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
3 E INTERNATIONAL CORP.
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(Name of Small Business Issuer as specified in its charter)
DELAWARE 98-0214095
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
79 Barbara Crescent, Kitchener, Ontario, Canada N2M-4N3
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (519) 743-8153
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Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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Common ______________________________
___________________ ______________________________
Securities to be registered under Section 12(g) of the Act:
COMMON STOCK
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(Title of class)
________________
(Title of class)
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ITEM 1. DESCRIPTION OF BUSINESS
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The Company
Port Development Corp.(the "Company") was incorporated under the laws
of the State of Delaware on April 1, 1998. On November 24, 1998 the
Company amended its Articles of Incorporation to officially change its
name from Port Development Corp. to 3 E International Corp. and had a
1:7 reverse stock split in which seven existing shares were exchanged
for one new share, reducing the total shares outstanding from 11,553,100
shares to 1,651,201 shares.
3 E International Limited (the "Ghana Subsidiary") was incorporated
under the Companies Code of the Republic of Ghana on November 7, 1997.
On November 24, 1998, the Company exchanged 1,285,000 of its common
shares for 100% of the outstanding shares of 3 E International Limited.
As a result of this transaction, the Ghana Subsidiary is now a wholly
owned subsidiary of the Company. All references to the operations of the
Company refer to the operations of the Company and the Ghana Subsidiary.
Mr. Murray Stark is the President and Chief Executive Officer of the
Company, Mr. R.E. Fyn is its Vice President and Treasurer and Mr.
Emmanuel Ashitei is its Operations Manager. The Company's principal
offices are located at 79 Barbara Crescent, Kitchener, Ontario, Canada
N2M 4N3 and its telephone number is (519) 743-8153. All references
to the operations of the Company refer to the operations of the Company
and the Ghana Subsidiary.
The Company has voluntarily elected to file this Form 10-SB. The Company
thereby intends to facilitate the trading of its common stock pursuant
to Section 15(c) of the Securities Exchange Act of 1934 (the
"Exchange Act") and Rule 15c2-11 promulgated thereunder. If the
Company's obligation to file reports pursuant to the Exchange Act is
suspended, the Company has not yet determined whether or not it will
voluntarily file those reports.
The Business
At the present time, the Company does not provide any product or
services. Oct. 12, 1998, the Company was granted a License for
Transmission of MMDS Telecommunications by the Ghana Frequency
Registration and Control Board of the National Communication Authority
of the Republic of Ghana on (the "MMDS License".) See "MMDS
Telecommunications License."
Under the MMDS License, the Company, through the Ghana Subsidiary,
intends to operate a 25 - 30 channel multi-channel multipoint
distribution system ("MMDS") to broadcast television using 20 watt
transmitters operating from a broadcasting tower located in the city of
Accra, Ghana. Such system will be fully expandable to 99 channels or
more when required. The Company intends to offer educational as well as
entertainment programming to its subscribers. The service will be
provided for greater Accra with expansion to other centers in Ghana
expected in the near future and is expected to be operational in Accra
by March 1, 2000. Ultimately, the Company intends to manufacture the
decoder boxes and wiring harnesses used by the subscribers. Once
established in Ghana, the Company plans to extend its operations to
other countries in Africa.
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As part of the television operations, the Company intends to provide
a working studio for the development and showcasing of local talent and
provide the local education system with 2-3 channels for classroom
instruction, which, when these channels are not in use for formal
education, they could be used for community programming. The Company is
currently negotiating for the purchase of a television transmission
company in Accra for the Company's common stock, which will include the
purchase of all of the necessary studio equipment. There is no assurance
that the Company will be able to purchase the television transmission
company and if it can, that the Company will be able to obtain the
necessary funds to operate it.
Once television operations are underway, the Company intends to expand
into providing subscribers with telephone, internet, teleconferencing
and surveillance capabilities. In order to provide telephone and
internet services, the Company will require special licenses, which
management feels will be issued to the Company after the Company
commences its television operations. There is no assurance that such
licenses will be able to be obtained from the government by the Company
and if they are, that the Company will be able to obtain the necessary
funds to provide telephone and Internet services.
Market for Television Programming in Ghana and Competition
The Company has chosen Ghana as its base in Africa because of its
location, infrastructure and its relative stability. Accra, the capital
and the largest city in Ghana with a current growing population of
approximately 2.5 - 3 million people, is situated in southeastern Ghana
on the Gulf of Guinea. A sprawling city, it is an important commercial,
manufacturing and communications center and is the site of an
international airport and the focus of the country's railroad system,
including a link to nearby Tema, which since 1962 has served as the
city's deepwater port. Industries include vehicle and appliance
assembly, petroleum refining, and the manufacture of foodstuffs,
textiles, metal and wood products, plastics and pharmaceuticals. Accra
is the seat of the University of Ghana and several research and
technical institutes.
Since the launching of the Economic Recovery Program in 1995 by the
government of Ghana which emphasized the free market system, the number
of television sets which have been imported into the country has greatly
increased and televisions are widely available. Currently in Ghana,
there are approximately ten F.M. stations. Eighty per cent of the
population has at least one television, with many having two and three
sets. The only television programs available are from the one government
television station and private television stations which beam to viewers
programs developed and run outside the country. Because of the structure
and cost, these are only available to the upper income earners in Ghana.
Management believes that if there was an affordable television system
available to the Accra market, 30 -50 % of the population have the means
to afford a multi- channel system. Additionally, the youth of Accra are
demanding a wider exposure to television viewing than that which is
currently available. In addition, the advent of a large number of middle
- - class housing estates has fueled the market for multi - channel TV
viewing. New tract housing developments reflecting the higher incomes
of their residents has been built in suburban Accra.
Competition in multi - channel viewing includes Multi - Choice
Kaleidoscope GH. Ltd., which provides 6 channels and costs the
subscriber approximately $55.00 US per month. The decoder costs the
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subscriber approximately $175.00 US and installation with an antenna is
approximately $115.00 US. ESN Satellite and Cable and Cable Network Ltd,
proposes to market a 6 channel nationwide pay television service to
begin at the end of 1999 at reasonable rates although costs have not
been released at this time. Direct Broadcast Satellite Systems (e.g.
Expressvu, Direct TV ), which provides up to 45 channels, at the present
time costs the subscriber an Installation fee of $1234.00 US and monthly
fees of $75.00 US.
As part of the television operations, the Company intends to provide
a working studio for the development and show-casing of local talent;
provide the local -education system with 2-3 channels which could
greatly expand classroom opportunities. When these channels are not in
use for formal education they could be used for community enrichment.
Once television operations are underway, the Company intends to expand
into video, telephony, internet, teleconferencing, surveillance and
education and establish an assembly plant in Accra, which would employ
approximately 20-30 employees, for the assembly of the decoder units and
wiring harnesses for all of its markets.
MMDS Telecommunications License
Management believes that the Company's success and ability to compete
are dependent to a significant degree on the MMDS License, which was
granted to the Company by the Ghana Frequency Registration and Control
Board of the National Communication Authority of the Republic of Ghana
on Oct. 12, 1998. This license, which was obtained by the Company at a
cost of $10,000 US, enables the Company to transmit on six television
channels simultaneously. In the event that the Company purchases the
television transmission company in Accra, the Company will be able to
transmit on six additional channels. The MMDS License also permits the
Company to be able to transmit on another twelve television channels
upon payment of certain additional fees. Once obtained, the MMDS License
can be lost only if the Company violates Ghanian telecommunications
laws. Several MMDS Licenses of this kind have been awarded so far by the
Republic of Ghana. Management believes that the Company will be able to
purchase some of the MMDS Licenses from the holders for common stock of
the Company and/or cash, although there is no assurance that the Company
will be able to do so.
Technology and Equipment
Initially, the installation will provide for the viewing of 25-30
channels (the system can handle 99) using 20 watt transmitters operating
from a broadcasting tower located in the city of Accra. In the
beginning, this service will be provided for greater Accra with
expansion to other Ghanian cities in the immediate future.
The MMDS system is made up of 4 main parts: head-end, antenna,
transmission system and subscriber encoder. The system uses a video
encoder, digital data encoder and control system software which offers
subscribers authorization functions from the cable head-end and the
addressable decoder or addressable decoder converter offering
descrambling at the subscriber's home. In a typical MMDS system,
satellite and local programming are received by means of a large
satellite dish located at the receiving/transmitting facility. There,
the channel selections are assembled. The signal is then sent to a
transmit antenna either by means of a microwave transmission, satellite
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transmission or a special cable. The signal is encrypted at this time
and then retransmitted over the designated coverage area, often over a
50 mile radius. The encryption process will help prevent signal theft.
The signals are then received by subscribers using antennas with
suitable downconverters. Standard coaxial cable then carries the signal
to the set top "box" known as an addressable converter/decoder, similar
to those used by cable companies in the United States, which decodes the
incoming signals and converts them to frequencies that can be handled
by any standard television tuner. Through the use of super high
frequencies (SHF), wireless cable eliminates the need for running cable
from one home to another. The obvious benefit of this is cost and since
there are no wires that have to be strung, services can be offered in
areas where wiring would not be possible either because of expense or
inhospitable terrain.
The equipment that has been chosen has been designed to support the
marketing and the general service goals of the satellite television
operation. The equipment selected is such that the programming services
can be expanded and adapted to changes in market in general and of the
subscribers within the market.
Wireless cable uses a line-of-sight, super high frequency (SHF)
microwave television broadcast technique that makes use of a technology
that has been available for several years. The equipment available is
not new and there are more than 100 systems in the United States
currently employing this technology to reach hundreds of thousands of
subscribers throughout the country.
There are three major component blocks - transmission, reception and
control. The first two deal with the TV signal quality and reliability
that will be radiated throughout the desired market area. The third
component, control, is the key that provides signal security and allows
for changes that will beneficially affect revenue.
Transmission site equipment is the foundation of the system and is the
main component that is responsible for the quality and range of the
signal that brings the programming to the subscribers. There are another
three sub components - satellite signal reception and descrambling,
signal encryption and re-processing of the signal to the assigned
transmission frequencies or channels.
The satellite reception and decoding equipment that will be used will
include a minimum 4.5 meter high gain receiving dish with a cost
efficient, best quality integrated receiver/decoder (IRD). This will
provide a maximum capture of a signal from the satellite and to allow
registration of the earth station to reduce the amount of interference
from earth based sources.
In addition to satellite based programs, provisions for laser disc and
video tape equipment may be included to permit the use of prerecorded
movies, special events, to time-delay broadcasts or to fill-in for
interrupted satellite-originated telecasts. A provision for the addition
of video graphic display equipment will be available to create a local
graphic channel including a program guide, news and weather ticker and
whatever else may be required.
The signal processing and scrambling equipment will control the routing
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of the signals to the appropriate transmitters. It will also provide a
"channel mapping" capability that will switch the signal to transmitters
in a way that will coincide with the availability of microwave channels
that could be shared perhaps with an educational institution. During
off-peak viewing times or otherwise, channel or channels can be used for
instructional purposes (ITV) and then can be switched back to allow
their continued use for entertainment broadcast. This mapping process
can have other uses as well, such as to provide a weather ticker or
other service during the early morning, and then switch to a movie or
other program during prime time. All transmissions will be encrypted on
all channels to avoid "signal theft" and insure that only paying
subscribers receive what they pay for. It will be necessary to plan the
purchase of equipment that will make use of technical innovations as
they become available. These may include impulse pay per view, other
program material, over-the-air addressability of all channels and could
be used to multiply the number of channels available to subscribers
without additional frequency assignments, and other features that may
be demanded by the subscribers from time to time. One of these could use
a subcarrier to monitor an in-home security system.
The signal transmission system will make use of top-of-the-line MDS
transmitters, wave guides, combiners and antennas. At the receive site,
equipment will include a roof top antenna, blockdown converter, power
supply, a programmable, user-friendly home set top converter/descrambler.
The set top unit will allow such features as remote control, VCR
hook-up, impulse pay per view programs and parental control to allow
parents to block certain stations when required. The Company has
located a multi-frequency rooftop antenna, including a suitable
converter to allow the reception of microwave signals as well as other
types of signals. Such a system, when used with a suitable LNB,
will be able to receive both MDS and DBS (Expressvu) type programs.
The control equipment will allow the operator to choose the programs
that are broadcast on which channel, to end transmissions to delinquent
subscribers, and to authorize pay-per-view events as required. This
equipment is divided into the addressing computer, the billing computer
and the pay-per-view order entry system. The addressing computer
controls the signal routing as required at the transmitter, the
encryption or scrambling and the subscriber's level of access to the
system. The billing computer holds and maintains the subscriber records
and prepares the bills for delivery to the subscribers. This system can
be used for general accounting purposes, to maintain inventories of
equipment and work orders as needed. Some of these systems can operate
remotely over telephone lines, therefore allowing for a centralized
management system at a location away from the transmitter.
Marketing Plan
The Company is proposing to provide to the subscriber one of two
telecommunications packages - a base package which would consist of a
television encoder, hook-up hardware with channel selections for $25.00
per month; and deluxe package which would consist of a television
encoder, activated telephone board and internet transceiving capacity
for $25.00 for the television channels only, an additional $25.00 for
telephone services and an additional $15.00 for internet services.
The deluxe encoder would be sold to the subscriber for approximately
$150.00. The telephone and the internet board would be given to the
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subscriber without charge upon signing a one year contract for service.
Every subscriber wishing to have internet access will have to have a
telephone, which is the least expensive method to have a link for the
internet. The internet will be accessed by a keyboard which will be
linked to the telephone and the television, thus negating the necessity
of the customer having to purchase an expensive computer, but making it
necessary for the subscriber to have a digital cellular telephone.
Management believes that the Company's immediate market will be
approximately 200,000 subscribers in Accra alone. The Company intends
to extend this service to Kumasi and Tema within 18 months. In addition,
the Accra market will expand due to the increased demand for world
access every year.
The Company's goal is to build a broad base of subscribers in Ghana and
quickly expand into 14 neighboring countries. Management believes that
early and quick entry into all aspects of telecommunications together
with competitive pricing will discourage competition from obtaining a
market in Ghana.
Cost of Implementing First Phase of Operations
Management expects that the cost of the first phase of the operations
of the Company, which will include the purchase of equipment with a
capability to broadcast up to 99 channels, but which will broadcast six
channels under the current status of the MMDS License, using 20 watt
transmitters operating from a broadcasting tower located in the city of
Accra, will be as follows:
Head-end equipment $386,143.60
Subscriber decoders (stock) 200,000.00
Installation cost 30,000.00
Vehicles 48,000.00
Prepaid interest (one year) 24,000.00
Office furniture/equipment 12,000.00
Salaries (three months) 33,900.00
Advertising (three months) 30,000.00
Contingencies 12,000.00
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TOTAL $758,043.60
The Company has entered into an oral agreement with Kam Khuu Products
Inc. Seoul, South Korea whereby Kam Khuu Products Inc. has agreed to
supply all of the above-described equipment together with the start-up
costs in exchange for a convertible debenture to be issued by the
Company in the amount of $2,000,000 US. The convertible debenture will
be convertible into common stock of the Company at price to be
determined by the market price of the common stock on the date of the
exercise of the conversion. While the Company expects to enter into a
written agreement with Kam Khuu Products Inc., there is no assurance
that the Company will be able to do so upon terms acceptable to the
Company.
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Hub System
A hub system is a system uniquely designed to bring low- cost television
to poor areas of Africa. The Company installs a server in one home with
MMDS access and from that server, services eight additional homes with
television, internet and telephone capability. In October, 1999, the
Company obtained the tentative rights to market such a hub system. Using
this system, the subscribers will pay an installation cost for the
complete service that services eight homes including encoders of $250.00
and a total monthly fee of $49.00. The home in which the hub is
installed will receive free service and will be responsible for
collecting the pro-rata monthly cost of $7.00 from the other seven
homes. The hub system will allow the Company to reach the 3,000,000 very
poorest residents in Accra with quality television relatively
inexpensively. Management expects that the marketing of the hub system
will be begun concurrently with the first phase of operations.
Potential Acquisition
The Company has entered into a letter of intent to acquire all of the
outstanding shares of V-Net Television, Ltd. for a combination of cash
and common stock of the Company totaling $250,000, subject to the
completion of our due diligence. V-Net Television, Ltd. is currently
licensed to operate an MMDS television system in Ghana. This purchase,
when completed, would bring a subscriber base to the Company of 2500 new
subscribers which would generate gross income of $62,500 monthly. The
purchase would provide the Company with a license which would give it
another six channels to add to our present venue. The equipment that
would come with the purchase, although outdated, could be utilized, in
part, as studio equipment. In addition, the purchase would provide a
relatively modern property centrally located in downtown Accra at
extremely attractive lease rates for the next 7 years which would be
large enough to house the Company's subscriber payment depot, the
service department and studios. In the event the purchase is completed,
the Company would consider selling the property that it owns and
consolidating both operations at the new location, which would give the
Company a central presence in Accra with better accessibility. It is
anticipated that the purchase will be completed, subject to due
diligence and all necessary regulatory approvals, in June of 2000.
Employees
The Company currently has no full-time or part-time employees. Murray
Stark is the President and Chief Executive Officer of the Company, R.E.
Fyn is its Vice President and Treasurer and Emmanuel Ashitei is its
Operations Manager. The Company has not entered into employment
agreements with Messrs. Stark, Fyn or Ashitei. The Company will
gradually add administrative, sales, operations and marketing staff to
support the expansion plans as outlined.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
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General
The Company is a start-up company and has had no operating history nor
any revenues from earnings from operations. The success of the Company's
proposed plan of operation will depend to a great extent on management's
<PAGE> 8
ability to implement the Company's business plan.
The Company's marketing plan calls for a two phase implementation. The
first phase will include television only and will be implemented as soon
as funds or services and equipment in exchange for common stock of the
Company are available to the Company. Management expects such operations
to begin within (5) five months of the date that the common stock of the
Company is listed on the NASDAQ Bulletin Board. There is no assurance,
however, that the common stock of the Company will be so listed and if
it is, that the funds, equipment and services will be available to the
Company upon terms and conditions acceptable to the Company.
The second phase will additionally include telephone and internet
service at the same time. Management expects the second phase, which
will add telephone and internet services to begin within 14 months of
the date that the common stock of the Company is listed on the NASDAQ
Bulletin Board.
There is no assurance, however, that the common stock of the Company
will be listed on the NASDAQ Bulletin Board and if it is, that the
funds, equipment and services will be available to the Company upon
terms and conditions acceptable to the Company.
First Phase
According to management's private surveys in the Ghanian market, the
first phase of the operations of the Company, which will include the
purchase of equipment with a capability to broadcast up to 99 channels,
but which will broadcast six channels under the current restrictions of
the MMDS License, using 20 watt transmitters operating from a
broadcasting tower located in the city of Accra, would dominate the
television market within four months of inception. The cost to the
subscriber will be less than half of what is currently offered and the
Company's selections, when fully implemented, will be four times what
is currently available except for satellite dish competition (the cost
of satellite dish service is prohibitive with only the very wealthy
being able to afford it.)
Second Phase
The second phase, the providing of wireless telephone and internet
services, will require an investment of approximately $2,000,000.00 US.
Management believes that part of the funds will be generated from cash
flow and the balance will be provided by the African Development Bank,
with whom management has had discussions. The required equipment, which
will consist of an encoder box with capabilities for television
reception, internet reception and transmission and cellular telephone
transmission, is readily available from many manufacturers. The total
package will be available to the subscriber for $65.00/month. The
Company's accountants in Ghana have advised management that the
Company's initial market in Accra will be approximately 200,000
subscribers. Management expects to extend this service to Kumasi and
Tema within 18 months. Management expects to expand service within 12
months into two additional West African countries with which management
has had discussions. Management expects little competition at the
beginning because of its favorable pricing structure.
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Sales Strategy
The Company intends to provide the Ghanian market with low cost, quality
television and will blanket its markets as quickly as possible through
door- to- door canvassing with introductory offers and by establishing
promoter sales people with defined territories consisting of a few
blocks. In addition, the Company will use newspaper advertising and will
market the service through churches (a popular gathering place for
Ghanians.)
Competition
Cost Comparative Analysis
Company Competition
Installation and Decoder Cost $100.00 $290.00
Subscription for one year $250.00 $660.00
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Total $350.00 $950.00
Note: This comparison does not include the significant
differences in program selection between the two systems i.e. the
competition shows only 6 channels while the Company will show 25
channels at no additional cost when fully implemented; the Company
will have its own studio to produce local programming for local
presentations on a designated channel; and the Company will make
available two channels solely for educational programming.
Hub System
The hub system is uniquely designed to bring low-cost television to poor
areas of Africa. Management views this hub system as an African solution
to a vital communications need that can be expanded to internet and
telephone capability. After the Company initially begins marketing this
in Ghana, it intends to expand its use to future markets in Africa.
Liquidity and Capital Resources
The Company has never had any revenues, has had no lines of credit or
similar credit facilities available to it and has relied solely on its
ability to raise money through equity financing to finance its business.
The majority of funds raised have been allocated to the development of
its distribution systems and product requirements. In 1998, the Company
raised $103,000 by selling 3,356,000 shares of common stock. The Company
expects to implement an employee stock option plan during 2000.
In February 2000, the Company agreed in principal with it's main
supplier that the supplier would provide a maximum of $2,000,000 in
equipment financing in exchange for convertible debentures and an
<PAGE> 10
agreement to be the Company's exclusive hardware supplier for the
Company's projects in Africa. Management feels that the Company can
raise the approximately $100,000 in operating funds required by the
Company over and above the equipment financing. There is no assurance
that this financing will take place as planned; if it does not, the
Company will have to seek other methods of financing, otherwise it will
not have the ability to construct its distribution system.
At current expenditure rate, the Company will run out of cash by July,
2000 if additional funds are not raised by the Company.
Results of operations - 6 months ending Dec. 31, 1999
During the six (6) month period ending Dec. 31,1999, the Company
incurred a net loss of $16,567 and had no revenues. At year-end, the
Company had cash of $417.00 and current liabilities of $31,229.00,
including $29.029.00 in loans advanced by shareholders. The majority
of the expenses incurred during this period related to the continued
development of the Company's systems and ongoing operating expenses.
Results of Operations - June 30, 1998 - June 30, 1999
During the fiscal year ending June 30, 1999, the Company incurred a
restated net loss of $60,635 and had no revenues. At year end, the
Company had no cash and had current liabilities of $17,220. Expenses
incurred during the year related primarily to research and development
costs, salaries and benefits to personnel, consulting fees for experts
engaged in management and research and development of the wireless
television transmission project. Activities by the Company during the
year centered on developing production and marketing plans for the
Company's projects.
Risk Factors
Management believes that the Company is subject to the following risks:
Limited Operating History; Development Stage Company. The Company was
only formed in April of 1998, has had a very limited operating history
and has had no income. To date, the Company has been primarily engaged
in the development of its business plan and the commencement of business
operations on a limited scale. The Company must be considered to be
in its development stage and subject to all the risks inherent in any
newly formed business including the absence of a significant operating
history, lack of market recognition and limited banking and financial
relationships. In addition, the business plan and operating strategy
involves expansion into businesses and markets (i.e. television
broadcasting which are highly competitive and typified by well
established and better financed companies with a long established and
highly recognized market presence.
Competition. The Company must compete with other companies whose
business plans and objectives are similar to that of the Company.
Management is aware of several other companies engaged in similar
businesses, some of which have substantially greater resources and
longer operating histories than the Company.
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Risks of Increasing Government Regulation in Ghana. Television
broadcasting in Ghana may become subject to increasing regulation by
government ordinances, regulations, and codes. The costs of compliance
with such statutes, ordinances, regulations and codes may have an
adverse impact on the operations. Due to the nature of the operations,
consumer self-regulation may also have an adverse effect on operations.
Dependence on Key Existing and Future Personnel. The success will
depend to a large degree upon the efforts and abilities of the officers
and key management employees. The loss of the services of one or more
of the key employees could have a material adverse effect on the
business prospects and potential earning capacity. As the business plan
is implemented, it will need to recruit and retain additional management
and key employees in virtually all phases of its operations. There can
be no assurances that the Company will be able to recruit or retain such
new employees on terms suitable to the Company.
Uncertainty of Market Acceptance. Commercial success of the Company is
dependent upon market acceptance, as the market for wireless
television, Internet and telephone access is still developing in Ghana.
As a result, future market success cannot be reliably estimated. In
addition, the Company is only in the early stages of it's marketing
program and the longer-term impact of this program has yet to be
realized. To date, the market for wireless services providers has
proven to be volatile and there can be no assurance that in the event
the Company begins operations, it will be able to retain future
customers.
Additional Financing Required - Lack of Traditional Financing Sources.
The Company is pursuing an aggressive growth strategy, which will
require substantially more funding than the Company has. However, there
can be no assurance that all, or any part of such additional financing
will in fact be realized. The Company may seek such financing from
sources such as bank financing or through the sale of additional debt
or equity securities (or a combination thereof) in future public or
private offerings. However, there can be no assurance that any such
financing will in fact be available to the Company when needed or upon
terms acceptable to the Company. Consequently, should the Company be
unable to secure needed additional financing in the future on a
reasonable basis, it is possible that the proceeds from this Offering
will be expended without the Company being able to realize the full
benefit of the proposed business plan or, possibly, without the Company
being able to sustain viable commercial operations. There can be no
assurances that any such additional financing will be available on terms
satisfactory to the Company, if at all.
Uncertain Ability to Manage Growth. As part of the business strategy,
we intend to pursue rapid growth. The ability to achieve the planned
growth depends upon a number of factors, including the ability to hire
and train management and other employees, the adequacy of the financial
resources, the ability to identify new markets in which we can
successfully compete and the ability to adapt the purchasing and other
systems to accommodate the expanded operations. In addition, there can
be no assurance that we will be able to achieve the planned expansion
or that we will be able to manage successfully the expanded operations.
Failure to manage growth effectively could adversely affect the
financial condition, results of operations and prospects.
Cultural Differences between the North American and Ghanian markets.
Management is aware that there are certain cultural differences between
<PAGE> 12
the North American and Ghanian markets. Management is preparing a
professional and localized marketing program tailored for local tastes
which will focus on only the cost savings, the availability of new
channels and the possibility upgrades. There is no assurance that such
a marketing program will be successful.
Currency Risks. There are possible currency risks associated with
operations in countries such as Ghana that have in the recent past
experienced high rates of inflation and devaluation. The Company will
attempt to take prudent steps and policies to mitigate and reduce those
risks based on its experience operating in those environments. However,
no assurance can be given that those steps will be successful.
MMDS License. The Company was granted a License for Transmission of MMDS
Telecommunications which by the Ghana Frequency Registration and Control
Board of the National Communication Authority of the Republic of Ghana
on Oct. 12, 1998. Once obtained, the MMDS License can be lost only if
the Company violates Ghanian telecommunications laws; there is no
assurance that the Company will not violate Ghanian laws and lose the
MMDS License.
Social, Political and Economic Risks Associated with Foreign
Operations. The Company operations will be located in the Republic of
Ghana. Social, political and economic conditions inherent in foreign
operations and international trade may change, including changes in the
laws and policies that govern foreign investment and international
trade. Social, political or economic changes could, among other things,
interrupt operations or cause significant increases in the cost of doing
business in Ghana. Political or labor unrest in Ghana could
interrupt programming and the ability for us to conduct business.
Accordingly, changes in social, political or economic conditions in
Ghana could have a material adverse effect on the Company's business.
Technological Changes. Telecommunications, particularly data
communications, is characterized by rapidly changing technology and
evolving industry standards in both the wireless and wireline
industries. The success of the Company will depend heavily on its
continuing ability to develop and introduce enhancements to its systems
to be used and new products that meet changing markets.
Limited Market for Securities. Although a limited market for the Common
Stock has developed, there is currently no broad and established public
market for the shares and no assurance can be given that such a market
will develop in the future. The current market price of the shares bears
no relationship whatsoever to assets, earnings, book value, or other
objective standards of worth.
Absence Of Dividends on the Common Stock. The Company has not paid any
dividends on any of its shares of Common Stock since the inception and
does not currently anticipate paying dividends on its Common Stock in
the foreseeable future.
Possible Failure to Obtain Listing of Common Stock and Market
Illiquidity. The Company intends to list its Common Stock on the
National Association of Securities Dealers OTC Bulletin Board. There
is no assurance that such a listing will be obtained, and if it is not
obtained, the Common Stock of the Company will continue to have a
limited market. Even if a listing is obtained, there's no assurance
that Common Stock of the Company will have anything other than a limited
<PAGE> 13
market.
Issuance of Additional Shares. The Board of Directors has the power to
issue additional shares without shareholder approval. Any additional
shares issued by the Company below the offering price in this Offering
may have the effect of further diluting the interest of then current
shareholders.
Year 2000 Risks. The Company believes that it is Year 2000
compliant at the present time. Given the relatively small size of the
Company's software systems, the Company uses standard software systems
that are Year 2000 compliant. The Company does not expect any
disruptions in its operations as a result of any failure by the
Company to be in compliance. The Company estimates that the cost of
replacing non compliant hardware will not be material and will be
carried out during the balance of Fiscal 1999 in the ordinary course of
business. The Company's operating systems are commercially available.
The cost to be upgraded to be fully compliant is estimated not to exceed
$10,000.
Year 2000 Conversion
The Year 2000 issue relates to the inability of certain computer
software programs to properly recognize and process date-sensitive
information relative to the Year 2000 and beyond. Without corrective
measures, this issue could cause computer applications to fail or to
create erroneous results. Incomplete or untimely resolution of the
Year 2000 issue by the Company or by its key vendors, customers,
suppliers or by other third parties could have a materially adverse
impact on the Company's business in the future.
The Company has evaluated its Year 2000 compliance issues. The Company
expects that all remediation issues will be completed during 1999
by upgrading its business information systems. There can be no
assurance, however, in the event full operations are commenced in 1999,
that the systems of other parties upon which the Company's business
will rely, including vendors, customers, suppliers and other third
parties, will be converted on a timely basis. The Company is not able
at this time to ascertain the extent of any disruption caused by other
parties.
The Company believes that the most reasonably likely worst case
scenario which could occur with respect to Year 2000 is a delay in
receiving payments on accounts receivable from customers.
The Company must raise significant additional funds to accomplish its
goals as discussed herein. There are no preliminary or other
agreements or understandings between the Company and its officers,
directors or affiliates or lenders with respect to any such financing.
The Company may seek loan financing to either replace current debt or
to purchase equipment. If it chooses to raise money through loan
financing, the Company would be subject to all of the risks associated
with such activities, including being bound by burdensome
covenants, fluctuating interest rates, and liens on assets. If the
ratio of indebtedness to capital grew too large, the Company's
operations might be materially adversely affected by its debt burden.
<PAGE> 14
Forward Looking Statements
When used in this Form 10-SB filing, the words "believe", "should",
"would" and similar expressions which are not historical are intended
to identify forward-looking statements that involve risks and
uncertainties. Such statements include, without limitation,
expectations with respect to the results for the next fiscal year, the
Company's beliefs about the telecommunications business in Ghana and
its views about the long-term future of the industry and the Company,
its plan to address the Year 2000 issue, the costs associated
therewith and the results of Year 2000 non-compliance by the Company or
its suppliers or other strategic business partners. In addition to
factors that may be described in the Company's other Securities and
Exchange Commission filings, all of the Risk Factors described herein
could cause the Company's financial performance to differ materially
from that expressed in any forward-looking statements made by, or on
behalf of, the Company. The Company does not undertake any
responsibility to update the forward-looking statements contained in
this Form 10-SB filing.
ITEM 3. DESCRIPTION OF PROPERTY
- -------------------------------
The Company's principal offices are located at 79 Barbara Crescent,
Kitchener, Ontario, Canada N2M 4N3 and its telephone number is (519)
743-8153. These facilities are the offices of the President, Murray
Stark, and are being occupied rent-free. Management believes that the
facilities are sufficient to support the Company's planned operations
for the foreseeable future. Our operations office is located in the
District of La, Accra, Ghana, West Africa in a building purchased by the
Company from Emmanuel Ashitei on May 15, 1997 in exchange for all of the
outstanding common stock of the Ghana Subsidiary. The property has an
area of approximately 200,000 square feet and on the property is
constructed a two story cement block building consisting of
approximately 12,000 square feet. The building can be used to for
various commercial uses, including television studios, offices,
showrooms and small conventions. In addition, there is a separate 1,500
square foot building on the property.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ----------------------------------------------------------------------
The following table sets forth the number of shares of our Common Stock
beneficially owned by (i) each person who, as the date hereof, was known
by us to own beneficially more than five percent (5%) of its Common
Stock; (ii) the individual Directors of our Company and (iii) the
Officers and Directors of our Company as a group. As of the date hereof,
there were 6,242,201 common shares issued and outstanding.
<TABLE>
<CAPTION>
Title of Class Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of
Class
<S> <C> <C> <C>
Common Murray Stark 695,000 11.13%
Common Emmanuel Ashitei 1,095,000 17.54%
Common Robert Fyn 480,715 7.70%
</TABLE>
<PAGE> 15
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Common Stephan Reize 47,143 0.76%
Common Officers and Directors 2,317,858 37.13%
as a group (1)
</TABLE>
(1) Does not include options, which may be issued to Messrs. Stark,
Ashitei and Fyn in the future at yet to be determined prices.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
- --------------------------------------------------------------------
Directors and Executive Officers
The following table sets forth the names and current positions with our
Company held by Directors, Executive Officers and Significant Employees.
There is no immediate family relationship between or among any of the
Directors, Executive Officers or Significant Employees and our Company
is not aware of any arrangement or understanding between any Director or
Executive Officer and any other person pursuant to which he was elected
to his current position.
Name Position with Company
- ---- ---------------------
Murray Stark President, Director and Chairman of the Board
Emmanuel Ashitei Treasurer and Director
Robert Fyn Secretary and Director
Stephan Reize Director
Murray Stark, 63, Murray H. Stark was born in Ontario, Canada and is a
citizen and resident of Canada.. From 1961 until 1964, Mr. Stark taught
school in Wellington County, Ontario. From 1964 until 1968, he was an
agent for the State Farm Northern Life Insurance Company division. From
1968 through 1976, he was manager of a large land bank used for
residential and commercial development for Xenon Land Development company
in Waterloo and Kitchener, Ontario. From 1976 through 1978, Mr. Stark was
a territory sales manager for I.M.A. Financial in Kitchener. In 1978, he
joined Safeway Investments where he worked in their business loans
department until 1981. In 1981, Mr. Stark founded H.M.S. Financial, a
company with an established network of mortgage lenders throughout
Ontario and continues in that capacity through the present time. Mr.
Stark is a graduate of Teacher's College in Stratford, Ontario and holds
the Residential Appraisal Certificate and Mortgage Certificate
designations.
Emmanuel Ashitei, 52, was born and raised in Ghana. Mr. Ashitei is a
senior member of the Society of Manufacturing Engineers, a member of the
International Society for Hybrid Microelectronics and an associate member
of the CEI, Royal Charter of the Engineers Registration Board, United
<PAGE> 16
Kingdom. Mr. Ashitel is an engineer with many years of experience,
including several years in the employ of Litton Industries. He has
experience in the fields of product development, training, supervision
of technicians, general management, costing, production and plant layout.
Mr. Ashitei is a senior member of the Society of Manufacturing Engineers,
a member of the International Society for Hybrid Microelectronics and is
an associate member of the Royal Charter of the Engineers Registration
Board of the United Kingdom. He received a Chartered Engineering Degree
in Telecommunications in 1976 from Willesden/Imperial College, London,
England and an Electronics II Degree from the University of Toronto,
Toronto, Ontario in 1981.
Robert E. Fyn, 52, was born in Switzerland. From 1977 through 1995, Mr.
Fyn was engaged in a series of increasingly more responsible positions
in the farming and horse ranching industries in Ontario. In 1995, Mr. Fyn
founded Rural Carriage and Buggy Works, Linden, Alberta, Canada which
manufactures vintage style carriages and buggies for use in the film
industry, on dude ranches and for sale to private enthusiasts. Mr. Fyn
owns the firm and operates all aspects of management on a day-to-day
basis.
Stephan Reize, 41, was born in Switzerland. From 1977 through 1984, Mr.
Reize worked for Naturel-Lep, Basle, Switzerland and it was involved in
all aspects of freight forwarding. From 1984 through 1991, he was a
regional manager with Meadows - Rockood International, where he was
responsible for all aspects of freight forwarding. Since 1991until the
present time, he has been the owner of Ocean - Air Freight Ltd., Calgary,
Alberta, a freight forwarder. In 1977, Mr. Reize received a Diploma in
Business Administration from Kantonale - Hankelsschule, Switzerland.
ITEM 6. EXECUTIVE COMPENSATION
- ------------------------------
At the present time, none of the officers or directors of the Company are
receiving compensation nor is any compensation being accrued nor does the
Company have any employment agreements with any of the officers or
directors of the Company.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- ------------------------------------------------------
On April 1, 1998 the Company was incorporated as Port Development Corp.
under the laws of the State of Delaware.
On August 19, 1998, the Company issued 11,553,100 shares of stock for
$0.001 per share to 1314 shareholders in reliance upon Rule 504 of
Regulation D promulgated under the Securities Act of 1933.
On November 24, 1998 the Company amended its Articles of Incorporation
to officially change its name from Port Development Corp. to 3 E
International Corp. had a 1:7 reverse stock split in which seven existing
shares were exchanged for one new share, reducing the total shares
outstanding from 11,553,100 shares to 1,651,201 shares.
On May 15, 1998, the Ghana Subsidiary purchased the building in which the
<PAGE> 17
operations office is located in the District of La, Accra, Ghana from Mr.
Ashitei in exchange for shares of common stock of the Ghana Subsidiary.
On November 25, 1998, the Company issued a total of 1,285,000 of its
common shares - 695,000 shares to Mr. Ashitei and 295,000 shares each to
Mssrs. Fyn and Stark in exchange for 100% of the outstanding shares of
the Ghana Subsidiary.
ITEM 8. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
- ---------------------------------------------------------------
The total number of shares which the Company has authority to issue is
20,000,000 shares of common stock, $.001 par value. A total of 6,242,201
shares of our Common Stock are currently outstanding and the number of
holders of record of our Common Stock is approximately 1366. The holders
of Common Stock have one vote per share on all matters (including
election of directors) without provision for cumulative voting. The
Common Stock is not redeemable and has no conversion or preemptive
rights. The Common Stock currently outstanding is validly issued, fully
paid and non-assessable. The Board of Directors may, from time to time,
declare and our Company may pay dividends on its shares in cash, property
or its own shares, except when our Company is insolvent subject to the
provisions of the Delaware Statutes. Our Company has paid no cash
dividends on its Common Stock.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND OTHER SHAREHOLDER MATTERS
- -----------------------------------------------------------------------
The Company's Common Stock is listed on the "pink sheets" under the
symbol "TEIL." Public trading of the Company's Common Stock commenced on
May 10, 1999 and the market for the Common stock is limited, sporadic and
highly volatile. The following table sets forth the high and low last
closing bid of the Common Stock for the periods indicated. The
information was obtained from FinancialWeb.com, Inc. The quotations
represent interdealer prices without retail mark-ups, mark-downs or
commissions and do not represent actual transactions. The following
chart shows the closing prices of the stock since it commenced trading
on May 10, 1999.
<PAGE> 18
Price Range
---------------------
High Low
------ ------
1999
----
Second Quarter $5.00 $1.50
Third Quarter $5.25 $4.75
Fourth Quarter $5.00 $0.50
On March 11, 2000, the closing price for the Common Stock was $3.25.
Effective August 11, 1993, the Securities and Exchange Commission adopted
Rule 15g-9, which established the definition of a "penny stock," for
purposes relevant to the Company, as any equity security that has a
market price of less than $5.00 per share or with an exercise price of
less than $5.00 per share, subject to certain exceptions. For any
transaction involving a penny stock, unless exempt, the rules require:
(i) that a broker or dealer approve a person's account for transactions
in penny stocks; and (ii) the broker or dealer receive from the investor
a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a
person's account for transactions in penny stocks, the broker or dealer
must (i) obtain financial information and investment experience and
objectives of the person; and (ii) make a reasonable determination that
the transactions in penny stocks are suitable for that person and that
person has sufficient knowledge and experience in financial matters to
be capable of evaluating the risks of transactions in penny stocks. The
broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating to the
penny stock market, which, in highlight form, (i) sets forth the basis
on which the broker or dealer made the suitability determination; and
(ii) that the broker or dealer received a signed, written agreement from
the investor prior to the transaction. Disclosure also has to be made
about the risks of investing in penny stocks in both public offerings and
in secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current quotations for
the securities and the rights and remedies available to an investor in
cases of fraud in penny stock transactions. Finally, monthly statements
have to be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny
stocks.
The National Association of Securities Dealers, Inc. (the "NASD"), which
administers NASDAQ, has recently made changes in the criteria for initial
listing on the NASDAQ Small Cap market and for continued listing. For
initial listing, a company must have net tangible assets of $4 million,
market capitalization of $50 million or net income of $750,000 in the
most recently completed fiscal year or in two of the last three fiscal
years. For initial listing, the common stock must also have a minimum bid
price of $4 per share. In order to continue to be included on NASDAQ, a
company must maintain $2,000,000 in net tangible assets and a $1,000,000
market value of its publicly-traded securities. In addition, continued
inclusion requires two market-makers and a minimum bid price of $1.00 per
share.
Dividend Policy
The Company has never declared nor paid dividends on its Common Stock and
does not intend to do so in the foreseeable future.
<PAGE> 19
ITEM 2. LEGAL PROCEEDINGS
- -------------------------
The Company is not a party to any pending legal proceedings. Management
is not aware of any legal proceedings pending, threatened or
contemplated, against any of the Company's officers or directors,
respectively, in their capacities as such.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
- ------------------------------------------------------
The auditor for the Company for the fiscal year ended June 30, 1998 was
Rotenberg & Company L.L.P., CPA's. The auditor for the Company was
William Friedman. As a result of the "reverse acquisition" of the
Company by 3 E International Corp. on November 23, 1998, the accountants
of the Company, George W. Stephenson, Chartered Accountant, assumed
responsibility for the consolidated audit as of December 30, 1998. There
were no disagreements with respect to accounting principles or practices,
financial statement disclosure, or auditing scope or procedure with the
Company's former auditors, Rotenberg & Company, LLP nor for either of the
past two fiscal years was there an adverse opinion, disclaimer of opinion
or modification. The Company's auditors, Rotenberg & Company L.L.P. have
assumed responsibility to prepare the consolidated financial statements
as of June 30, 1998 and 1999.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
- ------------------------------------------------
On August 19, 1998, the Company issued 11,553,100 shares of stock for
$0.001 per share to 1314 shareholders in reliance upon Rule 504 of
Regulation D promulgated under the Securities Act of 1933.
On November 25, 1998, the Company issued a total of 1,285,000 of its
common shares - 695,000 shares to Mr. Ashitei and 295,000 shares each to
Mssrs. Fyn and Stark - in exchange for 100% of the outstanding shares
of 3 E International Limited.
All of the shares sold by the Company pursuant to Rule 504 were sold by
the Company's officers and directors at the time. Rule 504 allows a
company to raise up to $1 million in a twelve month period, if the
company is not subject to the reporting requirements of the Securities
and Exchange Act of 1934 (the "Exchange Act") and the company is not a
"blank check" company. The Company has not raised more than $1 million
during the last twelve months. The Company is not subject to the
reporting requirements of the Exchange Act and it is not a blank check
company, therefore, the exemption under Rule 504 is available for all
such sales.
Other than the shares of common stock which may be issued in exchange for
the television transmission company or the convertible debenture to be
issued by the Company in the amount of $2,000,000 US which will be
convertible into common stock of the Company to be issued to Kam Khuu
Products Inc. in exchange for the purchase of the equipment for the first
phase of the operations of the Company, there are currently no
preliminary or other plans, proposals, arrangements or understandings
<PAGE> 20
with respect to the issuance of additional securities by the Company.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
- -------------------------------------------------
The Company's Articles of Incorporation do not specifically authorize
the indemnification of officers, directors, employees or agents,
however, Section 145 of the Delaware General Corporation Law permits such
indemnification without shareholder action as follows:
(a) The person conducted himself or herself in good faith;
(b) The person reasonably believed:
(1) In the case of conduct in an official capacity with
the Company, that his or her conduct was in the Company's best
interests; and
(2) In all other cases, that his or her conduct was at
least not opposed to the Company's best interests; and
(c) In the case of any criminal proceeding, the person had
no reasonable cause to believe that his or her conduct was unlawful.
Unless limited by the Articles of Incorporation, and there are not such
limitations with respect to the Company, Section 145 of the Delaware
General Corporation Law permits the Company to indemnify such a
person against reasonable expenses who was wholly successful, on
the merits or otherwise, in the defense of any proceeding to which the
person was a party because of his status with the Company.
Under Section 145 of the Delaware General Corporation Law, the Company
may pay reasonable fees in advance of final disposition of the
proceeding.
(d) A determination is made that the facts then known to those
making the determination would not preclude indemnification.
Section 145 of the Delaware General Corporation Law permits the Company
to purchase and maintain insurance to pay for any indemnification of
reasonable expenses as discussed herein.
The indemnification discussed herein shall not be deemed exclusive of
any other rights to which those indemnified may be entitled under
the Articles of Incorporation, any Bylaw, agreement, vote of
shareholders, or disinterested directors, or otherwise, and any procedure
provided for by any of the foregoing, both as to action in his official
capacity and as to action in another capacity while holding such office,
and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of heirs,
executors, and administrators of such a person.
<PAGE> 21
Insofar as indemnification for liabilities under the Securities Act of
1933 may be permitted to directors, officers, and controlling persons of
the Registrant pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expense
incurred or paid by a director, officer, or controlling person of
the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the Company
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
FINANCIAL STATEMENTS AND EXHIBITS
- ---------------------------------
(a) Financial Statements
Audited consolidated balance sheets of the Company And Ghana
Subsidiary as of June 30, 1999 and 1998, the related
consolidated statements of operations, changes in
stockholders' equity, and cash flows for the year ended June
30, 1999 and for the period from the date of inception
(November 7, 1997) to June 30, 1998 and 1999 and unaudited
consolidated balance sheet of the Company And Ghana
Subsidiary as of December 31, 1999, the related consolidated
statements of operations, changes in stockholders= equity and
cash flows for the six months ended December 31, 1999 and for
the period from the date of inception (November 7, 1997) to
December 31, 1999,
(b) Exhibits
3(i)(a) Articles of Incorporation of 3 E International
Corp.
3(i)(b) Certificate of Incorporation and Certificate to
Commence Business of 3 E Certificate International
Ltd.
3(ii)(a) Bylaws of 3 E International Corp.
3(ii)(b) Bylaws of 3 E International Ltd.
5 Tradeability Opinion
10(i) Verification of License for Transmission of MMDS
Telecommunications
10(ii) Letter from Kamkhuu Products Limited dated February
1, 2000
10(iii) Letter of Intent for purchase of V-Net Television,
Ltd. dated March 2, 2000
<PAGE> 22
21 List of Subsidiaries
27 Financial Data Schedule
SIGNATURES:
- ----------
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized.
3 E INTERNATIONAL CORP.
By:/s/Murray Stark
Murray Stark, President
Date: March 17, 2000
* Print the name and title of each signing officer under his or her
signature.
<PAGE> 23
3 E INTERNATIONAL CORP. & SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Kitchener, Ontario, Canada
TABLE OF CONTENTS
- ----------------------------------------------------------------------------
Independent Auditors' Report F-2
Independent Accountants' Report on Interim Unaudited
Financial Information F-3
Consolidated Balance Sheets at June 30, 1999 and 1998
and December 31, 1999 (Unaudited) F-4
Consolidated Statements of Changes in Stockholders' Equity for
the Period from the Date of Inception (November 7, 1997) to
June 30, 1998 and 1999 and for the Six Months Ended December
31, 1999 (Unaudited) F-5
Consolidated Statements of Operations for the Period from the
Date of Inception (November 7, 1997) to June 30, 1998 & 1999
and for the Six Months Ended December 31, 1999 (Unaudited) F-6 to F-7
Consolidated Statements of Cash Flows for the Period from the
Date of Inception (November 7, 1997) to June 30, 1998 & 1999
and for the Six Months Ended December 31, 1999 (Unaudited) F-8 to F-9
Notes to the Consolidated Financial Statements F-10 to F-12
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
and Shareholders
3 E International Corp. & Subsidiary
Kitchener, Ontario, Canada
We have audited the accompanying consolidated balance sheets of 3 E
International Corp. & Subsidiary (A Development Stage Company) as of June
30, 1999 and 1998, and the related consolidated statements of operations,
changes in stockholders' equity, and cash flows for the year ended June 30,
1999 and for the period from the date of inception (November 7, 1997) to
June 30, 1998 and 1999. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of 3 E International Corp. & Subsidiary as of June 30, 1999 and 1998, and the
consolidated results of their operations and their cash flows for the year
ended June 30, 1999 and for the period from the date of inception (November
7, 1997) to June 30, 1998 and 1999, in conformity with generally accepted
accounting principles.
Rotenberg & Company, llp
Rochester, New York
February 15, 2000
F-2
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors
and Shareholders
3E International Corp. & Subsidiary
Kitchener, Ontario, Canada
We have reviewed the accompanying consolidated balance sheet of 3E
International Corp. & Subsidiary (a Development Stage Company) as of December
31, 1999 and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for the six months ended December 31, 1999
and for the period from the date of inception (November 7, 1997) to December
31, 1999, in accordance with standards established by the American Institute
of Certified Public Accountants. All information included in these
consolidated financial statements is the representation of the Company's
management.
A review consists principally of inquiries of Company personnel and
analytical procedures applied to the financial data. It is substantially
less in scope than an audit in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying consolidated financial statements in order
for them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheets as of June 30, 1999 and
1998, and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for the year ended June 30, 1999 and
for the period from the date of inception (November 7, 1997) to June 30,
1998 and 1999 (presented elsewhere herein); and in our report dated February
15, 2000, we expressed an unqualified opinion on those consolidated
financial statements.
Rotenberg & Company, LLP
Rochester, New York
February 15, 2000
F-3
<PAGE>
3 E INTERNATIONAL CORP. & SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Kitchener, Ontario, Canada
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
- ---------------------------------------------------------------------------------------
(Unaudited)
December 31, June 30, June 30,
1999 1999 1998
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Current Assets
Cash $ 417 $ - $
Prepaid Expenses - 2,975 -
- ---------------------------------------------------------------------------------------
Total Current Assets 417 2,975 -
Other Assets
Land 100,000 100,000 -
Building - Not in Service 300,000 300,000 -
License Fees 1,000 1,000 -
Deferred Financial Costs 56,495 56,495 -
- ---------------------------------------------------------------------------------------
Total Assets $ 457,912 $ 460,470 $ -
- ---------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Loans Payable $ 15,009 $ - $ -
Accrued Expenses 2,200 2,200 -
Due to Stockholders 14,020 15,020 -
- ---------------------------------------------------------------------------------------
Total Current Liabilities 31,229 17,220 -
- ---------------------------------------------------------------------------------------
Stockholders' Equity
Common Stock - $.001 Par; 20,000,000
Shares Authorized;
6,242,201 Shares Issued and
Outstanding as of December 31,
1999 and June 30, 1999, and
1,601,201 Shares Issued and
Outstanding as of June 30, 1998 6,242 6,242 1,601
Additional Paid-In Capital 509,196 509,196 9,952
Deficit Accumulated During Development
Stage (88,755) (72,188) (11,553)
- ---------------------------------------------------------------------------------------
Total Stockholders' Equity 426,683 443,250 -
- ---------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 457,912 $ 460,470 $ -
- ---------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-4
<PAGE>
3 E INTERNATIONAL CORP. & SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Kitchener, Ontario, Canada
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE
PERIOD FROM THE DATE OF INCEPTION (NOVEMBER 7, 1997) TO JUNE 30, 1998
AND 1999 AND FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------------------------------
Deficit
Accumulated
Number Addt'l During Total
of Common Paid-In Development Stockholders'
Shares Stock Capital Stage Equity
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance - November 7, 1997 - $ - $ - $ - $ -
Initial Capitalization of Company 11,553,100 11,553 - - 11,553
Recapitalization and 1:7 Reverse
Stock Split (9,951,899) (9,952) 9,952 - -
- ---------------------------------------------------------------------------------------------------------
Restated Balance After Stock
Split 1,601,201 1,601 9,952 - 11,553
Net Loss - - - (11,553) (11,553)
- ---------------------------------------------------------------------------------------------------------
Balance - June 30, 1998 1,601,201 1,601 9,952 (11,553) -
Issuance of Shares in Connection
with Acquisition of Subsidiary 1,285,000 1,285 399,600 - 400,885
Issuance of Shares in Exchange
for Cash - Rule 504 3,356,000 3,356 99,644 - 103,000
Net Loss - - - (60,635) (60,635)
- ---------------------------------------------------------------------------------------------------------
Balance - June 30, 1999 6,242,201 6,242 509,196 (72,188) 443,250
Net Loss for Period (Unaudited) - - - (16,567) (16,567)
- ---------------------------------------------------------------------------------------------------------
Balance December 31, 1999 6,242,201 $ 6,242 $ 509,196 $ (88,755) $ 426,683
- ---------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-5
<PAGE>
3 E INTERNATIONAL CORP. & SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Kitchener, Ontario, Canada
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE PERIOD FROM
THE DATE OF INCEPTION (NOVEMBER 7, 1997) TO JUNE 30, 1998
AND 1999 AND FOR THE YEAR ENDED JUNE 30, 1999 AND FOR THE
SIX MONTHS ENDED DECEMBER 31, 1999 (UNAUDITED)
- ---------------------------------------------------------------------------------------
For the Period
From Inception
(November 7,
1997)
Through June 30, June 30,
June 30, 1999 1999 1998
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues $ - $ - $ -
- ----------------------------------------------------------------------------------------
Expenses
Equipment 4,010 4,010 -
Freight and Delivery - - -
Legal and Accounting 12,107 12,107 -
Organization Costs 11,553 - 11,553
Professional 13,754 13,754 -
Promotional 8,374 8,374 -
Salaries 12,000 12,000 -
Software 893 893 -
Supplies - - -
Telephone 1,203 1,203 -
Travel 6,900 6,900 -
Utilities 1,394 1,394 -
- ----------------------------------------------------------------------------------------
Total Expenses 72,188 60,635 11,553
- ----------------------------------------------------------------------------------------
Net Loss $ (72,188) $ (60,635) $ (11,553)
- ----------------------------------------------------------------------------------------
Loss Per Common Share - Basic
and Diluted $ (0.01) $ (0.01) $ -
- ----------------------------------------------------------------------------------------
Weighted Average Number of
Shares 6,242,201 6,242,201 1,601,201
- ----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-6
<PAGE>
3 E INTERNATIONAL CORP. & SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Kitchener, Ontario, Canada
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE PERIOD FROM THE
DATE OF INCEPTION (NOVEMBER 7, 1997) TO JUNE 30, 1998 AND 1999
AND FOR THE YEAR ENDED JUNE 30, 1999 AND FOR THE SIX MONTHS
ENDED DECEMBER 31, 1999 (UNAUDITED)
- ----------------------------------------------------------------------------------------
(Unaudited)
- ----------------------------------------------------------------------------------------
For the Period
From Inception
(November 7, Six Months
1997) Ended
Through December 31, June 30,
December 31, 1999 1999 1998
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues $ - $ - $
- ----------------------------------------------------------------------------------------
Expenses
Equipment 5,010 1,000 -
Freight and Delivery 1,250 1,250 -
Legal and Accounting 13,107 1,000 -
Organization Costs 11,553 - 11,553
Professional 19,979 6,225 -
Promotional 9,374 1,000 -
Salaries 12,000 - -
Software 893 - -
Supplies 2,842 2,842 -
Telephone 2,903 1,700 -
Travel 7,900 1,000 -
Utilities 1,944 550 -
- ----------------------------------------------------------------------------------------
Total Expenses 88,755 16,567 11,553
- ----------------------------------------------------------------------------------------
Net Loss $ (88,755) $ (16,567) $ (11,553)
- ----------------------------------------------------------------------------------------
Loss Per Common Share - Basic
and Diluted $ (0.01) $ 0.01 $ -
- ----------------------------------------------------------------------------------------
Weighted Average Number of
Shares 6,242,201 6,242,201 1,601,201
- ----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-7
<PAGE>
3 E INTERANTIONAL CORP. & SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Kitchener, Ontario, Canada
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE PERIOD FROM THE
DATE OF INCEPTION (NOVEMBER 7, 1997) TO JUNE 30, 1998 AND 1999
AND FOR THE YEAR ENDED JUNE 30, 1999 AND FOR THE SIX MONTHS
ENDED DECEMBER 31, 1999 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------
For the Period
From Inception
(November 7, 1997)
Through June 30, June 30,
June 30, 1999 1999 1998
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net Loss $ (72,188) $ (60,635) $ (11,553)
Non-Cash Adjustments:
Organizational Costs Paid By Shareholders 11,553 - 11,553
Changes in Assets and Liabilities:
Prepaid Expenses (2,975) (2,975) -
Accrued Expenses 2,200 2,200 -
- ------------------------------------------------------------------------------------------------------------
Net Cash Flows from Operating Activities (61,410) (61,410) -
- ------------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities
Cash Investment in License Fees (115) (115) -
Cash Investment in Deferred Financial Costs (56,495) (56,495) -
- ------------------------------------------------------------------------------------------------------------
Net Cash Flows from Investing Activities (56,610) (56,610) -
- ------------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities
Proceeds from Issuance of Common Stock 103,000 103,000 -
Proceeds from Loans Payable - - -
Loans from Stockholders - Net 15,020 15,020 -
- ------------------------------------------------------------------------------------------------------------
Net Cash Flows from Financing Activities 118,020 118,020 -
- ------------------------------------------------------------------------------------------------------------
Net Increase in Cash and Cash Equivalents - - -
Cash and Cash Equivalents - Beginning of Year - - -
- ------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents - End of Year $ - $ - $ -
- ------------------------------------------------------------------------------------------------------------
Supplemental Disclosures
Interest Paid $ - $ - $ -
Income Taxes Paid $ - $ - $ -
NON-CASH INVESTING AND FINANCING
ACTIVITIES
Issuance of Common Stock in Connection
With the Acquisition of Subsidiary $ 400,885 $ 400,885 $ -
- -----------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-8
<PAGE>
3 E INTERNATIONAL CORP. & SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Kitchener, Ontario, Canada
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE PERIOD FROM THE DATE OF
INCEPTION (NOVEMBER 7, 1997) TO JUNE 30, 1998 AND 1999 AND FOR THE YEAR
ENDED JUNE 30, 1999 AND FOR THE SIX MONTHS ENDED DECEMBER 31, 1999
(UNAUDITED)
- ------------------------------------------------------------------------------------------------
(Unaudited)
- ------------------------------------------------------------------------------------------------
For the Period
From Inception Six Months
(November 7, 1997) Ended
Through December 31,
December 31, 1999 1999
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows from Operating Activities
Net Loss $ (88,755) $ (16,567)
Non-Cash Adjustments:
Organizational Costs Paid By Shareholders 11,553 -
Changes in Assets and Liabilities:
Prepaid Expenses - (2,975)
Accrued Expenses 2,200 -
- -----------------------------------------------------------------------------------------------
Net Cash Flows from Operating Activities (75,002) (13,592)
- -----------------------------------------------------------------------------------------------
Cash Flows from Investing Activities
Cash Investment in License Fees (115) -
Cash Investment in Deferred Financial Costs (56,495) -
- -----------------------------------------------------------------------------------------------
Net Cash Flows from Investing Activities (56,610) -
- -----------------------------------------------------------------------------------------------
Cash Flows from Financing Activities
Proceeds from Issuance of Common Stock 103,000 -
Proceeds from Loans Payable 15,009 15,009
Loans from Stockholders - Net 14,020 (1,000)
- ----------------------------------------------------------------------------------------------
Net Cash Flows from Financing Activities 132,029 14,009
- ----------------------------------------------------------------------------------------------
Net Increase in Cash and Cash Equivalents 417 417
Cash and Cash Equivalents - Beginning of Year - -
- ----------------------------------------------------------------------------------------------
Cash and Cash Equivalents - End of Year $ 417 $ 417
- ----------------------------------------------------------------------------------------------
Supplemental Disclosures
Interest Paid $ - $ -
Income Taxes Paid $ - $ -
NON-CASH INVESTING AND FINANCING
ACTIVITIES
Issuance of Common Stock in Connection
With the Acquisition of Subsidiary $ 400,885 $ -
- -----------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-9
<PAGE>
3 E INTERNATIONAL CORP. & SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Kitchener, Ontario, Canada
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------
Note A - The Companies
The Company was incorporated under the laws of the State of Delaware
on April 1, 1998 as Port Development Corp. On November 24, 1998 the
Company amended its Articles of Incorporation to officially change
its name from Port Development Corp. to 3 E International Corp. and
authorized a 1:7 reverse stock split in which seven existing shares
were exchanged for one new share, reducing the total shares
outstanding from 11,553,100 shares to 1,651,201 shares.
3 E International Limited (the "Ghana Subsidiary") was incorporated
under the Companies Code of the Republic of Ghana on November 7,
1997. On November 24, 1998, the Company exchanged 1,285,000 of its
common shares for 100% of the outstanding shares of 3 E International
Limited. As a result of this transaction, the Ghana Subsidiary
became a wholly owned subsidiary of the Company.
The Company's principal corporate offices are located in Kitchener,
Ontario, Canada.
Scope of Business
At the present time, the Company is in the development stage and
does not provide any product or services. In October, 1998, the
Company was granted a License for Transmission of MMDS
Telecommunications by the Ghana Frequency Registration and Control
Board of the National Communication Authority of the Republic of
Ghana.
The Company, through its Ghana Subsidiary, intends to operate a
25-30 channel multi-channel multipoint distribution system ("MMDS")
to broadcast television in the city of Accra, Ghana, West Africa.
The Company's future success is dependent upon its ability to raise
sufficient capital in order to continue to develop its market for
its services. There is no guarantee that such capital will be
available on acceptable terms, if at all.
Note B - Summary of Significant Accounting Policies
Method of Accounting
The Company maintains its books and prepares its financial
statements on the accrual basis of accounting.
The accompanying unaudited interim financial statements reflect all
adjustments of a normal and recurring nature which are, in the
opinion of management, necessary to present fairly the financial
position, results of operations and cash flows of the Company for
the interim periods presented. The results of operations for these
periods are not necessarily comparable to, or indicative of, results
of any other interim period or for the year as a whole.
Principles of Consolidation
The consolidated financial statements include the accounts of 3 E
International Corp. and its wholly owned subsidiary, 3 E
International, Ltd. All significant inter-company balances and
transactions have been eliminated in the consolidation.
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
revenue and expense during the reporting period. Actual results can
differ from those estimates.
- continued -
F-10
<PAGE>
3 E INTERNATIONAL CORP. & SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Kitchener, Ontario, Canada
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note B - Summary of Significant Accounting Policies - continued
- -----------------------------------------------------------------------------
Concentrations of Credit Risk
Financial instruments that potentially expose the Company to
significant concentrations of credit risk consist principally of
bank deposits. Cash is placed primarily in high quality short-term
interest bearing financial instruments.
Cash and Cash Equivalents
Cash and cash equivalents include time deposits, certificates of
deposit, and all highly liquid debt instruments with original
maturities of three months or less.
Foreign Currency Translation
The financial statements of the Company's foreign subsidiary are
measured using the local currency as the functional currency.
Assets and liabilities of the subsidiary are translated at exchange
rates as of the balance sheet date. Revenues and expenses are
translated at average rates of exchange in effect during the year.
The resulting cumulative translation adjustments have been recorded
as a separate component of stockholders' equity. Foreign currency
transaction gains and losses are included in consolidated net income.
Development Stage
The Company has operated as a development stage enterprise since its
inception by devoting substantially all of its efforts to financial
planning, raising capital, research and development, and developing
markets for its services. The Company prepares its financial
statements in accordance with the requirements of Statement of
Financial Accounting Standards No. 7, Accounting and Reporting by
Development Stage Enterprises.
Income Taxes
Deferred taxes are provided in the financial statements for
significant temporary differences arising from assets and
liabilities whose bases are different for financial reporting and
income tax purposes. Deferred tax assets arising from net operating
losses incurred during the development stage have been fully
reserved against due to the uncertainty as to when or whether the
tax benefit will be realized.
Net Income (Loss) Per Common Share
Net income (loss) per common share is computed in accordance with
SFAS No. 128, "Earnings Per Share," by dividing income available to
common stockholders by the weighted average number of common shares
outstanding for each period. Share and per share amounts for all
periods presented have been adjusted to reflect the recapitalization
and reverse stock split. The weighted average shares outstanding
for the year ended June 30, 1999 reflects the common stock issued
under Rule 504 as outstanding for the entire year since there were
no significant operations prior to the stock offering.
Note C - Property and Equipment
Property and equipment consists of land and a building located in
Accra, Ghana, West Africa. The building will contain the operations
of the television business. No depreciation has been recorded in
the accompanying consolidated financial statements as the building
has not been placed in service for its intended use.
F-11
<PAGE>
3 E INTERNATIONAL CORP. & SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Kitchener, Ontario, Canada
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------
Note D - Due to Stockholders
Amounts due to stockholders represent temporary non-interest
bearing cash advances to finance operating costs.
Note E - Organizational Expenses
Organizational expenses represent management, consulting, legal,
accounting, and filing fees incurred to date in the formation of
the corporation. Organizational costs are expensed as incurred per
Statement of Position 98-5 on Reporting on the Costs of Start-Up
Activities.
Note F - Stockholders' Equity
Common Stock
The Company's securities are not registered under the Securities
Act of 1933 and, therefore, no offering may be made which would
constitute a "Public Offering" within the meaning of the United
States Securities Act of 1933, unless the shares are registered
pursuant to an effective registration statement under the Act.
The stockholders may not sell, transfer, pledge or otherwise
dispose of the common shares of the company in the absence of
either an effective registration statement covering said shares
under the 1933 Act and relevant state securities laws, or an
opinion of counsel that registration is not required under the Act
or under the securities laws of any such state.
Initial Capitalization
The Company had all of its organizational costs paid by the
shareholders. The shareholders paid $11,553 for these services for
which they received 11,553,100 shares of the Company's common
stock.
Stock Split
The Board of Directors approved a 1 share for 7 shares reverse
stock split. The adjusted shares outstanding after the split are
as follows:
-------------------------------------------------------------------
Total Outstanding Shares 11,533,100
Stock Split 1 for 7 1,650,442
Adjust Fractional Shares 759
-------------------------------------------------------------------
Restated Shares Outstanding 1,651,201
-------------------------------------------------------------------
Common Stock Issued
The Board of Directors authorized the Company to sell up to
3,300,000 shares of common stock to the insiders at $.01 per share
and an additional 775,000 shares to the public at $1.25 per share
pursuant to Regulation D, Rule 504 of the Securities and Exchange
Act. Stock subscriptions totaling $103,000 (representing 3,356,000
common shares) were received in cash.
Acquisition of Subsidiary
The Company issued 1,285,000 shares of its common stock
in connection with the acquisition of 3 E
F-12
<PAGE>
State of Delaware
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREE L., SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF INCORPORATION OF "PORT DEVELOPMENT
CORP.", FILED IN THIS OFFICE ON THE FIRST DAY OF APRIL, A.D.,
1998, AT, 9 O'CLOCK A.M.
/s/Edward J. Freel
[SEAL] Edward J. Freel, Secretary of State
AUTHENTICATION:
DATE:
2879329 8100 9053492
981164143 04-29-98
<PAGE> Ex 3(i)(a) - Pg. 1
CERTIFICATE OF INCORPORATION
OF
PORT DEVELOPMENT CORP.
----------------------------
FIRST. The name of this corporation shall be:
PORT DEVELOPMENT CORP.
SECOND. Its registered office in the State of Delaware is to be
located at 1013 Centre Road, in the City of Wilmington, County of New
Castle, 19805, and its registered agent at such address is CORPORATE
AGENTS, INC.
THIRD. The purpose or purposes of the corporation shall be:
To engage in any lawful act or activity for which
corporations may be organized under the General
Corporation Law of Delaware.
FOURTH. The total number of shares of stock which this corporation
is authorized to issue is:
Two Hundred (200) shares without par value.
FIFTH. The name and mailing address of the incorporator is as
follows:
Kerry Spittel
Corporate Agents, Inc.
1013 Centre Road
Wilmington, DE 19805
SIXTH. The Board of Directors shall have the power to adopt, amend
or repeal the by-laws.
IN WITNESS WHEREOF, The undersigned, being the incorporator
hereinbefore named, has executed, signed and acknowledged this certificate
of incorporation this first day of April, A.D. 1998.
/s/Kerry Spittel
Kerry Spittel
Incorporator
<PAGE> Ex 3(i)(a) - Pg. 2
State of Delaware
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF AMENDMENT OF "PORT DEVELOPMENT
CORP.", CHANGING ITS NAME FROM "PORT DEVELOPMENT CORP." TO "3
INTERNATIONAL CORP.", FILED IN THIS OFFICE ON THE TWENTY-FIFTH
DAY OF NOVEM3ER, A.D. 1998, AT 12 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS SEEN FORWARDED TO THE
NEW CASTLE COUNTY RECORDER OF DEEDS.
/s/Edward J. Freel
[SEAL] Edward J. Freel, Secretary of State
AUTHENTICATION: 9427002
2879329 8100 DATE: 11-25-98
981454786
<PAGE> Ex 3(i)(a) - Pg. 3
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 09/22/1998
981367909 - 2879329
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OP INCORPORATION
OF
PORT DEVELOPMENT CORP.
----------------------------
PORT DEVELOPMENT CORP., a corporation
organized and existing under and by virtue of the General
Corporation Law_of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation at a
meeting duly convened and held, adopted the following resolution:
RESOLVED that the Board of Directors hereby declares it
advisable and in th. best interest of the Company that Article
Fourth of the Certificate of Incorporation be amended to read as
follows:
FOURTH; The total number of shares of stock which this
corporation is authorized to issue is:
TWENTY MILLION (20 000,000) shares with a par value of One
Mil ($.0O1) per share, amounting to Twenty Thousand Dollars
($20,000).
SECOND; That the said amendment has been consented to and
authorized by the holders of a majority of the issued and
outstanding stock entitled to vote by written consent given in
accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware.
THIRD: That the aforesaid amendment was duly adopted in
accordance with the applicable provisions of Sections 242 and 228 of
the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said corporation has caused this
Certificate to be signed by Morris Diamond
this 11th day of September A.D. 199 .
/s/Morris Diamond
Authorized Officer
<PAGE> Ex 3(i)(a) - Pg. 4
No. 77,066
COMPANIES CODE, 1963
[SEAL]
REPUPLIC OF GHANA
CERTIFICATE TO COMMENCE
BUSINESS
I hereby certify that
3 E INTERNATIONAL LIMITED
having complied with the provision of Sections 27 and 28 of
the Companies Code, 1963 is entitled to commence business
with effect from 4th November, 1997
Given under my hand at Accra this 4th day of
November, 1997
/s/_____________________________
Assistant Registrar of Companies
<PAGE> Ex 3(i)(b) - Pg. 1
No. 77,066
[SEAL]
Certificate of Incorporation
-----------------
I hereby certify that the
3 E INTERNATIONAL LIMITED
is this day incorporated under the Companies Code, 1963
(Act 179) and that the liability of its members is limited.
Given under my hand and official seal at Victoriaborg, Accra,
this 3rd day of November, 1997
/s/_____________________________
For: Assistant Registrar of Companies
<PAGE> Ex 3(i)(b) - Pg. 2
BYLAWS OF
PORT DEVELOPMENT CORP.
ARTICLE I--Offices
The principal office of the corporation shall be located
in the State of New York in the County of Monroe. Tile
corporation may have such other offices, either within or
outside the state, as the Board of Directors may designate
or as the business of the corporation may require from
time to time. The registered office of the corporation may
be, but need not be, identical with the principal office,
and the address of the registered office may be changed
from time to time by the Board of Directors.
ARTICLE II--Shareholders
Section 1. Annual Meeting. The annual meeting of the
shareholders shall, be held at 4:00 o'clock PM. on the
Third Tuesday in the month of January in each year,
beginning with the year 1999. If the day fixed for the
annual meeting shall be a legal holiday, such meeting
shall be held on the next succeeding business day.
Section 2. Special Meetings. Special meetings of the
shareholders, for any purpose, unless otherwise prescribed
by statute, may be called by the president or by the Board
of Directors, and shall be called by the president at the
request of the holders of not less than one-tenth of all
the outstanding shares of the corporation entitled to vote
at the meeting.
Section 3. Place of Meeting. The Board of Directors may
designate any place as the place for any annual meeting or
for any special meeting called by the Board of Directors.
A waiver of notice signed by all shareholders entitled to
vote at a meeting may designate any place as the place for
such meeting. If no designation is made, or if a special
meeting shall be called otherwise than by the Board, the
place of meeting shall be the registered office of the
corporation.
Section 4. Notice of Meeting. Written or printed notice
stating the place, day and hour of the meeting, and, in
case of a special meeting, the purposes for which the
meeting is called, shall be delivered not less than ten
nor more than fifty days before the date of the meeting,
either personally or by mail, by or at the direction of
the president1 or the secretary, or the officer or persons
calling the meeting, to each shareholder of record enti-
tled to vote at such meeting, except that if the
authorized capital stock is to be increased at least
thirty days notice shall be given. If mailed, such notice
shall be deemed to be delivered when deposited in the
United States mail, addressed to the shareholder at his
address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid. If requested by
the person or persons lawfully calling such meeting, the
secretary shall give notice thereof at corporate expense.
1
<PAGE> Ex. 3(ii)(a) - Pg. 1
Section 5. Closing of Transfer Books or Fixing of Record
Date. For the purpose of determining shareholders entitled
to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or in order to make a
determination of shareholders for any other proper
purpose, the Board of Directors may provide that the stock
transfer books shall be closed for any stated period not
exceeding fifty days. If the stock transfer books shall be
closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten
days immediately preceding such meeting. In lieu of
closing the stock transfer books the Board of Directors
may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be
not more than fifty days, and, in case of a meeting of
shareholders, not less than ten days prior to the date on
which the particular action, requiring such determination
of shareholders, is to be taken. If the stock transfer
books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to
vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on
which notice of the meeting is mailed or the date on which
the resolution of the Board of Directors declaring such
dividend is adopted, as the case may be, shall be the
record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this
section, such determination shall apply to any adjournment
thereof except where the determination has been made
through the closing of the stock transfer books and the
stated period of the closing has expired.
Section 6. Voting Lists. The officer or agent having
charge of the stock transfer books for shares of the
corporation shall make, at least ten days before each
meeting of shareholders, a complete list of the
shareholders entitled to vote at such meeting or any
adjournment thereof, arranged in alphabetical order, with
the address of and the number of shares held by each. For
a period of ten days prior to such meeting, this list
shall be kept On file at the principal office of the
corporation and shall be subject to inspection by any
shareholder at any time during usual business hours. Such
list shall also be produced and kept open at the time and
place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the
meeting. The original stock transfer books shall be prima
facie evidence as to who are the shareholders entitled to
examine such list or transfer books or to vote at any
meeting of shareholders.
Section 7. Quorum. Fifty One Percent (51%) of the
outstanding shares of the corporation entitled to vote,
represented in person or by proxy, shall constitute a
quorum at a meeting of shareholders. If less than a quorum
of the outstanding shares are represented at a meeting, a
majority of the shares so represented may adjourn the
meeting from time to time without further notice. At
2
<PAGE> Ex. 3(ii)(a) - Pg. 2
such adjourned meeting at which a quorum shall be present
or represented, any business may be transacted which might
have been transacted at the meeting as originally
notified. The shareholders present at a duly organized
meeting may continue to transact business until
adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
If a quorum is present, the affirmative vote of a
majority or the shares represented at the meeting and
entitled to vote on the subject matter shall be the act of
the shareholders, unless the vote of a greater number or
voting by classes is required by law or the articles of
incorporation.
Section 8. Proxies. At all meetings of shareholders, a
shareholder may vote by proxy executed in writing by the
shareholder or his or her duly authorized attorney-in-
fact. Such proxy shall b~ filed with the secretary of the
corporation before or at the time of the meeting. No proxy
shall be valid after eleven months from the date of its
execution, unless otherwise provided in the proxy.
Section 9. Voting of Shares. Each outstanding share,
regardless of class, shall be entitled to one vote, and
each fractional share shall be entitled to a corresponding
fractional vote on each matter submitted to a vote at a
meeting of shareholders. Cumulative voting shah not be
allowed.
Section 10. Voting of Shares by Certain Holders. Neither
treasury shares, nor shares of its own stock held by the
corporation in a fiduciary capacity, nor shares held by
another corporation if a majority of the shares entitled
to vote for the election of Directors of such other
corporation is held by this corporation, shall be voted at
any meeting or counted in determining the total number of
outstanding shares at any given time.
Shares standing in the name of another corporation may be
voted by such officer, agent Or proxy as the bylaws of
such corporation may prescribe or, in the absence of such
provision, as the Board of Directors of such corporation
may determine.
Shares held by an administrator, executor, guardian or
conservator may be voted by him or her, either in person
or by proxy, without a transfer of such shares into his or
her name. Shares standing in the name of a trustee may be
voted by him or her, either in person or by proxy, but no
trustee shall be entitled to vote shares held by him or
her without a transfer of such shares into his or her
name.
Shares standing in the name of a receiver may be
voted by such receiver, and shares held by or under the
control of a receiver may be voted by such receiver
without the transfer thereof into his or her name if
authority to do so be contained in an appropriate order of
the court by which such receiver was appointed.
3
<PAGE> Ex. 3(ii)(a) - Pg. 3
A shareholder whose shares are pledged shall be
entitled to vote such shares until the shares have been
transferred into the name of the pledqee, and thereafter
the pledgee shall be entitled to vote the shares so
transferred.
Section 11. Informal Action by Shareholders. Any action
required to be taken at a meeting of the shareholders, or
any other action which may be taken at a meeting of the
shareholders, may be taken without a meeting if a consent
in writing, setting forth the action so taken, shall be
signed by the number of shareholders entitled to vote with
respect to the subject matter thereof necessary to approve
the matter being voted on if a meeting had been called.
Such consent shall have the same force and effect a~ a
vote of the shareholders.
ARTICLE III--Board of Directors
Section 1. General Powers. The business and affairs of the
corporation shall be managed by its Board of Directors,
except as otherwise provided by statute or the articles of
incorporation.
Section 2. Number, Tenure and Qualifications. The number
of Directors of the corporation shall be not less than
three not more than five, unless a lesser number is
allowed by statute. Directors shall be elected at each
annual meeting of shareholders. Each director shall hold
office until the next annual meeting of shareholders and
thereafter until his or her successor shall have been
elected and qualified.
Directors need not be residents of this state or
shareholders of the corporation. Directors shall be
removable in the manner provided by statute.
Section 3. Vacancies. Any director may resign at any time
by giving written notice to the president or to the
secretary of the corporation. Any vacancy occurring in the
Board of Directors may be filled by the affirmative vote
of a majority of the remaining Directors though not less
than a quorum. A director elected to fill a vacancy shall
be elected for the unexpired term of his or 1~er
predecessor in office. Any Directorship to be filled by
the affirmative vote of a majority of the Directors then
in office or by an election at an annual meeting or at a
special meeting of shareholders called for that purpose,
and a director so chosen shall hold office for the term
specified in Section 2 above.
Section 4. Regular Meetings. A regular meeting of the
Board of Directors shall be held without other notice than
this bylaw immediately after and at the same place as the
annual meeting of shareholders. The Board of Directors may
provide by resolution the time and place for the holding
of additional regular meetings without other notice than
such resolution.
Section 5. Special Meetings. Special meetings of the Board
of Directors may be called by or at the request of the
president or
4
<PAGE> Ex. 3(ii)(a) - Pg. 4
any two Directors. The person or persons authorized to
call special meetings of the Board of Directors may fix
any place as the place for holding any special meeting of
the Board of Directors called by them.
Section 6. Notice. Notice of any special meeting shall be
given at least seven days previous thereto by written
notice delivered personally or mailed to each director at
his or her business address, or by notice given at least
two days previously by telegraph. If mailed, such notice
shall be deemed to be delivered when deposited in the
United States mail so addressed, with postage thereon
prepaid. If notice be given by telegram, such notice shall
be deemed to be delivered when the telegram is delivered
to the telegraph company. Any director may waive notice of
any meeting. The attendance of a director at a meeting
shall constitute a waiver of notice of such meeting,
except where a, director attends a meeting for the express
purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the Board of
Directors need be specified in the notice of waiver of
notice of such meeting.
Section 7. Quorum. A majority of the number of Directors
fixed hy Section 2 shall constitute a quorum for the
transaction of business at any meeting of the Board of
Directors, but if less than such majority is present at a
meeting, a majority of the Directors present may adjourn
the meeting from time to time without further notice.
Section 8. Manner of Acting. The act of the majority of
the Directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 9. Compensation. By resolution of the Board of
Directors, any director may be paid any one or more of the
following:
expenses, if any, of attendance at meetings; a fixed sum
for attendance at each meeting; or a stated salary as
director. No such payment shall preclude any director from
serving the corporation in any other capacity and
receiving compensation therefor.
Section 10. Informal Action by Directors. Any action
required or permitted to be taken at a meeting of the
Directors may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be
signed by all of the Directors entitled to vote with
respect to the subject matter thereof. Such consent shall
have the same force and effect as a unanimous vote of the
Directors.
ARTICLE IV--Officers and Agents
Section 1. General. The officers of the corporation shall
be a president, one or more vice presidents, a secretary
and a treasurer. The salaries of all the officers of the
corporation shall
5
<PAGE> Ex. 3(ii)(a) - Pg. 5
be fixed by the Board of Directors.
One person may hold any two offices, except that no
person may simultaneously hold the offices of president
and secretary.
Section 2. Election and Term of Office. The officers of
the corporation shall be elected by the Board of Directors
annually at the first meeting of the Board held after each
annual meeting of the shareholders.
Section 3. Removal. Any officer or agent may be removed by
the Board of Directors whenever in its judgment the best
interests of the corporation will be served thereby.
Section 4. Vacancies. A vacancy in any office, however
occurring, may be filled by the Board of Directors for the
unexpired portion of the term.
Section 5. President. The president shall:
(a) subject to the direction and supervision of
the Board of Directors , be the chief executive officer of
the corporation;
(b) shall have general and active control of its
affairs and business and general supervision of its
officers, agents and employees; and
(c) the president shall have custody of the
treasurer's band, if any.
Section 6. Vice Presidents. The vice presidents shall:
(a) assist the president; and
(b) shall perform such duties as may be assigned
to them by the president or by the Board of Directors.
Section 7. Secretary. The secretary shall:
(a) keep the minutes of the proceedings of the
shareholders and the Board of Directors;
(b) see that all notices are duly given in
accordance with the provisions of these bylaws or as
required by law;
(c) be custodian of the corporate records and of
the seal of the corporation and affix the seal to all
documents when authorized by the Board of Directors;
(d) keep at its registered office or principal
place of business a record containing the names and
addresses of all shareholders and the number and class of
shares held by each, unless such a record shall be kept at
the office of the corporation's transfer agent or
registrar;
(e) sign with the president, or a vice president,
certificates for shares of the corporation, the issuance
of which shall have been authorized by resolution of the
Board of Directors;
(f) have general charge of the stock transfer
books of the corporation, unless the corporation has a
transfer agent; and
(g) in general, perform all duties incident to the
office as secretary and such other duties as from time to time may
be assigned to him or her by the president at by the Board of
Directors.
6
<PAGE> Ex. 3(ii)(a) - Pg. 6
Section 8. Treasurer. The treasurer shall:
(a) be the principal financial officer of the
corporation;
(b) perform all other duties incident to the
office of the treasurer and, upon request of the Board,
shall make such reports to it as may be required at any
time;
(c) be the principal accounting officer of the
corporation; and
(d) have such other powers and perform such other
duties as may be from time to time prescribed by the Board
of Directors or the president;
ARTICLE V-Stock
Section 1. Certificates. The shares of stock shall be
represented by consecutively numbered certificates signed
in the name of the corporation by its president or a vice
president and the secretary, and shall be sealed with the
seal of the corporation, or with a facsimile thereof. No
certificate shall be issued until the shares represented
thereby are fully paid.
Section 2. Consideration for Shares. Shares shall be
issued for such consideration, expressed in dollars (but
not less than the par value thereof, if any) as shall be
fixed from time to time by the Board of Directors. Such
consideration may consist, in whole or in part of money,
other property, tangible or intangible, or in labor or
services actually performed for the corporation, but
neither promissory notes nor future services shall
constitute payment or part payment for shares,
Section 3. Transfer of Shares. Upon surrender to the
corporation or to a transfer agent of the corporation of a
certificate of stock duly endorsed or accompanied by
proper evidence of succession, assignment or authority to
transfer, and such documentary stamps as may be required
by law, it shall be the duty of the corporation to issue a
new certificate to the person entitled thereto, and cancel
the old certificate. Every such transfer of stock shall be
entered on the stock book of the corporation which shall
be kept at its principal office, or by its registrar duly
appointed.
Section 4. Transfer Agents, Registrars and Paying Agents.
The Board may at its discretion appoint one or more
transfer agents, i.e registrars and agents for making
payment upon any class of stock, bond, debenture or other
security of the corporation.
ARTICLE VI--Indemnification Of Officers and Directors
Each director and officer of this corporation shall be
indemnified by the corporation against all costs and
expenses actually and necessarily incurred by him or her
in connection with the defense of any action, suit or
proceeding in which he or she may be involved or to which
he or she may be made a party by reason
7
<PAGE> Ex. 3(ii)(a) - Pg. 7
of his or her being or having been such director or
officer, except in relation to matters as to which he or
she shall be finally adjudged in such action, suit or
proceeding to be liable for negligence or misconduct in
the performance of duty.
ARTICLE VII--Miscellaneous
Section 1. Waivers of Notice. Whenever notice is required
by law, by the articles of incorporation or by these
bylaws, a waiver thereof in writing signed by the
director, shareholder or other person entitled to said
notice, whether before or after the time stated therein,
or his or her appearance at such meeting in person or (in
the case of a shareholders' meeting) by proxy,
*hall be equivalent to such notice.
Section 2. Fiscal Year. The fiscal year of the corporation
shall be as established by the Board of Directors.
Section 3. Amendments. The Board of Directors shall have
power to make, amend and repeal the bylaws of the
corporation at any regular meeting of the Board or at any
special meeting called for the purpose.
APPROVED:
DATED: August 17, 1998
/s/Shirley Diamond
Director: Shirley Diamond
/s/Suzanne Luxenberg
Director: Suzanne Luxenberg
/s/Morris Diamond
Director: Morris Diamond
8
<PAGE> Ex. 3(ii)(a) - Pg. 8
BY-LAW NO. 1
of
TABLE OF CONTENTS
-----------------
Page No.
--------
ARTICLE 1 INTERPRETATION 1
ARTICLE 2 SEAL, REGISTERED OFFICE AND
FINANCIAL YEAR. . . . . . . . . . . . . . . . . . . . . . . . 2
2.01 Seal. . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.02 Registered Office . . . . . . . . . . . . . . . . . . . 2
2.03 Financial Year. . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 3 DIRECTORS 2
3.01 Power of Directors. . . . . . . . . . . . . . . . . . . 2
3.02 Number and Quorum . . . . . . . . . . . . . . . . . . . 2
3.03 Qualification . . . . . . . . . . . . . . . . . . . . . 2
3.04 Resident Canadians. . . . . . . . . . . . . . . . . . . 3
3.05 Election and Term . . . . . . . . . . . . . . . . . . . 3
3.06 Removal of Directors. . . . . . . . . . . . . . . . . . 3
3.07 Vacancies. . . . . . . . . . . . . . . . . . . . . . . 3
3.08 Vacation of Office. . . . . . . . . . . . . . . . . . . 3
3.09 Committee of Directors. . . . . . . . . . . . . . . . . 4
3.10 Remuneration of Directors . . . . . . . . . . . . . . . 4
3.11 Disclosure of Interest. . . . . . . . . . . . . . . . . 4
ARTICLE 4 MEETING OF DIRECTORS 5
4.01 Notice of Meeting . . . . . . . . . . . . . . . . . . . 5
4.02 First Meeting of New Board. . . . . . . . . . . . . . . 5
4.03 Place of Meeting. . . . . . . . . . . . . . . . . . . . 5
4.04 Meetings by Telephone . . . . . . . . . . . . . . . . . 5
4.05 Voting. . . . . . . . . . . . . . . . . . . . . . . . . 6
4.06 Chairman. . . . . . . . . . . . . . . . . . . . . . . . 6
4.07 Transaction of Business by Signature. . . . . . . . . . 6
ARTICLE 5 OFFICERS 6
5.01 Appointment . . . . . . . . . . . . . . . . . . . . . . 6
5.02 Remuneration and Removal. . . . . . . . . . . . . . . . 7
5.03 Chairman of the Board . . . . . . . . . . . . . . . . . 7
5.04 Managing Director . . . . . . . . . . . . . . . . . . . 7
5.05 President . . . . . . . . . . . . . . . . . . . . . . . 7
5.06 Vice-President. . . . . . . . . . . . . . . . . . . . . 8
5.07 General Manager . . . . . . . . . . . . . . . . . . . . 8
5.08 Secretary . . . . . . . . . . . . . . . . . . . . . . . 8
5.09 Treasurer . . . . . . . . . . . . . . . . . . . . . . . 8
5.10 Other Officers. . . . . . . . . . . . . . . . . . . . . 9
5.11 Vacancies . . . . . . . . . . . . . . . . . . . . . . . 9
#1 BY-LAW GHANA
SEPT. 95
<PAGE> Ex. 3(ii)(b) - Pg. 1
ARTICLE 6 PROTECTION OF DIRECTORS 9
AND OFFICERS
6.01 Limitation of Liability . . . . . . . . . . . . . . . . . 9
6.02 Indemnities to Directors and Officers . . . . . . . . . . 10
6.03 Submission of Contracts to Shareholders for Approval. . . 10
ARTICLE 7 MEETINGS OF SHAREHOLDERS 11
7.01 Annual Meeting. . . . . . . . . . . . . . . . . . . . . . 11
7.02 Special Meetings. . . . . . . . . . . . . . . . . . . . . 11
7.03 Notice. . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.04 Omission of Notice. . . . . . . . . . . . . . . . . . . . 12
7.05 Persons Entitled to be Present. . . . . . . . . . . . . . 12
7.06 Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.07 Right to Vote . . . . . . . . . . . . . . . . . . . . . . 13
7.08 Representatives . . . . . . . . . . . . . . . . . . . . . 13
7.09 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.10 Chairman, Secretary and Scrutineers . . . . . . . . . . . 15
7.11 Votes to Govern . . . . . . . . . . . . . . . . . . . . . 15
7.12 Show of Hands . . . . . . . . . . . . . . . . . . . . . . 16
7.13 Polls . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.14 Adjournment . . . . . . . . . . . . . . . . . . . . . . . 16
7.15 Resolution in Writing . . . . . . . . . . . . . . . . . . 16
ARTICLE 8 SHARES AND TRANSFERS 17
8.01 Allotment and Issue . . . . . . . . . . . . . . . . . . . 17
8.02 Certificates. . . . . . . . . . . . . . . . . . . . . . . 17
8.03 Payment of Commissions. . . . . . . . . . . . . . . . . . 18
8.04 Transfer Agent and Registrar. . . . . . . . . . . . . . . 18
8.05 Securities Registers. . . . . . . . . . . . . . . . . . . 19
8.06 Surrender of Certificates . . . . . . . . . . . . . . . . 19
8.07 Lien for Indebtedness . . . . . . . . . . . . . . . . . . 19
8.08 Non-Recognition of Trusts . . . . . . . . . . . . . . . . 19
8.09 Lost Certificates . . . . . . . . . . . . . . . . . . . . 19
8.10 Joint Shareholders. . . . . . . . . . . . . . . . . . . . 20
8.11 Deceased Shareholders . . . . . . . . . . . . . . . . . . 20
ARTICLE 9 VOTING SHARES IN OTHER COMPANIES 20
ARTICLE 10 INFORMATION AVAILABLE TO
SHAREHOLDERS 21
10.01 Discovery of Information . . . . . . . . . . . . . . . . 21
10.02 Inspection of Records. . . . . . . . . . . . . . . . . . 21
ARTICLE 11 DIVIDENDS 21
11.01 Declaration. . . . . . . . . . . . . . . . . . . . . . . 21
11.02 Payment. . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 12 NOTICES 22
12.01 Service. . . . . . . . . . . . . . . . . . . . . . . . . 22
12.02 Shares Registered in Several Names . . . . . . . . . . . 22
(ii)
<PAGE> Ex. 3(ii)(b) - Pg. 2
12.03 Entitlement by Operation of Law. . . . . . . . . . . . . 22
12.04 Notice to Deceased Shareholders. . . . . . . . . . . . . 23
12.05 Signature to Notices . . . . . . . . . . . . . . . . . . 23
12.06 Computation of Time. . . . . . . . . . . . . . . . . . . 23
12.07 Proof of Service . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 13 CUSTODY OF SECURITIES 24
13.01 Safekeeping. . . . . . . . . . . . . . . . . . . . . . . 24
13.02 Nominees . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 14 EXECUTION OF INSTRUMENTS
14.01 Cheques, Drafts and Notes. . . . . . . . . . . . . . . . 24
14.02 Contracts, Documents or Other Instruments. . . . . . . . 25
14.03 Sealing of Contracts . . . . . . . . . . . . . . . . . . 26
(iii)
<PAGE> Ex. 3(ii)(b) - Pg. 3
BY-LAW NO. 1
------------
a by-law relating generally
to the conduct of the affairs of
(the "Corporation")
ARTICLE 1
---------
INTERPRETATION
--------------
1.01 In this by-law and all other by-laws of the Corporation,
unless the context otherwise specifies or requires:
(i) "Act" means the Business Corporations Act, Ghana,
SEPT. 95 as from time to time amended and every
statute that may be substituted therefor;
(ii) "Regulations" means the Regulations made under the
Act from time to time amended and every regulation
that may be substituted therefor;
(iii) "Board" means the board of directors of the Corporation;
(iv) all terms which are used in this or any other by-law
of the Corporation and which are defined in the Act
or the Regulations shall have the meanings given to
them in the Act or the Regulations;
(v) words importing the singular number include the
plural and vice versa;
(vi) words importing the masculine gender include the
feminine and neuter genders; and
(vii) the word "person" includes individuals, bodies
corporate, corporations, companies, partnerships,
syndicates, trusts and unincorporated organizations.
<PAGE> Ex. 3(ii)(b) - Pg. 4
2
ARTICLE 2
---------
SEAL, REGISTERED OFFICE AND FINANCIAL YEAR
------------------------------------------
2.01 SEAL - The Corporation may but need not have a corporate
seal. Any corporate seal adopted for the Corporation shall be
such as the of directors may from time to time approve by resolution.
2.02 REGISTERED OFFICE - The directors may from time to
time by resolution fix the location of the registered office of
the Corporation within the place in Ghana of the Corporation
directors may from time to of the registered office of the
designated as such by the articles
2.03 FINANCIAL YEAR - The financial year of shall terminate on
such date in each year as the directors to time by resolution
determine.
ARTICLE 3
---------
DIRECTORS
---------
3.01 POWER OF DIRECTORS - Subject to any unanimous shareholder
agreement, the directors shall manage or supervise the management of
the business and affiars of the Corporation.
3.02 NUMBER AND QUORUM - The board of directors shall consist of
the number of directors set out in the articles of the Corporation
or, where a minimum and maximum number is provided for in the
articles, such number of directors as shall be determined from time
to time by special resolution or, if the special resolution
empowers the directors to determine the number, by resolution of
the directors. At any meeting of directors, two of the directors
shall constitute a quorum for the transaction of business.
<PAGE> Ex. 3(ii)(b) - Pg. 5
3
3.03 QUALIFICATION - Each director shall be eighteen (18) or
more years of age and no person who is not an individual, who has
the status of a bankrupt or who is of unsound mind and has been so
found by a court in Ghana or elsewhere shall be a director. A director
need not be a shareholder.
3.04 RESIDENT GHANIANS - A majority of the directors shall
be resident Canadians, but where the Corporation has only one or
two directors, that director or one of the two directors, as the
case may be, shall be a resident Ghanian.
3.05 ELECTION AND TERM - The election of directors shall take
place at each annual meeting of shareholders and all the directors
then in office shall retire but, if qualified, shall be eligible
for re-election. The number of directors to be elected at any such
meeting shall be the number of directors then in office unless the
directors or shareholders shall have otherwise determined in
accordance with the Act. Where the shareholders adopt an amendment
to the articles to increase the number or minimum number of
directors, the shareholders may, at the meeting at which they adopt
the amendment, elect the additional number of directors authorized
by the amendment. If an election of directors is not held at the
proper time, the incumbent directors shall continue in office until
their successors are elected.
3.06 REMOVAL OF DIRECTORS - The shareholders may by ordinary
resolution passed at an annual or special meeting of shareholders,
remove any director or directors from office before the expiration
of his term of office, and may by a majority of votes cast at the
meeting elect any person in his stead for the remainder of his
term.
3.07 VACANCIES - Vacancies among the directors shall be
filled in compliance with the Act.
3.08 VACATION OF OFFICE - The office of a director shall ipso
facto be vacated: (a) if he dies; (b) if he becomes bankrupt or
suspends
<PAGE> Ex. 3(ii)(b) - Pg. 6
4
payment of his debts generally or compounds with his creditors or
makes an authorized assignment or is declared insolvent; (c) if he
is found to be of unsound mind or a mentally incompetent person; or
(d) subject to the provisions of the Act if by notice in writing to
the Corporation he resigns his office. Any such resignation shall
be effective at the time it is sent to the Corporation or at the
time specified in the notice, whichever is later.
3.09 COMMITTEE OF DIRECTORS - The directors may appoint
from among their number a committee of directors and, subject to
Section 127 of the Act, may delegate to such committee any of the
powers of the directors. A majority of the directors of any such
committee must be resident Ghanians.
3.10 REMUNERATION OF DIRECTORS - The remuneration to be paid
to the directors shall be such as the Board shall from time to time
determine and such remuneration shall be in addition to the salary
paid to any officer or employee of the Corporation who is also a
member of the Board. The directors may also award special
remuneration to any director undertaking any special services on
the Corporation's behalf other than the routine work ordinarily
required of a director by the Corporation and the confirmation of
any such resolution or resolutions by the shareholders shall not be
required. The directors shall also be entitled to be paid their
travelling and other expenses properly incurred by them in
connection with the affairs of the Corporation.
3.11 DISCLOSURE OF INTEREST - Every director or officer of
the Corporation who is a party to a material contract or a proposed
material contract for the Corporation or who is the director or an
officer of, or has a material interest in, any person who is a
party to a material contract, or a proposed material contract, with
the Corporation shall disclose the nature and extent of his
interest at the time and in the manner provided by the Act.
<PAGE> Ex. 3(ii)(b) - Pg. 7
5
ARTICLE
-------
MEETINGS OF DIRECTORS
---------------------
4.01 NOTICE OF MEETING - Meetings of the Board shall be held
from time to time at such place, at such time and on such day as
the Chairman of the Board, if any, the President or any two
directors may determine, and the Secretary shall call meetings when
so directed or so authorized. Notice of every meeting so called
shall be delivered or mailed or sent by telegram, telex or other
electronic means to each director not less than forty-eight (48)
hours (excluding any part of a Saturday or a holiday as defined by
the Interpretation Act of Ghana for the time being in force) before
the time when the meeting is to be held. No notice of a meeting
shall be necessary if all the directors are present or if those
absent have waived notice of or have otherwise signified their
consent to the holding of such meeting.
4.02 FIRST MEETING OF NEW BOARD - For the first meeting of
the Board to be held immediately following the election of
directors by the shareholders or for a meeting of the Board at
which a director is appointed to fill a vacancy in the Board, no
notice of such meeting shall be necessary to the newly elected or
appointed director or directors in order to legally constitute the
meeting, provided that a quorum of the directors is present.
4.03 PLACE OF MEETING - Meetings of the Board and of a
committee of directors may be held at any place within or outside
of Ghana and in any financial year of the Corporation a majority of
the meetings of the board of directors of the Corporation are not
required to be held at a place within Ghana.
4.04 MEETINGS BY TELEPHONE - If all the directors present or
participating in .a meeting consent, a director may participate in
a meeting of the Board by means of such telephone or other
communications facilities as permit all persons participating in
the meeting to hear each other and a director participating in such
a meeting by such means shall be deemed to
<PAGE> Ex. 3(ii)(b) - Pg. 8
6
be present at the meeting. Any such consent shall be effective
whether given before or after the meeting to which it relates and
need not be in writing.
4.05 VOTING - At all meetings of the Board, every question
shall be decided by a majority of the votes cast. In case of an
equality of votes the chairman of the meeting shall not be entitled
to a second or casting vote in addition to his original vote.
4.06 CHAIRMAN - The Chairman of the Board, if elected and
present, and otherwise the President, shall be chairman of any
meeting of the Board. If no such officer is present the directors
present shall choose one of their members to be chairman.
4.07 TRANSACTION OF BUSINESS BY SIGNATURE - A resolution
in writing signed by all the directors entitled to vote on that
resolution at a meeting of directors or a committee of directors is
as valid as if it had been passed at a meeting of directors or a
committee of directors.
ARTICLE 5
---------
OFFICERS
--------
5.01 APPOINTMENT - The Board shall annually or more often as
may be necessary, appoint a President and a Secretary and, if
deemed advisable, may annually or more often as may be necessary,
appoint a Chairman of the Board, a Managing Director (who shall be
a resident Canadian), one or more Vice-Presidents, a Treasurer and
such other officers as the Board may determine including one or
more assistants to any of the officers so appointed. None of the
said officers, except the Chairman of the Board and the Managing
Director, need be a director. Any two of the said offices may be
held by the same person. If the same person holds the office of
Secretary and Treasurer, he may, but need not, be known as the
Secretary-Treasurer. The Board may from time to time appoint such
other
<PAGE> Ex. 3(ii)(b) - Pg. 9
7
officers and agents as it shall deem necessary who shall have such
authority and shall perform such duties as may from time to time be
determined by the Board.
5.02 REMUNERATION AND REMOVAL - The terms of employment and
remuneration of all officers appointed by the Board (including the
President) shall be determined, or the manner of determination
thereof provided for, from time to time by resolution of the Board.
The fact that any officer or employee is a director or shareholder
of the Corporation shall not disqualify him from receiving such
remuneration as may be determined. All officers, in the absence of
agreement to the contrary, shall be subject to removal by
resolution of the Board at any time, with or without cause.
5.03 CHAIRMAN OF THE BOARD - From time to time the Board may
appoint a Chairman of the Board who shall be a director. If so
appointed, the Chairman of the Board shall, if present, preside at
all meetings of the Board and at all meetings of shareholders. In
addition, the Board may assign to him any of the powers and duties
that are by any provisions of this by-law assigned to the
President, and he shall have such other powers and duties as the
Board may prescribe. During the absence or disability of the
Chairman of the Board, the President shall assume all his powers
and duties.
5.04 MANAGING DIRECTOR - The Managing Director shall, if
appointed, be a resident Ghanian and shall exercise such powers and
have such authority as may be delegated to him by the Board in
accordance with the provisions of Section 127 of the Act.
5.05 PRESIDENT - The President shall be the chief executive
officer of the Corporation unless otherwise determined by
resolution of the Board and shall have responsibility for the
general management and direction of the business and affairs of the
Corporation, subject to the authority of the Board. When no
Chairman of the Board is elected or during the absence or inability
to act of the Chairman of the Board, the
<PAGE> Ex. 3(ii)(b) - Pg. 10
8
President shall, when present, preside at all meetings of
shareholders, and if he is a director at all meetings of the Board.
5.06 VICE-PRESIDENT - During the absence or inability of the
President, his duties may be performed and his powers may be
exercised by the Vice-President, or if there are more than one, by
the Vice-Presidents in order of seniority (as determined by the
Board) save that no Vice-President shall preside at a meeting of
the Board or at a meeting of shareholders who is not qualified to
attend the meeting as a director or shareholder, as the case may
be. A Vice-President shall also perform such duties and exercise
such powers as the President may from time to time delegate to him
or as the Board may prescribe.
5.07 GENERAL MANAGER - The General Manager, if one be
appointed, shall have responsibility for the general management and
direction, subject to the authority of the Board and the
supervision of the President, of the Corporation's business and
affairs and shall have the authority to appoint and remove any and
all officers, employees and agents of the Corporation not elected
or appointed directly by the Board and to settle the terms of their
employment and remuneration.
5.08 SECRETARY - The Secretary shall give, or cause to be
given, all notices required to be given to shareholders, directors,
auditors and members of committees. He shall attend all meetings of
the directors and of the shareholders and shall enter or cause to
be entered in books kept for that purpose minutes of all
proceedings at such meetings. He shall be the custodian of all
books, papers, records, documents and other instruments belonging
to the Corporation and shall prepare and maintain all records
(other than accounting records) referred to in Section 140 of the
Act. He shall perform such other duties as may from time to time be
prescribed by the Board.
5.09 TREASURER - The Treasurer shall ensure that adequate
accounting records are prepared and maintained and shall keep, or
cause to be kept, full and accurate books of account in which shall
be recorded all
<PAGE> Ex. 3(ii)(b) - Pg. 11
9
receipts and disbursements of the Corporation and, subject to the
direction of the Board, shall control the deposit of money, the
safekeeping of securities and the disbursement of funds of the
Corporation. He shall provide to the Board whenever required of him
an account of all his transactions as Treasurer and of the
financial position of the Corporation and he shall perform such
other duties as may from time to time be prescribed by the Board.
5.10 OTHER OFFICERS - The duties of all other officers of the
Corporation shall be such as the terms of their engagement call for
or the Board requires of them. Any of the powers and duties of an
officer to whom an assistant has been appointed may be exercised
and performed by such assistant, unless the Board otherwise
directs.
5.11 VACANCIES - If the office of the Chairman of the Board,
Managing Director, President, Vice-President, Secretary, Assistant
Secretary, Treasurer, Assistant Treasurer, or any one of such
offices, or any other office shall be or become vacant by reason of
death, resignation, disqualification or otherwise the directors by
resolution shall in the case of the President or Secretary and may
in the case of any other office appoint a person to fill such
vacancy.
ARTICLE 6
---------
PROTECTION OF DIRECTORS AND OFFICERS
------------------------------------
6.01 LIMITATION OF LIABILITY - Except as otherwise provided
in the Act, no director or officer for the time being of the
Corporation shall be liable for the acts, receipts, neglects or
defaults of any other director or officer or employee or for
joining in any receipt or act for conformity or for any loss,
damage or expense happening to the Corporation through the
insufficiency or deficiency of title to any property acquired by
the Corporation or for or on behalf of the Corporation or for the
insufficiency or deficiency of any security in or upon which any of
the
<PAGE> Ex. 3(ii)(b) - Pg. 12
10
moneys of or belonging to the Corporation shall be invested or for
any loss or damage arising from the bankruptcy, insolvency or
tortious acts of any person with whom any of the moneys, securities
or effects of the Corporation shall be deposited or for any loss
occasioned by any error of judgment or oversight on his part or for
any other loss, damage or misfortune which may happen in the
execution of the duties of his office or in relation thereto;
provided that nothing herein shall relieve any director or officer
from the duty to act in accordance with the Act and Regulations or
from liability for any breach thereof.
6.02 INDEMNITIES TO DIRECTORS AND OFFICERS - Subject to
Section 136 of the Act, every director and officer of the
Corporation and his heirs, executors, administrators and other
legal personal representatives, shall from time to time be
indemnified and saved harmless by the Corporation from and against,
(a) any liability and all costs, charges and expenses that he
sustains or incurs in respect of any action, suit or
proceeding that is proposed or commenced against him for or
in respect of anything done or permitted by him in respect
of the execution of the duties of his office; and
(b) all other costs, charges and expenses that he sustains or
incurs in respect of the affairs of the Corporation.
6.03 SUBMISSION OF CONTRACTS TO SHAREHOLDERS FOR APPROVAL -
The Board in its discretion may submit any contract, act or
transaction for approval or ratification at any annual meeting of
the shareholders (or at any special meeting of the shareholders)
called for the purpose of considering the same and, subject to the
provisions of Section 132 of the Act, any such contract, act or
transaction that shall be approved or ratified or confirmed by a
resolution passed by a majority of the votes cast at any such
meeting (unless any different or additional requirement is imposed
by the Act or by the Corporation's articles or any other by-law)
shall be as valid and as binding upon the Corporation and upon all
the shareholders as though it had been approved, ratified or
confirmed by every shareholder of the Corporation
<PAGE> Ex. 3(ii)(b) - Pg. 13
11
ARTICLE 7
---------
MEETINGS OF SHAREHOLDERS
------------------------
7.01 ANNUAL MEETING - Subject to the provisions of Section
94 of the Act, the annual meeting of shareholders shall be held on
such day in each year and at such time and place in or outside as
the directors may determine for the purpose of hearing and
receiving the reports and statements required by the Act to be read
and laid before the shareholders at any annual meeting, electing
directors, appointing, if necessary, an auditor and fixing or
authorizing the board of directors to fix his remuneration and for
the transaction of such other business as may properly be brought
before the meeting.
7.02 SPECIAL MEETINGS - The Board, the Chairman of the Board,
the Managing Director, the President or a Vice-President who is a
director shall have the power at any time to call a special meeting
of the shareholders of the Corporation to be held at any time and
place in or outside Ghana.
The phrase "meeting of shareholders" wherever it occurs in
this bylaw shall mean and include an annual meeting of
shareholders, a special meeting of shareholders and any meeting of
any class or classes of shareholders.
7.03 NOTICE - Notice of the time and place of each meeting
of shareholders shall be given not less than ten (10) days or if
the Corporation is an offering corporation not less than twenty-one
(21) days but in either case not more than fifty (50) days before
the day on which the meeting is to be held, to the auditor, if any,
the directors and to each shareholder entitled to vote at the
meeting. Notice of a special meeting of shareholders shall state
the nature of the business to be transacted in sufficient detail to
permit the shareholders to form a reasoned judgment thereon
together with the text of any special resolution or by-law to be
submitted to the meeting. A meeting of shareholders may be held at
any time without notice if all the shareholders entitled to vote
thereat are
<PAGE> Ex. 3(ii)(b) - Pg. 14
12
present or represented by proxy and do not object to the holding of
the meeting or those not so present or represented by proxy have
waived notice, if all the directors are present or have waived
notice of or otherwise consent to the meeting and if the auditor,
if any, is present or has waived notice of or otherwise consents to
the meeting.
7.04 OMISSION OF NOTICE - The accidental omission to give
notice of any meeting or the non-receipt of any notice by any
shareholder or shareholders or by the auditor of the Corporation
shall not invalidate any resolution passed or any proceedings taken
at any meeting of shareholders.
7.05 PERSONS ENTITLED TO BE PRESENT - The only persons
entitled to attend a meeting of shareholders shall be those
entitled to vote thereat, the directors of the Corporation, the
auditor, if any, of the Corporation and others who although not
entitled to vote are entitled or required under the provisions of
the Act or by-laws of the Corporation to be present at the meeting.
Any other person may be admitted only on the invitation of the
Chairman of the meeting or with the consent of the meeting.
7.06 QUORUM - A quorum at any meeting of shareholders (unless
a greater number of persons are required to be present or a greater
number of shares are required to be represented by the Act or by
the articles or any other by-law) shall be persons present not
being less than two in number and holding or representing not less
than twenty percent (20%) of the total number of the issued shares
of the Corporation for the time being enjoying voting rights at
such meeting. No business shall be transacted at any meeting unless
the requisite quorum be present at the time of the transaction of
such business. If a quorum is not present at the opening of a
meeting of shareholders, the persons present and entitled to vote
may adjourn the meeting to a fixed time and place but may not
transact any other business and the provisions of paragraph 7.14
with regard to notice shall apply to such adjournment.
Notwithstanding the foregoing, if the Corporation has only one
shareholder or only one holder
<PAGE> Ex. 3(ii)(b) - Pg. 15
13
of any class of shares or series of shares entitled to be present
at a meeting of shareholders, that shareholder present in person or
by proxy shall constitute a meeting.
7.07 RIGHT TO VOTE - At each meeting of shareholders every
shareholder shall be entitled to vote who is entered on the books
of the Corporation as a holder of one (1) or more shares carrying
the right to vote at such meeting or where a record date has been
fixed, satisfactory evidence is produced not later than ten (10)
days before the meeting that such person owns shares in the
Corporation and demands that his name be included on the list of
shareholders entitled to vote at the meeting; save that, if the
share or shares in question have been mortgaged or hypothecated,
the person who mortgaged or hypothecated such share or shares (or
his proxy) may nevertheless represent the shares at the meetings
and vote in respect thereof unless in the instrument creating the
mortgage or hypothec he has expressly empowered the holder of such
mortgage or hypothec to vote thereon, in which case such holder (or
his proxy) may attend meetings to vote in respect of such shares
upon filing with the secretary of the meeting sufficient proof of
the terms of such instrument.
7.08 REPRESENTATIVES - An executor, administrator, committee
of a mentally incompetent person, guardian or trustee and where a
corporation is such executor, administrator, committee of a
mentally incompetent person, guardian or trustee, any person duly
appointed a proxy for such corporation, upon filing with the
secretary of the meeting sufficient proof of his appointment, shall
represent the shares in his or its hands at all meetings of the
shareholders of the Corporation and may vote accordingly as a
shareholder in the same manner and to the same extent as the
shareholder of record. Where two or more persons hold the same
share or shares jointly,' any one of such persons present at a
meeting of shareholders has the right, in the absence of the other
or others, to vote in respect of such share or shares but if more
than one of such persons are present or represented by proxy and
vote, they shall vote together as one on the share or shares
jointly held by them.
<PAGE> Ex. 3(ii)(b) - Pg. 16
14
7.09 PROXIES - Votes at meetings of shareholders may be given
either personally or by proxy or, in the case of a shareholder who
is a body corporate or association, by an individual authorized by
a resolution of the directors or governing body of the body
corporate or association to represent it at meetings of
shareholders of the Corporation. At every meeting at which he is
entitled to vote, every shareholder and/or person appointed by
proxy and/or individual so authorized to represent a shareholder
who is present in person shall have one vote on a show of hands.
Upon a ballot at which he is entitled to vote, every shareholder
present in person or represented by proxy or by an individual so
authorized shall (subject to the provisions, if any, of the
articles of the Corporation) have one vote for every share held by
him.
A proxy shall be executed by the shareholder or his attorney
authorized in writing and is valid only at the meeting in respect
of which it is given or any adjournment thereof.
A person appointed by proxy need not be a shareholder.
Subject to the Regulations, a proxy may be in the following
form:
The undersigned shareholder of [name of corporation] hereby
appoints of , or failing him,
of as the nominee of the undersigned to
attend and act for the undersigned and on behalf of the undersigned
at the meeting of the shareholders of the said Corporation to be
held on the day of , 19 and at any adjournment
or adjournments thereof in the same manner, to the same extent and
with the same power as if the undersigned were present at the said
meeting or such adjournment or adjournments thereof.
DATED this day of ,19
---------------------------
Signature of Shareholder
The directors may from time to time make regulations
regarding the lodging of proxies at some place or places other than
the place at which a meeting or adjourned meeting of shareholders
is to be held and for
<PAGE> Ex. 3(ii)(b) - Pg. 17
15
particulars of such proxies to be cabled or telegraphed or sent by
telex or in writing before the meeting or adjourned meeting to the
Corporation or any agent of the Corporation for the purpose of
receiving such particulars and providing that proxies so lodged may
be voted upon as though the proxies themselves were produced at the
meeting or adjourned meeting and votes given in accordance with
such regulations shall be valid and shall be counted. The chairman
of any meeting of shareholders may, subject to any regulations made
as aforesaid, in his discretion accept telegraphic or cable or
telex or written communication as to the authority of any person
claiming to vote on behalf of and to represent a shareholder
notwithstanding that no proxy conferring such authority has been
lodged with the Corporation, and any votes given in accordance with
such telegraphic or cable or telex or written communication
accepted by the chairman of the meeting shall be valid and shall be
counted.
7.10 CHAIRMAN. SECRETARY AND SCRUTINEERS - The
Chairman of the Board, if such an officer has been elected and is
present, otherwise the President shall be chairman of any meeting
of shareholders. If no such officer is present within fifteen
minutes from the time fixed for holding the meeting, then the
persons present and entitled to vote shall choose one of their
number to be chairman. If the Secretary of the Corporation is
absent the Chairman shall appoint some person, who need not be a
shareholder, to act as secretary of the meeting. If desired, one or
more scrutineers, who need not be shareholders, may be appointed by
resolution or by the chairman with the consent of the meeting.
7.11 VOTES TO GOVERN - At all meetings of shareholders every
question shall be determined by a majority of the votes cast on the
question, unless otherwise required by the articles or by-laws or
by the Act. In the case of an equality of votes at any meeting of
shareholders, either upon a show of hands or upon a poll, the
chairman of the meeting shall be entitled to a second or casting
vote in addition to the vote or votes to which he may be entitled
as a shareholder.
<PAGE> Ex. 3(ii)(b) - Pg. 18
16
7.12 SHOW OF HANDS - Subject to the provisions of the Act,
any question at a meeting of shareholders shall be decided by a
show of hands unless a poll thereon is required or demanded. Upon
a show of hands, every shareholder present in person or represented
by proxy and entitled to vote shall have one vote. Whenever the
vote by show of hands shall have been taken upon a question, a
declaration by the chairman of the meeting that the vote upon the
question has been carried or carried by a particular majority or
not carried and an entry to that effect in the minutes of the
meeting shall be prima facie evidence of the fact without proof of
the number or proportion of the votes recorded in favour of or
against any resolution or other proceedings in respect of the
question.
7.13 POLLS - If a poll is required by the chairman of the
meeting, or is demanded by any shareholder who is present in person
or represented by proxy and entitled to vote on the question
(whether the poll is required or demanded either before or after a
vote has been taken upon the question by a show of hands), and such
requirement or demand is not withdrawn, a poll upon the question
shall be taken by ballot or in such other manner as the chairman of
the meeting may direct. Upon a poll, each shareholder who is
present or represented by proxy shall (subject to the provisions,
if any, of the articles of the Corporation) be entitled to one vote
for each share in respect of which he is entitled to vote on the
question. A demand for a poll may be withdrawn.
7.14 ADJOURNMENT - The Chairman at a meeting of the
shareholders may, with the consent of the meeting and subject to
such conditions as the meeting may decide, adjourn the meeting from
time to time to a fixed time and place. If a meeting of
shareholders is adjourned for less than thirty (30) days no notice
of the adjourned meeting need be given to the shareholders. Subject
to the Act, if a meeting of shareholders is adjourned for thirty
(30) days or more, notice of the adjourned meeting shall be given
as for an original meeting.
7.15 RESOLUTION IN WRITING - Subject to the provisions of the
Act, a resolution in writing signed by all the shareholders
entitled to
<PAGE> Ex. 3(ii)(b) - Pg. 19
17
vote on that resolution at a meeting of shareholders is as valid
and effective as if passed at a meeting of the shareholders duly
called, constituted and held for that purpose.
ARTICLE
-------
SHARES AND TRANSFERS
--------------------
8.01 ALLOTMENT AND ISSUE - Subject to the provisions of
Section 23 of the Act, shares in the capital of the Corporation may
be allotted and issued by resolution of the Board at such times and
on such terms and conditions and to such persons or class of
persons as the Board determines.
8.02 CERTIFICATES - Share certificates and the form of stock
transfer power on the reverse side thereof shall (subject to
Section 56 of the Act) be in such form as the Board may by
resolution approve and such certificates shall be signed by the
Chairman of the Board or the President or a Vice-President and the
Secretary or an Assistant Secretary holding office at the time of
signing.
The signature of the Chairman of the Board, the Vice-
Chairman of the Board, the President or a Vice-President may be
printed, engraved, lithographed or otherwise mechanically
reproduced upon certificates for shares of the Corporation.
Certificates so signed shall be deemed to have been manually signed
by the Chairman of the Board, the Vice-Chairman of the Board, the
President or the Vice-President whose signature is so printed,
engraved, lithographed or otherwise mechanically reproduced thereon
and shall be as valid to all intents and purposes as if they had
been signed manually. Where the Corporation has appointed a
trustee, registrar, transfer agent, branch transfer agent or other
authenticating agent for the shares (or for the shares of any class
or classes) of the Corporation the signature of the Secretary or
Assistant Secretary may also be printed, engraved, lithographed or
otherwise mechanically reproduced on certificates representing the
shares (or the shares of the class or classes in
<PAGE> Ex. 3(ii)(b) - Pg. 20
18
respect of which any such appointment has been made) of the
Corporation and when countersigned by or on behalf of a trustee,
registrar, transfer agent, branch transfer agent or other
authenticating agent such certificates so signed shall be as valid
to all intents and purposes as if they had been signed manually. A
share certificate containing the signature of a person which is
printed, engraved, lithographed or otherwise mechanically
reproduced thereon may be issued notwithstanding that the person
has ceased to be an officer of the Corporation and shall be as
valid as if he were an officer at the date of its issue.
8.03 PAYMENT OF COMMISSIONS - The Board may authorize the
Corporation to pay reasonable commissions to persons in
consideration of their purchasing or agreeing to purchase shares of
the Corporation, or procuring or agreeing to procure purchasers for
such shares.
8.04 TRANSFER AGENT AND REGISTRAR - The directors may from
time to time by resolution appoint or remove one or more transfer
agents and/or branch transfer agents and/or registrars and/or
branch registrars (which may or may not be the same individual or
body corporate) for the securities issued by the Corporation in
registered form (or for such securities of any class or classes)
and may provide for the registration of transfers of such
securities (or such securities of any class or classes) in one or
more places and such transfer agents and/or branch transfer agents
and/or registrars and/or branch registrars shall keep all necessary
books and registers of the Corporation for the registering of such
securities (or such securities of the class or classes in respect
of which any such appointment has been made). In the event of any
such appointment in respect of the shares (or the shares of any
class or classes) of the Corporation, all share certificates issued
by the Corporation in respect of the shares (or the shares of the
class or classes in respect of which any such appointment has been
made) of the Corporation shall be countersigned by or on behalf of
one of the said transfer agents and/or branch transfer agents and
by or on behalf of one of the said registrars and/or branch
registrars, if any.
<PAGE> Ex. 3(ii)(b) - Pg. 21
19
8.05 SECURITIES REGISTERS - A securities register and the
register of transfers of the Corporation shall be kept at the
registered office of the Corporation or at such other office or
place in Ontario as may from time to time be designated by
resolution of the Board and a branch securities register or
registers of transfers may be kept at such office or offices of the
Corporation or other place or places, either in or outside Ghana,
as may from time to time be designated by resolution of the Board.
8.06 SURRENDER OF CERTIFICATES - No transfer of shares shall
be recorded or registered unless or until the certificate
representing the shares to be transferred has been surrendered and
cancelled.
8.07 LIEN FOR INDEBTEDNESS - The Corporation has a lien on
a share registered in the name of a shareholder or his legal
representative for a debt of that shareholder to the Corporation. By
way of enforcement of such lien the directors may refuse to permit
the registration of a transfer of such share.
8.08 NON-RECOGNITION OF TRUSTS - The Corporation shall be
entitled to treat the registered holder of any share as the
absolute owner thereof and accordingly shall not, except as ordered
by a court of competent jurisdiction or as required by statute, be
bound to see to the execution of any trust, whether express,
implied or constructive, in respect of any share or to recognize
any such claim to or interest in such share on the part of any
person other than the registered holder thereof.
8.09 LOST CERTIFICATES - The Board or any officer or agent
designated by the Board may in its or his discretion direct the
issue of a new share certificate in lieu of and upon cancellation
of a share certificate that has been mutilated or in substitution
for a share certificate that has been lost, apparently destroyed or
wrongfully taken on payment of such fee, not exceeding $1.00, and
on such terms as to indemnity, reimbursement of expenses and
evidence of loss and of title as the Board may from time to time
prescribe, whether generally or in any particular case.
<PAGE> Ex. 3(ii)(b) - Pg. 22
20
8.10 JOINT SHAREHOLDERS - If two or more persons are
registered as joint holders of any share, the Corporation shall not
be bound to issue more than one certificate in respect thereof, and
delivery of such certificate to one of such persons shall be
sufficient delivery to all of them. Any one of such persons may
give effectual receipts for the certificate issued in respect
thereof or for any dividend, bonus, return of capital or other
money payable or warrant issuable in respect of such share.
8.11 DECEASED SHAREHOLDERS - In the event of the death of a
holder of any share, the Corporation shall not be required to make
any entry in the register of shareholders in respect thereof or to
make payment of any dividends thereon except upon production of all
such documents as may be required by law and upon compliance with
the reasonable requirements of the Corporation and its transfer
agent. Where shares are issued to joint holders, upon satisfactory
proof of the death of one joint holder, the Corporation may treat
the surviving joint holder or holders as the issuer of the shares.
ARTICLE 9
---------
VOTING SHARES IN OTHER COMPANIES
--------------------------------
9.01 All of the shares or other securities carrying voting
rights of any other body corporate held from time to time by the
Corporation may be voted at any and all meetings of shareholders,
bondholders, debenture holders or holders of other securities (as
the case may be) of such other body corporate and in such manner
and by such person or persons as the Board shall from time to time
determine. The proper signing officers of the Corporation may also
from time to time execute and deliver for and on behalf of the
Corporation proxies and/or arrange for the issuance of voting
certificates and/or other evidence of the right to vote in such
names as they may determine without the necessity of a resolution
or other action by the Board.
<PAGE> Ex. 3(ii)(b) - Pg. 23
21
ARTICLE 10
----------
INFORMATION AVAILABLE TO SHAREHOLDERS
-------------------------------------
10.01 DISCOVERY OF INFORMATION - Except as provided by the
Act, no shareholder shall be entitled to discovery of any
information respecting any details of conduct of the Corporation's
business which in the opinion of the directors it would be
inexpedient in the interests of the Corporation to communicate to
the public.
10.02 INSPECTION OF RECORDS - The directors may from time to
time, subject to rights conferred by the Act, determine whether and
to what extent and at what time and place and under what conditions
or regulations the documents, books and registers and accounting
records of the Corporation or any of them shall be open to the
inspection of shareholders and no shareholder shall have any right
to inspect any document or book or register or accounting record of
the Corporation except as conferred by statute or authorized by the
Board or by a resolution of the shareholders.
ARTICLE 11
----------
DIVIDENDS
---------
11.01 DECLARATION - Subject to the Act and articles of the
Corporation, the Board may from time to time by resolution declare
dividends payable on the issued and outstanding shares of the
Corporation.
11.02 PAYMENT - A dividend payable in cash shall be paid by cheque
drawn on the Corporation's bankers or one of them to the order of
each registered holder of shares of the class in respect of which
it has been declared, and delivered or mailed by ordinary mail
postage prepaid to such registered holder at his last address
appearing on the records of the Corporation. In the case of joint
holders the cheque shall, unless such
<PAGE> Ex. 3(ii)(b) - Pg. 24
22
joint holders otherwise direct, be made payable to the order of all
of such joint holders and if more than one address appears on the
books of the Corporation in respect of such joint holding the
cheque shall be mailed to the first address so appearing. The
mailing of such cheque as aforesaid shall satisfy and discharge all
liability for the dividend to the extent of the sum represented
thereby, unless such cheque is not paid on presentation.
ARTICLE
-------
NOTICES
-------
12.01 SERVICE - Any notice or other document required by the Act,
the Regulations, the articles or the by-laws of the Corporation to
be sent to any shareholder or director or to the auditor shall be
delivered personally or sent by prepaid mail or by telegram or
cable or telex to any such shareholder or director at his latest
address as shown in the records of the Corporation or its transfer
agent, whichever is the more current, and to the auditor at his
business address; provided always that notice may be waived or the
time for the notice may be waived or abridged at any time with the
consent in writing of the person entitled thereto. If a notice or
document is sent to a shareholder by prepaid mail in accordance
with this paragraph and the notice or document is returned on three
consecutive occasions because the shareholder cannot be found, it
shall not be necessary to send any further notices or documents to
the shareholder until he informs the Corporation in writing of his
new address.
12.02 SHARES REGISTERED IN SEVERAL NAMES - All notices or other
documents with respect to any shares registered in more than one
name shall be given to whichever of such persons is named first in
the records of the Corporation and any notice or other document so
given shall be sufficient notice to all the holders of such shares.
12.03 ENTITLEMENT BY OPERATION OF LAW - Subject to Section 67 of
the Act, every person who by operation of law, transfer or by any
other
<PAGE> Ex. 3(ii)(b) - Pg. 25
23
means whatsoever shall become entitled to any share or shares shall
be bound by every notice or other document in respect of such share
or shares which previous to his name and address being entered on
the books of the Corporation shall be duly given to the person or
persons from whom he derives his title to such share or shares.
12.04 NOTICE TO DECEASED SHAREHOLDERS - Any notice or other
document delivered or sent by post or left at the address of any
shareholder as the same appears in the records of the Corporation
shall, notwithstanding that such shareholder be then deceased, and
whether or not the Corporation has notice of his decease, be deemed
to have been duly served in respect of the shares held by such
shareholder (whether held solely or with any other person or
persons) until some other person be entered in his stead in the
records of the Corporation as the holder or one of the holders
thereof and such service shall for all purposes be deemed a
sufficient service of such notice or document on his heirs,
executors or administrators and on all persons, if any, interested
through him or with him in such shares.
12.05 SIGNATURE TO NOTICES - The signature of any director or
officer of the Corporation to any notice or document to be given by
the Corporation may be written, stamped, typewritten or printed or
partly written, stamped, typewritten or printed.
12.06 COMPUTATION OF TIME - Where a given number of days' notice
or notice extending over a period is required to be given under any
provisions of the articles or by-laws of the Corporation the day of
service or posting of the notice or document shall unless it is
otherwise provided be counted in such number of days or other
period.
12.07 PROOF OF SERVICE - With respect to every notice or other
document sent by post it shall be sufficient to prove that the
envelope or wrapper containing the notice or other document was
properly addressed as provided in this by-law and put into a Post
Office or into a public letter box. A certificate of an officer of
the Corporation in office at the time of
<PAGE> Ex. 3(ii)(b) - Pg. 26
24
the making of the certificate or a transfer officer of any transfer
agent or branch transfer agent of shares of any class of the
Corporation as to the facts in relation to the mailing or delivery
of any notice or other document to any shareholder, director,
officer or auditor or publication of any notice or other document
shall be conclusive evidence thereof and shall be binding on every
shareholder, director, officer or auditor of the Corporation as the
case may be.
ARTICLE 13
----------
CUSTODY OF SECURITIES
---------------------
13.01 SAFEKEEPING - All shares and securities owned by the
Corporation shall be lodged (in the name of the Corporation) with
a chartered bank or a trust company or in a safety deposit box or,
if so authorized by resolution of the Board, with such other
depositories or in such other manner as may be determined from time
to time by the Board.
13.02 NOMINEES - All share certificates, bonds, debentures, notes
or other obligations or securities belonging to the Corporation may
be issued or held in the name of a nominee or nominees of the
Corporation (and if issued or held in the names of more than one
nominee shall be held in the names of the nominees jointly with the
right of survivorship) and shall be endorsed in blank with
endorsement guaranteed in order to enable transfer to be completed
and registration to be effected.
ARTICLE 14
----------
EXECUTION OF INSTRUMENTS
------------------------
14.01 CHEQUES. DRAFTS AND NOTES - All cheques, drafts or orders
for the payment of money, and all notes and acceptances and bills
of
<PAGE> Ex. 3(ii)(b) - Pg. 27
25
exchange shall be signed by such officer or officers or person or
persons, whether or not officers of the Corporation, and in such
manner as the Board may from time to time designate by resolution.
14.02 CONTRACTS. DOCUMENTS OR OTHER INSTRUMENTS -
Contracts, documents or instruments in writing requiring the
signature of the Corporation may be signed by (a) the Chairman of
the Board, if any, or the President or a Vice President and the
Secretary or the Treasurer or (b) any two directors and all
contracts, documents and instruments in writing so signed shall be
binding upon the Corporation without any further authorization or
formality. The Board shall have power from time to time by
resolution to appoint any officer or officers or any person or
persons on behalf of the Corporation either to sign contracts,
documents and instruments in writing generally or to sign specific
contracts, documents or instruments in writing.
In particular, without limiting the generality of the
foregoing, the officer or officers or the person or persons
hereinbefore set out shall have authority to sell, assign,
transfer, exchange, convert or convey any and all shares, stocks,
bonds, debentures, rights, warrants or other securities owned by or
registered in the name of the Corporation and to sign and execute
(under the seal of the Corporation or otherwise) all assignments,
transfers, conveyances, powers of attorney and other instruments
that may be necessary for the purpose of selling, assigning,
transferring, exchanging, converting or conveying any such shares,
stocks, bonds, debentures, rights, warrants or other securities.
The term "contracts, documents or instruments in writing" as
used in this by-law shall include deeds, mortgages, hypothecs,
charges, conveyances, transfers and assignments of property, real
or personal, immovable or movable, agreements, releases, receipts
and discharges for the payment of money or other obligations,
conveyances, transfers and assignments of shares, share warrants,
stocks, bonds, debentures or other securities and all paper
writings.
14.03 SEALING OF CONTRACTS - The seal (if any) of the
Corporation may when required be affixed to contracts, documents
and instruments in writing signed as aforesaid or by any officer
or officers, person or persons, appointed as aforesaid by
resolution by the Board.
ENACTED the day of , 19
- ----------------------------- -------------------------
President Secretary
<PAGE> Ex. 3(ii)(b) - Pg. 28
BY-LAW NO. 2
------------
A by-law respecting the borrowing of money by the
Corporation.
1. In addition to, and without limiting such other powers
which the Corporation may by law possess, the directors of the
corporation may without authorization of the shareholders,
a) borrow money upon the credit of the Corporation;
b) issue, reissue, sell or pledge debt obligations of
the Corporation; and
c) mortgage, hypothecate, pledge or otherwise create a
security interest in all or any property of the
Corporation, owned or subsequently acquired, to
secure any obligation of the Corporation.
The words "debt obligation" as used in this paragraph mean
a bond, debenture, note or other similar obligation or guarantee
of such an obligation of the Corporation, whether secured or
unsecured.
2. The directors may from time to time by resolution delegate the
powers conferred on them by paragraph 1 of this by-law to a
director, a committee of directors or an officer of the
Corporation.
3. The powers hereby conferred shall be deemed to be in
supplement of and not in substitution for any powers to borrow
money for the purposes of the Corporation possessed by its
directors or officers independently of a borrowing by-law.
ENACTED the day of , 19
- ----------------------------- -------------------------
President Secretary
<PAGE> Ex. 3(ii)(b) - Pg. 29
DON A. PARADISO P.A.
5874 DEERFIELD PLACE, LAKE WORTH, FLORIDA 33463
(561) 968-9099 FAX (561) 367-4736
Don A. Paradiso
Member New York and Florida Bar
January 4, 1 999
National Capital L.L.C;,
Suite 203
6801 Broadway Extension
Oklahoma City, Oklahoma 73116
Re: 3 E International Corp. (3 E)
Dear Sirs.
This will serve as an opinion of counsel for 3 F International
Corp. ("3 E") in connection with the due diligence investigation
of 3 E for the purposes of Rule 15c2-11 promulgated pursuant to
the Securities Exchange Act of 1934. (the 'Act) with respect to
the issuance of shares of 3 E common stock, par value $0.001 per
share, to certain persons identified as investors In 3 E,
(collectively, the "Shares"). In connection herewith, I have
examined originals or copies identified to my satisfaction, of
such documents, records and instruments as I have deemed necessary
for the purpose of this opinion, including, among other things,
the 3 E Articles of Incorporation and the , various amendments
thereto, the Bylaws of the company, the minutes of the meetings of
the Officers, Directors and Shareholders of the company, and the
Regulation D, Rule 604 offering memorandum of the company which is
currently effective. I have also examined the 3 E financial
statements. Based upon the foregoing, and to the best of my
knowledge, I am of the opinion that:
1. 3 E is a corporation duly organized, validly existing and
in good standing in the State of Delaware.
2. The authorized capital stock of 3 E consists of 20
million shares of $.OOI par value common stock, of which 2,936,201
are validly issued and now outstanding, fully paid and
nonassessable, free of liens, encumbrances. and options, No other
equity or debt securities of 3 E have been issued. All securities
issued to date have been issued pursuant to available exemptions
from registration under Applicable state and federal securities
laws, including but not limited to Regulation D of the Securities
and Exchange Commission.
3. There is no action, suit, proceeding, order or
investigation pending or threatened against or affecting 3 E at law
or in equity or before any federal, state, municipal or other
governmental department, commission, board, bureau. agency or
instrumentality,
4. At no time has 3 E been: a) subject to reporting
requirements of Section 13 or 15(,c,) of the Act, or b) an
"investment company" within the meaning of Federal securities laws.
5. The offers, sales and/or securities exchanges by 3 E prior to
the date of this letter do not appear to the undersigned attorney
to be attempts to evade any registration or resale requirements of
the securities laws of the United States or any of it's States.
<PAGE> Ex. 5 - Pg. 1
6. 3 E had complied with the requirements of Rule 504 of
Regulation D promulgated pursuant to the Securities Act of 1933
(the "Act"), and as such, the filings provide for an exemption from
registration of any shares sold.
7. To date, no investor in the Regulation D, Rule 504
offering of the company was affiliated with any Director, Officer
or promoter of 3 E or any beneficial owner of 10% or more of 3 E's
securities.
8. If within the twelve month period commenced August 19, 1998,
(the "Exemption window"), 3 E shall not have made any offers or
sales in the United States unless such offers and sales had been
registered under the Act, and under any applicable state seurilties
laws, provided, however, that 3 E may have made additional sales of
securities within the Exemption Window pursuant to Rule 504 of
Regulation D under the Act (and corresponding state exemptions from
registration, if available) to the extent that the aggregate
offering price of such sales, when aggregated with the aggregate
offering price of prior sales, does not exceed $1,0OO,000, 3 E
shall be entitled to rely upon the exemption from registration
provided for under Rule 504 of Regulation D. I have been informed
that thus far 3 E, during the Exemption Window, has not made any
registration offering of securities on such terms as shall have
caused it to be subject to "integration," within the meaning of
Rule 504 of Regulation D under the Act, with any prior offering of
3 E.
Solely based upon the assumptions noted above, I am of the
opinion that the shares are not subject to any resale restrictions
imposed by the Act, and have so informed the transfer agent.
The opinions and conclusions expressed herein are based in part
upon facts provided to me by 3 E, Gaution is given to anyone
referring to this opinion that opinion letters of counsel are not
binding upon the Securities and Exchange Commission nor on the
courts. To the extent that persons relying on this letter may have
knowledge of facts or circumstances which are contrary to those
upon which this opinion is based., then this opinion would not be
applicable, Further, this opinion May be withdrawn at any time if
information is discovered which would cause me to change my opinion
or if anv state or federal agency or court takes an adverse
position.
Sincerely,
/s/Don A. Paradiso
Don A. Paradiso, Esq.
Florida Bar #0969974
For the Firm
In case of reply the G.F.R.& C.B.
number and date of NATIONAL COMMUNICATIONS
this letter should be [SEAL] AUTHORITY
quoted P O BOX 1627
ACCRA
My Ref..............
Your Ref............
Tel 666932 REPUBLIC OF GHANA October 12, 1998
Fax: 233-31-238147
Mr. Murray Stark
Director of Finance
"3 E" International Corporation
P. O. Box A362
LA - Accra
Ghana
Dear Sir,
LICENCE FOR TRANSMISSION OF MMDS TELECOMMUNICATIONS
- ---------------------------------------------------
Kindly consider this letter as verification by "3 E"
International Corporation has been awarded a licence for the
transmission of MMDS telecommunications.
On behalf of the Board, I wish to success in your endeavour.
Your faithfully,
/s/Major J.R.K. Tandoh
MAJOR J.R.K. TANDOH (RTD)
CHAIRMAN, GHANA FREQUENCY
REGISTRATION AND CONTROL BOARD
<PAGE> Ex. 10(i)
KAMKHUU PRODUCTS LIMITED
#394-19, SeogyO-Dong, Mapo-Gu, Seoul, Korea
- -------------------------------------------
February 1,2000
3 E International Corporation,
79 Barbara Cres.,
Kitchener, Ontario
N2M 4N3
Dear Mr. Stark:
This document will verify that we are prepared to provide you
with a $2,000,000.OO U.S.$ line of credit against the purchase
of product from KamKhuu Products Limited. The product line
would include moderators, multiplex units, encoders, patch
antennae, all fittings, base tower, repeaters, beam benders,
In addition we can also source your requirements for the
wireless telephone and intenet needs.
The rate on the Credit Line would be set at the Federal
Reserve US Bank Prime plus 2%, This line of credit would be
secured by a general debenture against the company and its
assets convertible into common shares of the company at a
price to be determined in accordance with the lowest price
allowed by any appropriate regularity authority.
This offer can only be put into effect when 3 E International
Corporation's common shares are accepted for trading on a
recognized stock exchange.
At such time when you have completed the above, we will
instruct our US attorneys to prepare the necessary documents.
It is understood that we will be the sole supplier of
equipment to 3 E International Corporation.
Thank you again for the opportunity to be of service, and I
look forward to your indicated early date response.
Yours truly,
/s/Sam Khuu
Sam Khuu
President
<PAGE> Ex. 10(ii)
3 E INTRNATIONAL CORPORATION
P. O. BOX A362, LA - ACCRA, GHANA
---------------------------------------------------------------------------
TELEPHONE 011 233 (21) 764219
March 2, 2000
Mr. Nana Antwi Darkwah,
Vision Network Communications Inc.,
No. 3, Fifth Cres., Asylum Down,
P.O. Box 9244,Airport,
Accra, Ghana,
West Africa
Re: Purchase of all issued shares of V Net
Dear Sir:
This letter will evidence our respective intent as follows:
1) 3 E International shall acquire all of the issued and
outstanding shares of V Net for the total price of
$250,000.00
2) The purchase price shall be paid in cash and shares of
3 E International in an amount to be agreed upon.
3) The transaction will be completed as soon as all
regulatory bodies have approved same (expected to
be by June 2000)
4) Our representative shall become a member of the board
of directors of 3 E International on closing
This intent is subject to 3 International confirming the
subscriber base and verifying the lease renewal provisions.
After completion of due diligence, we will have our
attorneys in Ghana prepare a formal agreement. Such
agreement will have to be approved by our attorneys in the
United States.
If you concur with the above, would you kindly sign your
acceptance on a copy of this letter and return same to me.
We look forward to a successful future together.
Yours truly,
Signed " R. E. Fyn" Accepted and Agreed this 8th day of March, 00
Col. R.E. Fyn Signed "Nana Antwi Darkwah"
Secretaty/Treasurer
---------------------------------------------------------------------------
GHANA-WEST AFRICA FT. LAUDERDALE, FLORIDA MISSISSAUGA, ONT., CAN.
<PAGE> Ex. 10(iii)
Exhibit 21
3 E International Ltd.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Balance
Sheet, Statement of Operations, Statements of Cash Flows and Notes thereto
incorporated in Part II of this Form 10-SB and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 6-MOS YEAR
<FISCAL-YEAR-END> JUN-30-1999 JUN-30-1999
<PERIOD-END> DEC-31-1999 JUN-30-1999
<CASH> 417 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 2,975
<INVENTORY> 0 0
<CURRENT-ASSETS> 417 2,975
<PP&E> 457,495 457,495
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 457,912 457,912
<CURRENT-LIABILITIES> 31,229 17,220
<BONDS> 0 0
0 0
0 0
<COMMON> 6,242 6,242
<OTHER-SE> 509,196 509,196
<TOTAL-LIABILITY-AND-EQUITY> 457,912 460,470
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 72,188 60,635
<LOSS-PROVISION> 72,188 60,635
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (72,188) (60,635)
<EPS-BASIC> (0.01) (0.01)
<EPS-DILUTED> (0.01) (0.01)
</TABLE>
