other 3,128
Taxes - payroll 17,927
Telephone 4,860
Travel and entertainment 2,869
Utilities 12,325
-----------
$ 409,926
===========
</TABLE>
F-19
<PAGE>
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, hereunto duly authorized.
COMMUNITRONICS OF AMERICA, INC.
Date: August 13, 1999
By: S/S David R. Pressler S/S Charles H. Hillman
------------------------------------- ------------------------------
David R. Pressler Charles H. Hillman
Director, President, Chief Executive Director
Officer, and Chairman of the Board of
Directors
S/S Samuel Mastrull
-------------------------------------
Samuel Mastrull
Director, Secretary and
principal accounting officer
20
<PAGE>
EXHIBIT 2
REORGANIZATION AGREEMENT
THIS REORGANIZATION AGREEMENT entered into this 1st day of October,
1998 between and among Oneida General Corporation ("ONXD"), a Utah corporation,
and Communitronics, Inc., an Alabama Corporation ("BEEP") (collectively ONXD and
BEEP shall be referred to as "Parties").
Recitals
WHEREAS, ONXD seeks a business entity with which to acquire and to own
as a wholly owned subsidiary.
WHEREAS, BEEP seeks to be acquired by a corporate shell company
publicly held and quoted on the National Association of Securities Dealers
("NASD") Over-The-Counter ("OTC") Bulletin Board.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereby agree as
follows:
1. ACQUISITION. ONXD agrees to issue 5,500,000 shares of ONXD's
restricted common stock to the shareholders of BEEP in exchange for shares of
common stock in BEEP, which represents all of the issued and outstanding capital
stock of BEEP (the "BEEP Common Stock"). BEEP shall retain its corporate
identity and become a wholly-owned subsidiary of ONXD.
2. EXCHANGE OF SHARES. Subject to all the terms and conditions of
this Agreement, all of the BEEP common stock outstanding on the date of closing,
as defined later in this Agreement, shall be exchanged for 5,500,000 shares of
ONXD Common Stock (the "Exchanged Shares"). All owners of the BEEP common stock
(the "BEEP Common Stock") listed in Exhibit B shall tender and surrender to ONXD
certificates evidencing the BEEP Common Stock. Such certificates shall be
properly endorsed to accommodate transfer to ONXD Holdings. The Exchanged Shares
pursuant to this Section shall be, when issued, fully paid, and non-assessable.
a. As a wholly owned subsidiary of ONXD, BEEP may take any action
in the name and on behalf of BEEP in order to carry out and
effectuate the transactions contemplated by this Agreement.
b. The directors and officers of BEEP listed in Exhibit C shall
remain the directors and officers of BEEP after the Exchange
of Shares and at such time additionally replace the current
directors and officers of ONXD listed in Exhibit D.
c. The Articles of Incorporation of BEEP in effect immediately
prior to the Exchange of Shares will remain the Articles of
Incorporation after the Exchange of Shares, without any
modification or amendment as a result of the Exchange of
Shares.
d. The Bylaws of BEEP in effect immediately prior to the Exchange
of Shares will remain the Bylaws after the Exchange of Shares,
without any modification or amendment as a result of the
Exchange of Shares.
3. EXEMPTION FROM REGISTRATION. The parties hereto intend that
the Exchanged Shares shall be exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"), pursuant to Section 4(2)
<PAGE>
of the 1933 Act and the rules and regulations promulgated thereunder and exempt
from the registration requirements of the applicable states. In furtherance
thereof, the BEEP Shareholders will execute and deliver to ONXD at Closing,
investment letters suitable to ONXD counsel, in substantially the form attached
hereto as Exhibit E.
4. NON-TAXABLE TRANSACTION. The parties intend to effect this
transaction as a non-taxable reorganization.
5. WARRANTIES AND REPRESENTATIONS OF BEEP In order to induce ONXD
to enter into this Agreement and to complete the transaction contemplated
hereby, BEEP warrants and represents to ONXD that:
a. ORGANIZATION AND STANDING. BEEP is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Alabama. It is also qualified to do
business in every other state or jurisdiction in which it
operates and to own and operate its assets, properties and
business in such states or jurisdictions. Attached hereto as
Exhibit F are true and correct copies of BEEP's Articles of
Incorporation, Amendments thereto and current By-laws. No
changes to any of the documents listed in Exhibit F shall be
effected prior to Closing.
b. CAPITALIZATION. As of Closing, BEEP's entire authorized equity
capital consists of 25,000,000 shares of Common Stock, of
which ______________ shares of Common Stock will be
outstanding as of the Closing. As of Closing, there will be no
other voting or equity securities authorized or issued, nor
any authorized or issued securities convertible into voting
stock, and no outstanding subscriptions, warrants, calls,
options, rights, commitments or agreements by which BEEP is
bound, calling for the issuance of any additional shares of
Common Stock of any other voting or equity security. The
BEEP's Common Shares constitute 100% of the equity capital of
BEEP, which includes, INTER ALIA 100% of BEEP's voting power,
right to receive dividends, when, and if declared and paid,
and the exclusive right to receive the proceeds of liquidation
attributable to BEEP Common Stock, if any. From the date
hereof, and until the Closing Date, no dividends or
distributions of capital, surplus, or profits shall be paid or
declared by BEEP in redemption of their outstanding shares or
otherwise, and except as described herein, no additional
shares shall be issued by said corporation.
c. OWNERSHIP OF BEEP SHARES As of the date hereof, the BEEP
Stockholders are the sole owners of 100% of the BEEP Common
Shares and all such securities are free and clear of all
liens, encumbrances and restrictions of any nature whatsoever,
with the sole exception being possible restrictions imposed by
the 1933 Act and applicable state Blue Sky laws due to such
securities not having been registered with any federal or
state securities commissions or authorities.
d. TAXES. Within the times and in the manner prescribed by law,
BEEP and if applicable, its subsidiaries, has filed all
federal, state and local income or other tax returns and
reports that it is required to file with all governmental
agencies and has paid or accrued for payment all taxes as
shown on such returns, such that a failure to file, pay or
accrue will not have a material adverse effect on BEEP.
No Pending ACTIONS. Except as set forth in Exhibit K, to the
best of BEEP's knowledge, after diligent inquiry, there are no
legal actions, lawsuits, proceedings or investigations, either
administrative or judicial, pending or threatened against or
affecting BEEP, its subsidiaries, or against any of the
officers or directors therewith that arise out of their
operation of BEEP and its subsidiaries, nor is BEEP or its
subsidiaries in violation of any federal or state law,
material ordinance or regulation of
<PAGE>
any kind whatever, including, but not limited to laws, rules
and regulations governing the sale of its products, services
or securities. BEEP is not an investment company as defined in
or otherwise subject to regulation under, the Investment
Company Act of 1940.
f. OWNERSHIP OF ASSETS. BEEP and its subsidiaries has good,
marketable title, without any liens or encumbrances of any
nature whatever, to all of the following: its assets,
properties and rights of every type and description,
including, without limitation, all cash on hand and in banks,
certificates of deposit, stocks, bonds, and other securities,
goodwill, customer lists, its corporate name and all variants
thereof, trademarks and trade names, copyrights and interests
thereunder, licenses and registrations, pending licenses and
permits and applications therefor, inventions, processes,
know-how, trade secrets, real estate and interests therein
and improvements thereto, machinery, equipment, vehicles,
notes and accounts receivable, fixtures, rights under
agreements and leases, franchises, all rights and claims under
insurance policies and other contracts of whatever nature,
rights in funds of whatever nature, books and records and all
other property and rights of every kind and nature owned or
held by BEEP and its subsidiaries as of this date, and will
continue to hold such title on and after the completion of the
transactions contemplated by this Agreement; and, except in
its ordinary course of business, BEEP or its subsidiaries has
not disposed of any such asset since the date of the most
recent balance sheet described herein.
g. SUBSIDIARIES. The only subsidiary of BEEP is Crescent Paging.
h. NO INTEREST IN SUPPLIERS, CUSTOMERS, LANDLORDS OR COMPETITORS.
None of the following persons possess any ownership interest
either directly or indirectly of any nature whatsoever in any
supplier, customer, landlord or competitor of BEEP or its
subsidiaries:
BEEP Shareholder, family member of any BEEP Shareholder, or
employee of BEEP or any of its subsidiaries.
1. NO DEBT OWED BY BEEP. Except as set forth in Exhibit K,
neither BEEP nor its subsidiaries owe any money, securities, or property to any
of the following persons either directly or indirectly: BEEP Shareholder, family
member of any BEEP Shareholder, or employee of BEEP or any of its subsidiaries.
BEEP and its subsidiaries do not have any material Benton, liability or
obligation of any nature, whether accrued absolute, contingent or otherwise, and
whether due or to become due, that is not reflected in the balance sheet of BEEP
included hereto. BEEP or its subsidiaries do not currently have, nor will it
have on the Closing Date any pension plan, profit-sharing plan, or stock
purchase plan for any of its employees or certain options to proposed executive
officers. To the extent that BEEP or its subsidiaries may have any undisclosed
liability to pay any sum or property to any such persons, such liability is
hereby forever irrevocably released and discharged.
J. CORPORATE RECORDS. All of BEEP's and its subsidiaries' books
and records, including, without limitation, its books of
account, corporate records, minute book, stock certificate
books and other records are up-to-date, complete and reflect
accurately and fairly the conduct of its business in all
material respects since its date of incorporation.
k. BEEP FINANCIAL STATEMENTS. Within 30 days from the date of
this Agreement, BEEP will provide to
<PAGE>
the approval of ONXD, audited financial statements for BEEP
and its subsidiaries for the period ended August 31, 1998
prepared in accordance with generally accepted accounting
principles in the United States ("GAAP") (or as permitted by
regulation S-X, S-B and/or the rules promulgated under the
1933 Act and the 1934 Act and audited by independent certified
public accountants with substantial SEC experience).
1. BEEP represents that it shall not materially change the normal
course of its business operations prior to Closing. BEEP shall
not amend its Articles of Incorporation, or Bylaws (except as
may be described in this Agreement), declare dividends, redeem
securities, incur additional or newly-funded liabilities
outside the ordinary course of business, acquire or dispose of
fixed assets, change employment terms, enter into any material
or long-term contract, guarantee obligations of any third
party, settle or discharge any balance sheet receivable for
less than its stated amount, pay more on any liability than
its stated amount, or enter into any other transaction without
the prior approval of ONXD. Such approval shall not to be
unreasonably withheld.
m. CORPORATE SUMMARY. Attached hereto as Exhibit M is BEEP's
business plan, which accurately describes BEEP's business,
assets, proposed operations and management of BEEP and its
subsidiaries.
6. WARRANTIES AND REPRESENTATIONS OF ONXD. In order to induce BEEP to
enter into this Agreement and to complete the transaction contemplated
herein, ONXD warrants and represents to BEEP that:
a. ORGANIZATION AND STANDING. ONXD is a corporation duly
organized, validly existing and in good standing under the
laws of Utah. It is also qualified to do business in every
other state or jurisdiction in which it operates and to own
and operate its assets, properties and business in such states
or jurisdictions. Attached hereto as Exhibit N are true and
correct copies of ONXD' 5 Articles of Incorporation,
Amendments thereto and current By-laws. No changes to any of
the documents listed in Exhibit N shall be effected prior to
Closing.
b. CAPITALIZATION. At Closing, ONXD's entire authorized equity
capital consists of 50,000,000 shares of voting common stock,
$0.01 par value and no preferred stock. By Closing, but
immediately prior to the reorganization contemplated herein,
ONXD shall have a total of 4,487,936 shares of its common
stock issued and outstanding. There are no other voting or
equity securities convertible into voting stock, and no
outstanding subscriptions, warrants, calls, options, rights,
commitments or agreements by which ONXD is bound, calling for
the issuance of any additional shares of common stock or any
other voting or equity security. After giving effect to the
cancellation by the directors of ONXD of 3,000,000 shares and
the issuance of 5,500,000 shares of restricted stock issued to
BEEP Stockholders, pursuant to this Agreement, there will be a
total of 6,987,936 shares of ONXD's common stock issued and
outstanding. Upon such issuance, all of the ONXD common stock
will be validly issued, fully paid and non-assessable. The
relative rights and preferences of ONXD's equity securities
are set forth in ONXD's Articles of Incorporation, Amendments
thereto and current By-laws which are collectively set forth
in Exhibit N. Accordingly, as of the Closing, the 5,500,000
shares being issued to the BEEP Stockholders will constitute
approximately 79.0% of the total outstanding shares of ONXD,
which includes INTER ALIA that same percentage of ONXD's
voting power, right to receive dividends, when, as and if
declared and paid, and the right to receive the proceeds of
<PAGE>
liquidation attributable to Common Stock, if any.
c. OWNERSHIP OF SHARES. By ONXD's issuance of the ONXD Common
Shares to the BEEP Stockholders pursuant to this Agreement,
the BEEP Stockholders will thereby acquire good and absolute
marketable title thereto, and will be subject to resale terms
under the investment letter sent forth in Exhibit E. Such
securities shall be free and clear of all liens, encumbrances
and restrictions of any nature whatsoever, with the sole
exception being possible restrictions imposed by the 1933 Act,
and applicable state Blue Sky laws due to such securities not
having been registered with any federal or state securities
commissions or authorities.
d. TAXES. Within 90 days after Closing, ONXD will have filed all
federal, state and local income or other tax returns and
reports that it is required to file with all governmental
agencies and has paid all taxes as shown on such returns. To
the best of ONXD's knowledge, All of such returns shall be
true and complete.
e. NO PENDING ACTIONS. To the best of ONXD's knowledge, after
diligent inquiry, there are no legal actions, lawsuits,
proceedings or investigations, either administrative or
judicial, pending or threatened against or affecting ONXD, or
against any of ONXD's officers or directors that arise out of
their operation of ONXD, nor is ONXD in violation of any
federal or state law, material ordinance or regulation of any
kind whatever, including, but not limited to laws, rules and
regulations governing the sale of its products, services or
securities. ONXD is not an investment company as defined in or
otherwise subject to regulation under, the Investment Company
Act of 1940.
f. CORPORATE RECORDS. All of ONXD's books and records, including
without limitation, its book of account, corporate records,
minute book, stock certificate books and other records are
up-to-date, complete and reflect accurately and fairly the
conduct of its business in all respects since its date of
incorporation. All of said books and records will be delivered
to BEEP at Closing and are available for BEEP's review at any
time.
7. NO MISLEADING STATEMENTS OR OMISSIONS. Neither this Agreement nor any
Exhibit, Schedule or Documents attached hereto or presented to ONXD by
BEEP or to BEEP by ONXD in connection herewith, contains any materially
misleading statement, or omits any fact of statement necessary to make
the other statements or facts therein set forth not materially
misleading.
8. VALIDITY OF THIS AGREEMENT. By Closing, all corporate and other
proceedings required to be taken by BEEP and ONXD in order to enter
into and to carry out this Agreement will have been duly and properly
taken. Upon execution, this Agreement shall constitute the valid and
binding obligation of BEEP, and ONXD, except to the extent limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other
laws relating to or effecting generally the enforcement of creditors
rights. The execution and delivery of this Agreement and its stated
terms shall not result in the breach of any of the terms or conditions
of, or constitute a default under or violate the parties Articles of
Incorporation and Amendment thereto or document of undertaking, oral or
written, to which the Parties are a party to or is bound or may be
affected by, nor will such execution, delivery and carrying out violate
any order, writ, injunction, decree, law, rule or regulation of any
court, regulatory agency or other governmental body; and the business
now conducted by the Parties can continue to be so
<PAGE>
conducted after completion of the transaction contemplated hereby, with
BEEP as a wholly-owned subsidiary of the ONXD.
9. ENFORCEABILITY OF THIS AGREEMENT. When duly executed and delivered,
this Agreement and the Exhibits hereto, which are incorporated herein
and made a part hereof, are legal, valid, and enforceable by the
Parties hereto according to their terms, except to the extent limited
by applicable bankruptcy, reorganization, insolvency, moratorium or
other laws relating to or effecting generally the enforcement of
creditors rights.
10. ACCESS TO BOOKS AND RECORDS. During the course of the Exchange of
Shares through Closing, ONXD and BEEP agree to make available for
inspection all corporate books, records and assets, and otherwise
afford to each other and their respective representatives, reasonable
access to all documentation and other information concerning the
business, financial and legal conditions of each other for the purpose
of conducting a due diligence investigation thereof. Such due diligence
investigation shall be for the purpose of satisfying each party as to
the business, financial and legal condition of each other for the
purpose of determining the desirability of consummating the proposed
Reorganization. ONXD and BEEP further agree to keep confidential and
not use for their own benefit, except in accordance with this
Agreement, any information or documentation obtained in connection with
any such investigation.
11. INDEMNIFICATION. All representations, warranties, covenants and
agreements made herein and in the Exhibits attached hereto shall
survive the execution and delivery of this Agreement and payment
pursuant thereto. The officers and directors of the Parties hereto
hereby agree, jointly and severally, to indemnify, defend, and hold the
other harmless from and against any damage, loss liability, or expense
(including, without limitation, reasonable expenses of investigation
and reasonable attorney's fees)' arising out of any material breach of
any representation, warranty, covenant, or agreement made by the
officers and directors of the other parties to this Agreement.
12. RESTRICTED SHARES: LEGEND. All of the 5,500,000 ONXD Common Shares
issued to the BEEP Stockholders, will be "restricted securities" as
defined in Rule 144 under the 1933 Act; and each stock certificate
issued to the BEEP stockholders hereunder will bear the usual
restrictive legend to such effect. Appropriate Stop Transfer
instructions will be given to ONXD1s stock transfer agent.
13. NO REVERSE SPLIT. As a material term hereto and a condition to ONXD
entering into this Agreement, BEEP and the BEEP Shareholders agree that
for a period of twelve (12) months from the date of Closing, there will
be no reorganizations, recapitalization or reverse stock splits,
without the prior written consent of the existing directors of ONXD as
of the date immediately prior to the Closing of this Agreement.
14. EXPENSES. Each of the Parties shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the consummation of
this Agreement, including, without limiting the generality of the
foregoing, fees and expenses of financial consultants, accountants and
counsel and the cost of any documentary stamps, sales and excise taxes
which may be imposed upon or be payable in respect to the transaction.
15. CLOSING. The Closing of the transactions contemplated by this Agreement
("Closing") shall take place at 1:00 P.M. on the day after all Parties
have supplied the required documents and obtained the required
approvals as
<PAGE>
discussed herein except that BEEP shall have until 30 days from the
date of this Agreement to obtain the financial statements as discussed
herein and ONXD shall have 90 days to complete and deliver past tax
returns. Closing shall take place at such place as the parties hereto
shall agree upon or by FAX and Federal Express.
16. DELIVERIES.
a. Pursuant to Section 2 herein, at Closing, the BEEP
Shareholders shall deliver properly endorsed certificates
representing the BEEP Common Stock to ONXD, and ONXD shall
deliver either certificates representing the Exchanged Shares,
duly issued to the BEEP Shareholders as listed on Exhibit B
attached hereto, or a copy of a letter from ONXD to its
transfer agent, instructing such transfer agent to issue the
certificates representing the ONXD Shares to the BEEP
Shareholders.
b. ONXD shall deliver an opinion from counsel to the satisfaction
of BEEP that:
i. ONXD does not have any liens or judgments against it.
c. BEEP shall deliver a letter to ONXD that the opinion of
counsel is to BEEP's satisfaction.
d. ONXD shall deliver appointments of officers and directors
chosen by BEEP and resignations of ONXD's current officers and
directors.
e. ONXD shall deliver a copy of all its corporate records that
are in the possession of its current management.
17. CONDITIONS PRECEDENT TO CLOSING.
a. The obligations of BEEP under this Agreement shall be and are
subject to fulfillment, prior to or at the Closing of each of
the following conditions:
i. That each of the representations and warranties of
ONXD contained herein shall be true and correct at
the time of the Closing date as if such
representations and warranties were made at such
time;
ii. That ONXD shall have performed or complied with all
agreements, terms and conditions required by this
Agreement to be performed or complied with by them
prior to or at the time of the Closing;
iii. That BEEP's representations and warranties contained
herein shall be true and correct at the time of
Closing date as if such representations and
warranties were made at such time; and
iv. That BEEP has performed or complied with all
agreements, terms and conditions required by this
Agreements to be performed or complied with by them
prior to or at the time of Closing date.
<PAGE>
18. TERMINATION. This Agreement may be terminated at any time before or; at
Closing, by:
a. The mutual agreement of the parties;
b. Any party if:
i. Any provision of this Agreement applicable to a party
shall be materially untrue or fail to be
accomplished.
ii. Any legal proceeding shall have been instituted or
shall be imminently threatening to delay, restrain or
prevent the consummation of this Agreement.
iii. There is a materially adverse change in the financial
condition or business operation of the other party.
c. Upon termination of this Agreement for any reason, in
accordance with the terms and conditions set forth in this
paragraph, each said party shall bear all costs and expenses
as each party has incurred and no party shall be liable to the
other.
19. EXHIBITS. All Exhibits attached hereto are incorporated herein by this
reference as if they were set forth in entirety.
20. MISCELLANEOUS PROVISIONS. This Agreement is the entire agreement
between the Parties in respect of the subject matter hereof, and there
are no other agreements, written or oral, nor may this Agreement be
modified except in writing and executed by all of the Parties hereto.
The failure to insist upon strict compliance with any of the terms,
covenants or conditions of this Agreement shall not be deemed a waiver
or relinquishment of such right or power at any other time or times.
21. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Utah.
22. NOTICES. All notices, requests, instructions, or other documents to be
given hereunder shall be in writing and sent by registered mail to the
parties at the addresses first appearing herein.
23. COUNTERPARTS. This Agreement may be executed in duplicate facsimile
counterparts, each of which shall be deemed an original and together
shall constitute on and the same binding Agreement, with one
counterpart being delivered to each party hereto.
IN WITNESS WHEREOF, The foregoing Reorganization Agreement, having been
duly approved and adopted by the Board of Directors, and duly approved and
adopted by the stockholders of the constituent corporations as required, in the
manner provided by the laws of the State of Utah, the Chairman of the Board, the
President or the Secretary of said corporations, and the Shareholders of BEEP do
now execute this Reorganization Agreement under the respective seals of said
corporation by the authority of the directors and stockholders of each, as
required, as the act, deed and agreement of each of said corporations.
<PAGE>
Oneida General Corporation
By: s/ Ken Kurtz
---------------------------
Ken Kurtz, President
Communitronics, Inc.
By: s/ David Pressler
---------------------------
David Pressler, President
List of Exhibits
Exhibit "B" BEEP Stockholders.
Exhibit "C" BEEP officers and directors.
Exhibit "D" ONXD officers and directors.
Exhibit "E" Investment Letter
Exhibit "F" True and correct copies of BEEP's Certificate of
Incorporation, Amendments thereto and all current By-laws.
Exhibit "G" BEEP Subsidiaries
Exhibit "K" BEEP's liabilities including pending legal actions
Exhibit "L" BEEP's financial statements.
Exhibit "M" BEEP's Corporate Summary.
Exhibit 'N" ONXD's Articles of Incorporation, Amendments thereto and all
current By-Laws.
Exhibit "P" ONXD Holdings' Articles of Incorporation, Amendments thereto
and all current ByLaws.
<PAGE>
EXHIBIT 3(i)
ARTICLES OF INCORPORATION
OF
INDUSTRIAL SALES AND MARKETING CORPORATION
We, the undersigned natural persons of the age of twenty-one years or
more, acting as incorporators of a corporation under the Utah Business
Corporation Act, adopt the following Articles of Incorporation for such
corporation:
FIRST: The name of the corporation is Industrial Sales and Marketing
Corporation.
SECOND: The purpose or purposes for which the corporation is organized
are:
(a) To engage in the marketing and sales promotion of all
goods and commodities, including but not limited to, plastic
products and to merchandise, develop and manufacture products
of all classes and descriptions for any purposes.
(b) To buy and otherwise acquire, to own and hold, manage,
operate, improve, develop, and sell lands, mining claims,
mineral rights, oil wells, and other real estate and
interests and rights in and to any of the properties; to buy
and sell oil royalties of every kind and character; to rent
and lease machinery of every kind and character.
(c) To carry on as principals, agents, commission merchants,
consignees, or in any capacity whatever, the business of
milling, mining, concentrating, converting, smelting,
treating, preparing for market, manufacturing, buying,
selling, exchanging, and otherwise producing and dealing in
all kinds of ores, metals, and minerals, coal, oil, and
salines, and in the products and by-products thereof of every
kind, class, and description, and by whatsoever processes the
same are or may be hereafter produced; and generally and
without limit as to amount, to buy, sell, exchange, lease,
acquire and deal in and with lands, mines, and minerals,
rights and claims, and in the above specified products, and
to carry on, in any capacity, any business appertaining
thereto or any other business which, in the judgment of the
company may, at any time, be conveniently conducted in
conjunction with any of the matters aforesaid, or otherwise.
<PAGE>
(d) To acquire by purchase or exchange, or in any other
manner, in the United States or in foreign countries, mining
claims, grounds, or lodes, mining and mineral rights,
concessions or grants, or any interest therein, and to sell,
exchange, lease or in any other manner to dispose of the
whole or any part thereof or any interest therein when
desirable.
(e) To acquire, by purchase, lease, or otherwise, and to
equip, maintain, and operate a general machine shop. To
design and manufacture tools, machinery, boilers, engines,
motors, and all things made wholly or partly from metals. To
do repairing, welding, brazing, soldering, polishing,
moulding, casting, pattern-making, lacquering, enameling,
metal stamping and cutting, and electrical work of all kinds.
(f) To carry on and conduct a general agency business, to
act, and to appoint others to act, as general agent, special
agent, broker, factor, manufacturers' agent, purchasing
agent, sales agent, distributing agent, representative, and
commission merchant, for individuals, firms, associations,
and corporations in the distribution, delivery,, purchase,
and sale of goods, wares, merchandise, property, commodities,
and articles of commerce of every kind and description, and
in selling, promoting the sale, advertising, and introducing,
and contracting for the sale, introduction, advertisement,
and use of , services of all kinds, relating to any and all
kinds of businesses, for any and all purposes.
(g) To acquire by purchase, exchange, lease, or otherwise,
and to own, hold, use, develop, operate, sell, assign, lease,
transfer, convey, exchange, mortgage, grant security
interests in, pledge, or otherwise dispose of or deal in and
with, real and personal property of every class or
description and rights and privileges therein wheresoever
situate.
(h) To engage in the business of purchasing or otherwise
acquiring in whole or in part letters patent, concessions,
licenses, inventions, rights, and privileges, subject to
royalties or otherwise, whether exclusive, nonexclusive, or
limited, whether in the United States or elsewhere; to sell,
let, or grant any patent rights, license, concessions,
inventions, rights, or privileges belonging to this
corporation or which it may acquire, or any interest in the
same, and generally to deal in any and all such properties;
to manufacture, produce, and exploit, trade, and deal in all
products of any such inventions or rights, and maintain
machinery, plants, articles, appliances, and other things in
connection therewith.
<PAGE>
(i) To engage in research, exploration, laboratory, and
development work relating to any material, substance,
compound, or mixture now known or which may hereafter be
known, discovered, or developed, and to perfect, develop,
manufacture, use, apply, and generally to deal in and with
any such material, substance, compound, or mixture, and to
undertake, conduct, manage, assist, promote, and engage or
participate in every kind of research or scientific,
experimental, design, or development work, including pure or
basic research.
FOURTH: The aggregate number of shares which the corporation shall
have the authority to issue is 10,000.000 shares of common stock, par value
$.05 per share.
FIFTH: The corporation will not commence business until at least One
Thousand Dollars ($1,000.00) has been received by its consideration for the
issuance of shares.
SIXTH: Provisions limiting or denying to shareholders the
pre-emptive rights to acquire additional or treasury shares of the
corporation are: The shareholders shall not have pre-emptive rights to
acquire unissued or treasury shares of the corporation.
SEVENTH: Provisions for the regulation of the internal affairs of
the corporation are: The By-Laws shall control the regulation and management
of the internal affairs of the corporation.
EIGHTH: The address of the initial registered office of the
corporation is 692 Kennecott Building, Salt Lake City, Utah, and the same of
its initial registered agent as such address is John B. Anderson.
NINTH: The number of directors constituting the initial board of
directors of the corporation is three (3) and the names and addresses of the
persons who are to serve as directors until the first annual meeting of
shareholders or until their successors are elected and shall qualify are:
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
David Louis Durbano 2008 North 450 West
Sunset, Utah
Michael Hugh Ford 4273 Taylor
Ogden, Utah
<PAGE>
Edward Browning Rich 2568 Swaner Place
Ogden, Utah
</TABLE>
TENTH: The name and address of each incorporator is:
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
David Louis Durbano 2008 North 450 West
Sunset, Utah
Michael Hugh Ford 4273 Taylor
Ogden, Utah
Edward Browning Rich 2568 Swaner Place
Ogden, Utah
</TABLE>
DATED this 18th day of September, 1970.
S/David Louis Durbano
----------------------
S/Michael Hugh Ford
----------------------
S/Edward Browning Rich
----------------------
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
I, Connie D. Smith, a Notary Public, hereby certify that on the 18th
day of September, 1970 personally appeared before me, David Louis Durbano,
Michael Hugh Ford, and Edward Browning Rich, who being by be first duly
sworn, severally declared that they are the persons who signed the foregoing
document as incorporators, and that the statements therein contained are true.
S/Connie D. Smith
--------------------------------
NOTARY PUBLIC
Residing in Salt Lake City, Utah
My Commission Expires:
APRIL 9, 1974
- ---------------------
<PAGE>
EXHIBIT "B"
BY-LAWS OF ONEIDA GENERAL CORPORATION
<PAGE>
EXHIBIT 3(ii)
ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
INDUSTRIAL SALES AND MARKETING CORPORATION
Pursuant to the provisions of the Utah Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the corporation is INDUSTRIAL SALES AND MARKETING
CORPORATION.
SECOND: The following amendment to the Articles of Incorporation was
adopted by the shareholders of the corporation on the 16th day of February,
1971, in the manner prescribed by the Utah Business Corporation Act.
"FOURTH: The aggregate number of shares which the corporation
Shall have authority to issue is 50,000,000 shares of common
stock, par value $.01 per share."
THIRD: The number of shares of the corporation outstanding at the time
of such adoption was 168,367; and the number of shares entitled to vote thereon
was 168,367.
FOURTH: The designation and number of outstanding shares of each class
entitled to vote thereon as a class were as follows:
<TABLE>
<CAPTION>
Class Number of Shares
----- ----------------
<S> <C>
Common 168,367
</TABLE>
FIFTH: The number of shares voted for each such amendment was 168,367,
and the number of shares voted against such amendment was non.
SIXTH: The number of shares of each class entitled to vote thereon as a
class voted for and against such amendment, respectively was:
<TABLE>
<CAPTION>
Number of Shares
----------------
<PAGE>
Class For Against
----- --- -------
<S> <C> <C>
Common 168,367 -0-
</TABLE>
SEVENTH: The manner, if not set forth in such amendment, in which
any exchange, reclassification, or cancellation of issued shares provided for
in the amendment shall be effected, or cancellation of issued shares provided
for in the amendment shall be effected, is as follows: No Change.
EIGHTH: The manner in which such amendment effects a change in the
amount of stated capital, and the amount of stated capital as changed by such
amendment are as follows: No Change.
DATED this 16th day of February, 1971.
INDUSTRIAL SALES AND MARKETING
CORPORATION
By: S/David Louis Durbano
-------------------------------------
David Louis Durbano, Vice President
and S/ Michael Hugh Ford
------------------------------------
Michael Hugh Ford, Secretary
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
Before me, Tonia Richards, a Notary Public in and for the said
County and State, personally appeared David Louis Durbano and Michael Hugh
Ford, who acknowledged before me that they are the vice-president and
secretary, respectively, of Industrial Sales and Marketing Corporation, a
Utah corporation, and that they signed the foregoing Articles of Amendment as
their free and voluntary acts and deeds for the uses and purposes therein set
forth.
In witness whereof, I have hereunto set my hand and seal this 16th
day of February, 1971.
S/Tonia Richards
----------------------------------------
Notary Public residing at Salt Lake City
My Commission Expires:
March 14, 1973
- --------------
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION OF
INDUSTRIAL SALES AND MARKETING CORPORATION
Pursuant to the provisions of the Utah Business Corporation Act, the
undersigned corporation adopts the following articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the corporation is INDUSTRIAL SALES AND
MARKETING CORPORATION.
SECOND: The following Amendment of the Articles of Incorporation was
adopted by the shareholders of the corporation on the 21st day of December,
1978, in the manner prescribed by the Utah Business Corporation Act:
Article I of the Articles of Incorporation of Industrial Sales and
Marketing Corporation filed with the Secretary of State of the State of Utah,
September 21, 1970, as amended February 16, 1971, is hereby amended so as to
delete "Industrial Sales and Marketing Corporation; and substitute therefor
"Oneida General Corporation". Therefore, Article I shall be as follows:
"FIRST: The name of the corporation is ONEIDA GENERAL
CORPORATION."
Said Amendment is for the purposes of better name identification by
reason of the fact that the company's principal products are manufactured by
the Oneida Manufacturing Division of Industrial Sales and Marketing
Corporation.
THIRD: The number of shares of the corporation outstanding at the
time of such adoption was 6,023,670; and the number of shares entitled to
vote thereon was 6,023,670.
FOURTH: The designation and number of outstanding shares of each
class entitled to vote thereon as a class were as follows:
<TABLE>
<CAPTION>
Class Number of Shares
----- ----------------
<S> <C>
Common 6,023,670
</TABLE>
<PAGE>
FIFTH: The number of shares voted for such Amendment was 5,945,170,
and the number of shares voted against such Amendment was 78,500.
SIXTH: The number of shares of each class entitled to vote thereon
as a class voted for and against such Amendment,
<TABLE>
<CAPTION>
Class Number of Shares Voted
----- ----------------------
<S> <C>
Common For: 5,945,170
Against: 78,500
</TABLE>
SEVENTH: The manner, if not set forth in such Amendment, in which
any exchange, reclassification, or cancellation of issued shares provided for
in the Amendment shall be effected, is as follows: NO CHANGE.
EIGHTH: The manner in which such Amendment effects a change in the
amount of stated capital, and the amount of stated capital as changed by such
Amendment, are as follows: NO CHANGE.
DATED this 9th day of February, 1979.
INDUSTRIAL SALES AND MARKETING
CORPORATION
By: S/David L. Durbano
---------------------------------
David L. Durbano
Executive Vice President
By: S/Michael H. Ford
---------------------------------
Michael H. Ford
Secretary
<PAGE>
STATE OF UTAH :
: ss.
COUNTY OF WEBER :
Before me, Muriel Eason, a Notary Public in and for the said county
and state, appeared David L. Durbano and Michael H. Ford, who acknowledged
before me that they are the Executive Vice President and Secretary,
respectively, of Industrial Sales and Marketing Corporation, a Utah
corporation, and that they signed the foregoing Articles of Amendment as
their free and voluntary act and deed for the uses and purposes therein set
forth.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 9th day
of February, 1979.
S/Muriel L. Eason
-----------------------------------
Muriel L. Eason, Notary Public
Residing at: Ogden, Utah
My Commission Expires: 10-2-82
<PAGE>
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION
OF
ONEIDA GENERAL CORPORATION
Pursuant to the provisions of the Utah Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the corporation is Oneida General Corporation.
SECOND: The following Amendment of the Articles of Incorporation was
adopted by the shareholders of the corporation on October 26,
1998:
Article First of the Articles of Incorporation of Oneida
General Corporation, which was filed with the Secretary of
State on September 21, 1970, and as amended on February 16,
1971, and as further amended on February 16, 1979, is hereby
amended to read as follows:
"FIRST: The name of the corporation is Communitronics of
America, Inc."
Said Amendment is for the purpose of Reorganization by and
between Oneida General Corporation and Communitronics, Inc.,
a Alabama corporation.
THIRD: The above amendment shall be effective October 26, 1998.
FOURTH: The number of issued and outstanding shares of the common
stock of the corporation at the time of such adoption was
4,487,936 shares; the number of votes entitled to vote
thereon was 4,487,936 shares; and the number of shares voted
thereon was 3,018,575 shares.
FIFTH: The number of issued and outstanding shares of the common
stock of the corporation at the time of such adoption was
4,487,936 shares; the shares voted in favor for such
amendment was 3,018,575, and the number of shares which were
note voted was 1,469,361; the number of shares voted in favor
for such amendment is 56.3% of the issued and outstanding
shares of common stock of the corporation.
Dated this 26th day of October, 1998.
Oneida General Corporation
s/ Ken Kurtz
- ------------------------------
Ken Kurtz, President
<PAGE>
EXHIBIT 3(iii)
BY-LAWS
OF
INDUSTRIAL SALES AND MARKETING CORPORATION
ARTICLE I
Principal Office and Seal
Section 1 Principal Office. The principal office of the corporation
shall be at 3909 South Airport Road, Ogden, Utah, or at such other place in the
State of Utah as the Board of Directors shall from time to time determine.
Section 2. Seal. The corporation shall have a common seal of such form
and device as the Board of Directors shall from time to time determine.
ARTICLE II
Stockholders' Meetings
Section 1. Annual Meeting. The annual meeting of the stockholders of
the corporation shall be held on the first Monday of May of each year at such
time and place as the President or the Board of Directors shill determine. The
annual meeting shall be a general meeting, and at such meeting any business.
within the powers of the corporation, without special notice of such business,
may be
<PAGE>
transacted, except as limited by law or by these By-Laws.
Section 2. Special Meeting. Special meetings of the stockholders may be
held at any time upon the call of the President, or upon the call of any two
directors, or upon the written request of stockholders owning not less than
one-tenth (1/10) of the capital stock issued and outstanding.
Section 3. Notice of Meetings. A written or printed notice of all
meetings, annual, special, stating the place, day and hour of the meeting and
whether it is annual or special care of each special meeting stating briefly the
business proposed to be transacted thereat, shall be given by mailing such
notice, postage prepaid, in the case of annual meetings, at least thirty (30)
days, and in the case of special meetings, at least ten (10) days before the
date assigned for the meeting, to each stockholder at his address as it appears
upon the transfer books of the corporation. Upon notice being given in
accordance with the provisions hereof, the failure of any stockholder to
received actual notice of any meeting shall not in any way invalidate the
meeting or proceedings thereat.
Section 4 Quorum. At all meetings of stockholders, the presence in
person or by proxy of stockholders owning a majority in number of all the shares
of stock issued and outstanding and entitled to vote at said meeting shall be
necessary to constitute a quorum, and the act~on C: the holders of the majority
of the capital stock present or represented at any meeting at which a
<PAGE>
quorum is present shall be valid and binding upon the corporation except as
otherwise provided by law or by these By-Laws.
Section 5. Voting. At each meeting of stockholders, each stockholder,
except where otherwise provided by the clauses and terms applicable to the stock
held by such stockholder, shall be entitled to vote in person or by
representative appointed by instrument in writing subscribed by such stockholder
or his duly authorized attorney and filed with the Secretary, and he shall have
one vote for each share of voting stock registered in his name at the close of
business on the day preceding the date of said meeting or on the record date
fixed by the Board of Directors. In case of an adjourned meeting, unless
otherwise provided by the Board of Directors, the record date for the purpose of
voting shall be considered to be the day preceding the date of the original
meeting. Where voting stock is transferred into the name of a pledgee under a
pledge agreement, the pledgor shall have the right to vote such stock unless
prior to the meeting the pledgee or his representative shall file with the
Secretary written authorization from the pledgor to vote such stock.
Section 6. Adjournment. Any meeting of the stockholders, whether annual
or special, may be adjourned from time to time whether a quorum be present or
not without notice other than the announcement at the meeting, and such
adjournment may be to such time and to such place as may be determined by a
majority vote of those present. At any such adjourned meeting at which a
<PAGE>
quorum shall be present, any business may be transacted which mnight have been
transacted at the original meeting as originally called and notified.
ARTICLE III
Board of Directors
Section 1. Number and Term of Office A Board consisting of not less
than three (3) directors shall be elected at the annual meeting. The directors,
except as otherwise in these ByLaws provided, shall hold office until the annual
meeting held next after their election and until their respective successor
shall be elected. The number of directors constituting the Board during any
annual period shall be the number of directors elected at the annual meeting of
stockholders.
Section 2 Removal of Directors. Any director may be re moved from
office at any time with or without cause and another person may be elected in
his place to serve for the remainder of his term at any special meeting of
stockholders called for the purpose by the affirmative vote of the holders of a
majority of all the shares of capital stock of the corporation outstanding and
entitled to vote. In case any vacancy so created shall not be filled by the
stockholders at such meeting, such vacancy may be filled by the Board of
Directors as provided in Section 5 of Article III.
Section 3. Meeting notice. The Board shall hold meetings as often as
the business of the corporation may require at the call of the President or any
director, The Secretary shall give notice
<PAGE>
of each meeting of the Board of Directors, either orally or in writing, by
mailing, delivering or giving the same not less than three (3) days before the
meeting, unless otherwise prescribed as to notice of any meeting of the Board of
Directors. The failure by any director to receive such notice shall not
invalidate the proceedings of any meeting at which a quorum of directors is
present The directors elected at the annual stockholders' meeting of the
corporation shall, without any notices being given, hold a meeting as soon as
may be after the meeting of the stockholders at which they were elected.
Section 4. Quorum and Adjournment. A majority of the directors shall
constitute a quorum for the transaction of business, but no actions taken other
than the appointment of directors to fill temporary vacancies, as provided in
these By-Laws, shall bind the corporation unless it shall receive the concurring
vote of a majority of all the directors. In the absence of a quorum, the
presiding officer or a majority of the directors present may adjourn the meeting
from time to time without further notice until a quorum be had.
Section 5. Vacancies and Substitute Directors. If any permanent vacancy
shall occur in the Board of Directors through death, resignation, removal or
other cause, the remaining directors, by affirmative vote of a majority of the
whole Board, may by the vote of a majority of
Section 4. The Secretary-Treasurer. The Secretary-Treasurer shall keep
the minutes of all
<PAGE>
meetings of the Board of Directors and the minutes of all meetings of the
stockholders. He shall give notice in conformity with these By-Laws, of all
meetings of the stockholders and the Board of Directors. In the absence of the
President and of the Vice-President, he shall call the meetings of the
stockholders to order and shall preside until a chairman pro tempore is chosen.
He shall have the custody of all the funds, notes, bonds and other evidences of
property of the corporation, and shall render statements thereof in such form
and as often as required by the Board of Directors. He shall be responsible for
the keeping of the stock books, stock transfer books and stock ledger of the
corporation. The Secretary-Treasurer shall perform all other duties assigned to
him by the President or the Board of Directors.
Section 5. Assistant Secretary. The Assistant Secretary shall perform
all the duties and exercise all the powers of the Secretary during his absence
or disability or whenever the office of Secretary is vacant, and shall perform
all the duties assigned to him Dy the Board of Directors.
ARTICLE V
Execution of Instruments
Section 1. Proper Officers. Except as otherwise provided by these
By-Laws or by law, all check drafts, notes, bonds acceptances, deeds leases,
contracts and all other documents and instruments shall be Signed, executed and
delivered by the President or Vice President and by the Secretary-Treasurer, or
the Assistant Secretary; provided, however, that the Board of Directors may
<PAGE>
from time to time by resolution authorize checks, drafts bills of exchange,
notes, orders for the payment of money, licenses, endorsements, stock powers,
powers of attorney, proxies, waivers, consents, returns, reports, applications,
notices, agreements or documents, instruments or writings of any nature to be
signed, executed and delivered by such officers, agents or employees of the
corporation, or any one of them, in such manner as may be determined by the
Board of Directors.
Section 2. Facsimile Signatures. The Board of Directors may from time
to time by resolution provide for the. execution of any corporate instrument or
document by a mechanical device or a machine, or by use of facsimile signatures,
under such terms as shall be set forth in the resolution of the Board of
Directors.
ARTICLE VI
Voting of Stock by the Corporation
In all cases where the corporation owns, holds, or represents, under
power of attorney or proxy or in any representative capacity, shares of the
capital stock of any corporation, or shares or interests in business trusts,
co-partnerships or other associations, such shares or interests shall be
represented and voted by such proxy or proxies as may be appointed by or
pursuant to authority granted by the Board of Directors or, failing such
appointment, by the President, or in the absence of the President, by the Vice
President, and in the absence of the Vice President, by the Secretary-
Treasurer; provided, however, that in the absence of any such officer, then any
person specifically appointed by the Board of Directors for the purpose shall
have the right, if present, to represent and
<PAGE>
vote such shares or interest.
ARTICLE VII
Capital Stock
Section 1. Certificates of Stock. The certificates of stock of each
class shall be in such form and of such device as the Board of Directors shall
from time to time determine. They shall be signed manually or, if countersigned
or registered by a Transfer Agent or Registrar, then in facsimile by the
President or Vice President, and by the Secretary-Treasurer, or an Assistant
Secretary, and shall bear the corporate seal or a facsimile thereof.
Section 2. Transfer of Stock. Transfer of stock may be made in any
manner permitted by law, but no transfer shall be valid except between the
parties thereto until a new certificate shall have been obtained and the
transfer shall have been duly recorded in the stock books of the corporation. No
certificates for stock shall be delivered unless the person entitled to such
certificate, or some person duly authorized by him, shall receipt for the same.
Section 3. Closing of Transfer Books. The Board of Directors shall have
power, for any corporate purpose, to close from time to time the stock transfer
books of the corporation for a period not exceeding; thirty (30) consecutive
days; provided, however, that in lieu of closing the stock transfer books as
aforesaid, the Board of Directors may fix in advance a record date for the
payment of any dividend, or for the allotment of rights, or for the effective
date of any change, conversion or exchange of capital stock, or in connection
with obtaining the consent of stockholders in any
<PAGE>
matter requiring their consent, or for the determination of the stockholders
entitled to notice of and to vote at any meeting; and in such case only such
stockholders as shall be stockholders of record on the record date so fixed
shall be entitled to the rights, benefits and privileges incident to ownership
of tine shares of stock for which said record date has been fixed,
notwithstanding any transfer of any stock on the books of the corporation after
any such record date.
Section 4. Lost Certificates. The Board of Directors may, subject to
such rules and regulations as may be adopted by it from time to time, in its
discretion, order a new certificate or certificates of stock to be issued in the
place of any certificate or certificates of stock of the corporation alleged to
have been lost or destroyed, but in every such case the owner of the lost
certificate or certificates shall be required to file sworn evidence showing the
facts connected with such loss, and shall be required to give to the corporation
a bond or undertaking in such sum, not less than twice the par value, if any, or
not less than twice the amount of the market value, whichever is greater, of
such lost or destroyed certificate or certificates of stock as the Board of
Directors may approve, as indemnity against loss, damage or liability that the
corporation may incur by reason of such issuance of a new certificate or
certificate the Board of Directors may, in its sole discretion, refuse to
replace any lost certificate save upon the order of the court having
jurisdiction in the matter.
<PAGE>
ARTICLE VIII
Amendment
These By-Laws may be altered, amended or repealed either by a vote of
not less than the majority of all the stock of the corporation issued and
outstanding and entitled to vote at any annual meeting or at any special meeting
called for such purpose, or may be altered, amended or repealed by tine Board of
Directors, except that (1) no By-Law adopted or amended by the shareholders
shall be altered or repealed by the Board of Directors; (2) no By-Law shall be
adopted by the directors which shall require more than a majority of the voting
shares for a quorum at a meeting of shareholders, or more than a majority of the
votes cast to constitute action by the shareholders, except where higher
percentages are required by law.
ARTICLE IX
Calendar Year
The fiscal year of this corporation is hereby fixed to commence on
January 1 of each year and to close on December 31 of each year with the fiscal
year to be the calendar year.
ARTICLE X
Execution
The undersigned, being a majority of the initial Board of Directors of
Industrial Sales and
<PAGE>
Marketing Corporation, following the incorporation of the same at Salt Lake
City, Salt Lake County, State of Utah, have adopted the foregoing as the
By-Laws of the corporation this 1st day of October, 1970
DAVID LOUIS DURBANO
MICHAEL H. FORD
EDWARD B RICH
<PAGE>
EXHIBIT 10(a)
STOCK EXCHANGE AGREEMENT
This agreement is made and entered into this 23rd Day of November,
1998 between Communitronics of America, Inc a Utah Corporation and Data
Paging, Inc. a Mississippi Corporation. Communitronics of America, Inc.
(C.OA.) is a public trading corporation, trading under the symbol ("BEEP").
Data Paging, Inc. is 100% owned by Kenneth E. Smith at 2911 Shortcut Road,
Pascagoula, Mississippi (Shareholder) a Mississippi Corporation (Licensee)
WITNESSETH
WHEREAS, Shareholders owns all of the issued and outstanding stock
of Licensee ("the Licensee Shares"); and,
WHEREAS, Licensee holds numerous licenses authorized by the FCC for
the provision of communication services ("The System") which are more fully
described on Exhibit A attached hereto; and,
WHEREAS, Communitronics of America, Inc., is developing various
types of communication systems located in major markets through the United
States; and,
WHEREAS, Shareholders desires to assign to Communitronics of
America, Inc. and, Communitronics of America, Inc. desires to acquire from
Shareholder the Licensee shares, on the terms and conditions as set forth
herein; and,
WHEREAS, Communitronics of America and Shareholders intend that such
transaction shall qualify for treatment under Section 368 (a) (lB) of the
Internal Revenue Code; and now
<PAGE>
therefore in consideration of these premises and mutual promises and
covenants contained herein, Communitronics of America, Inc. and Licensees and
Shareholders agree as follows:
ARTICLE I
Exchange of stock (a) in accordance with terms set forth in the
"Definitive Agreement" executed between the parties, dated November 23, 1998
and as set forth herein, Communitronics of America, Inc., agrees to acquire
from Shareholders.
The Shareholders agree to assign to Communitronics of America, Inc.
100% of all issued and outstanding voting stock of Data Paging, Inc. in
exchange for 250,000 shares of Communitronics of America 144 Restricted Stock
at $2.00 per share 88 agreed for a value of $500,000.
1.1. DISTRIBUTION OF COMMUNITRONICS OF AMERICA, INC.,SHARES: The
distribution of Communitronics of America, Inc. shares in this transaction
will be to Kenneth E. Smith owner of Data Paging, Inc.
1.2 SHARES: Shares will be in compliance with Rule 144. After 1 year
required by regulation, the stock will cease to be restricted and will be
free trading shares.
1.3 COMMUNITRONICS OF AMERICA, INC.: Communitronics of America, Inc.
hereby guarantees that its shares provided in payment for shares of stock in
Data Paging, Inc. will be worth no less than $2.00 per share in price up to
and including 72 hours following the time at which the Communitronics of
America ~hares transferred herein may be traded pursuant to IRS Rule 144
and/or such other IRS and/or SEC rules and regulations as may be applicable.
1.4 DATA PAGING, INC.: Data Paging, Inc. is to become a wholly owned
subsidiary of
<PAGE>
Communitronics of America, Inc. subject to a mortgage on all shares of Data
Paging, Inc. stock, transferred to Communitronics of America, Inc. herein, in
favor of Kenneth E. Smith, until such time as Kenneth E. Smith sells all
shares of said stock in Communitronics of America, Inc or up to and including
72 hours following the time upon which the shares of Communitronics of
America, Inc. transferred herein may be traded pursuant to IRS Rule 144
and/or such other IRS and/or SEC rules and regulations as may be applicable,
whichever occurs first. Should the Communitronics of America shares
transferred Kenneth E. Smith be worth less than two dollars ($2.00) per share
during the time period described above, Communitronics of America does hereby
agree to pay Kenneth E. Smith the difference between the two dollar ($2.00)
guaranteed price and the sale price of the stock or return "the System" to
Data Paging, Inc. along with 811 issued shares of stock in Data raging, Inc.
1.5 PAYMENT FOR SALE AND TRANSFER: The agreement for sale and
transfer of Data Paging, Inc., shall be completed within ten (10) days of a
grant by FCC final order (as defined in Section 5.7 herein) and any other
necessary governmental authorities of an application for consent to the
transfer of contract of the system from Data Paging, Inc. to Communitronics
of America, Inc,
1.6 CLOSING: The closing transaction provided for in this agreement
("closing") shall take place at the corporate offices of Garner, Prichard &
Middleton, PC, 6925 Cottage Hill Road, Suite A, Mobile, Alabama 36695 at or
about 2:00 P.M. C.S.T., within five (5) business days of the receipt by
Communitronics of America of all government consents to transfer of control
of The System by final order (as defined in Section 5.7 herein) or such other
place and time as mutually agreed to by both parties.
<PAGE>
ARTICLE II
2.1 REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER: Shareholders
hereby represent and warrant to Communitronics of America, Inc. the following
material representations as set forth in the following paragraphs of this
Article II.
2.2 INSTRUMENTS OF CONVENIENCE TRANSFER AND CANCELLATION: Subject
other terms and provision herein, Shareholders will at closing execute or to
be executed and delivered to Communitronics of America, Inc.;
(a) A Stock Certificate ("certificate") representing a total of 100%
of the issued and outstanding shares of common voting stock of Data Paging,
Inc. which certificate or certificates (or accompanying assignment separate
from Certificate) shall be in negotiable form, duly endorsed for transfer to
Communitronics of America, Inc., subject to the mortgage established herein
in Section 1.4
(b) Copies of minute books, stock books and all other corporate and
business records or documents of Data Paging, Inc.;
(c) At least ten (10) business days prior to the closing date the
Shareholders will cause to be delivered to Comniunitronics of America, Inc.
an opinion of counsel for the Licensee that
(1) the Licensee is duly incorporated and legally existing in good
standing under the laws in Mississippi, and has full corporate power and
authority to carry on its present business;
(2) The transfer documents to be delivered to Communitronics of
America. Inc. at the closing are fully authorized, executed and delivered by
Shareholders and are valid and binding in
<PAGE>
accordance with their terms;
(3) The execution and delivery of this Stock Purchase Agreement and
the consummation of the transactions contemplated herein and permis8ible
under the Articles of Incorporation and By Laws of Data Paging, Inc.
(4) This Stock Purchasing Agreement is a valid and legal obligation
of Shareholders, enforceable by its terms.
(5) Any and all requisite fees and state regulatory approvals of the
consummation of the transactions contemplated herein are granted by final
order (as defined in the Section 5.7 herein) and are in full force and effect
and have not been suspended, modified or revoked;
(6) Unless otherwise disclosed herein, the Shareholders represent
that neither they or Data Paging, Inc. is a party to or affected by any
pending or threatened proceedings, claims or investigations relating to the
stock being transferred to Communitronics of Amenca, Inc.; and,
(7) The Shareholders represent that Data Paging, Inc,, is not
subject to any' restnctions in it's Article of Incorporation or By Laws which
materially and adversely affect its business, property prospects, assets or
condition, financial or otherwise which adversely affects its ability to
carry out its obligation. under this agreement.
(d) Shareholders shall attach as schedules to this agreement copies
of all contracts, either in force or executory, pertaining to the Licensee's
business, and ~ other documents called for in this agreement.
2.3 STATUS OF STOCK WITH RESPECT TO THE SHARES OF STOCKS BEING
<PAGE>
TRANSFERRED TO COMMUNITRONICS OF AMERICA, INC.:
(a) Such shares of stock have been lawfully issued, and are fully
paid and not assessable;
(b) Such shares represent a total of 100% of the issued common
voting stock in Licensee;
(c) Such shares are owned free and clear of any pledges, liens.
encumbrances and claims, and are not subject to any restrictions or
limitation~ prohibiting or restricting transfer to Communitronics of America,
Inc. except ~ maybe disclosed in this agreement.
(d) Shareholders have full right, power and authority to sell and
transfer such shares pursuant to this agreement.
(e) The certificates for the shares to be transferred to
Communitronics of America, Inc. will be genuine and together with any
supporting papers shall be in such form as to enable the shares of stocks
represented thereby to be immediately transferred to Communitronics of
America, Inc. on the stock transfer books of the Licensee.
2.4 AVAILABILITY: Shareholders hereby agree that, from time to time
after the closing at Communitronics of Amen ca, Inc.'s request and without
further consideration, Shareholders will executed and deliver such other
instruments of conveyance, assignment and transfer, and take such action as
Communitronics of America, Inc. may reasonable require, to more effectively
convey or transfer to in Communinitronics of America, Inc. possession of the
stock purchased hereunder; and, included in this agreement is 152.4800
frequency in Ocean Springs and Pascagoula, MS and 464.025 as operated.
2.5 COMPLETE TRANSFER: All assets and properties, if any of every
nature in
<PAGE>
connection with the business of Licensee are owned by Licensee and are
hereinafter referred to as the "Assets".
2.6 CORPORATE EXISTENCE, ORGANIZATION AND QUALIFICATION OF
LICENSEE: Licensee is a corporation duly incorporated, legally existing and
in good standing under the laws of the State of Mississippi; and, it has no
state or local fees or penalties outstanding; and it has full corporate power
and authority to carry on the business as now being conducted by it. The
authorized stock of Licensee consists solely of: 5000 Shares of voting common
stock, of which 1600 are outstanding in the name of Kenneth E. Smith. There
are on this date no outstanding warrants, options or rights of any kind to
acquire from Licensee shares of stock in Licensee, other than as contained in
this agreement.
2.7 LICENSE'S SUBSIDIARIES AND AFFILIATES: Licensee has no
investments of any kind in any corporation, joint venture or partnership. The
Licenses is not subject to any mortgage, debt or other encumbrance, which
materially or adversely affects it business, properties, assets, or condition.
2.8 LITIGATION: Shareholders have no knowledge of litigation
threatened against or relating to Licensee's business or properties which
might individually or in the aggregate have a material adverse effect on such
business or properties or the financial condition of Licensee, nor has
Shareholder or Licensee received any notice that any basis is known to exist
for any such action or for any governmental investigation relative to
Licensee's business or properties.
2.9 COURT ORDERS AND DECREES: Shareholders assert that there is no
validly
<PAGE>
served and effective outstanding order, writ, injunction or decree Of any
court, governmental agency or arbitration tribunal against or which could,
either individually or in the aggregate, have a material adverse effect upon
Licensee's business, property, assets or financial condition.
2.10 COMPLIANCE WITH LAWS: Except as specifically disclosed in
writing to Communitronics of America, Inc.'s counsel prior to execution of
this agreement, Licensees are in compliance with all provisions of all
applicable laws (including environmental laws) regulations and administrative
orders of the United States, all States and each municipality, county, or
subdivision of any thereof, to which its business or any properties may be
subjected which if not complied with either individually or in the aggregate
may have a material adverse effect upon Licensee's business, properties,
assets or financial condition.
2.11. NO ADVERSE CONTRACTS: Except for contracts specifically
identified and of which complete copies thereof specifically identified and
in Exhibit "B" hereto previously delivered to Communitronics of America, Inc.
counsel, Licensee is not obligated under any contract or agreement or any law
which materially and adversely affects its business, properties, prospects,
assets or condition, financially or otherwise.
2.12 EXECUTION AND PERFORMANCE OF AGREEMENT: The parties hereto
represent and agree that execution and performance by Shareholders of this
agreement and the transactions contemplated hereby by the Shareholder will
not violate any provision of, or resort in the breach of, or constitute a
default under, any law, order, writ, injunction, decree or regulation of any
court, state or federal government agency or arbitration, tribunal, or any
contract, agreement,
<PAGE>
license, permit or instrument by which any of the stock or licensees,
businesses or property is bound.
2.13 STATUS OF LEASE AND AGREEMENT: Licensees are not a party, by
transfer or otherwise, to any lease or agreement not specifically identified
in Exhibit "C" hereto and disclosed to Commurnitronics of America, Inc. Said
leases and agreements, if any, are not suspended, modified or revoked and
Licensee and its transferors are operating and will continue to operate
without modification of its agreement rights until closing, in compliance
with all of the terms of said agreement.
2.14 STATEMENT AND RECORDS: All books, statements. documents,
records and financial, statements including but not limited to, yearly and
monthly profit and 1088 statements of Licensee furnished or given to
Communitronics of America, Inc. or it agents during the negotiation of and
preparatory to the execution or consummation of the transactions contemplated
herein, including Licensee' S audited due diligence acceptable financial
statement dated November 20, 1998, are true and correct are to be provided to
Communitronics of America are genuine and as accurately contain no material
misrepresentations or omissions of material facts, and all such statements
represent fairly the financial position of Licensee as of the date thereof,
and the results of its operation for the periods designated therein, and were
in prepared in accordance with generally accepted accounting principles
applied on a consistent basis (except as otherwise previously disclosed in
writing to Communitronics of America' counsel) throughout the period involved
as of the date of Licensee's latest audited financial statements it had no
liabilities, contingent or otherwise, except in those financial statements,
income statements and other financial documents.
<PAGE>
2.15 NO UNDISCLOSED LIABILITY: At closing the Licensee will have no
material liabilities contingent on otherwise except these liabilities
referred to and attached as Exhibit "D" hereto, and those audited liabilities
incurred since that date in the ordinary course of business, but only to the
extent permitted under Article IV.
2.16 TAX RETURNS: Licensees has timely filed all Federal, State and
Local tax returns required to be filed by it by the laws of the United States
and each state which it does business in, including, but not limited to all
taxes with respect to income, property withholding, workman's compensation,
social security and unemployment taxes. To the best of Licensees' knowledge
and belief all such returns are correct as filed and all taxes due and all
additional assessments and penalties and interest thereon received prior to
the date hereof and at closing have been paid. All filed returns were
prepared in accordance with the applicable state's laws and generally
accepted accounting principles relating to taxation. The reserves for any
taxes in licensee's financial statements are sufficient for the payment of
all accrued and unpaid taxes of Licensee, if any.
2.17 Taxes and all personal income excise, conveyance or other taxes
directly related to the transaction contemplated herein which were incurred
prior to the closing of this transaction or concurrent therewith which may
become payable by reason of the sale and purchase of the stock at closing
will be borne by the Shareholders.
2.18 NO UNDISCLOSED CONTRACTS: Licensee has no contracts not
previously disclosed in writing and delivered to Communitronics of America,
Inc.; nor has Licensee caused any contracts for the purchase or sale of
products on services, nor continuing contracts for the future
<PAGE>
purchase or lease of materials, supplies, services or equipment or other
property except as previously disclosed in writing to Communitronics of
America, Inc.
2.19 STATUS OF ASSETS: After due inquiry, Shareholders know of no
material adverse condition regarding the business of Licensee not disclosed
herein, exception generally applicable to the Paging industry.
2.20 NEW DIRECTORS AND OFFICERS: At closing the purchase of
Licensee's stock, any election of a new board of directors and officers of
Licensee will not cause the cancellation, beach, acceleration, or any other
material adverse change in terms of any contract or agreement to which
Licensee is bound.
2.21 INDEBTEDNESS TO AND FROM OFFICERS, DIRECTORS AND OTHERS:
Licensee is not indebted to any director, officer, employer or agent of
Licensee except as indicated on the financial statement provided to
Communitronics of America or in the ordinary course of business.
2.22 GOVERNMENTAL CONSENT: No consent, approval, order or
authorization or regulation, qualification, designation, declaration or
filing with any governmental authority is required on part of Shareholder in
connection with the acceptance of this agreement and delivery of the stock of
Licensee as contemplated by the agreement, except any approval or filing as
may be required under requirements of the FCC and applicable state
authorities ("PUC").
2.23 FCC AUTHORIZATION: Licensee has been granted FCC authorization
to construct and operate the system by FCC action, which has become a Final
Order (as defined in Section 5.7).
<PAGE>
Such authorization has not been suspended, modified, or revoked, and the
Licensee has complied with and will continue without modification with terms
with closing Shareholder knows of no event or condition which would materially
endanger the continued effectiveness of the Authorization.
2.24 DURING THE PERIOD FROM OCTOBER 16, 1998 UNTIL CLOSING DATE:
Shareholder shall riot discuss with, accept offers from or negotiate with any
other party regarding the sale, transfer, or management of Shareholders'
interests in Data Paging, Inc. but will instead deal exclusively and good faith
with Communitronics of America, Inc. regarding the transfer of control of the
Licensee. During this period, Shareholders shall be restricted from encumbering,
agreeing to transfer or convey, or, transferring or conveying any portion of
their interests except with the express written consent of Communitronics of
America, Inc.
2.25 SURVIVAL OF REPRESENTATIONS AND WARRANTIES: The representation
and warranties contained in this agreement shall survive the closing date and
shall bind Shareholders and Shareholders' transfer's heirs and assigns.
ARTICLE III
3.1 REPRESENTATIONS AND WARRANTIES OF COMMUNITRONICS OF AMERICA, INC.:
Communitronics of America, Inc. represents and warrants as set forth in this
Article III.
3.2 QUALIFICATIONS OF COMMUNITRONICS OF AMERICA, INC.: Commurntrorncs
of America, Inc. is a Utah corporation duly qualified to do business in all the
jurisdictions in which it is legally required to be so qualified. Communitronics
of America, Inc. is
<PAGE>
legally, financially, technically, and otherwise qualified to acquire Licensee's
stock as contemplated herein.
3.3 AUTHORITY ACTION OF COMMUNITRONICS OF AMERICA, INC.: The execution
and delivery of this agreement by Communitronics of America, Inc. has been duly
authorized by all necessary corporate action. The consummation of the
transaction contemplated by this agreement will not violate any provision in
Communitronics of America, Inc.'s Articles of Incorporation, by-laws, or result
in any breech or default under any applicable State or Federal law, nor any
rule, regulation, order, writ, injunction or decree of any court, state or
federal governmental agency or arbitration tribunal having jurisdiction over
Communitronics of America, Inc. or any contract, agreement or instrument by
which Communitronics of America, Inc. may be bound. All action required of the
Shareholders and directors of Communitronics of America, Inc. in connection with
the execution, delivery and performance of this agreement has been taken.
3.4 LITIGATION: There is not any undisclosed litigation pending or
threatened against Communitronics of America, Inc. which would have a material
adverse effect on the business of Communitronics of America, Inc. or prevent
Communitronics of America, Inc. from fulfilling all its obligation hereunder.
4.1 CONDUCT OF BUSINESS FROM EXECUTION OF THIS AGREEMENT PENDING
CLOSING: From October 16, 1998 until the closing date, Shareholders warrant and
covenant that, pending and as a condition precedent to closing, except as
otherwise consented to in advance in writing by Communitronics of America, Inc.
with respect to Licensee the following, to
<PAGE>
wit:
(a) Licensee's business will be conducted only in the ordinary and
usual course business;
(b) No contract or commitment will be entered into by Licensee except
in the ordinary course of business;
(c) No indebtedness for borrowed money will be created, assumed or
incurred by Licensee;
(d) No sale, transfer or other disposition, directly or indirectly, and
mortgage, pledge or other encumbrance, of its assets will be made or entered
into by or on behalf of Licensee (even if made in the ordinary course of
business);
(e) Licensee will use its best efforts to keep the organizations of its
business intact to preserve and maintain its assets and properties;
(f) Licensee will not directly or indirectly do, or agree to do any of
the following acts:
(1) Grant any increase in salaries payable or to become
payable or grant any bonus to any officer, employee,
agent, or representative, except with the consent of
Communitronics of America, Inc.; to any officer,
employee, agent or pension plan or other contract or
(2) Increase benefits payable representative under any
commitment;
(3) Enter into any collective bargaining agreement to
which it is a party or by which it may be bound;
(4) Enter into any employment agreement or other such
agreement;
(5) Pay any obligation or liability, fixed or contingent,
other than current audited
<PAGE>
liabilities payable to persons other than
Shareholder, or other related or affiliated entities
or to their employees, agents, shareholders, partners
assigns;
(6) Waive or compromise any right or claim;
(7) Cancel, without full payment any note loan or other
obligation owing to it;
(8) Take any other action, which would materially
diminish the value of its business to Communitronics
of America, Inc.;
(9) Licensee will not directly or indirectly:
a. Declare, set aside or pay any dividend or
make any distribution in respect of its
capital stock;
b. Purchase, redeem, or otherwise acquire any
shares of its capital stock;
c. Change its accounting method or treatment of
any material item; or
d. Enter into any agreement obligation to do
any of the foregoing prohibited acts;
(10) Licensee will not directly or indirectly enter into
any contract or other agreement of any nature with
Shareholders or other related or affiliated persons
or entities or their employees, agents or assigns; or
(11) Licensee will not directly or indirectly modify,
cancel, or terminate any of its existing contracts or
agreements to do any of these acts.
<PAGE>
4.2 ACCESS AND INFORMATION: To the extent reasonably required for the
purpose of this agreement Shareholders will permit Communitronics of America,
Inc., its counsel, accountants and other representatives to have full access
during normal business hours throughout the period prior to closing, to its
properties, books and records of Licensee, and will cause to be furnished to
Communitronics of America, Inc. and its representative during such all such
information concerning the affairs of Licensee as Communitronics of America,
Inc. or its representatives may reasonably request, including but not limited
to., subscriber customer data.
ARTICLE V
5.1 CONDITIONS PRESIDENT TO CLOSING: Closing shall occur only upon the
occurrence of all the conditions set forth in this Article V and elsewhere in
this agreement (unless expressly waiving in writing by the party to whose favor
the representation or condition runs at any time prior to closing). Each party
shall have performed its obligations due to be performed hereunder on or before
the closing date.
5.2 REPRESENTATION AND WARRANTIES TRUE WHEN MADE: No
representations or warranty of Shareholders or Communitronics of America, Inc.
contained in this agreement shall be inaccurate or incomplete, nor have
Shareholders knowingly or negligently omitted to disclose any material fact
pertinent to this transaction.
5.3 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING: The
representations and warranties of Shareholders and Communitronics of America,
Inc. contained in this agreement shall be deemed to have been made again at
the time of closing, and shall have
<PAGE>
caused all covenants, agreements and conditions required by this agreement to be
performed or complied with prior to or at closing to be so performed and
complied with; and, The parties hereto will furnish to each other a certificate
signed by each respectively, dated on the date of closing date, certifying to
the truth of such representations and to the fulfillment Of all such covenants,
agreements and conditions.
5.4 OCCURRENCE OF EVENTS: All of the following events shall occur
at or prior to closing:
(a) The receipt by Communitronics of America of all government
approvals by final order (as defined in Section 5.9), if any are necessary, and
all other necessary approvals, if any, for the assignment and transfer of the to
Communitronics of America, Inc. with respect to the rights, agreements,
privilege, licenses and franchises referred to in this agreement, including but
not limited to the agreements, if any, referred to in Section 2.13.
Communitronics of America, Inc. and Shareholders agree to cooperate in obtaining
all necessary governmental and third party consents and approvals required to
complete this agreement.
(b) The receipt by Communitronics of America, Inc.'s attorneys of the
documents if any, referred to in Section 2.2.
(c) The mortgage referred to within Section 1.4 herein
5.5 ABSENCE OF ADVERSE CHANGES: Subsequent to the execution of this
agreement and prior to closing Shareholders and Licensee agree that there
shall not be any adverse change in the business or prospects of Licensee's
properties or business and on the closing date,
<PAGE>
there shall be delivered to Communitronics of America, Inc. a certificate to
such effect, dated the date of closing and signed by the Shareholders. It is
understood that Shareholders assume all risks of destruction, loss or damage due
to fire or other causes of destruction to the Licensee's properties and business
up to and including the date of closing.
5.6 TERMINATION AS OF RIGHT: If this agreement is terminated pursuant
to Section 8.11 of this agreement) Communitronics of America, Inc. agrees to
return to Shareholders any and all information, documents or assets received
from Shareholders, and Shareholders agree to return to Communitronics of
America, Inc., the funds held by escrow agent pursuant to the Escrow Agreement
and this agreement shall have no effect whatsoever and the transactions
contemplated herein shall terminate and be null and void.
5.7 FINAL ORDER: For purposes of this agreement, a grant by
governmental authority shall be considered a Final Order ("Final Order") when it
is no longer subject to regulatory or administrative reconsideration, review or
appeal, with said times have lapsed with no petition, appeal, objection or other
like adverse pleading having been filed with the FCC or other authority having
jurisdiction over the matter.
ARTICLE VI
6.1 INDEMNIFICATION BY SHAREHOLDERS: Shareholders agree to defend and
hold Communitronics of America, Inc. harmless from any and all losses,
liabilities, expenses, damages Qr costs (including reasonable attorney' s
penalties and interest), payable to or for the benefit of or asserted by any
party, resulting from or arising out of or incurred as a result of the
<PAGE>
falsify of any representation or breach of any warranty or covenant made by
Communitronics of America, Inc. herein or in accordance herewith.
6.3 SURVIVAL OF COVENANTS AND WARRANTIES: The representative,
warranties and agreements made by Shareholders, except as they may be fully
performed prior to or contemporaneously with closing, shall survive closing and
shall be fully enforceable at law or in equity against Shareholders, Licensee
and 'their successors and assigns by Communitronics of America, Inc. and its
successors and assigns. The representations, warranties and agreements made by
Communitronics of America, Inc. herein, except as they may be fully performed
prior to or contemporaneously with closing shall survive closing and shall be
enforceable at law or in equity against Communitronics of America, Inc. and it'
successors and assigns. Any investigation at any time made by or on behalf of
(or disclosure to) any party hereto shall not diminish in any respect whatsoever
all parties hereto right to rely on such representation and warranties.
ARTICLE VII
7.1 Notices, all notices, request, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given and
effective upon receipt if delivered in person or by prepaid overnight express
service delivered to the parties hereto at the following addresses:
If to Shareholder:
Kenneth E. Smith
2911 Shortcut Road
Pascagoula, Mississippi 39568-1713
<PAGE>
If to Communitronics of America, Inc.:
David Pressler, President & C.E.O.
Magnolia Shopping Center
27955 Highway 98, Suite WW-X
Daphne, AL 36526
(Facsimile (334) 344-3171
with copy to:
Samuel Mastrull, C.F.O. & Secretary
1118 Hatteras Circle
West Palm Beach, Florida 334l3
or such other address as specified by the parties from time to time.
ARTICLE VIII
8.1 NOTICE OF CLAIMS: Shareholder and Communitronics of America, Inc.
each agree to give prompt written notice to the other and to all affected
parties of any claim against the party giving notice which might give rise to a
claim against the party, to include information detailing the nature and basis
of the claim and the actual or estimated amount thereof. In the event action,
suit or proceeding is brought against the Shareholders, Licensee and/or
Communitronics of America, Inc. with respect to which any party hereto may have
liability under the indemnity provisions herein, the indemnifying party shall
have the right, but not the responsibility, at its sole cost and expense, to
defend such action in the name of and on behalf of the indemnified party or
corporation, and in connection with any such action, suit or proceeding and in
connection with any such assistance as may reasonably be required, in order to
insure proper and adequate defense of any such action, suit or proceeding. No
party hereto shall make any settlement of any claim which might give rise to
<PAGE>
liability of the other parties hereto under the indemnity provisions contained
herein without the written consent of such other party(s), of which said consent
such party covenants shall not be unreasonably withheld.
8.2 AMENDMENTS: This agreement may be amended or modified only by a
written instrument executed by Communitronics of America, Inc. and Shareholders.
8.3 EXPENSES: Communitronics of America, Inc. agrees to reimburse
Shareholders for out-of-pocket expenses (including capital contribution)
incurred during normal course of operation and construction of the system
between October 16, 1998 and the closing date, provided that said expenses have
been approved in writing by Communitronics of America, Inc. In addition,
Communitronics of America, Inc. shall assume the continuing obligation of the
systems, if any reasonable incurred in the normal course of operation and
construction of the system through such closing date. Communitronics of America,
Inc. shall not reimburse Shareholders for Shareholder's legal expenses
attributable to the sale of their interests. Communitronics of America, Inc.
shall not be reimbursed for reasonable and necessary out-of-pocket expenses or
construction costs incurred by Communitronics of America, Inc. not paid by
System Financing if the FCC or other governmental authority does not approve
contemplated transfer of control of the system without first obtaining written
consent from Shareholders.
8.4 BROKERS: Shareholders agree to indemnity Communitronics of
America, Inc. against any third person for any commission, brokerage fee, finder
fee or other payment alleged to be due as a result of this transaction based
upon any alleged agreement or understanding between such third
<PAGE>
person and shareholders whether expressed or implied from actions of
Shareholders or their agents.
8.5 COUNTER PARTS: This agreement may be executed in any number of
counter parts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.6 PARTIES IN INTEREST: This agreement shall inure to the benefit of
and be binding upon Communitronics of America, Inc. and Shareholders (Data
Paging, Inc.) and their respective successors, heirs and assigns. Nothing in
this agreement, either expressed or implied, is intended to confer upon any
other person any rights or remedies under or by reason of this agreement.
8.7 APPLICABLE LAW: The rights and obligations of the parties shall be
construed under and governed by the laws of the State of Utah. Personal
jurisdiction over all parties hereto and venue over any legal action shall be
in the Federal or State courts of general jurisdiction, which are under the
laws of the State of Utah.
8.8 WAIVERS: No provision in this agreement shall be deemed waived by
course of conduct, including the act of closing under Article V unless such
waiver is in writing signed by all parties and stating specifically that it was
intended to modify this agreement.
8.9 SCHEDULES AND EXHIBITS: The exhibits attached hereto shall be
deemed to be incorporated by referenced in this agreement as if fully set forth
herein.
8.10 CAPTIONS: Section headings are descriptive only, and shall have no
legal effects.
8.11 TERMINATION OF RIGHTS: Shareholders (Data Paging, Inc.) and
Communitronics of America, Inc. may terminate this agreement if counsel for
Shareholders and
<PAGE>
counsel for Communitronics of America, Inc. determine in good faith that any
provision of this agreement or the performance of any obligation will adversely
affect Shareholders or Licensee's application for, or their qualification to
hold or transfer the FCC authorization or PVC Certificate for the System- If an
irreconcilable difference of opinion develops between counsel for Shareholders
and counsel for Communitronics of America regarding a claim of such adverse
condition, then both counsel shall agree upon a independent counsel whose
opinion shall be determinative in this matter. However, in the event that a
determination is made that such adverse conditions exists, the parties agree to
use their best efforts to cure the adverse or disqualifying condition, provided
that the cure does not substantially diminish the benefits of this agreement to
either party.
8.12 SEVERABLITY: In the event that any item or provision of this
agreement is determines to be void, unenforceable, or contrary to law, the
remainder of this agreement shall continue in full force and effect, provided.
that such continuation would not materially diminish the benefits of this
agreement for either party.
8.13 ASSIGNMENT: No right or obligation herein may be assigned or
delegated by a party, either directly or indirectly, by transfer of control
without the written consent of the other party, where whose consent shall not
be unreasonably withheld.
8.14 ARBITRATION AGREEMENT: Shareholders, Licensee and/or
Communitronics of America, Inc agree that any material dispute arise
out of this agreement between Shareholders, Licensee and/or
Communitronics of America, Inc., said dispute. will be submitted for
resolution by arbitration in accordance with the rules of the
American Arbitration Association. Such arbitration
<PAGE>
shall be binding and final. In agreeing to arbitration? all parties acknowledge
that in the event of a dispute, each party is giving up the right to have the
dispute decided in a court of law before a judge of jury, and instead are
accepting the use of arbitration far resolution. The non prevailing party(s) as
a result of the arbitration process 8180 agrees to pay all costs, including
reasonable attorney's fees, incurred in said arbitration process including such
initial fees as may be required to initiate a claim in arbitration.
8.15 ENTIRE AGREEMENT: This agreement and letter agreement entered into
between Shareholders (Data Paging, Inc.) and Communitronics of America, Inc.
constitute the entire agreement between the parties governing the matters
addressed, No prior agreement or representation, whether verbal or written,
shall have any force or effect upon this agreement
12/14/98 s/ David Pressler
- -------------- ----------------------------------
Dated DAVID PRESSLER
President & C.E.O. of
Communitronics of America, Inc.
11/23/98 s/ Samuel Mastrull
- -------------- ----------------------------------
Dated SAMUEL MASTRULL
C.F.O. & Secretary
12/14/98 s/ Kenneth Smith
- -------------- ----------------------------------
Dated KENNETH SMITH
Owner of Data Paging, Inc.
12/14/98 s/ Robert I. Prichard
- -------------- ----------------------------------
Dated Witness by Robert I. Prichard
Garner, Prichard & Middleton, P.C.
<PAGE>
EXHIBIT 21
Communitronics of America, Inc. has the following wholly owned corporate
subsidiaries:
<TABLE>
<CAPTION>
Subsidiary State of Incorporation
---------- ----------------------
<S> <C>
20. Data Paging, Inc. Mississippi
21. Crescent Paging, Inc. Louisiana
22. Radio Systems, Inc. Louisiana
23. Communitronics, Inc. Alabama
</TABLE>
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in Form 10-SB of our report dated
February 26, 1999, relating to the consolidated financial statements of
Communitronics of America, Inc., which is contained therein.
Mobile, Alabama Garner Prichard & Middleton, P.C.
August 13, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-1-1998
<PERIOD-END> DEC-31-1998
<CASH> 34,205
<SECURITIES> 0
<RECEIVABLES> 131,823
<ALLOWANCES> 1,045
<INVENTORY> 70,524
<CURRENT-ASSETS> 279,024
<PP&E> 1,292,116
<DEPRECIATION> 631,047
<TOTAL-ASSETS> 944,147
<CURRENT-LIABILITIES> 129,028
<BONDS> 0
0
0
<COMMON> 77,052
<OTHER-SE> 551,592
<TOTAL-LIABILITY-AND-EQUITY> 944,147
<SALES> 394,751
<TOTAL-REVENUES> 1,156,731
<CGS> 256,790
<TOTAL-COSTS> 929,313
<OTHER-EXPENSES> 204,726
<LOSS-PROVISION> 175,354
<INTEREST-EXPENSE> 4,372
<INCOME-PRETAX> (29,372)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
