<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
ROMPUS INTERACTIVE CORPORATION
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(Name of Small Business Issuer in its charter)
Florida 65-075004
- --------------------------------- ---------------------------------
(State or Other Jurisdiction (IRS Employer Identification No.)
of Incorporation or Organization)
225 Richmond Street West, Suite 302A, Toronto, Ontario, Canada M5V 1W2
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(Address of principal executive offices) (Zip Code)
(416) 593-4848
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(Issuer's Telephone Number, Including Area Code)
Securities to be registered under Section 12(b) of the Act:
<TABLE>
Title of each class Name of each exchange on which
to be so registered each class is to be registered
------------------- ------------------------------
<S> <C>
None None
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----------- --------------
</TABLE>
Securities to be registered pursuant to section 12(g) of the Act:
Common Stock, $.0001 par value
------------------------------
(Title of Class)
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
A. BUSINESS DEVELOPMENT
1. FORM AND YEAR OF ORGANIZATION
Rompus Interactive Corporation (the "Company" or "Rompus") was first
incorporated as Mercur Enterprises, Inc. in August, 1991 in the state of
Florida. Reinstated in August, 1995, the Company changed its name to AutoMetreks
on January 3, 1997 and traded on the OTC/BB under the symbol ATMT until April 5,
1999. The Company changed its name to OnLine Hearing Dot Com, Co. on April 6,
1999. The Company's wholly owned subsidiary, Rompus CD-Rom Productions, Ltd., is
incorporated under the laws of the province of British Columbia ("Rompus-BC").
Effective July 30, 1999, the Company entered into a share exchange with
Rompus-BC wherein the Company acquired all of the common stock of Rompus-BC in
exchange for common and preferred stock of the Company. On July 30, 1999, the
Company changed its name to Rompus Interactive Corporation. The Company intends
to trade on the OTC/BB as ROMP.
2. ANY BANKRUPTCY, RECEIVERSHIP OR SIMILAR PROCEEDING.
Not Applicable.
3. ANY MATERIAL RECLASSIFICATION, MERGER, CONSOLIDATION, OR
PURCHASE OR SALE OF A SIGNIFICANT AMOUNT OF ASSETS NOT IN THE ORDINARY COURSE OF
BUSINESS.
The Company entered into a share exchange agreement effective July 30,
1999 with Rompus-BC resulting in the Company being the parent and Rompus-BC
being the subsidiary operating company.
B. BUSINESS OF ISSUER.
The Company's business focuses on providing innovative multimedia
solutions to companies in E-commerce and Internet marketing. The Company has
developed an innovative product known as the i.d.rom-TM-. An i.d.rom-TM- is a
CD-Rom shaped like a business card, on which large amounts of audio and video
information can be stored. When placed in a standard computer, it replays its
multimedia content then connects to the issuer's web site. This product
allows a company, regardless of its size or its industry to market its image
and products anywhere using leading edge multimedia technology. The concept
is simple yet unique. Rompus is able to provide businesses worldwide with the
technical, design and manufacturing means to better meet the demand of their
markets. It does this by producing interactive multimedia presentations to
fulfill its clients' communications needs, and delivering them in the
i.d.rom-TM- package.
1. PRINCIPAL PRODUCTS AND SERVICES AND THEIR MARKET.
a. THE MARKET
The technology market has been molded by the explosive growth of the
Internet and the overwhelming interest of the business community in E-commerce,
expected to generated $95 billion in revenue by the end of 1999 according to the
figures from Activmedia and sales of $3.2 trillion by 2003 according to
Forrester Research. Online retail is an industry that the Boston Consulting
Group cites as growing at a rate of 200% per annum. In addition, Giga
Information Group found that companies are already saving billions of dollars by
turning to the Internet to deal with suppliers, customers and internal
communication.
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Many organizations have created expensive web sites, invested in
elaborate E-commerce sites and purchased advertising, and still, have failed to
drive target customers to their site, build brand identity or generate revenue.
This disparity has created a need for innovative new economy marketing
initiatives. In fact, the Web is now the third most popular advertising and
promotion medium for the local business market, after the Yellow Pages and
newspapers, according to the Kelsey Group and ConStat Inc. Successful businesses
are embracing innovative technology solutions in order to assume leadership in
Internet and E-commerce initiatives.
b. PRINCIPAL PRODUCTS AND SERVICES
The Company's current products focus almost entirely on the
i.d.rom-TM-. The i.d.rom-TM- is a quality, cost-effective marketing tool. An
i.d.rom-TM- is a CD-Rom shaped like a business card, on which large amounts
of audio and video information can be stored. When placed in a standard
computer, it replays its multimedia content then connects to the issuer's web
site. Marketing via an i.d.rom-TM- allows companies to increase their return
on investment by displacing other marketing materials. Radio or television
commercials and promotional videos can be reproduced and digitally edited.
Artwork can be scanned and databases added effortlessly. Additionally, the
i.d.rom-TM- can be programmed to link the user directly to any web site.
Rompus has pioneered a revolutionary disc-to-net interfacing process, known
as Connected CD-ROM. Webmasters can record site hits and orders generated by
any i.d.rom-TM-. This, along with e-mail, is a powerful means to track the
usage and effectiveness of a company's i.d.rom-TM- marketing program. The
i.d.rom-TM- combines multimedia design and production by either the Company
or the Customer with specialized functions.
i. MULTIMEDIA DESIGN AND PRODUCTION
Rompus' focus has been to create useful interfaces between
information and information users. When placed in a standard computer, the
i.d.rom-TM- replays its multimedia content then connects to the issuer's web
site. The i.d.rom-TM- uses aspects of current existing media resources, such
as television or radio commercials, corporate videos, brochure or catalog
artwork or text, technical drawings or web site content, while reducing much
of the media cost and production time. While the specific needs of each
customer are different, Rompus can provide all of the services necessary to
make a compelling and effective multimedia presentation and accompanying web
site for each customer's i.d.rom-TM-.
ii. ON-LINE DESIGNER
Rompus has created an unprecedented tool called the i.d.rom-TM-
Designer. Using the Designer, the customer will be able to create their own
multimedia presentation and label to be put on their i.d.rom-TM-. The Design
program will be available for download free of charge from the i.d.rom-TM-
web site, and will run on the customer's computer. Network and sever capacity
is not required. When the customer is satisfied with their layout, they can
upload the information to the i.d.rom-TM- server along with partial payment.
The information will be compiled, and e-mailed back to the customer as an
executable file, along with a draft of the label, for final confirmation. On
confirmation of the order, the balance of payment will be remitted.
iii. SPECIALIZED FUNCTIONS
While the Company continues to develop new and innovative functions and
products, some specialized functions developed and proven by Rompus and
available for use on i.d.rom-TM- are listed below:
1) DOCUMENT ENCRYPTION/PASSWORD DE-ENCRYPTION. Any document
can be encrypted and delivered on an i.d.rom-TM-. The user of the i.d.rom-TM-
cannot open the documents until they have acquired a password, by telephone,
over the Internet or otherwise, from the issuer of the i.d.rom-TM-. This
creates opportunities for the issuer to provide sensitive information, such
as detailed product specifications without the danger of widespread access.
An issuer can also control the release of content by delivering the content
but not supplying the password until the user provides the purchase price.
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2) ONE CARD/MANY NAMES. A solution developed for customers
such as real estate or financial services brokers allows profiles of many
people to be stored on one i.d.rom-TM- while only the profile of the person
whose name is printed on the label to be accessible by the user. The user
could still access generic information about the company no matter which
individual person's information is accessed. Typing in the first few letters
of the name of the person on the label could provide the user with not only
information on the named individual but a link to the named person's e-mail
address or individual web site.
3) CD KEY. This feature allows an i.d.rom-TM- to be
registered as an exclusive key to a restricted web site. The i.d.rom-TM-
creates a link to the secured site, and generates and passes an encrypted
password. Unless the i.d.rom-TM- is in the computer, the user will not be
able to access the site. The issuer can then ensure that only authorized
individuals are privy to information contained on the site. For example,
sensitive information such as pricing or product specifications, or premium
content such as new music releases will be protected. This feature can be
applied to existing CD-ROMS and CDS.
4) WEB LINK TRACKING. Every line to the Internet from every
i.d.rom-TM- can be individually monitored to collect data on usage patterns.
This process is transparent to the user, but allows Rompus and its customers
to evaluate the effectiveness of each i.d.rom-TM-. Data can be made available
in real time to customers, through a password protected web site, or
delivered periodically as the customer requires.
5) I.D.ROM-TM- REFERRAL LINK. Every i.d.rom-TM- has an
animated i.d.rom-TM- logo on its main menu. Mousing over this logo shows the
notice to learn more about i.d.rom-TM- and connects the user to i.d.rom.com,
the Company's website.
6) VIDEO PLAYER. To eliminate the typical slow process of
installing video playback software on the user's system, Rompus has incorporated
the technical capability to embed the most popular video formats such as MPEG in
the multimedia program. The result is a presentation that plays automatically
and requires not set up or installation.
7) GIS DATA VIEWER. This is a highly specialized function that
provides the non-expert with a map with pre-processed data presented to the user
in a simple, intuitive interface.
8) WINDOWS/MACINTOSH COMPATIBILITY. Although the popularity of
Macintosh appears to be waning, it still retains a very loyal customer base. Mac
users tend to be early adopters, while being quite computer and design savvy. To
avoid alienating this user group, Rompus develops i.d.roms to run on both
Windows 95/98/NT and Macintosh platforms.
9) STOCK CONTENT. For less sophisticated customers why may not
have a web site or presentable digital content, stock content will be made
available. For example, content may be purchased or licensed form other sources
and could include a screen saver, mortgage calculator, historic weather data,
animals etc. Customers will be able to select the stock content they want on the
i.d.rom, they then only need to provide the label art.
10) MULTIMEDIA FUNCTIONS. In addition to the specialized
functions listed above, an i.d.rom can deliver the latest in multimedia
features. Currently the state of the art multimedia includes: text, full color
still images, audio, video 2-D animation, 3-D renderings, 360-degree panoramic
"virtual reality" environments, vector graphics which are infinitely saleable
and the ability to launch other applications.
2. DISTRIBUTION
The Company's products are distributed directly to customers, through
affiliations with advertising agencies, printers, print brokers, media
designers, novelty distributors and licensees.
Rompus intends to market its product through the following channels:
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a. Directly to the Customer- Regional sales
representatives will be situated across the United
States and Canada and, as prospective customers are
identified, a qualified i.d.rom representative will
make personal contact.
b. Media Exposure- Mansfield Communications,
Inc. has been retained as Rompus' agency of record
for all pubic relations initiatives. Mansfield has
designed a comprehensive media campaign targeted to
"No charge direct distribution services" (such as
free software and e-mail web sites).
c. Advertising- Advertising will be focused
primarily in the print medium. Rompus plans to
advertise in national newspapers and fist round
publications which are directed to the marketing
industry.
d. Trade shows- The Company will exhibit the
i.d.rom at selected venues such as Film Expo, Graphic
Expo and Seybold.
e. Off-line- i.d.roms will be mailed directly to
prospective customers and resellers.
f. On-line- On-line marketing will focus on
the ease of finding and accessing the i.d.rom site
through search engines and advertising banners,
e-mail solicitations and product previews.
3. STATUS OF ANY PUBLICLY ANNOUNCED NEW PRODUCT OR SERVICE.
i.d.rom is currently available for purchase by customers.
4. COMPETITION
There are several boutique products currently offering similar cards in
the United States and Canada. None of these competitors have created a
significant presence in the market. These competitors focus primarily on the
"Digicard" or the "RomCard". The "Digicard" is similar to the i.d.rom except
that it is rectangular in shape, larger than the i.d.rom and has four bumps or
"feet" on the corners to help it operate in the CD disc drive. The Digicard has
been licensed to a number of small boutiques around the world but has been
relatively ineffective in marketing because of technological deficiencies. These
deficiencies include a tendency to break, to not properly perform when installed
in the disc drive and its marketed standard capacity of 16MB of Ram compared to
the 30 MB of Ram the i.d.rom can accommodate. The "RomCard" has recently
appeared in Europe but is not competitive with the i.d.rom because of its
pricing and technology.
The Company has learned that Amway is developing a on-line shopping
service in conjunction with Microsoft to be launched in September 1999 which
will utilize a digital business card as part of the marketing campaign. The
Company believes that Amway intends to use the cards internally. Amway's order
is currently being completed by Cinram, Rompus' i.d.rom manufacturer. The Amway
card will refer only to Cinram, and it is intended that Cinram will direct any
inquires for card production to Rompus.
While there is no evidence of this to date, competitors may be able to
devote greater resources to marketing and promotional campaigns, and devote
substantially more resources to card development than the Company. Increased
competition may result in reduced operating margins and loss of market share.
There can be no assurance that the Company will be able to compete successfully
against current and future competitors, and competitive pressures faced by the
Company may have a material adverse effect on the Company's business, prospects,
financial condition and results of operations. Further as a strategic response
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<PAGE>
to changes in the competitive environment, the Company may, from time to time,
make certain service or marketing decisions or acquisitions that could have a
material adverse effect on its business, prospects, financial condition and
results of operations. New technologies and the expansion of existing
technologies may increase the competitive pressures on the Company.
5. THE SOURCES AND AVAILABILITY OF RAW MATERIALS.
The Company has worked with Cinram International Inc., a Toronto-based
company that manufactures prerecorded multimedia products. Cinram operates
facilities in Canada, the United States, Europe and Latin America. With market
capitalization of $800 million and fiscal year 1998 operating performance of $42
million in earnings, on sales of $642 million, Cinram is a dominant global
player in pre-recorded multimedia products and services. Cinram and Rompus have
entered into an oral agreement wherein Cinram is the sole global source of
Rompus' i.d.roms. Rompus is obliged to order a minimum of 14 million i.d.roms in
2000, 25.4 million in 2001, and 35.6 million in 2002. CINRAM guarantees to
manufacture the initial two molds of the i.d.rom and to provide the peripheral
equipment at their expense.
Rompus currently contracts the pressing of the standard 12cm CD-ROMS to
Cinram then has the product cut into the i.d.rom shape by a separate contractor.
This two-step process has been identified as a potential production bottleneck,
and the cutting step contributes significantly to the cost of the final product.
The manufacturing process includes application of a silk-screened label, in up
to four colors, on the disc surface prior to cutting. Cinram has recently
eliminated the cutting step through the development of a new stamping method.
This is expected to reduce production costs by 61% per unit. Recent negotiations
have resulted in a 3-year agreement whereby Cinram will mold CD-ROMs in the
unique i.d.rom shape. Under this agreement, Cinram will produce this product for
Rompus only, and Rompus will use Cinram exclusively for manufacturing. Cinram
will also promote the i.d.rom product world wide through its network of sales
representatives.
6. DEPENDENCE ON A SINGLE OR FEW CUSTOMERS.
Not Applicable.
7. THE IMPORTANCE OF PATENTS, TRADEMARKS, LICENSES, FRANCHISES
AND CONCESSIONS HELD.
To protect its rights to its intellectual property, the Company relies
on a combination of trademark and copyright law, patent, trade secret
protection, confidentiality agreements, and other contractual arrangements with
its employees, affiliates, clients, strategic partners, and others. The
protective steps it has taken may be inadequate to deter misappropriation of the
Company's proprietary information. The Company may be unable to detect the
unauthorized use of, or take appropriate steps to enforce its intellectual
property rights. Rompus has registered certain of its trademarks in the United
States and Canada and has pending U.S. applications for patents. Effective
trademark, copyright, patent, and trade secret protection may not be available
in every country in which it offers or intends to offer its products. In
addition, although the Company believes that its proprietary rights do not
infringe on the intellectual property rights of others, other parties may assert
infringement claims against the Company or claims that it has violated a patent
or infringed a copyright, trademark, or other proprietary right belonging to
them. These claims, even if not meritorious, could result in the expenditure of
significant financial and managerial resources on its part, which could
materially adversely affect the Company's business, results of operations, and
financial condition. The Company incorporates certain licensed third-party
technology in some of its services. In these license agreements, the licensors
have generally agreed to defend, indemnify, and hold the Company harmless with
respect to any claim by a third party that the licensed software infringes any
patent or other proprietary right. The Company cannot assure that these
provisions will be adequate to protect from infringement claims. The loss or
inability to obtain or maintain any of these technology licenses could result in
delays in introduction of new services.
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8. GOVERNMENT APPROVAL.
No government approval is required for any of the Company's current
products or services.
9. EFFECT OF ANY EXISTING OR PROPOSED GOVERNMENT REGULATIONS
Other than normal government regulations that any business encounters,
the Company's business is not effected by any government regulations.
10 RESEARCH AND DEVELOPMENT COSTS.
Since the Company began operations it has spent $150,000 on the
research and development of its proprietary technology. The revenues the Company
achieve will be primarily from strategic alliances and direct customer revenues.
Fees generated, while paying directly for research and technology costs accrued
to date, will fund the operations of the Company, which includes funding
on-going technological development.
11. COST AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS AND
REGULATIONS
The Company is not involved in a business which involves the use of
materials in a manufacturing stage where such materials are likely to result in
the violation of any existing environmental rules and/or regulations. Further,
the Company does not own any real property which would lead to liability as a
land owner. Therefore, the Company does not anticipate that there will be any
costs associated with the compliance of environmental laws and regulations.
12. EMPLOYEES
As of the date hereof, the Company employed 11 full-time employees. The
Company hires independent contractors on an "as needed" basis only. The Company
has no collective bargaining agreements with its employees. The Company believes
that its employee relationships are satisfactory. In the long term, the Company
will attempt to hire additional employees as needed based on its growth rate.
13. YEAR 2000
The Company has begun to address possible remedial efforts in
connection with computer software that could be affected by the Year 2000
("Y2K") problem. The Y2K problem is the result of computer programs being
written using two digits rather than four to define the applicable year. Any
programs that have time-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in a major system
failure or miscalculations. The Y2K problem can affect any modern technology
used by a business in the course of its day. Any machine that uses embedded
computer technology is susceptible to this problem, including for example,
telephone systems, postage meters and scales, and of course, computers. The
impact on a company is determined to a large extent by the company's dependence
on these technologies to perform their day to day operations.
Internally, the Company has begun reviewing all such equipment and has
determined that many of its systems are Y2K compliant. The Company anticipates
that all system and software will be fully reviewed and brought into compliance
by October 31, 1999. If certain systems are not brought up to Y2K compliance by
November 30, 1999, then the non-compliant technology will be disabled so as not
to have an impact on the systems that are compliant. Any such event, the amount
of technology that the Company uses which may have Y2K implications is minimal
and would not have a serious or material impact on the Company's day to day
operations, nor would any valuable information be lost.
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The costs of bringing the Company's technology up to Y2K compliance
is expected to be less than $5,000. This is because the majority of the
"patches" or programs designed to make software Y2K compliant can be obtained
over the Internet from manufacturers for little or no cost and the Company
does not expect to rely heavily on outside consultants to upgrade its systems
as most of the work can be performed in-house.
Externally the Y2K problem may impact other entities with which the
Company transacts business, and the Company cannot predict the impact that
the Y2K n such entities will have on the company. With regard to those
companies that the Company does business with on a daily basis, the Company
cannot guarantee that they will be vigilant about their Y2K plan of action.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
These financial projections contain figures relating to plans,
expectations, future results, performance, events or other matters that are
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended. When used in the Plan of Operations,
words such as "estimate", "project", "intend", "expect", "anticipate" and
similar expressions are intended to identify forward-looking statements. Such
forward looking statements involve numerous risks and uncertainties,
pertaining to technology, development of the Company's products, and markets
for such products, timing and level of customer orders, competitive products
and pricing, changes in economic conditions and markets for the Company's
products and other risks and uncertainties. Actual results, performance and
events are likely to differ and may differ materially and adversely.
Investors are cautioned not to place undue reliance on these forward-looking
statements which speak only as to the date of the Plan of Operations. The
Company undertakes no obligation to release or deliver to investors revisions
to these forward-looking statements to reflect events or circumstances after
the date of the Plan of Operations, the occurrence of unanticipated events or
other matters. Operational references refer to the Company's operating
subsidiary, Rompus-BC.
(a) PLAN OF OPERATIONS
The Company began operations in February 1998 for the purpose of
developing its multimedia proprietary product the i.d.rom. The Company has a
limited operating history on which to evaluate its prospects. The risks,
expense, and difficulties encountered by startup companies must be considered
when evaluating the Company's prospects. The Company's plan of operations for
the next twelve months is to further develop its products while seeking
strategic alliances with media and Internet related companies in order to
demonstrate its technology to companies and consumers. The Company believes
that its existing funds in combination with funds raised in private offerings
and the revenues generated by its operations will be sufficient to fund its
operations for the next twelve months. However, there is no guarantee that
the Company will be able raise sufficient capital. Additionally, the
Company's estimates of the costs to advertise and market its product might be
low. The operating expenses of the Company cannot be predicted with
certainty. They will depend on several factors, including the amount of
marketing expenses, the acceptance of the Company's products in the market,
and competition for such product. Management may be able to control the
timing of development expenses in part by speeding up or slowing down
marketing development and distribution activities
A significant portion of the money recently raised in private
placements of the Company's securities will be used to launch the product
through a variety of sales channels as well as to create a provocative
advertising and public relations campaign. In the first year, $3.3 million
has been allocated to penetrate the market quickly and to capitalize on this
limited window of opportunity.
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The Company's plan of operations for the next twelve months consist
of the following key figures:
- Revenues totaling $13,782,000
- Costs of Sales $6,375,000
- Sales Commissions $1,497,000
- Wages and Salaries $1,954,000
- Promotion and Advertising $825,000
- Research and Development Costs $340,000
- Office and General $300,000
(b) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is management's discussion and analysis of the
Company's financial condition and results of operations. Detailed information
is contained in the financials included with this document. This section
contains forward-looking statements that involve risks and uncertainties,
such as statements of the Company's plans, objectives, expectations and
intentions. The cautionary statements made in this document should be read as
being applicable to all related forward-looking statements wherever they
appear in this document.
The following table sets forth, for the periods indicated, selected
financial information for the Company:
ROMPUS INNOVATIVE CORPORATION
AND ROMPUS CD-ROM PRODUCTIONS, INC.
CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Rompus Rompus BC Adjustments Pro Forma
For the For the five
nine months months ended
ended May 31, 1999
May 31, 1999
---------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues $ 42,021 $115,159 $ -- $ 157,180
Cost of Sales 38,462 61,299 99,761
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Gross Profit 3,559 53,680 57,419
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Selling, general and administrative:
Sales and marketing 15,448 -- 15,448
General and administrative 64,626 116,259 180,885
Current Research & development 9,003 -- 9,003
Amortization of Goodwill 3,464 3,464
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89,077 116,259 205,336
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Net income (loss) for the period $(85,518) $(62,399) $(147,917
---------------------------------------------------------------
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</TABLE>
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<TABLE>
<CAPTION>
Rompus Rompus BC Adjustments Pro Forma
For the For the year
year ended ended
August 31, 1998 August 31, 1998
------------------------------------------------------------------
(Audited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues $123,561 $291,159 $ -- $414,720
Cost of Sales 19,634 161,117 180,751
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Gross Profit 103,927 130,042 233,969
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Selling, general and administrative:
Sales and marketing 33,714 -- 33,714
General and administrative 43,941 158,201 202,142
Current Research & development 21,333 -- 21,333
Amortization of Goodwill 4,618 4,618
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98,988 158,201 (23,220)
------------------------------------------------------------------
Net income (loss) for the period $ 4,939 $(28,159) $(23,220)
------------------------------------------------------------------
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</TABLE>
BALANCE SHEET
<TABLE>
<CAPTION>
Historical (May 31, 1999)
As of
Rompus Interactive Rompus BC 7/30/99 Combined
-----------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Assets
Current Assets:
Cash $ 354 $ 142,665 $ -- $ 143,009
Accounts Receivable 896 -- 896
Refundable investment 27,770 -- 27,780
tax credits
Loans to shareholders -- 315 315
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Total Current Assets 29,030 142,970 172,000
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Investment in subsidiary -- 135,000 135,000
Goodwill
Less accumulated amortization
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135,000
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Property and equipment, at cost 12,429 446,560 458,989
Less accumulated depreciation (3,214) (205,489) (208,703)
-----------------------------------------------------------------------
9,215 241,071 250,286
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Total Assets $ 38,245 $ 384,041 $135,000 $ 557,287
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Liabilities and Stockholder's Equity
Current Liabilities:
Accounts Payable $ 15,509 $ 10,694 $ -- $ 26,203
Due to related parties 286,160 -- 258,160
Notes payable 76,742 76,742
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Total Current Liabilities 273,669 87,436 361,105
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Notes payable, less 207,785 207,785
current portion
Stockholder's Equity
Preferred Stock 900 900 900
Common Stock 100 2,502 450 3,052
Additional Paid in Capital 578,417 133,650 712,067
Accumulated deficit (235,524) (492,099) (727,623)
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Total Stockholders Equity (235,524) 88,820 (11,604)
-----------------------------------------------------------------------
Total liabilities and $ 38,245 $ 384,041 $135,000 $ 557,286
Stockholders Equity -----------------------------------------------------------------------
-----------------------------------------------------------------------
</TABLE>
BALANCE SHEET
Pro Forma
<TABLE>
<CAPTION>
Elimination Consolidated
----------- ------------
(Unaudited) (Unaudited)
<S> <C> <C>
Assets
Current Assets:
Cash $ -- $ 143,009
Accounts Receivable 896
Refundable investment 27,780
tax credits
Loans to shareholders
315
------------------------------
Total Current Assets 172,000
------------------------------
Investment in subsidiary (88,820) 46,180
Goodwill
Less accumulated amortization (8,082) (8,082)
------------------------------
38,098
------------------------------
Property and equipment, at cost 458,989
Less accumulated depreciation (208,703)
------------------------------
250,286
------------------------------
Total Assets $ (96,902) $ 460,384
------------------------------
------------------------------
10
<PAGE>
Liabilities and Stockholder's Equity
Current Liabilities:
Accounts Payable $ -- $ 26,203
Due to related parties 258,160
Notes payable 76,742
------------------------------
Total Current Liabilities 361,105
------------------------------
Notes payable, less 207,785
current portion
Stockholder's Equity
Preferred Stock 900
Common Stock (2,502) 550
Additional Paid in Capital (578,417) 133,650
Accumulated deficit 484,017 (243,606)
------------------------------
Total Stockholders Equity (108,506)
------------------------------
Total liabilities and $ (96,902) $ 460,384
------------------------------
------------------------------
Stockholders Equity
</TABLE>
ITEM 3. DESCRIPTION OF PROPERTY
The main office of the Company is located at 225 Richmond Street
West, Suite 302A, Toronto, Ontario, Canada M5V 1W2. The Company leases 1,000
square feet at this location on a month to month basis for $1,500 per month.
The current lease is an oral lease, however, the Company is under
negotiations to acquire more permanent quarters having about 6,000 square
feet.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding
beneficial ownership of the Company's Common Stock, as of August 3, 1999 by
(i) each stockholder known by the Company to be the beneficial owner of more
than five percent of the outstanding Common Stock, (ii) each director of the
Company, (iii) each executive officer of the Company, and (iv) all directors
and executive officers as a group. Unless otherwise indicated, the address
for each stockholder is 225 Richmond Street West, Suite 302A, Toronto,
Ontario, Canada M5V 1W2.
11
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
NAME NUMBER OF SHARES(1) BENEFICIALLY OWNED
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Yoshiro Higuchi(2) 0 0
Jennie Popham(2) 0 0
Jeff Popham(2,3) 0 0
Cascadian Pacific Holdings Ltd.(2) 0 0
Tracy O'Hara(2) 0 0
Phil Butterfield(2) 0 0
Shawn Smith(2,3) 0 0
Capstral Limited(2) 0 0
Mansfield Communications(2,3) 0 0
Granitebridge(2) 0 0
Striker Capital Ltd. 600,000 7.9%
Rosehill Capital Holdings Ltd. 500,000 6.6%
Hugh Mansfield(4) 0 0
Martin Tiernay 0 0
All officers and directors 0 0
as a group (5 persons) 0 0
</TABLE>
- ---------------------------------------------------------------------------
(1) Except as otherwise indicated, the Company believes that the beneficial
owners of Common Stock listed above, based on information furnished by such
owners, have sole investment and voting power with respect to such shares,
subject to community property laws where applicable. Beneficial ownership is
determined in accordance with the rules of the Securities and Exchange
Commission and generally includes voting or investment power with respect to
securities. Shares of Common Stock subject to options or warrants currently
exercisable, or exercisable within 60 days, are deemed outstanding for
purposes of computing the percentage of the person holding such options or
warrants, but are not deemed outstanding for purposes of computing the
percentage of any other person.
(2) The following shareholders have been issued exchangeable shares of
Rompus-BC. These exchangeable shares may be exchanged for common stock of the
Company on a one for one basis at the discretion of the shareholder. These
shareholders also hold an equal number of voting preferred stock of the
Company. Upon the issuance of the common stock in exchange for the
exchangeable share, the Company may cancel the preferred stock held by the
shareholder. The shareholders, and the amount of exchangeable
shares/preferred shares held by these shareholders are: Yoshiro Higuchi,
1,350,000 shares, representing a fully diluted percentage ("fully diluted")
of 8.13%; Jennie Popham and Jeff Popham, and Cascadian Pacific Holdings Ltd.,
3,027,500, fully diluted 18.84; Tracy O'Hara, 540,000, fully diluted 3.25%;
Phil Butterfield, individually and as trustee for Harry Butterfield and
Oonagh Butterfield, 1,822,500; fully diluted 10.98%; Shawn Smith, 450,000,
fully diluted 2.71%; Capstral Limited, 500,000, fully diluted 3.02%;
Mansfield Communications, 850,000, fully diluted 5.12%; Granitebridge,
450,000, fully diluted 2.71%.
(3) Hugh Mansfield, Jeff Popham, Martin Tiernay and Shawn Smith are
directors of the Company. Of these individuals, Mr. Mansfield holds 850,000
exchangeable shares as the beneficial owner of Mansfield Communications as
referred to in note 2; Mr. Popham owns 1,102,500 and beneficially owns with
Jennie Popham a total of 2,115,000 exchangeable shares; and, Mr. Smith owns
450,000 exchangeable shares. Officers of the Company consist of Mr. Smith as
Chief Executive Officer, John Drewry as Chief Financial Officer and
Secretary. Officers and directors collectively own a total of 3,415,000
exchangeable shares and an equal number of voting preferred stock consisting
of 20.57% of the stock on a fully diluted basis.
(4) Mr. Mansfield does not hold stock individually but has beneficial
ownership of 850,000 through his ownership of Mansfield Communications.
12
<PAGE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE OFFICE
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Hugh Mansfield 37 Chairman of the Board
Shawn Smith 34 Chief Executive Officer, Director
John Drewry 61 Chief Financial Officer
Jeff Popham 33 Director
Martin Tiernay 38 Director
</TABLE>
MR. HUGH MANSFIELD - CHAIRMAN OF THE BOARD. Mr. Mansfield joined the Company
as a director in August, 1999. Mr. Mansfield is the owner of Mansfield
Communications a public relations agency he formed in 1994. Mr. Mansfield
specializes in creating media awareness for corporations throughout North
America. Mr. Mansfield received his Political Science degree from York
University in 1987.
MR. SHAWN SMITH - CHIEF EXECUTIVE OFFICER AND DIRECTOR. Mr. Smith joined the
Company as a Director in August, 1999 and was appointed Chief Executive
Officer in July, 1999. Mr. Smith has over ten years senior executive
experience in the natraceutical business. From September 1998 to June 1,
1999, Mr. Smith served as Vice President of Muscletech Research and
Development. From April 1, 1997 to September 1998, Mr. Smith was Vice
President and General Manager of Natraceuticals, Inc. From January, 1994 to
April 1997, Mr. Smith was Vice President and General Manger of Visex Inc. He
received his degree in economics from York University in 1987 and completed
his Canadian Securities Course in 1988.
MR. JOHN DREWRY, CHIEF FINANCIAL OFFICER. Mr. Drewry joined Rompus-BC in
July, 1999. Prior to joining the Company, From 1990 to 1999, Mr. Drewry
served as President of OTEC Software Corporation, which provides executive
services to the technology industry. From 1987 to 1990, Mr. Drewry was
President of Thoroughbred Canada, a U.S. software developer and from 1983 to
1987 was Partner in Charge of Computer Strategies for an international
accounting firm. Mr. Drewry is a Fellow of the Institute of Chartered
Accountants of Ontario and a Certified Management Consultant.
MR. JEFF POPHAM, DIRECTOR. Mr. Popham joined Rompus-BC in October, 1995
becoming a Director of Rompus in August, 1999. Prior to joining Rompus,
Mr. Popham worked in real estate development and financing with Pardigm
Properties from 1991 to September, 1995. Mr. Popham received his Bachelors of
Science degree in Economics from the University of Victoria in 1988.
MR. MARTIN TIERNAY, DIRECTOR. Mr. Tiernay joined Rompus-BC as a director in
1999 becoming a Director of Rompus in August, 1999. Mr. Tiernay is currently
the director of global sponsorship for Teleglobe Canada. Mr. Tiernay has held
this position from July, 1999 to the present. Mr. Tiernay worked in the
marketing department of British American Tobacco ("BAT") from August 1996 to
June 1999. Prior to BAT, Mr. Tiernay worked with Imperial Tobacco in
Montreal, from 1986 to 1996. Mr. Tiernay received his Bachelor of Business
degree from the University of Ryerson University of 1995.
13
<PAGE>
ITEM 6. EXECUTIVE COMPENSATION.
The Company currently has no operations but is the parent of the
operations company, Rompus-BC. Rompus-BC's operations began in February,
1998. Accordingly, no salary or other benefits have been awarded to any
executive officer of director of the Company to date with the exception of
Jeff Popham who received $43,750 as a salary in 1999. No other salary or
benefits, including long term compensation has been awarded to any of the
executive officers or directors of the Company or Rompus-BC.
The Company did not grant any stock options in the last fiscal year.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On March 15, 1999, Rompus-BC entered into an agreement with
Mansfield Communications wherein, Mansfield will provide public relations for
the Company to the financial and investment communities. This agreement
requires Rompus to pay approximately $200,000 to Mansfield in exchange for
these services. Mr. Mansfield is the Chief Executive Officer of Mansfield
Communications and is the majority shareholder of Mansfield Communications.
In all matters regarding an agreements between the companies, Mr. Mansfield
has provided a full and complete disclosure of the various advantages and
disadvantages of the transactions and has disclosed his relationship to the
board of directors of Rompus. All prior agreements were approved by a
disinterested majority of the board of directors of Rompus. It is
Mr. Mansfield's intention and that of the Board of Directors that all future
agreements between Mansfield Communications and Rompus will continue to be
the result of arms length negotiations and will be approved by a
disinterested majority of both boards of directors.
On May 26, 1999, Rompus entered into an agreement with Dominick &
Dominick Securities, Inc. ("Dominick") wherein Dominick agreed to provide
financial advisory services to the Company. As compensation for these
services, the Company has agreed to provide Stephen Sharpe, Vice-Chairman of
Dominick with options to purchase 200,000 shares of common stock of the
Company at $.80 per share exercisable from August 12, 1999 to August 12, 2002.
ITEM 8. DESCRIPTION OF REGISTRANT'S SECURITIES.
COMMON STOCK
The Company's Articles of Incorporation authorize the issuance of
80,000,000 shares of Common Stock, with a par value of $.0001 per share, of
which 7,601,573 shares are currently outstanding.
Holders of shares of common stock are entitled to one vote for each
share on all matters to be voted on by the stockholders. Holders of common
stock have no cumulative voting rights. Accordingly, the holders of in excess
of 50% of the aggregate number of shares of Common Stock outstanding will be
able to elect all of the directors of the Company and to approve or
disapprove any other matter submitted to a vote of all shareholders.
Holders of shares of common stock are entitled to share ratably in
dividends, if any, as may be declared, from time to time, by the Board of
Directors in its discretion, from funds legally available therefor. The
Company does not currently anticipate paying any dividends on its Common
Stock. In the event of a liquidation, dissolution or winding up of the
Company, the holders of shares of common stock are entitled to share pro rata
all assets remaining after payment in full of all liabilities. Holders of
common stock have no preemptive rights to purchase the Company's common
stock. There are no conversion rights
14
<PAGE>
or redemption or sinking fund provisions with respect to the common stock.
All of the outstanding shares of common stock are fully paid and
non-assessable.
Shares of Common Stock are registered at the transfer agent and are
transferable at such office by the registered holder (or duly authorized
attorney) upon surrender of the Common Stock certificate, properly endorsed.
No transfer shall be registered unless the Company is satisfied that such
transfer will not result in a violation of any applicable federal or state
securities laws.
15
<PAGE>
PREFERRED STOCK
The Articles of Incorporation of the Company authorize the issuance
of 20,000,000 shares of $.0001 par valued preferred stock. On July 28, 1999
the Board of Directors authorized the issuance of a class of 9,000,000 shares
of Series A Special Voting Preferred Shares $.0001 par value of which
9,000,000 shares are issued and outstanding.
The holders of Series A Preferred Shares are not entitled to receive
any portion of any dividend or distribution at any time. The holders do have
the following voting rights:
(i) The Series A Preferred Shares shall entitle the holders
thereof to one vote for each Series A Preferred held by such holder. (Such
number being equal to the number of Exchangeable Shares of Rompus-BC
outstanding as of the date thereof).
(ii) Except as otherwise provided by law, the holder of the Series A
Preferred Shares and the holders of Common Stock shall vote as one class on all
matters submitted to a vote of shareholders of Corporation.
(iii) The holders of the Series A Preferred Share shall have no
special voting rights, and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Shares as set forth
herein) for taking any corporate action.
(iv) At such time as the Series A Preferred Shares entitle their
holder to a number of votes equal to zero because there are not Exchangeable
Shares of Rompus-BC outstanding which are not owned by the Company nor any of
its direct or indirect subsidiaries, and there are no shares of stock, debt,
option or other obligation or commitment of Rompus-BC which could by its
terms require Rompus-BC to issue any Exchangeable Shares to any person other
than the Rompus or any of its direct or indirect subsidiaries, then the
Series A Preferred Shares shall thereupon be retired and canceled promptly
thereafter. Such share shall upon its cancellation, and upon the taking, of
any such action required by applicable law, become an authorized but unissued
preferred share and may be reissued as part of a new series of preferred
shares to be crated by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth herein.
Upon any liquidation, dissolution, or winding up of the Corporation,
the holders of the Series A Preferred Shares shall not be entitled to any
portion of any distribution. The Series A Preferred Shares shall not be
redeemable to convertible.
The Company's transfer agent is Pacific Stock Transfer, 5844 South Pecos
Road, Suite D, Las Vegas, Nevada 89120.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANTS' COMMON EQUITY AND
OTHER STOCKHOLDERS MATTERS
A. MARKET INFORMATION
The Company's common stock trades in the over-the-counter bulletin board
market since April, 1999 as ONLH. The Company is currently in the process of
changing its symbol to ROMP.
16
<PAGE>
The following table sets forth the high and low bid prices for the
Company's common stock since its inception. The prices below also reflect
inter-dealer quotations, without retail mark-up, mark-down or commissions and
may not represent actual transactions:
<TABLE>
<CAPTION>
High Low High
Quarter ended Ask Bid Bid
-----------------------------------------------------------------
<S> <C> <C> <C>
3/31/97 2.50 2.25 2.25
6/30/97 3.63 3.13 3.75
9/30/97 3.88 3.50 3.69
12/31/97 3.13 2.75 2.94
3/31/98 .50 .56 .56
6/30/98 .25 .06 .16
9/30/98 .38 .06 .22
12/31/98 .05 .02 .03
3/31/99 .08 .03 .06
6/30/99 .75 .75 .75
</TABLE>
As of August 10, 1999 the bid price of the Company's common shares was
$.75 per share.
B. HOLDERS
As of July 31, 1999, there were approximately 1,026 holders of Company
Common Stock, as reported by the Company's transfer agent.
C. DIVIDENDS
The Company has not paid any dividends on its Common Stock. The Company
currently intends to retain any earnings for use in its business, and
therefore does not anticipate paying cash dividends in the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS
The Company is not subject to any legal proceedings or claims.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Not applicable.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
In March, 1999, the Company offered a total of 7,000,000 shares of its
common stock at $.01 per share to accredited non-U.S. residents only. This
offering was made in reliance on the exemption available from registration
provided by Rule 504 of Regulation D of the Securities Act of 1933. The
Company raised a total of $70,000 in this offering.
In June 1999, Rompus-BC offered common stock of its Company at the price
of $.05 per share to non-U.S. Residents only. Rompus-BC sold 2,000,000 shares
of its stock to seven shareholders raising a total of $100,000. In July 1999,
Rompus-BC offered common stock of its Company at the price of $.80 per share
to non-U.S. Residents only. Rompus-BC sold a total 2,500,000 shares of common
stock to ten accredited non-U.S. resident shareholders raising a total of
$2,000,000. The shares offered in these offering were
17
<PAGE>
exchanged for restricted common stock of Rompus pursuant to the exchange
agreement by and between the Company and the Rompus-BC shareholders.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Florida Statutes and the Company's Articles of Incorporation and
Bylaws authorize indemnification of a director, officer, employee or agent of
the Company against expenses incurred by him or her in connection with any
action, suit, or proceeding to which such person is named a party by reason
of having acted or served in such capacity, except for liabilities arising
from such person's own misconduct or negligence in performance of duty. In
addition, even a director, officer, employee or agent of the Company who was
found liable for misconduct or negligence in the performance of duty may
obtain such indemnification if, in view of all the circumstances in the case,
a court of competent jurisdiction determines such person is fairly and
reasonably entitled to indemnification. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers, or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that in the opinion of the
Commission, such indemnification is against public policy as expressed in the
Act and is therefore unenforceable.
18
<PAGE>
PART F/S
FINANCIAL STATEMENTS
The following financial statements are included herein:
Audited Financial Statements for the Company for the years ending December 31
1997 and 1998 and Unaudited Interim Statements for the Company for the most
recent interim periods for 1999 and 1998.
Audited Financial Statements for Rompus-BC for the years ending August 31,
1997 and 1998, and Unaudited Interim Statements for Rompus-BC for the most
recent interim periods for 1999 and 1998.
Consolidated Pro Forma Financial Statements as of August 31, 1998 and May 31,
1999.
PART III
ITEM 1 AND
ITEM 2. INDEX TO EXHIBITS AND DESCRIPTION OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DOCUMENT DESCRIPTION
- ----------------------------------
<S> <C>
2.1 Exchange Agreement by and between OnLine Hearing and Rompus-BC Effective
July 30, 1999
3.1 Articles of Incorporation, dated April 6, 1991
3.2 Amendment to Articles of Incorporation, dated August 25, 1995
3.3 Amendment of Articles of Incorporation, dated October 19, 1995
3.4 Amendment of Articles of Incorporation, dated January 3, 1997
3.5 Amendment of Articles of Incorporation, dated April 5, 1999
3.6 Amendment of Articles of Incorporation, dated July 28, 1999
3.7 Amendment of Articles of Incorporation, dated July 28, 1999
3.8 Bylaws, dated August 25, 1995
4.1 Specimen of Common Stock Certificate
4.2 Specimen of Series A Preferred Stock Certificate
</TABLE>
19
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized.
ROMPUS INTERACTIVE CORPORATION
By: /s/ Shawn Smith
-------------------------
Shawn Smith
Its: President
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Shawn Smith Chief Executive Officer August 11, 1999
- ------------------------------
Shawn Smith
/s/ Hugh Mansfield Chairman of the Board August 11, 1999
- ------------------------------
Hugh Mansfield
/s/ John Drewry Chief Financial Officer August 11, 1999
- ------------------------------
John Drewry
/s/ Jeff Popham Director August 11, 1999
- ------------------------------
Jeff Popham
/s/ Martin Tiernay Director August 11, 1999
- ------------------------------
Martin Tiernay
</TABLE>
20
<PAGE>
ROMPUS CD-ROM PRODUCTION LTD.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED AUGUST 31, 1998
<PAGE>
ROMPUS CD-ROM PRODUCTION LTD.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED AUGUST 31, 1998
<TABLE>
<CAPTION>
CONTENTS
- ------------------------------------------------------------------------------
<S> <C>
AUDITOR'S REPORT 2
FINANCIAL STATEMENTS
Balance Sheet 3
Statement of Operations and Deficit 4
Statement of Changes in Financial Position 5
Summary of Significant Accounting Policies 6
Notes to Financial Statements 7
Schedule 1 - Sales and Marketing 10
Schedule 2 - General and Administrative 10
Schedule 3 - Current Research and Development 10
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
AUDITORS' REPORT
- -------------------------------------------------------------------------------
TO THE SHAREHOLDERS OF
ROMPUS CD-ROM PRODUCTION LTD.
We have audited the balance sheet of Rompus CD-ROM Production Ltd. as at
August 31, 1998 and the statements of operations and deficit and changes in
financial position for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to
obtain reasonable assurance 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.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at August 31, 1998 and the
results of its operations and the changes in its financial position for the
year then ended in accordance with generally accepted accounting principles.
Chartered Accountants
Victoria, BC
July 6, 1999
2
<PAGE>
- -------------------------------------------------------------------------------
ROMPUS CD-ROM PRODUCTION LTD.
BALANCE SHEET
<TABLE>
<CAPTION>
AUGUST 31
(Comparative figures compiled on a Notice to Reader basis) 1998 1997
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT
Cash $ 45,896 $ 1,446
Accounts receivable 7,286 3,823
Refundable investment tax credits (Note 1) 37,847 42,529
-------------------------
91,029 47,798
CAPITAL ASSETS (Note 2) 12,001 11,671
-------------------------
$ 103,030 $ 59,469
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT
Accounts payable and accrued liabilities $ 10,518 $ 21,833
DUE TO RELATED PARTIES (Note 3) 242,418 192,481
-------------------------
252,936 214,314
-------------------------
SHAREHOLDERS' EQUITY
Share capital (Note 4) 100 100
Deficit (150,006) (154,945)
-------------------------
(149,906) (154,845)
-------------------------
$ 103,030 $ 59,469
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
On behalf of the Board:
______________________________ Director
______________________________ Director
The accompanying summary of significant accounting policies and notes are an
integral part of these financial statements.
3
<PAGE>
- --------------------------------------------------------------------------------
ROMPUS CD-ROM PRODUCTION LTD.
STATEMENT OF OPERATIONS AND DEFICIT
<TABLE>
<CAPTION>
FOR THE YEAR ENDED AUGUST 31
(Comparative figures compiled on a Notice to Reader Basis) 1998 1997
- -----------------------------------------------------------------------------------
<S> <C> <C>
SALES $ 123,561 $ 498
COST OF SALES 19,634 150
------------------------
GROSS PROFIT 103,927 348
------------------------
EXPENSES
Sales and marketing (Schedule 1) 33,714 53,654
General and administrative (Schedule 2) 43,941 22,608
Current research and developement (Schedule 3) 21,333 20,094
------------------------
98,988 96,356
------------------------
NET INCOME (LOSS) FOR THE YEAR 4,939 (93,008)
DEFICIT, beginning of year (154,945) (58,937)
------------------------
DEFICIT, end of year $ (150,006) $ (154,945)
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
</TABLE>
The accompanying summary of significant accounting policies and notes are an
integral part of these financial statements.
4
<PAGE>
- --------------------------------------------------------------------------------
ROMPUS CD-ROM PRODUCTION LTD.
STATEMENT OF CHANGES IN FINANCIAL POSITION
<TABLE>
<CAPTION>
FOR THE YEAR ENDED AUGUST 31 1998 1997
- ------------------------------------------------------------------------------------
<S> <C> <C>
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net income (loss) for year $ 4,939 $ (93,008)
Item not involving cash
Amortization 5,078 4,863
----------------------------
10,017 (91,145)
Changes in non-cash working capital balances
Accounts receivable (3,463) 11,125
Refundable investment tax credits 4,682 (18,695)
Accounts payable and accrued liablilities (11,315) 1,061
----------------------------
(79) (97,654)
----------------------------
INVESTING ACTIVITIES
Purchase of capital assets (5,408) (1,120)
----------------------------
FINANCING ACTIVITIES
Advances by related parties 49,937 97,154
----------------------------
INCREASE (DECREASE) IN CASH DURING THE YEAR 44,450 (1,620)
CASH, beginning of year 1,446 3,066
----------------------------
CASH, end of year $ 45,896 $ 1,446
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
</TABLE>
The accompanying summary of significant accounting policies and notes are an
integral part of these financial statements.
5
<PAGE>
- --------------------------------------------------------------------------------
ROMPUS CD-ROM PRODUCTION LTD.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
AUGUST 31, 1998
- --------------------------------------------------------------------------------
NATURE OF BUSINESS The Company is incorporated under the laws of the
Province of B.C. and is engaged in the business of
selling "Net-connected" CD-ROMS as well as the
scientific research and experimental development
(SR & ED) efforts to create and improve such
products.
CONTINUING OPERATIONS These financial statements have been prepared on a
basis which assumes the realization of assets and
the settlement of liabilities in the normal course
of business. During the year ended August 31,
1998, the Company earned income of $4,939.
However, the Company incurred losses of $96,008
and $59,810 for the fiscal years ending August 31,
1997 and 1996 respectively. The ability of the
Company to continue its planned course of action
and to recover its investment in capital and other
assets is dependent upon generating future
profitable operations.
CAPITAL ASSETS Amortization of capital assets is determined at
rates which will reduce the original cost to
estimated residual value over the useful life of
the assets. The annual rates are as follows:
Office equipment -20% diminishing balance basis
Computer hardware -30% diminishing balance basis
Computer software -100% diminishing balance basis
One-half of the annual rate is used in the year of
acquisition.
SCIENTIFIC RESEARCH
AND EXPERIMENTAL
DEVELOPMENT Scientific research and experimental development
costs are charged as an expense of the period in
which they are incurred except when the
development project meets certain defined criteria
for deferment. At that time such development
costs from that point forward are deferred to the
extent that their recovery can be reasonably
assured. Amortization of such deferred development
costs commences with the commercial production or
use of the product or processes by reference to the
sale or use of the product or process. Costs are
offset by government and non-government direct
funding. Refundable investment tax credits,
calculated on SR&ED expenditures, are based on
the Company being a Canada ian controlled private
corporation, ('CCPC'). Such credits are offset
against the expenditures.
MEASUREMENT UNCERTAINTY The preparation of financial statements in
conformity with generally accepted accounting
principals requires management to make estimates
and assumptions that affect the reported amounts
of assets, including accounts receivables,
refundable investment tax credits, liabilities and
the reported amount of revenue and expenses during
the year. Actual results could differ from the
estimates used in the preparation of the financial
statements.
6
<PAGE>
- --------------------------------------------------------------------------------
ROMPUS CD-ROM PRODUCTION LTD.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1998
- --------------------------------------------------------------------------------
1. REFUNDABLE INVESTMENT TAX CREDITS
The Company has estimated an entitlement of refundable investment tax
credits as a result of incurring eligible scientific research and
experimental development expenditures (SR & ED). The credit is
calculated at a rate of 35% of the total of such expenditures. For the
year ended August 31, 1998, the refundable investment tax credit is
estimated at $19,152 (1997 - $18,695). To the extent Revenue Canada
Taxation assesses the eligibility of such scientific expenditures
differently than as filed by the Company, the amount which is not
recoverable by way of refundable investment tax credits will be charged
against income when such a determination is made.
- --------------------------------------------------------------------------------
2. CAPITAL ASSETS
<TABLE>
<CAPTION>
1998 1997
-------------------------------------------------------
ACCUMULATED NET BOOK Net Book
COST AMORTIZATION VALUE Value
-------------------------------------------------------
<S> <C> <C> <C> <C>
Office equipment $ 1,827 $ 741 $ 1,086 $ 669
Computer hardware 22,556 12,653 9,903 10,780
Computer software 2,467 1,455 1,012 222
-------------------------------------------------------
$ 26,850 $ 14,849 $ 12,001 $ 11,671
-------------------------------------------------------
-------------------------------------------------------
</TABLE>
Amortization claimed during the year amounts to $5,078 (1997 - $4,863).
- --------------------------------------------------------------------------------
3. DUE TO RELATED PARTIES
<TABLE>
<CAPTION>
1998 1997
------------------------------
<S> <C> <C>
Philip Butterfield (shareholder) $ 3,100 $ 558
Jeff Popham (director) 1,994 842
Cascadian Pacific Holding Ltd. (shareholder) 237,324 191,081
------------------------------
$ 242,418 $ 192,481
------------------------------
------------------------------
</TABLE>
Jeff Popham, a director of the Company owns 100% of Cascadian Pacific
Holdings Ltd. Such advances are unsecured, have no fixed terms of
repayment, and have not attracted interest.
- --------------------------------------------------------------------------------
4. SHARE CAPITAL
Authorized
10,000 Class A common shares without par value
10,000 Class B common shares without par value
10,000 Class C non-voting common shares without par value
5,000,000 12% non-cumulative, non-voting redeemable preferred shares
with a par value of $1.00 each.
<TABLE>
<CAPTION>
1998 1997
--------------------------------
<S> <C> <C>
Issued
100 Class A Common shares $ 100 $ 100
--------------------------------
--------------------------------
</TABLE>
7
<PAGE>
- -------------------------------------------------------------------------------
ROMPUS CD-ROM PRODUCTION LTD.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1998
- -------------------------------------------------------------------------------
5. UNCERTAINTY DUE TO YEAR 2000 ISSUE
The Year 2000 issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems may
recognize the year 2000 as 1900 or some other date, resulting in errors
when information using year 2000 dates is processed. In addition,
similar problems may arise in some systems which use certain dates in
1999 to represent something other than a date. The effects of the Year
2000 issue may be experienced before, on, or after January 1, 2000, and,
if not addressed, the impact on operations and financial reporting may
range from minor errors to significant systems failure which could
affect an entity's ability to conduct normal business operations. It is
not possible to be certain that all aspects of the Year 2000 issue
affecting the entity, including those related to the efforts of the
customers, suppliers, or other third parties, will be fully resolved.
- -------------------------------------------------------------------------------
6. SUBSEQUENT EVENTS
Since the year end, the Company has focussed on its newly developed
"ID-ROM" which is a form of a business card. It is a CD-ROM cut in the
shape of a conventional business card. The "ID-ROM" has received
extensive interest from various sources, both domestically and abroad. As
a result, the Company has opened a sales office in Toronto and has
entered into various distributor and financing agreements.
The Company is in the process of raising venture capital to support the
"ID-ROM" initiative. The Company is in the process of filing patent and
trademark applications in Canada, the U.S.A.., and Japan for its "ID-ROM".
The authorized share capital was changed March 26, 1999 when the Class A
Common shares were renamed and increased from 10,000 to 100,000,000
Common shares. The Class B and C Common shares were cancelled as were
all the preferred shares. On March 26, 1999, the 100 Class A Common
share certificates were cancelled and 100 new Common shares issued.
In addition, the Company has entered into an exclusive manufacturing
agreement with Cinram International of Scarborough, Ontario to
manufacture and replicate its "ID-ROMS".
- -------------------------------------------------------------------------------
7. INCOME TAXES
The Company has, for income tax purposes, non-capital losses
of $72,953 and deferred research and development expenditures
of $71,064 which can be carried forward to reduce taxable
income and income taxes in future. the future possible
benefits of these losses and deductions have not been recorded
in the accounts of the Company due to the uncertainty of such
benefits of being realized. Non-capital losses expire as
follows:
<TABLE>
<CAPTION>
Amount Expires
-------- -------
<S> <C> <C>
1996 $ 2,316 2003
1997 70,637 2004
--------
$ 72,953
--------
--------
</TABLE>
- -------------------------------------------------------------------------------
8. COMPARATIVE FIGURES
The comparative figures were compiled on a Notice to Reader basis. As
such, we have not audited, reviewed, or otherwise attempted to verify
the accuracy or completeness of such information. Readers are cautioned
that these comparative figures may not be appropriate for their purpose.
8
<PAGE>
- -------------------------------------------------------------------------------
ROMPUS CD-ROM PRODUCTION LTD.
SCHEDULE 1 - SALES AND MARKETING
<TABLE>
<CAPTION>
FOR THE YEAR ENDED AUGUST 31
(Comparative figures compiled on a Notice to Reader basis) 1998 1997
- -------------------------------------------------------------------------------
<S> <C> <C>
Advertising $ 431 $ 565
Dues and fees - 924
Entertainment 488 828
Equipment rental (recovery) (1,439) 7,833
Mailing and materials 274 50
Printing and pre-production 4,467 10,310
Promotional design 1,181 1,693
Subcontractor fees 27,454 29,750
Trade shows 48 7
Travel 810 1,694
------- -------
$33,714 $53,654
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
ROMPUS CD-ROM PRODUCTION LTD.
SCHEDULE 2 - GENERAL AND ADMINISTRATIVE
<TABLE>
<CAPTION>
FOR THE YEAR ENDED AUGUST 31 1998 1997
- ------------------------------------------------------------------------------
<S> <C> <C>
Accounting and legal $ 8,583 $ 3,652
Administrative salary 14,614 -
Amortization 5,078 4,863
Automotive 2,229 4,094
Bad debts - 240
Bank charges and interest 2,245 2,449
Office supplies 7,080 3,980
Postage and courier 368 293
Rent 521 1,330
Telephone and fax 2,903 1,190
Utilities 320 517
------- -------
$43,941 $22,608
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
ROMPUS CD-ROM PRODUCTION LTD.
SCHEDULE 3 - CURRENT RESEARCH AND DEVELOPMENT
<TABLE>
<CAPTION>
FOR THE YEAR ENDED AUGUST 31 1998 1997
- ------------------------------------------------------------------------------
<S> <C> <C>
Salary $29,200 $30,000
Subcontractor fees 11,285 8,789
------- -------
40,485 38,789
Less: Investment tax credit recoveries
on current expenditures 19,152 18,695
------- -------
$21,333 $20,094
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
ROMPUS CD-ROM PRODUCTION LTD.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED MAY 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
CONTENTS
- -----------------------------------------------------------------
<S> <C>
REVIEW ENGAGEMENT REPORT 2
FINANCIAL STATEMENTS
Balance Sheet 3
Statement of Operations and Deficit 4
Statement of Changes of Financial Position 5
Summary of Significant Accounting Policies 6
Notes to Financial Statements 7
Schedule 1 - Sales and Marketing 10
Schedule 2 - General and Administrative 10
Schedule 3 - Current Research and Development 10
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
REVIEW ENGAGEMENT REPORT
- -------------------------------------------------------------------------------
TO THE SHAREHOLDERS OF
ROMPUS CD-ROM PRODUCTION LTD.
We have reviewed the balance sheet of Rompus CD-ROM Production Ltd. as at
May 31, 1999 and the statements of operations and deficit and changes in
financial position for the year then ended. Our review was made in accordance
with generally accepted standards for review engagements and accordingly
consisted primarily of enquiry, analytical procedures and discussion related
to information supplied to us by the company.
A review does not constitute an audit and consequently we do not express an
audit opinion on these financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that these financial statements are not, in all material respects, in
accordance with generally accepted accounting principles.
Chartered Accountants
Victoria, B.C.
August 9, 1999
2
<PAGE>
- --------------------------------------------------------------------------------
ROMPUS CD-ROM PRODUCTION LTD.
BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MAY 31 1999 1998
- ------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT
Cash $ 354 $ 84,684
Accounts receivable 896 3,797
Refundable investment tax credits (Note 1) 27,780 32,443
------------------------------
29,030 120,924
CAPITAL ASSETS (Note 2) 8,994 12,321
------------------------------
$ 38,024 $ 133,245
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
CURRENT
Accounts payable and accrued liabilities $ 16,514 $ 17,500
DUE TO RELATED PARTIES (Note 3) 257,677 246,002
------------------------------
274,191 263,502
------------------------------
SHAREHOLDERS' DEFICIENCY
Share capital (Note 4) 100 100
------------------------------
Deficit (236,267) (130,357)
------------------------------
(236,167) (130,257)
------------------------------
$ 38,024 $ 133,245
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
</TABLE>
On behalf of the Board:
_______________________________ Director
_______________________________ Director
The accompanying summary of significant accounting policies and notes are an
integral part of these financial statements.
3
<PAGE>
- --------------------------------------------------------------------------------
ROMPUS CD-ROM PRODUCTION LTD.
STATEMENT OF OPERATIONS AND DEFICIT
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31 (Note 8) 1999 1998
- ------------------------------------------------------------------------------------
<S> <C> <C>
SALES $ 52,191 $ 113,392
COST OF SALES 45,661 12,435
------------------------------
GROSS PROFIT 6,530 100,957
------------------------------
EXPENSES
Sales and marketing (Schedule 1) 16,632 48,418
General and administrative (Schedule 2) 78,674 35,136
Current research and development (Schedule 3) 17,134 18,133
------------------------------
112,440 101,687
------------------------------
NET LOSS FOR THE YEAR (105,910) (730)
DEFICIT, beginning of year (130,357) (129,627)
------------------------------
DEFICIT, end of year $ (236,267) $ (130,357)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
</TABLE>
The accompanying summary of significant accounting policies and notes are an
integral part of these financial statements.
4
<PAGE>
- --------------------------------------------------------------------------------
ROMPUS CD-ROM PRODUCTION LTD.
STATEMENT OF CHANGES IN FINANCIAL POSITION
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31 (Note 8) 1999 1998
- ----------------------------------------------------------------------------------
<S> <C> <C>
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net loss for the year $(105,910) $ -
Item not involving cash
Amortization 4,463 -
-----------------------------------
(101,447) -
Cash provided by (used in) changes in non-cash
Accounts receivable 2,901 -
Refundable investment tax credits 4,663 -
Accounts payable and accrued liabilities (986) -
-----------------------------------
(94,869) -
-----------------------------------
INVESTING ACTIVITIES
Purchase of capital assets (1,136) -
-----------------------------------
FINANCING ACTIVITIES
Advances by related parties 11,675 -
-----------------------------------
DECREASE IN CASH DURING THE YEAR (84,330) -
CASH, beginning of year 84,684 -
-----------------------------------
CASH, end of year $ 354 $ 84,684
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>
The accompanying summary of significant accounting policies and notes are an
integral part of these financial statements.
5
<PAGE>
- -------------------------------------------------------------------------------
ROMPUS CD-ROM PRODUCTION LTD.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(UNAUDITED)
MAY 31, 1999
- -------------------------------------------------------------------------------
NATURE OF BUSINESS The Company is incorporated under the laws of the
Province of B.C. and is engaged in the business of
selling "Net-connected" CD-ROMS as well as the
scientific research and experimental development
(SR & ED) efforts to create and improve the
technology for such products.
CONTINUING OPERATIONS These financial statements have been prepared on a
basis which assumes the realization of assets and
the settlement of liabilities in the normal course
of business. During the year ended May 31, 1999,
the Company incurred a net loss of $105,910, and
for the year ended May 31, 1998, a net loss of
$730. In addition, the Company incurred losses of
$96,008 and $59,810 for the fiscal years ending
August 31, 1997 and 1996 respectively. See Note 8.
The ability of the Company to continue its planned
course of action and to recover its investment in
capital and other assets is dependent upon
generating future profitable operations.
CAPITAL ASSETS Amortization of capital assets is determined at
rates which will reduce the original cost to
estimated residual value over the useful life of
the assets. The annual rates are as follows:
Office furniture and equipment -20% diminishing
balance basis
Computer hardware -30% diminishing
balance basis
Computer software -100% diminishing
balance basis
One-half of the annual rate is used in the year of
acquisition.
SCIENTIFIC RESEARCH
AND EXPERIMENTAL
DEVELOPMENT Scientific research and experimental development
costs are charged as an expense of the period in
which they are incurred except when the development
project meets certain defined criteria for
deferment. At that time such development costs from
that point forward are deferred to the extent that
their recovery can be reasonably assured.
Amortization of such deferred development costs
commences with the commercial production or use of
the product or processes by reference to the sale or
use of the product or process. Costs are offset by
government and non-government direct funding.
Refundable investment tax credits, calculated on
SR&ED expenditures, are based on the Company being
a Canadian controlled private corporation,
('CCPC'). Such credits are offset against the
expenditures.
MEASUREMENT
UNCERTAINTY 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, including accounts receivables, refundable
investment tax credits, liabilities and the
reported amount of revenue and expenses during the
year. Actual results could differ from the
estimates used in the preparation of the financial
statements.
6
<PAGE>
- --------------------------------------------------------------------------------
ROMPUS CD-ROM PRODUCTION LTD.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
MAY 31, 1999
- --------------------------------------------------------------------------------
1. REFUNDABLE INVESTMENT TAX CREDITS
As a result of being a Canadian controlled private corporation, ('CCPC'),
the Company has estimated an entitlement of refundable investment tax
credits as a result of incurring eligible scientific research and
experimental development expenditures. The credit is calculated at a rate
of 35% of the total of such expenditures. For the year ended May 31, 1999,
the refundable investment tax credit is estimated at $14,032 (for the year
ended May 31, 1998 - $13,748). To the extent Revenue Canada, Taxation
assesses the eligibility of such scientific expenditures differently than
as filed by the Company, the amount which is not recoverable by way of
refundable investment tax credits will be charged against income when such
a determination is made.
- --------------------------------------------------------------------------------
2. CAPITAL ASSETS
<TABLE>
<CAPTION>
1999 1998
--------------------------------------------------------
ACCUMULATED Accumulated
COST AMORTIZATION Cost Amortization
--------------------------------------------------------
<S> <C> <C> <C> <C>
Office furniture and equipment $ 1,827 $ 931 $ 1,827 $ 707
Computer hardware 22,984 15,026 22,128 11,799
Computer software 2,467 2,327 2,187 1,315
--------------------------------------------------------
$27,278 $18,284 $26,142 $13,821
--------------------------------------------------------
--------------------------------------------------------
Net book value $ 8,994 $12,321
-------------------------------------------
-------------------------------------------
</TABLE>
Amortization claimed during the year amounted to $4,463 (1998-$5,277).
- --------------------------------------------------------------------------------
3. DUE TO RELATED PARTIES
<TABLE>
<CAPTION>
1999 1998
------------------------
<S> <C> <C>
Phillip Butterfield $ 8,291 $ 7,485
Jeff Popham (director) 5,562 1,193
Cascadian Pacific Holdings Ltd. $243,824 237,324
------------------------
$257,677 $246,002
------------------------
------------------------
</TABLE>
Jeff Popham, a director of the Company, owns 100% of Cascadian Pacific
Holdings Ltd. Such advances are unsecured, have no fixed terms of
repayment, and have not attracted interest.
- --------------------------------------------------------------------------------
7
<PAGE>
- --------------------------------------------------------------------------------
ROMPUS CD-ROM PRODUCTION LTD.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
MAY 31, 1999
- --------------------------------------------------------------------------------
4. SHARE CAPITAL
Authorized
100,000 Common shares without par value
<TABLE>
<CAPTION>
1999 1998
-------------------------
<S> <C> <C>
Issued
100 Common shares (1998 100 Class A) $ 100 $ 100
-------------------------
-------------------------
</TABLE>
The authorized share capital was changed March 26, 1999 when the Class A
Common shares were renamed and increased from 10,000 to 100,000,000 Common
shares. The Class B and C Common shares were cancelled as were all the
preferred shares. On March 26, 1999, the 100 Class A Common share
certificates were cancelled and 100 new Common shares issued.
- --------------------------------------------------------------------------------
5. UNCERTAINTY DUE TO YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems may
recognize the year 2000 as 1900 or some other date, resulting in errors
when information using year 2000 dates is processed. In addition, similar
problems may arise in some systems which use certain dates in 1999 to
represent something other than a date. The effects of the Year 2000 issue
may be experienced before, on or after January 1, 2000, and, if not
addressed, the impact on operations and financial reporting may range
from minor errors to significant systems failure which could affect an
entity's ability to conduct normal business operations. It is not
possible to be certain that all aspects of the Year 2000 issue affecting
the entity, including those related to the efforts of the customers,
suppliers, or other third parties, will be fully resolved.
- --------------------------------------------------------------------------------
6. SUBSEQUENT EVENTS
After May 31, 1999, the Company has focused on its newly developed
"ID-ROM" which is a form of a business card. It is an actual CD-ROM which
is cut in the shape and size of a conventional business card. The
"ID-ROM" has received extensive interest from various sources, both
domestically and abroad. As a result, the Company has opened a sales
office in Toronto and has entered into various distributor and financing
agreements.
The Company is in the process of raising venture capital to support the
"ID-ROM" initiative.
The Company is in the process of filing patent and trademark applications
in Canada, U.S.A., and Japan for its "ID-ROM".
- --------------------------------------------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
ROMPUS CD-ROM PRODUCTION LTD.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
MAY 31, 1999
- --------------------------------------------------------------------------------
7. INCOME TAXES
The Company has, for income tax purposes, non-capital losses of
$150,775 and deferred research and development expenditures of $88,695
to carry forward to reduce taxable income and income taxes in future
years. The future possible benefits of these losses and deductions have
not been recorded in the accounts of the Company due to the uncertainty
of such benefits being realized. Non-capital losses expire as follows:
<TABLE>
<CAPTION>
AMOUNT EXPIRY DATE
------ -----------
<S> <C>
$ 2,316 2003
70,637 2004
77,822 2006
--------
$150,775
--------
--------
</TABLE>
- --------------------------------------------------------------------------------
8. COMPARATIVE FIGURES
The Company's regular fiscal year ends on August 31. These financial
statements have been prepared for the year ended May 31, 1999, with
comparative figures for the year ended May 31, 1998. Since there were no
financial statements prepared at May 31, 1997, there are no comparative
figures in the Statement of Changes in Financial Position.
9
<PAGE>
- --------------------------------------------------------------------------------
ROMPUS CD-ROM PRODUCTION LTD.
SCHEDULE 1 - SALES AND MARKETING
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31 1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Advertising $ 483 $ 652
Dues and fees 150 225
Entertainment 1,050 754
Equipment rental 158 851
Mailing and materials 157 267
Printing and promotional 3,903 5,633
Subcontractor fees 7,347 39,454
Trade shows and travel 3,384 582
--------------------------
$ 16,632 $ 48,418
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
SCHEDULE 2 - GENERAL AND ADMINISTRATIVE
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31 1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Accounting and legal $ 24,243 $ 7,624
Administrative salary 20,890 9,501
Amortization 4,463 5,277
Automotive 2,229 2,207
Bad debts 2,000 240
Bank charges and interest 2,942 2,056
Office supplies 4,918 5,319
Postage and courier 884 354
Rent - 200
Telephone and fax 4,985 2,040
Utilities 320 318
Management salary 10,800 -
--------------------------
$ 78,674 $ 35,136
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
SCHEDULE 3 - CURRENT RESEARCH AND DEVELOPMENT
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED MAY 31 1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Salary $ 18,000 $ 29,500
Subcontractor fees 13,166 6,140
--------------------------
31,166 35,640
Less: Investment tax credit recoveries on current
expenditures 14,032 17,507
--------------------------
$ 17,134 $ 18,133
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
AUTO METREKS, INC. AND SUBSIDIARIES
FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
<PAGE>
BARRY I. HECHTMAN, P.A.
CERTIFIED PUBLIC ACCOUNTANT
MEMBER OF
FLORIDA AND AMERICAN
INSTITUTE OF CPAS
8100 SW 81 DRIVE TELEPHONE: (305) 270-0014
SUITE 210 FAX: (305) 598-3695
MIAMI FLORIDA, 33143-6603 EMAIL: [email protected]
June 16, 1999
To the Board of Directors of
Auto Metreks, Inc. and subsidiaries
d/b/a Manhatten Financial Services
We have audited the accompanying balance sheets of Auto Metreks, Inc. and
subsidiaries as of December 31, 1998 and 1997 and the related statements of
income, stockholders' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance whether the financial statements are free from
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Auto Metreks, Inc. and
subsidiaries as of December 31, 1998 and 1997, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ B. I. Hechtman, P.A.
------------------------
Barry I Hechtman, P.A.
<PAGE>
AUTO METREKS, INC. AND SUBSIDIARIES
BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash in Bank $134,090 $142,490
Loans to Shareholders 315 0
------------ ------------
TOTAL CURRENT ASSETS $134,405 $142,490
TOTAL PROPERTY AND EQUIPMENT AT COST 446,170 445,323
LESS:
Accumulated Depreciation (183,180) (93,946)
------------ ------------
NET PROPERTY AND EQUIPMENT 262,990 351,377
------------ ------------
TOTAL ASSETS $397,395 $493,867
------------ ------------
------------ ------------
</TABLE>
See accompanying notes and accountants' report
Barry I Hechtman, P.A.
<PAGE>
AUTO METREKS, INC. AND SUBSIDIARIES
BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
LIABILITIES AND
STOCKHOLDERS' EQUITY
LIABILITIES:
CURRENT LIABILITIES:
Accounts Payable $6,442 $13,220
Notes Payable 74,198 62,995
------------ ------------
TOTAL CURRENT LIABILITIES $80,640 $76,215
LONG TERM DEBT:
Loans Payable Shareholders 0 1,205
Notes Payable 235,536 292,990
------------ ------------
TOTAL LONG-TERM DEBT 235,536 294,195
------------ ------------
TOTAL LIABILITIES $316,176 $370,410
STOCKHOLDERS' EQUITY
Preferred Stock, $.0001 par
value, 20,000,000 authorized;
no shares outstanding 0 0
Common stock, $.0001 par value
80,000,000 authorized;
18,021,064 issued and
outstanding 1,802 1,802
Additional Paid-In Capital 509,117 509,117
Beg. Retained Earnings (387,462) 0
Y-T-D Net Loss (42,238) (387,462)
------------ ------------
Accumulated Deficit (429,700) (387,462)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 81,219 123,457
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $397,395 $493,867
------------ ------------
------------ ------------
</TABLE>
See accompanying notes and accountants' report
Barry I Hechtman, P.A.
<PAGE>
AUTO METREKS, INC. AND SUBSIDIARIES
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
INCOME 436,738 123,487
COST OF SALES 241,675 102,913
------------ ------------
GROSS PROFIT 195,063 20,574
OPERATING EXPENSES 100,166 284,254
DEPRECIATION 89,234 93,946
INTEREST 47,901 29,836
------------ ------------
NET LOSS BEFORE TAXES (42,238) (387,462)
PROVISION FOR INCOME TAXES 0 0
------------ ------------
NET LOSS ($42,238) ($387,462)
------------ ------------
------------ ------------
</TABLE>
See accompanying notes and accountants' report
Barry I Hechtman, P.A.
<PAGE>
AUTO METREKS, INC. AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
This summary of significant accounting policies of Auto Metreks, Inc. and
subsidiaries, (the Company), is presented to assist in understanding the
Company's financial statements. The financial statements and notes are
representations of the Company's management, who is responsible for their
integrity and objectivity. These accounting policies conform to generally
accepted accounting principles and have been consistently applied in the
preparation of the financial statements.
COMPANY'S ACTIVITIES AND OPERATING CYCLE
Auto Metreks, Inc. and subsidiaries (the "Company") is engaged in the
selling, leasing and servicing state-of-the-art Automatic Teller Machines
which access numerous banking institutions as well as several electronic
transfer networks which accept ATM and credit cards.
ORGANIZATION
On January 20, 1997, Manhattan Financial Services, Inc. ("Manhattan), a
Florida corporation, was acquired by Auto Metreks, Inc. ("Auto Metreks")
Pursuant to the terms of the Acquisition, Auto Metreks which had 29,280
shares of its common stock previously outstanding, exchanged with the
shareholders of Manhattan an aggregate of 12,000,000 shares of previously
unissued Auto Metreks stock for all the outstanding shares of Manhattan's
outstanding common stock.
Since the Acquisition resulted in voting control by the stockholder of
Manhattan, the Acquisition was treated as a recapitalization of Auto
Metreks and the sale of 29,280 shares of previously issued Auto Metreks
common stock for the net assets of Auto Metreks ($-0-).
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on the accrual
method of accounting; depreciation was calculated under the Federal Income
Tax method.
CASH AND CASH EQUIVALENTS
The Company considers cash and all highly liquid investments purchased with
an original or remaining maturity of less than three months at the date of
purchase to be cash equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Carrying amounts of certain of the Company's financial instruments
including cash and cash equivalents, accounts receivable, notes receivable,
and accrued liabilities approximate fair value because of their short
maturities.
<PAGE>
PROPERTY AND EQUIPMENT
Furniture, Fixtures and Equipment are recorded at cost. Depreciation is
calculated using the straight-line and accelerated methods. Expenditures
for major renewals and improvements that extend the useful lives of the
property are capitalized. Expenditures for maintenance and repairs are
charged to expense as incurred.
CONCENTRATIONS
Cash and cash equivalents are, for the most part, maintained with several
major financial institutions in the United States. Deposits held with banks
may exceed the amount of insurance provided on such deposits. Generally
these deposits may be redeemed upon demand and therefore bear minimal risk.
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
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the accounting period. Actual results could differ from these
estimates.
INCOME TAXES
The Company accounts for income taxes pursuant to Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes," which uses the
liability method to calculate deferred income taxes. The realization of
deferred tax assets is based upon historical tax positions and expectations
about future taxable income.
SEGMENT INFORMATION
Statement of Financial Accounting Standards (SFAS) No. 131, "Disclosures
about Segments of an Enterprises and Related Information", supersedes SFAS
No. 14, "Financial Reporting for Segments of a Business Enterprise." SFAS
131 establishes standards for the way that public companies report
information about operating segments in annual financial statements and
requires reporting of selected information about operating segments in
interim financial statements issued to the public. It also establishes
standards for disclosures regarding products and services, geographic areas
and major customers. SFAS 131 defines operating segments as components of a
company about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how
to allocate resources and in assessing performance. The Company adopted
SFAS No. 131 during 1998. The Company currently operates in one segment,
the selling, leasing and servicing state-of-the-art Automatic Teller
Machines.
<PAGE>
FUTURE ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standard Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133
requires companies to recognize all derivatives contacts as either assets
or liabilities in the balance sheet and to measure them as fair value. If
certain conditions are met, a derivative may be specifically designated as
a hedge, the objective of which is to match the timing of gain or loss
recognition on the hedging derivative with the recognition of (i) the
changes in the fair value of the hedged assets or liability that are
attributable to the hedged risk or (ii) the earnings effect of the hedged
forecasted transaction. For a derivative not designated as a hedging
instrument, the gain or loss is recognized in income in the period of
change. SFAS No. 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999.
Historically, the Company has not entered into derivatives contracts either
to hedge existing risks or for speculative purposes. Accordingly, the
Company does not expect adoption of the new standard on July 1, 1999 to
affect its financial statements
NOTE 2 - NOTES PAYABLE
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Capital Leases (see Note 6) $181,093 $227,344
Note Payable to Broward Vending, Inc.,
(a related party),secured by equipment.
Monthly payments of $3,263, final
payment Jan. 4, 2002 (see Note 7) 128,641 128,641
Less current portion ( 74,198) ( 62,995)
----------- -----------
$235,536 $292,990
----------- -----------
----------- -----------
</TABLE>
NOTE 3 - COMMON STOCK
Common stock is $0.0001 par value. There are 80,000,000 shares authorized
and 18,028,280 issued and outstanding as of December 31, 1998.
Preferred stock is $0.0001 par value. There are 20,000,000 shares
authorized and -0- shares issued and outstanding as of December 31, 1998.
<PAGE>
NOTE 4 - INCOME TAXES
At December 31, 1998, the Company had Federal net operating loss
carryforwards of approximately $426,018 that expire through 2018. For
financial reporting purposes, a valuation allowance of $160,311 has been
recognized to offset the net deferred tax assets related to these
carryforwards and other deferred tax assets since realization of any
portion of the Company's deferred tax asset is not considered to be more
likely than not.
Deferred income taxes reflect the net effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
Significant components of the Company's deferred tax liabilities and assets
are as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards $8,659 $151,652
-------- ----------
Total deferred tax assets 8,659 151,652
Valuation allowance for deferred tax assets ( 8,659) (151,652)
-------- ----------
0 0
-------- ----------
-------- ----------
</TABLE>
NOTE 5 - RELATED PARTY TRANSACTIONS
The Company owes a related company for the purchase of ATM machines (see
Note 2) under a note payable. The Company also sub-leases office space from
the same related company. Total payments under the office lease were
$16,647 and $18,656 during 1997 and 1998 respectively.
NOTE 6 - CAPITAL LEASES
The Company acquired various ATM equipment under the provisions of several
long term leases. The lease agreements provide for minimum annual lease
payments as follows:
<TABLE>
<CAPTION>
<S> <C>
1999 $ 94,152
2000 94,152
2001 56,183
---------
244,487
Less amount representing interest (63,394)
---------
Present value of net minimum
capital lease payments 181,093
---------
---------
</TABLE>
NOTE 7 - SUBSEQUENT EVENTS
CHANGE OF OWNERSHIP
In April, 1999, the majority shareholders ("Nolte(s)") of the Company sold
all their shares to an unrelated party. Pursuant to the sale, the Nolte(s)
resigned as officers of the Company and new officers were elected.
<PAGE>
SALE OF ASSETS AND SUBSIDIARY
On April 1, 1999, 1999 the Company sold its wholly owned subsidiary,
Manhattan Financial Services, Inc. and certain assets to the Nolte(s) in
exchange for release of primary responsibility on leases and, obligations
arising from loans, advances, and services rendered by the Nolte(s) or by
the related company owned by them (see Note 2). Specific details of the
agreement are as follows:
The assets sold included (1) all rights, title and interest in and to all
ATMs including those leased by the Company, (2) all cash in Company's
possession except a Certificate of Deposit("CD") in the principle amount of
$60,000 and, (3) all rights, title and interest in the outstanding stock of
Manhattan Financial Services, Inc. The CD is to remain in the Company's
possession until such time that the proceeds from the CD will be sufficient
to satisfy a lease (Genesee) which is secured by the CD. Any proceeds not
needed to satisfy said lease shall inure to the benefit of the Company.
The Nolte(s) agree to keep all payments and obligations current on the
Company's leases of ATMs. The Nolte(s) further agree to use their best
efforts to obtain the release of the Company from all obligations under
such leases except the obligation to use the CD proceeds on the Genesee
lease.
The Company released the Nolte(s) and Manhattan from all obligations and
liabilities except those specifically created in the agreement.
The sale agreement provided for the release liability of the note payable
to Broward Vending, Inc., a company owned by the Nolte(s) see NOTE 2.
Finally, the Nolte(s) and Manhattan agreed to release the Company from all
obligations and liabilities to them of whatsoever nature, including those
arising from loans, advances, services rendered, employment contracts or
service contracts, except for the obligation of the Company to make the CD
proceeds available for payment on the Genesee lease.
STOCK SPLIT
On April 6, 1999 the Company decreased the outstanding stock of the Company
in a reverse stock split so that each 30 shares of common stock outstanding
at the above date became 1 share of common stock outstanding at the close
of business on April 6, 1999. One full share was issued to holders of
shares in lieu of any fractional shares created by the above split. The
authorized number of shares remained unchanged after the split.
PURCHASE OF LICENSE
On April 6, 1999 the Company accepted the offer from MLI Group, Inc.
("MLIG") to grant the Company a non-exclusive license ("License") to sell
and distribute MLIG's proprietary interactive/intelligent system for
hearing testing and hearing aid products and, to service the system sales
made by the Company in exchange for 6,000,000 shares of the Company's
common stock and a royalty of 20% of the sales proceeds. The 6,000,000 were
issued as "restricted securities" as defined under the Securities Act of
1933. These issuances were valued at $60,000 which equals management's
estimate of the fair market value at the date of issuance.
<PAGE>
COMPENSATION TO OFFICERS
On April 6, 1999 the Company issued 3,000,000 shares of "restricted
securities" to officers of the Company for services rendered. These
issuances were valued at $30,000 which equals management's estimate of the
fair market value of the services provided. This will be reflected by the
Company as compensation to officer during the year ended December 31, 1999.
CHANGE OF NAME
On April 6, 1999 the Company changed it's name from Auto Metreks,
Inc. to Online Hearing Dot Com Co.
STOCK OFFERING
On April 6, 1999 the Board of Directors authorized a placement of 7,000,000
shares of common stock at $0.01 per share pursuant to Rule 504 of Reg D.
NOTE 8 - YEAR 2000 (UNAUDITED)
Like other companies, the Company could be adversely affected if the
computer systems the Company, our suppliers or customers use do not
properly process and calculate date-related information and data from the
period surrounding and including January 1, 2000. This is commonly known as
the "Year 2000" issue. Additionally, this issue could impact non-computer
systems and devices. At this time, because of the complexities involved in
the issue, management cannot provide assurances that the Year 2000 issue
will not have an impact on the Company's operations.
<PAGE>
AUTO METREKS, INC. AND SUBSIDIARIES
FINANCIAL STATEMENTS
MARCH 31, 1999
<PAGE>
BARRY I. HECHTMAN, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF
FLORIDA AND AMERICAN
INSTITUTE OF CPAs
8100 SW 81 DRIVE TELEPHONE: (305) 270-0014
SUITE 210 FAX: (305) 598-3695
MIAMI FLORIDA, 33143-6603 EMAIL: [email protected]
July 28, 1999
To the Board of Directors of
Auto Metreks, Inc. and subsidiaries
We have reviewed the accompanying balance sheet of Auto Metreks, Inc. and
subsidiaries as of March 31, 1999, and the related statements of income and
stockholders' equity and cash flows for the three months then ended, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants. All
information included in these financial statements is the representation of
management of Auto Metreks, Inc. and subsidiaries.
A review consists principally of inquiries of Company personnel and
analytical procedures applied to 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 March 31, 1999 financial statements in order for them
to be in conformity with generally accepted accounting principles.
The accompanying March 31, 1998 statement of income of Auto Metreks, Inc.
and subsidiaries were compiled by us in accordance with Statements on
Standards for Accounting and Review Services issued by the American
Institute of Certified Public Accountants. A compilation is limited to
presenting in the form of financial statements information that is the
representation of management. We have not audited or reviewed the March 31,
1998 statement of income and, accordingly, do not express an opinion or any
other form of assurance on it.
/s/ B I Hechtman, P.A.
--------------------------
Barry I Hechtman, P.A.
<PAGE>
AUTO METREKS, INC. AND SUBSIDIARIES
BALANCE SHEETS
MARCH 31, 1999
ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
CURRENT ASSETS
Cash in Bank $134,400
Loans to Shareholders 315
------------
TOTAL CURRENT ASSETS $134,715
PROPERTY AND EQUIPMENT AT COST 446,560
LESS:
Accumulated Depreciation (205,489)
------------
NET PROPERTY AND EQUIPMENT 241,071
------------
TOTAL ASSETS $375,786
------------
------------
</TABLE>
See accompanying notes and accountants' report
Barry I Hechtman, P.A.
<PAGE>
AUTO METREKS, INC. AND SUBSIDIARIES
BALANCE SHEETS
MARCH 31, 1999
LIABILITIES AND
STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
<S> <C> <C> <C>
LIABILITIES:
CURRENT LIABILITIES:
Accounts Payable 12,339
Notes Payable 76,742
------------
TOTAL CURRENT LIABILITIES $89,081
LONG TERM DEBT:
Notes Payable 207,785
------------
TOTAL LONG-TERM DEBT 207,785
------------
TOTAL LIABILITIES $296,866
STOCKHOLDERS' EQUITY
Preferred Stock, $.0001 par
value, 20,000,000 authorized;
no shares outstanding 0
Common stock, $.0001 par value
80,000,000 authorized;
18,021,064 issued and
outstanding 1,802
Additional Paid-In Capital 509,117
Beg. Retained Earnings (429,700)
Y-T-D Net Loss (2,299)
------------
Accumulated Deficit (431,999)
------------
TOTAL STOCKHOLDERS' EQUITY 78,920
------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $375,786
------------
------------
</TABLE>
See accompanying notes and accountants' report
Barry I Hechtman, P.A.
<PAGE>
AUTO METREKS, INC. AND SUBSIDIARIES
COMPARATIVE STATEMENT OF INCOME
THREE MONTHS ENDED MARCH 31, 1999 (REVIEWED) AND 1998 (COMPILED)
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
INCOME 115,159 121,011
COST OF SALES 61,299 51,744
------------ ------------
GROSS PROFIT 53,860 69,267
------------ ------------
OPERATING EXPENSES 24,917 37,531
DEPRECIATION 22,309 22,309
INTEREST 8,933 12,876
------------ ------------
NET INCOME BEFORE TAXES (2,299) (3,449)
PROVISION FOR INCOME TAXES 0 0
------------ ------------
NET LOSS ($2,299) ($3,449)
------------ ------------
------------ ------------
</TABLE>
See accompanying notes and accountants' report
Barry I Hechtman, P.A.
<PAGE>
AUTO METREKS, INC. AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
This summary of significant accounting policies of Auto Metreks, Inc. and
subsidiaries, (the Company), is presented to assist in understanding the
Company's financial statements. The financial statements and notes are
representations of the Company's management, who is responsible for their
integrity and objectivity. These accounting policies conform to generally
accepted accounting principles and have been consistently applied in the
preparation of the financial statements.
COMPANY'S ACTIVITIES AND OPERATING CYCLE
Auto Metreks, Inc. and subsidiaries (the "Company") is engaged in the
selling, leasing and servicing state-of-the-art Automatic Teller Machines
which access numerous banking institutions as well as several electronic
transfer networks which accept ATM and credit cards.
ORGANIZATION
On January 20, 1997, Manhattan Financial Services, Inc. ("Manhattan), a
Florida corporation, was acquired by Auto Metreks, Inc. ("Auto Metreks")
Pursuant to the terms of the Acquisition, Auto Metreks which had 29,280
shares of its common stock previously outstanding, exchanged with the
shareholders of Manhattan an aggregate of 12,000,000 shares of previously
unissued Auto Metreks stock for all the outstanding shares of Manhattan's
outstanding common stock.
Since the Acquisition resulted in voting control by the stockholder of
Manhattan, the Acquisition was treated as a recapitalization of Auto
Metreks and the sale of 29,280 shares of previously issued Auto Metreks
common stock for the net assets of Auto Metreks ($-0-).
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on the accrual
method of accounting.
CASH AND CASH EQUIVALENTS
The Company considers cash and all highly liquid investments purchased with
an original or remaining maturity of less than three months at the date of
purchase to be cash equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Carrying amounts of certain of the Company's financial instruments
including cash and cash equivalents, accounts receivable, notes receivable,
and accrued liabilities approximate fair value because of their short
maturities.
<PAGE>
PROPERTY AND EQUIPMENT
Furniture, Fixtures and Equipment are recorded at cost. Depreciation is
calculated using the straight-line and accelerated methods. Expenditures
for major renewals and improvements that extend the useful lives of the
property are capitalized. Expenditures for maintenance and repairs are
charged to expense as incurred.
CONCENTRATIONS
Cash and cash equivalents are, for the most part, maintained with several
major financial institutions in the United States. Deposits held with banks
may exceed the amount of insurance provided on such deposits. Generally
these deposits may be redeemed upon demand and therefore bear minimal risk.
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
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the accounting period. Actual results could differ from these
estimates.
INCOME TAXES
The Company accounts for income taxes pursuant to Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes," which uses the
liability method to calculate deferred income taxes. The realization of
deferred tax assets is based upon historical tax positions and expectations
about future taxable income.
SEGMENT INFORMATION
Statement of Financial Accounting Standards (SFAS) No. 131, "Disclosures
about Segments of an Enterprises and Related Information", supersedes SFAS
No. 14, "Financial Reporting for Segments of a Business Enterprise." SFAS
131 establishes standards for the way that public companies report
information about operating segments in annual financial statements and
requires reporting of selected information about operating segments in
interim financial statements issued to the public. It also establishes
standards for disclosures regarding products and services, geographic areas
and major customers. SFAS 131 defines operating segments as components of a
company about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how
to allocate resources and in assessing performance. The Company adopted
SFAS No. 131 during 1998. The Company currently operates in one segment,
the selling, leasing and servicing state-of-the-art Automatic Teller
Machines.
<PAGE>
FUTURE ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standard Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133
requires companies to recognize all derivatives contacts as either assets
or liabilities in the balance sheet and to measure them as fair value. If
certain conditions are met, a derivative may be specifically designated as
a hedge, the objective of which is to match the timing of gain or loss
recognition on the hedging derivative with the recognition of (i) the
changes in the fair value of the hedged assets or liability that are
attributable to the hedged risk or (ii) the earnings effect of the hedged
forecasted transaction. For a derivative not designated as a hedging
instrument, the gain or loss is recognized in income in the period of
change. SFAS No. 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999.
Historically, the Company has not entered into derivatives contracts either
to hedge existing risks or for speculative purposes. Accordingly, the
Company does not expect adoption of the new standard on July 1, 1999 to
affect its financial statements
NOTE 2 - NOTES PAYABLE
<TABLE>
<S> <C>
Capital Leases (see Note 6) $170,927
Note Payable to Broward Vending, Inc.,
(a related party),secured by equipment.
Monthly payments of $3,263, final
payment Jan. 4, 2002 (see Note 7) 113,600
Less current portion (76,742)
-----------
$207,785
-----------
-----------
</TABLE>
NOTE 3 - COMMON STOCK
Common stock is $0.0001 par value. There are 80,000,000 shares authorized
and 18,021,064 issued and outstanding as of March 31, 1999.
Preferred stock is $0.0001 par value. There are 20,000,000 shares
authorized and -0- shares issued and outstanding as of March 31, 1999.
<PAGE>
NOTE 4 - INCOME TAXES
At March 31, 1999, the Company had Federal net operating loss carryforwards
of approximately $426,018 that expire through 2013. For financial reporting
purposes, a valuation allowance of $160,311 has been recognized to offset
the net deferred tax assets related to these carryforwards and other
deferred tax assets since realization of any portion of the Company's
deferred tax asset is not considered to be more likely than not.
Deferred income taxes reflect the net effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
Significant components of the Company's deferred tax liabilities and assets
are as follows:
<TABLE>
<S> <C>
Deferred tax assets:
Net operating loss carryforwards 345
--------
Total deferred tax assets 345
Valuation allowance for deferred tax assets (345)
--------
0
--------
--------
</TABLE>
NOTE 5 - RELATED PARTY TRANSACTIONS
The Company owes a related company for the purchase of ATM machines (see
Note 2) under a note payable. The Company also sub-leases office space from
the same related company. Total payments under the office lease were
$16,647 and $18,656 during 1997 and 1998 respectively.
NOTE 6 - CAPITAL LEASES
The Company acquired various ATM equipment under the provisions of several
long term leases. The lease agreements provide for minimum annual lease
payments as follows:
<TABLE>
<S> <C>
1999 $ 75,053
2000 94,152
2001 56,183
----------
225,388
Less amount representing interest (55,793)
----------
Present value of net minimum
capital lease payments 169,595
----------
----------
</TABLE>
<PAGE>
NOTE 7 - SUBSEQUENT EVENTS
CHANGE OF OWNERSHIP
In April, 1999, the majority shareholders ("Nolte(s)") of the Company sold
all their shares to an unrelated party. Pursuant to the sale, the Nolte(s)
resigned as officers of the Company and new officers were elected.
SALE OF ASSETS AND SUBSIDIARY
On April 1, 1999, the Company sold its wholly owned subsidiary, Manhattan
Financial Services, Inc. and certain assets to the Nolte(s) in exchange for
release of primary responsibility on leases and, obligations arising from
loans, advances, and services rendered by the Nolte(s) or by the related
company owned by them (see Note 2). Specific details of the agreement are
as follows:
The assets sold included (1) all rights, title and interest in and to all
ATMs including those leased by the Company, (2) all cash in Company's
possession except a Certificate of Deposit("CD") in the principle amount of
$60,000 and, (3) all rights, title and interest in the outstanding stock of
Manhattan Financial Services, Inc. The CD is to remain in the Company's
possession until such time that the proceeds from the CD will be sufficient
to satisfy a lease (Genesee) which is secured by the CD. On June 24, 1999
the proceeds from the CD and additional funds from Manhattan totaling
$73,090 were used to satisfy the Genesee lease.
The Nolte(s) agree to keep all payments and obligations current on the
Company's leases of ATMs. The Nolte(s) further agree to use their best
efforts to obtain the release of the Company from all obligations under
such leases except the obligation to use the CD proceeds on the Genesee
lease.
The Company released the Nolte(s) and Manhattan from all obligations and
liabilities except those specifically created in the agreement.
The sale agreement provided for the release liability of the note payable
to Broward Vending, Inc., a company owned by the Nolte(s) see NOTE 2.
Finally, the Nolte(s) and Manhattan agreed to release the Company from all
obligations and liabilities to them of whatsoever nature, including those
arising from loans, advances, services rendered, employment contracts or
service contracts, except for the obligation of the Company to make the CD
proceeds available for payment on the Genesee lease.
STOCK SPLIT
On April 6, 1999 the Company decreased the outstanding stock of the Company
in a reverse stock split so that each 30 shares of common stock outstanding
at the above date became 1 share of common stock outstanding at the close
of business on April 6, 1999. One full share was issued to holders of
shares in lieu of any fractional shares created by the above split. The
authorized number of shares remained unchanged after the split.
<PAGE>
PURCHASE OF LICENSE
On April 6, 1999 the Company accepted the offer from MLI Group, Inc.
("MLIG") to grant the Company a non-exclusive license ("License") to sell
and distribute MLIG's proprietary interactive/intelligent system for
hearing testing and hearing aid products and, to service the system sales
made by the Company in exchange for 6,000,000 shares of the Company's
common stock and a royalty of 20% of the sales proceeds. The 6,000,000 were
issued as "restricted securities" as defined under the Securities Act of
1933. These issuances were valued at $60,000 which equals management's
estimate of the fair market value at the date of issuance.
COMPENSATION TO OFFICERS
On April 6, 1999 the Company issued 3,000,000 shares of "restricted
securities" to officers of the Company for services rendered. These
issuances were valued at $30,000 which equals management's estimate of the
fair market value of the services provided. This will be reflected by the
Company as compensation to officer during the year ended December 31, 1999.
CHANGE OF NAME
On April 6, 1999 the Company changed it's name from Auto Metreks,
Inc. to Online Hearing Dot Com Co.
STOCK OFFERING
On April 6, 1999 the Board of Directors authorized a placement of 7,000,000
shares of common stock at $0.01 per share pursuant to Rule 504 of Reg. D.
NOTE 8 - YEAR 2000 (UNAUDITED)
Like other companies, the Company could be adversely affected if the
computer systems the Company, our suppliers or customers use do not
properly process and calculate date-related information and data from the
period surrounding and including January 1, 2000. This is commonly known as
the "Year 2000" issue. Additionally, this issue could impact non-computer
systems and devices. At this time, because of the complexities involved in
the issue, management cannot provide assurances that the Year 2000 issue
will not have an impact on the Company's operations.
<PAGE>
Auto Metreks, Inc.
Statements of Stockholders' Equity
For the Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Common stock Total
--------------------------- Additional Accumulated stockholders'
Shares Amount paid-in capital deficit equity
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Balance, January 1, 1997 0 $0 $0 $0 $0
Stock issued to founder 12,000,000 1,200 (1,200) 0
Sale of common stock
relating to merger with
Auto Metreks, Inc. (Note 1) 29,280 3 (3) 0
Sale of common stock 5,991,784 599 510,320 510,919
Net Loss 1997 (387,462) (387,462)
- --------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 18,021,064 1,802 509,117 (387,462) 123,457
Net Loss 1998 (42,238) (42,238)
- --------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 18,021,064 1,802 509,117 (429,700) 81,219
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes and accountants' report
Barry I Hechtman, P.A.
<PAGE>
Auto Metreks, Inc.
Statements of Stockholders' Equity
For the Three months Ended March 31, 1999
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Common stock Total
------------------------- Additional Accumulated stockholders'
Shares Amount paid-in capital deficit equity
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1999 18,021,064 1,802 509,117 (429,700) 81,219
Net Loss (2,299) (2,299)
- ---------------------------------------------------------------------------------------------------------------
Balance, March 31, 1999 18,021,064 1,802 509,117 (431,999) 78,920
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes and accountants' report
Barry I Hechtman, P.A.
<PAGE>
AUTO METREKS, INC. AND SUBSIDIARIES
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
Cash flows from operating activities:
Net Income ($2,299)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 22,309
Accounts Payable 5,897
--------------
Net cash provided by operating activities 28,206
Cash flows from investing activities:
Purchase of Equipment (390)
--------------
Net cash utilized by investing activities (390)
Cash flows from financing activities:
Repayment of long term obligations (25,207)
Loans to shareholders --------------
Net cash utilized by financing activities (25,207)
---------------
Net Increase in Cash 310
Cash in Bank and on Hand at January 1, 1999 134,090
---------------
Cash in Bank and on Hand at March 31, 1999 $134,400
---------------
---------------
</TABLE>
See accompanying notes and accountants' report
Barry I. Hechtman, P.A.
<PAGE>
AUTO METREKS, INC. AND SUBSIDIARIES
Statement of Cash Flows
For the Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
---------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net Loss ($42,238) ($387,462)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 89,234 93,946
Accounts Payable (6,779) 13,220
------------------- ------------------
Net cash provided by operating activities 82,455 107,166
Cash flows from investing activities:
Purchase of Equipment (847) (445,323)
------------------- ------------------
Net cash utilized by investing activities (847) (445,323)
Cash flows from financing activities:
Origination of long term debt - 377,802
Repayment of long term obligations (46,251) (21,816)
Issuance of common stock - 510,919
Shareholder loans originated (repaid) (1,520) 1,205
------------------- ------------------
Net cash utilized by financing activities (47,771) 868,110
------------------- ------------------
Net Decrease in Cash (8,401) 142,491
Cash in Bank and on Hand at January 1 142,491 -
------------------- ------------------
Cash in Bank and on Hand at December 31 $134,090 $142,491
------------------- ------------------
------------------- ------------------
</TABLE>
See accompanying notes and accountants' report
Barry I. Hechtman, P.A.
<PAGE>
ROMPUS INTERACTIVE, INC. AND SUBSIDIARY
PROFORMA BALANCE SHEET
MAY 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
Historical (May 31, 1999) Proforma
---------------------------------------------------------- ----------------------
ASSETS Parent Subsidiary
------ ----------
Online
Rompus CD-ROM Hearing Dot Acquisition
Production, LTd. Com, Inc. on 7/30/99 Combined Elimination Consolidated
---------------- ----------- ----------- ---------- ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash $ 354 $ 142,655 $ - $ 143,009 $ - $ 143,009
Accounts receivable 896 - 896 896
Refundable investment tax credits 27,780 - 27,780 27,780
Loans to shareholders - $ 315 315 315
----------- ----------- ----------- -----------
Total current assets 29,030 142,970 172,000 172,000
----------- ----------- ----------- -----------
Investment in subsidiary/Goodwill - 135,000 135,000 (88,820) A 46,180
Less accumulated amortization - Goodwill (8,082) (8,082)
----------- ----------- ----------- -----------
- - 135,000 38,098
----------- ----------- ----------- -----------
Property and equipment, at cost 12,429 446,560 458,989 458,989
Less accumulated depreciation (3,214) (205,489) (208,703) (208,703)
----------- ----------- ----------- -----------
9,215 241,071 250,286 250,286
----------- ----------- ----------- ----------- ----------- -----------
Total Assets $ 38,245 $ 384,041 $ 135,000 $ 557,286 $ (96,902) $ 460,384
=========== =========== =========== =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 15,509 $ 10,694 $ - $ 26,203 $ 26,203
Due to related parties 258,160 - 258,160 258,160
Notes payable - 76,742 76,742 76,742
----------- ----------- ----------- -----------
Total current liabilities 273,669 87,436 361,105 361,105
----------- ----------- ----------- -----------
Notes payable, less current portion - 207,785 207,785 207,785
STOCKHOLDERS' EQUITY -
Preferred stock - - 900 900 900
Common stock 100 2,502 450 3,052 (2,502) A 550
Additional paid in Capital - 578,417 133,650 712,067 (578,417) A 133,650
Accumulated deficit (235,524) (492,099) (727,623) 484,017 A (243,606)
----------- ----------- ----------- -----------
Total stockholders' equity (235,424) 88,820 (11,604) (108,506)
----------- ----------- ----------- -----------
Total liabilities and Stockholders' Equity $ 38,245 $ 384,041 $ 135,000 $ 557,286 $ (96,902) $ 460,384
=========== =========== =========== =========== =========== ===========
</TABLE>
A See accompanying notes to (unaudited) proforma condensed consolidated
financial statements.
<PAGE>
ROMPUS INTERACTIVE, INC. AND SUBSIDIARY
PROFORMA STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Parent Subsidiary
------ ----------
Rompus CD-ROM Online Hearing
Production, LTd. Dot Com, Inc.
------------------------------------
For the nine For the five
months ended May months ended
31, 1999 May 31, 1999 Adjustments Proforma
----------------- ------------------ -------------- -------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues $ 42,021 $ 115,159 $ - $ 157,180
Cost of sales 38,462 61,299 99,761
------------- ------------ ------------
Gross profit 3,559 53,860 57,419
------------- ------------ ------------
Selling, general and administrative:
Sales and marketing 15,448 - 15,448
General and administrative 64,626 116,259 180,885
Current research and development 9,003 - 9,003
Amortization of Goodwill 3,464 (a) 3,464
------------- ------------ ------------
89,077 116,259 205,336
------------- ------------ ------------
Net income (loss) for the period $ (85,518) $ (62,399) $ (147,917)
============= ============ ============
(a)
Goodwill at acquisition $ 46,180
Managements estimated useful life (years) 10.0
-------------
Yearly amortization using straight line 4,618
0.75
-------------
For the nine months period $ 3,464
=============
</TABLE>
<PAGE>
ROMPUS INTERACTIVE, INC. AND SUBSIDIARY
PROFORMA STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Parent Subsidiary
------ ----------
Rompus CD-ROM Online Hearing
Production, LTd. Dot Com, Inc.
------------------------------------
For the eight
Year ended August months ended
31, 1998 August 31, 1998 Adjustments Proforma
----------------- ------------------ -------------- -------------
(AUDITED) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues $ 123,561 $ 291,159 $ - $ 414,720
Cost of sales 19,634 161,117 180,751
------------- ------------ ------------
Gross profit 103,927 130,042 233,969
------------- ------------ ------------
Selling, general and administrative:
Sales and marketing 33,714 - 33,714
General and administrative 43,941 158,201 202,142
Current research and development 21,333 - 21,333
Amortization of Goodwill 4,618 (a) 4,618
------------- ------------ ------------
98,988 158,201 257,189
------------- ------------ ------------
Net income (loss) for the period $ 4,939 $ (28,159) $ (23,220)
============= ============ ============
(a)
Goodwill at acquisition $ 46,180
Managements estimated useful life (years) 10.0
-------------
Yearly amortization using straight line $ 4,618
=============
</TABLE>
<PAGE>
ROMPUS INTERACTIVE, INC. AND SUBSIDIARY
NOTE TO PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A - The pro forma adjustments to the condensed consolidated balance sheet
are as follows:
To reflect the acquisition and allocation of the purchase price on
the basis of the fair values (using net book value since no
readily available fair value was determinable) of the assets
acquired and liabilities assumed. The components of the purchase
price and its allocation to the assets and liabilities of acquiree
are as follows:
<TABLE>
<S> <C> <C>
Purchase price $ 135,000
Assets acquired and liabilities assumed:
Cash 142,655
Other current asset 315
Property and equipment, net 241,071
Accounts payables and accrued expenses (10,694)
Loans and notes payable (284,527)
-----------------
Fair value of assets acquired 88,820
----------------
Cost in excess of net assets acquired (Goodwill) 46,180
Amortization of goodwill through 5/31/99 (8,082)
----------------
Goodwill, net $ 38,098
================
</TABLE>
<PAGE>
EXHIBIT 2.1
Exchange Agreement by and between OnLine Hearing
and Rompus-BC Effective July 30, 1999
<PAGE>
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT"), NOR
REGISTERED UNDER ANY STATE SECURITIES LAW, AND ARE "RESTRICTED SECURITIES"
AS THAT TERM IS DEFINED IN RULE 144 UNDER THE 1933 ACT. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, THE AVAILABILITY OF WHICH
IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
AGREEMENT FOR THE EXCHANGE OF COMMON STOCK
AGREEMENT made effective as of the 30th day of July, 1999, by and
among Online Hearing Dot Com., Co., a Florida corporation, (the "ISSUER"), and
Bradley Wilson, Patti Cooke, and MLI Group, Inc., ("the Shareholders"), Rompus
CD-Rom Limited, a British Columbia corporation ("Rompus"), and the shareholders
of Rompus (the "Rompus Shareholders". The shareholdes of Rompus are listed in
Schedule A hereto and incorporated herein by this reference.)
In consideration of the mutual promises, covenants, and representations
contained herein, and other good and valuable consideration,
THE PARTIES HERETO AGREE AS FOLLOWS:
a.. EXCHANGE OF SECURITIES. Subject to the terms and conditions
of this Agreement, the ISSUER agrees to issue to certain shareholders of
Rompus, as indicated in Schedule A, 4,500,000 shares of the restricted common
stock of ISSUER, $0.0001 par value and to certain shareholders of Rompus, as
indicated in Schedule A, 9,000,000 shares of preferred stock Series A
(collectively referred to as the "Shares"), in exchange for 100% of the
issued and outstanding common shares of Rompus such that Rompus shall become
a wholly owned subsidiary of the ISSUER. As a material inducement to the
transaction, the Shareholders will cancel 9,000,000 shares of its restricted
common stock of the ISSUER. The rights and privileges attached to the
preferred stock issued hereby is contained in the Voting, Support and
Exchange Agreement by and between ISSUER and Rompus of even date herewith,
attached hereto as EXHIBIT "E" and incorporated herein by this reference as
if set forth in full,
b.. REPRESENTATIONS AND WARRANTIES. ISSUER and Shareholders represent
and warrant to Rompus the following:
i. ORGANIZATION. ISSUER is a corporation duly organized, validly
existing, and in good standing under the laws of Florida, and has all
necessary corporate powers to own properties and carry on a business, and is
duly qualified to do business and is in good standing in Florida. All actions
taken by the Incorporators, directors and shareholders of ISSUER have been
valid and in accordance with the laws of the State of Florida.
ii. CAPITAL. The authorized capital stock of ISSUER consists of
80,000,000 shares of common stock, $0.001 par value, of which 16,601,573 shares
are issued and outstanding. The authorized capital stock of ISSUER also consists
of 20,000,000 shares of preferred stock, $.0001 par value, of which no shares
are issued or outstanding. All outstanding shares are fully paid and non
assessable, free of liens, encumbrances, options, restrictions and legal or
equitable rights of others not a party to this Agreement. At closing, there will
be no outstanding subscriptions, options, rights, warrants, convertible
securities, or other agreements or commitments obligating ISSUER to issue or to
transfer from treasury any additional shares of its capital stock. None of the
outstanding shares of ISSUER are subject to any stock restriction agreements.
All of the shareholders of ISSUER have valid title to such shares and acquired
their shares in a
<PAGE>
lawful transaction and in accordance with the laws of Florida. A full and
complete list of all the stockholders of ISSUER is attached hereto as EXHIBIT
"A". An opinion of counsel for ISSUER regarding the tradeability of the
free trading stock is attached hereto as EXHIBIT "B"
iii. OTC BULLETIN BOARD LISTING. The Company is currently
listed on the OTC Electronic Bulletin Board with the following trading
symbol: ONLH.
(1) FINANCIAL STATEMENTS. The audited Financial
Statements of the ISSUER as of December 31, 1998, and the related statements
of income and retained earnings for the period then ended have been prepared
in accordance with generally accepted accounting principles consistently
followed by ISSUER throughout the periods indicated, and fairly present the
financial position of ISSUER as of the date of the financial statements. The
audited financial statements are attached hereto as EXHIBIT "C".
iv. ABSENCE OF CHANGES. Since the date of the financial
statements, there has not been any change in the financial condition or
operations of ISSUER, except changes in the ordinary course of business, which
changes have not in the aggregate been materially adverse.
v. LIABILITIES. ISSUER does not have any debt, liability,
or obligation of any nature, whether accrued, absolute, contingent, or
otherwise, and whether due or to become due, that is not reflected on the
ISSUERS' financial statement. ISSUER is not aware of any pending, threatened
or asserted claims, lawsuits or contingencies involving ISSUER or its common
stock. There is no dispute of any kind between ISSUER and any third party,
and no such dispute will exist at the closing of this Agreement. At closing,
ISSUER will be free from any and all liabilities, liens, claims and/or
commitments. Provided, however, the ISSUER is subject to certain UCC liens
on its assets as indicated in EXHIBIT "D" hereto. ISSUER undertakes to
satisfy or remove such liens as a condition precedent to closing.
(1) ABILITY TO CARRY OUT OBLIGATIONS. ISSUER has
the right, power, and authority to enter into and perform its obligations
under this Agreement. The execution and delivery of this Agreement by ISSUER
and the performance by ISSUER of its obligations hereunder will not cause,
constitute, or conflict with or result in (a) any breach or violation or any
of the provisions of or constitute a default under any license, indenture,
mortgage, charter, instrument, articles of incorporation, bylaw, or other
agreement or instrument to which ISSUER or its shareholders are a party, or
by which they may be bound, nor will any consents or authorizations of any
party other than those hereto be required, (b) an event that would cause
ISSUER to be liable to any party, or (c) an event that would result in the
creation or imposition or any lien, charge or encumbrance on any asset of
ISSUER or upon the securities of ISSUER to be acquired by SHAREHOLDERS.
(2) FULL DISCLOSURE. None of representations and
warranties made by the ISSUER, or in any certificate or memorandum furnished or
to be furnished by the ISSUER, contains or will contain any untrue statement of
a material fact, or omit any material fact the omission of which would be
misleading.
(3) CONTRACT AND LEASES. ISSUER is not currently
carrying on any business and is not a party to any contract, agreement or
lease. No person holds a power of attorney from ISSUER.
vi. COMPLIANCE WITH LAWS. To the best of its knowledge,
ISSUER has complied with, and is not in violation of any federal, state, or
local statute, law, and/or regulation.
vii. LITIGATION. ISSUER is not (and has not been) a party to
any suit, action, arbitration, or legal, administrative, or other proceeding, or
pending governmental investigation. To the
<PAGE>
best knowledge of the ISSUER, there is no basis for any such action or
proceeding and no such action or proceeding is threatened against ISSUER and
ISSUER is not subject to or in default with respect to any order, writ,
injunction, or decree of any federal, state, local, or foreign court,
department, agency, or instrumentality.
viii. CONDUCT OF BUSINESS. Prior to the closing, ISSUER shall
conduct its business in the normal course, and shall not (1) sell, pledge, or
assign any assets (2) amend its Articles of Incorporation or Bylaws, (3) declare
dividends, redeem or sell stock or other securities, (4) incur any liabilities,
(5) acquire or dispose of any assets, enter into any contract, guarantee
obligations of any third party, or (6) enter into any other transaction.
ix. CORPORATE DOCUMENTS. Copies of each of the following
documents, which are true complete and correct in all material respects, will be
attached to and made a part of this Agreement:
(a) Articles of Incorporation;
(b) Bylaws;
(1) Minutes of Shareholders Meetings;
(2) Minutes of Directors Meetings;
(a) List of Officers and Directors;
(3) Audited Financial Statements of the Company dated
December 31, 1998 statements described in Section
2(iii);
(4) Stock register and stock records of ISSUER and a
current, accurate list of ISSUER's shareholders.
x. DOCUMENTS. All minutes, consents or other documents
pertaining to ISSUER to be delivered at closing shall be valid and in
accordance with the laws of Florida.
xi. TITLE. The Shares to be issued pursuant to this Agreement
will be, at closing, free and clear of all liens, security interests, pledges,
charges, claims, encumbrances and restrictions of any kind. None of such Shares
are or will be subject to any voting trust or agreement. No person holds or has
the right to receive any proxy or similar instrument with respect to such
shares, except as provided in this Agreement, the ISSUER is not a party to any
agreement which offers or grants to any person the right to purchase or acquire
any of the securities to be issued pursuant to this Agreement. There is no
applicable local, state or federal law, rule, regulation, or decree which
would, as a result of the issuance of the Shares, impair, restrict or delay any
voting rights with respect to the Shares.
xii. COUNSEL. ISSUER represents and warrants that prior to
Closing, it has been represented by independent counsel.
c.. Rompus represents and warrants to ISSUER the following:
i. ORGANIZATION. Rompus is a company duly organized, validly
existing, and in good standing under the laws of British Columbia, Canada and
has all necessary corporate powers to own properties and carry on a business,
and is duly qualified to do business and is in good standing in British
Columbia. All actions taken by the Incorporators, directors and shareholders of
Rompus have been valid and in accordance with the laws of British Columbia.
ii. COUNSEL. Rompus represents and warrants that prior to
Closing, it has been represented by independent counsel.
d.. INVESTMENT INTENT. Rompus is acquiring the Shares for its own
account for purposes of investment and without expectation, desire, or need for
resale and not with the view toward distribution, resale, subdivision, or
fractionalization of the Shares.
<PAGE>
e.. CLOSING. The closing of this transaction shall take place at
the law offices of Horwitz & Beam, Two Venture Plaza, Suite 350, Irvine,
California 92618. Unless the closing of this transaction takes place on or
before July 30, 1999, then either party may terminate this Agreement.
f.. DOCUMENTS TO BE DELIVERED AT CLOSING.
(1) By the ISSUER
(2) Board of Directors Minutes authorizing the issuance
of a certificate or certificates for the 13,500,000 shares to be issued pursuant
to this Agreement.
(3) Instructions to the ISSUER's transfer agent to cancel
9,000,000 shares of Shareholders' restricted common stock of the ISSUER.
(4) The resignation of the current officers and directors
of ISSUER.
(5) A Board of Directors resolution appointing William
Greenhalgh, Hugh Mansfield, Jeff Popham, Martin Tiernay, and Shawn Smith as
directors of ISSUER.
(6) Audited financial statements of ISSUER for the period
ending December 31, 1998.
(7) The opinion of counsel for the ISSUER as to the
tradeability of the free trading stock
(8) All of the business and corporate records of ISSUER,
including but not limited to correspondence files, bank statements, checkbooks,
savings account books, minutes of shareholder and directors meetings, financial
statements, shareholder listings, stock transfer records, agreements and
contracts.
i.. ROMPUS
(1) Delivery to the ISSUER, or to its Transfer Agent, the
certificates representing 100% of the issued and outstanding common stock of
Rompus.
(2) Board of directors and Shareholders resolutions
authorizing the transactions contained herein.
g.. MISCELLANEOUS.
i. CAPTIONS AND HEADINGS. The Article and paragraph headings
throughout this Agreement are for convenience and reference only, and shall in
no way be deemed to define, limit, or add to the meaning of any provision of
this Agreement.
ii. NO ORAL CHANGE. This Agreement and any provision hereof,
may not be waived, changed, modified, or discharged orally, but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, or discharge is sought.
iii. CHOICE OF LAW. This Agreement shall be exclusively governed
by and construed in accordance with the laws of the State of Florida, If any
action is brought among the parties with respect to this Agreement or otherwise,
by way of a claim or counterclaim, the parties agree that in any such action,
and on all issues, the parties irrevocably waive their right to a trial by jury.
Exclusive jurisdiction and venue for any such action shall be the State Courts
of Miami-Dade County, Florida. In the event suit or
<PAGE>
action is brought by any party under this Agreement to enforce any of its
terms, or in any appeal therefrom, it is agreed that the prevailing party
shall be entitled to reasonable attorneys fees to be fixed by the arbitrator,
trial court, and/or appellate court.
iv. NON WAIVER. Except as otherwise expressly provided
herein, no waiver of any covenant, condition, or provision of this Agreement
shall be deemed to have been made unless expressly in writing and signed by
the party against whom such waiver is charged; and (I) the failure of any
party to insist in any one or more cases upon the performance of any of the
provisions, covenants, or conditions of this Agreement or to exercise any
option herein contained shall not be construed as a waiver or relinquishment
for the future of any such provisions, covenants, or conditions, (ii) the
acceptance of performance of anything required by this Agreement to be
performed with knowledge of the breach or failure of a covenant, condition,
or provision hereof shall not be deemed a waiver of such breach or failure,
and (iii) no waiver by any party of one breach by another party shall be
construed as a waiver with respect to any other or subsequent breach.
v. TIME OF ESSENCE. Time is of the essence of this Agreement
and of each and every provision hereof.
vi. ENTIRE AGREEMENT. This Agreement contains the entire
Agreement and understanding between the parties hereto, and supersedes all
prior agreements and understandings.
vii. COUNTERPARTS. This Agreement may be executed simultaneously
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
viii. NOTICES. All notices, requests, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party
to whom notice is to be given, or on the third day after mailing if mailed to
the party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed, and by fax, as follows:
ISSUER: 1543 Bayview Avenue, Suite 409
and Shareholders Toronto, Ontario
M4G 1B5 Canada
Rompus: Rompus CD-Rom Production, Ltd.
225 Richmond Street West, Suite 302A
Toronto, Ontario
M5V 1W2 Canada
Copy to: Patti L.W. McGlasson, Esquire
Horwitz and Beam
2 Venture Plaza, Suite 350
Irvine CA 92618
IN WITNESS WHEREOF, the undersigned has executed this Agreement effective
July 30, 1999.
ONLINE HEARING DOT COM, CO. ROMPUS CD-ROM PRODUCTION LTD.
By: /s/ Bradley Wilson By: /s/ Shawn Smith
----------------------- --------------------------
Shawn Smith
Its: President Its: Chief Executive Officer
<PAGE>
SHAREHOLDERS
By: /s/ Bradley Wilson
-----------------------
Bradley Wilson
By: /s/ Patti Cooke
-----------------------
Patti Cooke
MLI GROUP, INC.
By: /s/ George Dragone
-----------------------
Its: President
<PAGE>
EXHIBIT "A"
SHAREHOLDER LIST
<PAGE>
EXHIBIT "B"
OPINION OF COUNSEL
<PAGE>
EXHIBIT "C"
AUDITED FINANCIAL STATEMENTS
<PAGE>
SCHEDULE "A"
SHAREHOLDERS OF ROMPUS
Shareholders to receive Common Stock
Shareholders to receive Preferred Stock
<PAGE>
EXHIBIT "D"
UCC LIENS
<PAGE>
EXHIBIT "E"
VOTING, SUPPORT AND EXCHANGE AGREEMENT
<PAGE>
EXHIBIT 3.1
Articles of Incorporation, dated April 6, 1991
<PAGE>
ARTICLES OF INCORPORATION
OF
MERCUR ENTERPRISES, INC.
I, the undersigned, being of legal age and a natural person, for the
purpose of forming a corporation for profit pursuant to the laws of the State
of Florida, do hereby make, subscribe, acknowledge and file the following
Articles of Incorporation:
ARTICLE I
CORPORATE NAME
The name of this corporation shall be:
MERCUR ENTERPRISES, INC.
ARTICLE II
CORPORATE AUTHORITY
This corporation shall have the authority to engage in any activity or
business permitted under the laws of the United States and of the State of
Florida and any other jurisdiction wherein it may conduct business.
ARTICLE III
CAPITALIZATION
This corporation is authorized to issue par value voting common stock as
described below, and none other:
Maximum Number of Shares: 50,000
Par Value Per Share: $0.01
Each share of common stock of this corporation shall entitle the holder
thereof to one vote upon each proposal presented at lawful meetings of the
shareholders. No holder of common stock of this corporation shall ben
entitled to any right of cumulative voting.
<PAGE>
ARTICLE IV
CORPORATE EXISTENCE
This corporation shall commence its existence immediately upon the
filing of these Articles of Incorporation by the Department of State of the
State of Florida and shall exist perpetually thereafter unless sooner
dissolved according to law.
ARTICLE V
INITIAL ADDRESS
The initial principal office of this corporation in the State of Florida
shall be:
2601 South Bayshore Drive, Suite 1225
Miami, Florida 33133
The resident registered agent shall be:
E.H.G. Resident Agents, Inc.
2601 South Bayshore Drive, Suite 1225
Miami, Florida 33133
The Board of Directors may, from time to time, move the principal or
registered office to any other address to which it seems pertinent in the
interest of the corporation, either within or without the State of Florida.
ARTICLE VI
DIRECTORS
This corporation shall have at least one (1) director initially. The
shareholders may, from time to time and at any time, raise or lower the
number of directors of this corporation by so providing in the Bylaws of the
corporation or by amending the Bylaws of the corporation, provided that there
shall always be at least one director and said director need not be a citizen
of the United States of America.
<PAGE>
ARTICLE VII
INCORPORATOR
The name and street address of the Incorporator to these Articles of
Incorporation is:
EDWARD H. GILBERT, ESQUIRE
EDWARD H. GILBERT
Professional Association
2601 South Bayshore Drive, Suite 1225
Miami, Florida 33133
ARTICLE VIII
NO PREEMPTIVE RIGHTS
The shareholders shall have no preemptive rights. No holder of stock of
any class of this corporation (or any subscriber) shall be entitled as of
right, merely because he is a shareholder, to purchase any part of the
unissued stock of the corporation of any class, or of any additional stock of
any class to be issued by reason of any increase in the following, including
but not limited to, authorized capital stock of the corporation, bonds,
certificates of indebtedness, debentures or other securities convertible into
or carrying the right to purchase stock of the corporation; but any such
unissued stock of any class, or such additional authorized issue of new stock
or of securities convertible into or carrying the right to purchase stock of
the corporation; but any such unissued stock of any class, or such additional
authorized issue of new stock or of securities convertible into or carrying
the right to purchase stock may be issued and disposed of by the Board of
Directors to such person, firm, corporation, entity, or association, and upon
such terms as the Board of Directors may, in its absolute discretion,
determine, without offering to the shareholders then of record, of any class,
any thereof, on the same terms or on any terms, with all preemptive or
preferential right of purchase of every kind being waived by each and every
shareholder.
ARTICLE IX
BYLAWS
The initial Bylaws of this corporation shall be adopted by the Board of
Directors. The Bylaws may be amended from time to time by either the
shareholders or the directors.
<PAGE>
ARTICLE X
MEETINGS
Any subscriber or shareholder present at any meeting of such Board of
Directors, either in person or by proxy, and any director in person at any
meeting of the Board of Directors shall conclusively be deemed to have
received proper notice of such meeting unless they shall make objections, on
the record, at such meeting to any defect or insufficiency of notice.
Members of the Board of Directors shall be deemed present at any meeting of
such Board of Directors if a conference telephone or similar communication
equipment is used by means of which all persons participating in the meeting
can reasonably communicate with each other.
ARTICLE XI
DIRECTOR AND OFFICER INDEMNIFICATION
Each director and officer of the corporation, whether or not then in
office, shall be indemnified by the corporation against all costs and
expenses reasonably incurred or imposed upon them in connection with or
arising out of any claim, demand, action, suit or proceeding in which they
may be involved or to which they may be made a party by reason of their being
or having been a director or officer of the corporation, said expense to
include attorneys' fees and the costs of reasonable settlement made with a
view to curtailment of cost of litigation, except in relation to matters as
to which they finally shall be adjudged in any such action, suit or
proceeding to have been derelict in the performance of this duty as such
officer or director, or breach in their duty of loyalty to the corporation.
Said costs and expenses may be advanced by the corporation to the officer and
director.
ARTICLE XII
AFFILIATED TRANSACTIONS
This corporation expressly elects not to be governed by the provisions
of Florida Statutes section 607.0901. A director or officer of the
corporation shall not be disqualified by virtue of their office from dealing
or contracting with the corporation either as a vendor, purchaser or
otherwise, nor shall any transaction or contract of the corporation be void
or voidable by reason of the fact that any director or officer, or any firm
of which any director
<PAGE>
or officer is a member, or any corporation of which any director or officer
is a shareholder, officer or director is in any way interested in such
transaction or contract, no director or officer shall be liable to account to
the corporation for any profits realized by or from or through any such
transaction or contract authorized, ratified or approved as herein provided
by reason of the fact that they, or any firm or entity of which any director
or officer is a member, or any corporation of which any director or officer
is a shareholder, officer or director or in any interested in such
transaction or contract, nor shall any director or officer be liable to
account to the corporation for any profits realized by or from or through any
such transaction or contract authorized, ratified or approved as herein
provided by reason of the fact that they, or any firm of which they are a
member, or any corporation of which they are a shareholder, officer or
director interested in such transaction or contract. Said interested officer
or director of this corporation may be counted in determining the existence
of a quorum at any meeting of the Board of Directors of this corporation
which shall authorize any such contract or transaction with like force and
effect as if they were not so interested. Nothing herein contained shall
create liability int he events above described or prevent the authoirzed
approval of such contracts in any other manner permitted by law.
ARTICLE XIII
VACANCY ON THE BOARD OF DIRECTORS
Vacancies on the Board of Directors may only be filled by a vote of the
then remaining directors, or if directors are then remaining, by the vote of
the shareholders.
I, THE UNDERSIGNED, being the Incorporator to these Articles of
Incorporation, for the purpose of forming a corporaiton to do business both
within and without the State of Florida, do make, subscribe, acknwledge and
file these Articles of Incorpoiration, hereby delcaring and certifying that
the facts herein stated are true, and accordingly, hereunto set my hand and
seal this 6th date of August, 1991.
/s/ Edward H. Gilbert
--------------------------------------
EDWARD H. GILBERT, Incorporator
<PAGE>
STATE OF FLORIDA )
) SS.:
COUNTY OF DADE )
I, the undersigned Notary Public, in and for the State of Florida, do
hereby certify that on this day personally appeared before me EDWARD H.
GILBERT, to me well known and known to be the person who executed the
foregoing Articles of Incorporation of MERCUR ENTERPRISES, INC., and
acknowledge that he executed the same for the uses and purposes therein
stated.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 6th day of
August, 1991.
/s/
---------------------------------------
NOTARY PUBLIC AT LARGE STATE OF FLORIDA
My commission expires:
Notary Public State of Florida
my commission exp Sept. 25, 1998
Bonded thru General Ins. Und.
<PAGE>
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICLE
FOR THE SERVICE OF PROCESS IWTHIN FLORIDA,
NAMING AGENT UPON WHOM PROCESS MAY BE SERVED
In compliance with Section 48.091, Florida Statutes, the following is
submitted:
FIRST, MERCUR ENTERPRISES, INC., desiring to organize or qualify
under the laws of the State of Florida, with its principal place of business
in Miami, State of Florida, has named E.H.G. Resident Agents, Inc., located
at 2601 South Bayshore Drive, Suite 1225, Miami, Florida, 33133, as its agent
to accept service of process iwthin Florida.
/s/ Edward H. Gilbert
--------------------------------------
EDWARD H. GILBERT, ESQUIRE
Title: Incorporator
-------------------------------
Date: 8/6/91
-------------------------------
I, having been named to accept service of process for the
above-stated corpriaotn at the palce designated in this certificate, hereby
agree to act in this capacity, and I further agree to comply with the
provisions of all statutes relative to the proper and complete performance of
my duties.
E.H.G. RESIDENT AGENTS, INC.
BY: /s/ Edward H. Gilbert
--------------------------------------
EDWARD H. GILBERT
Title: President
-----------------------------------
<PAGE>
EXHIBIT 3.2
Amendment to Articles of Incorporation, dated August 25, 1995
<PAGE>
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
MERCUR ENTERPRISES, INC.
ARTICLE I
CORPORATE NAME
The name of this corporation shall be:
MERCUR ENTERPRISES, INC.
ARTICLE II
CORPORATE AUTHORITY
This corporation shall have the authority to engage in any activity or
business permitted under the laws of the United States and of the State of
Florida and any other jurisdiction where it may conduct business.
ARTICLE III
CAPITALIZATION
The total number of shares of all classes that the Corporation shall
have authority to issue is one hundred million (100,000,000) shares, of which
twenty million (20,000,000) shares at $.0001 par value shall be a class
designated "Preferred Shares" and eighty million (80,000,000) shares at
$.0001 par value shall be a class designated "Common Shares".
A. PREFERRED SHARES.
1. Preferred Shares may be issued from time to time in one or more
series, each such series to have distinctive serial designations, as same
shall hereafter be determined in the resolution providing for the issuance
of such Preferred Shares from time to time as adopted by the Board of
Directors pursuant to the authority to do so, which authority is hereby
vested in the Board of Directors.
2. Subject to the provisions of the Florida Business Corporation Act,
each series of Preferred Shares:
(a) may have such number of shares;
(b) may have such voting powers, full or limited, or may be
without voting power;
(c) may be redeemable or convertible at such time or times and at
such prices;
(d) may entitle the holders thereof to receive distributions
calculated in any manner, including but not limited to dividends, which may
be cumulative, non-cumulative or partially cumulative; at such rate or rates,
on such conditions, from such date or dates, at such times, and payable in
preference to, or in such relations to, the dividends payable on any other
class or classes or series of shares;
(e) may have such preference over any other class of shares with
respect to distributions, including but not limited to dividends and
distributions upon dissolution of the Corporation;
<PAGE>
(f) may be made convertible into, or exchangeable for, shares of
any other class or classes (except the class having prior or superior rights
and preferences as to the dividends or distribution assets upon liquidation)
or to any other series of the same or any other class or classes of shares of
the Corporation at such price or prices or at such rates of exchange, and
with such adjustments;
(g) may be entitled to the benefit of a sinking fund or purchase
fund to be applied to the purchase or redemption of shares of such series in
such amount or amounts;
(h) may be entitled to the benefit of conditions and restrictions
upon the creation of indebtedness of the Corporation or any subsidiary, upon
the issue of any additional shares (including additional shares of such
series or of any other series) and upon the payment of dividends or the
making of other distributions on, and the purchase, redemption or other
acquisition by the Corporation or any subsidiary of any outstanding shares of
the Corporation; and
(i) may have such other relative, participating, option or other
special rights, and qualifications, limitations or restrictions; all as may
be stated in said resolution or resolutions providing for the issuance of
such Preferred Shares.
3. Except where otherwise set forth in the resolution or resolutions
adopted by the Board of Directors providing for the issuance of any series of
Preferred Shares, the number of shares comprised in such series may be
increased or decreased (but not below the number of shares then outstanding)
from time to time by like action of the Board of Directors.
4. Shares of any series of Preferred Shares which have been redeemed
(whether through the operation of a sinking fund or otherwise) or purchased
by the Corporation, or which, if convertible, were exchangeable, have been
converted into or exchanged for shares of any other class or classes, shall
have the status f authorized and unissued Preferred Shares and may be
reissued as a part of the series of which they were originally a part of may
be reclassified and reissued as part of a new series of Preferred Shares to
be created by resolution or resolutions of the Board of Directors or as part
of any other series of Preferred Shares, all subject to the conditions or
restrictions on issuance set forth in the resolution of resolutions adopted
by the Board of Directors providing for the issue of any series of Preferred
Shares and to any filing required by law.
B. COMMON SHARES.
The par value of the Common Shares shall be payable:
(a) in lawful money of the United States of America; or
(b) in other property, tangible or intangible; or
(c) in labor or services actually performed; or
(d) in labor or services to be performed as evidenced by a
written contract to or for the Corporation at a just valuation to be fixed by
the Board of Directors or the Shareholders of this Corporation. The Common
Shares of the Corporation may be increased or decreased at any time as
provided by the laws of the State of Florida.
Subject to all the rights of the Preferred Shares or any series thereof,
the holders of the Common Shares shall be entitled to receive when, as and if
the declared by the Board of Directors, out of funds legally available
therefor, dividends payable in cash, shares or otherwise, as provided by
Florida law.
<PAGE>
Upon any liquidation, dissolution or winding-up of the Corporation,
whether voluntary or involuntary, and after the holders of the Preferred
Shares of each series shall have been paid in full the amounts to which they
respectively shall be entitled or a sum sufficient for such payment in full
shall have been set aside, the remaining assets of the Corporation shall be
distributed pro rata to the holders of all common shares in accordance with
their respective rights and interest, to the exclusion of the holders of the
Preferred Shares.
Each share of Common Stock of this Corporation shall entitle the holder
thereof to one vote upon each proposal presented at the lawful meetings of
the Shareholders. No holder of Common Stock of this Corporation shall be
entitled to any right of cumulative voting.
ARTICLE IV
CORPORATE EXISTENCE
This Corporation shall commence its existence immediately upon the
filing of these Articles of Incorporation by the Department of State of the
State of Florida and shall exist perpetually thereafter unless sooner
dissolved according to law.
ARTICLE V
INITIAL ADDRESS
The initial principal office of this corporation in the State of Florida
shall be:
5100 Town Center Circle, Suite 330
Boca Raton, Florida 33486
The resident agent shall be:
E.H.G. Resident Agents, Inc.
5100 Town Center Circle, Suite 330
Boca Raton, Florida 33486
The Board of Directors may, from time to time, move the principal or
registered office to any other address to which it seems pertinent in the
interest of the corporation, either within or without the State of Florida.
ARTICLE VI
DIRECTORS
This corporation shall have at least one (1) director initially. The
shareholders may, from time to time and at any time, raise or lower the
number of directors of this corporation by so providing in the Bylaws of the
corporation or by amending the Bylaws of the corporations, provided that
there shall always be at least one director and said director need not be a
citizen of the United States of America.
ARTICLE VII
INCORPORATOR
The name and street address of the Incorporator to these Articles of
Incorporation is:
EDWARD H. GILBERT
Gilbert and Bomstein, P.A.
5100 Town Center Circle, Suite 330
Boca Raton, Florida 33486
<PAGE>
ARTICLE VIII
NO PREEMPTIVE RIGHTS
The shareholders shall have no preemptive rights. No holder of stock of
any class of this corporation (or any subscriber) shall be entitled as of
right, merely because said shareholder is a shareholder, to purchase any part
of the unissued stock of the corporation of any class, or of any additional
stock of any class to be issued by reason of any increase in the following,
including but not limited to, authorized capital stock of the corporation,
bonds, certificates of indebtedness, debentures or other securities
convertible into or carrying the right to purchase stock of the corporation;
but any such unissued stock of any class, or such additional authorized issue
of new stock or of securities convertible into or carrying the right to
purchase stock may be issued and disposed of by the Board of Directors to
such person, firm, corporation, entity, or association, and upon such terms
as the Board of Directors may, in its absolute discretion, determine, without
offering to the shareholders then of record, of any class, any thereof, on
the same terms or on any terms, with all preemptive or preferential right of
purchase of every kind being waived by each and every shareholder.
ARTICLE IX
BYLAWS
The initial Bylaws of this corporation shall be adopted by the Board of
Directors. The Bylaws may be amended from time to time by either the
shareholders or the directors
ARTICLE X
MEETINGS
Any subscriber or shareholder present at any meeting of such
shareholders, either in person or by proxy, and any director present in
person at any meeting of the Board of Directors shall conclusively be deemed
to have received proper notice of such meeting unless they shall make
objections, on the record, at such meeting to any defect or insufficiency of
notice. Members of the Board of Directors shall be deemed present at any
meeting of such Board of Directors if a conference telephone or similar
communication equipment is used by means of which all persons participating
in the meeting can reasonably communication with each other.
ARTICLE XI
DIRECTOR LIABILITY
No director of this corporation shall be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director/ Nothing in this paragraph shall serve to eliminate or
limit the liability of a director (i) for any breach of the director's duty
of loyalty to this corporation or its stockholders, (ii) for actors of
omissions not in good faith or which involves international misconduct or a
knowing violation of law, (iii) under Section 607.0831 of the Florida General
Corporation Act, or (iv) for any transaction from which the director derived
an improper personal benefit. If the Florida General Corporation Act is
amended after approval by the stockholders of this Article to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the corporation shall be
eliminated or limited to the fullest extent permitted by the Florida General
Corporation Act, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the corporation shall not adversely affect any right or
protection of a director of the corporation existing at the time of such
repeal or modification.
<PAGE>
ARTICLE XII
DIRECTOR AND OFFICER INDEMNIFICATION
(a) Each person who was or is made a party or is threatened to be
made a party to or is otherwise involved in any action, suit or proceeding,
whether civil, criminal or administrative, (hereinafter a "Proceeding"), or
is contacted by any governmental or regulatory body in connection with any
investigation or inquiry (hereinafter an "Investigation"), bu reason of the
fact that such person ir or was a director or executive officer (as such term
is utilized pursuant to interpretations under Section 16 of the Securities
Exchange Act of 1934) of the corporation or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans (hereinafter an
"Indemnitee"), whether the basis of such Proceeding or Investigation is
alleged action in an official capacity or in any other capacity as set forth
above shall be indemnified and held harmless by the corporation to the
fullest extent authorized by the Florida General Corporation Act, as the same
exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the corporation to provide
broader indemnification rights than such law permitted the corporation to
provide prior to such amendment), against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) or the costs of reasonable settlement made
with a view to curtailment of the cost of litigation reasonably incurred or
suffered by such Indemnitee in connection therewith and such indemnification
shall continue as to an Indemnitee who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the Indemnitee's heirs,
personal representatives, executors and administrators; provided, however,
that except as provided in paragraph (b) hereof with respect to Proceedings
to enforce rights to indemnification, the corporation shall indemnify any
such Indemnitee in connection with a proceeding (or part thereof) initiated
by such Indemnitee only if such proceeding (or part thereof) was authorized
by the board of directors of the corporation. The right to indemnification
conferred in this Article shall be a contract right and shall include the
right to be paid by the corporation the expenses incurred in defending any
such proceeding in advance of its final disposition (hereinafter an
"Advancement of Expenses"); provided, however, that the Advancement of
Expenses shall be made only upon delivery to the corporation of a personal
guarantee by or on behalf of such Indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such Indemnitee is or was not
entitled to be indemnified for such expenses under this Article or otherwise
(hereinafter a "Guarantee").
(b) If a claim under paragraph (a) of this Article is not paid in
full be the corporation within sixty (60) days after a written claim has been
received by the corporation, except in the case of a claim for an Advancement
of Expenses in which case the applicable period shall be twenty (20) days,
the Indemnitee may at any time hereafter bring suit against the corporation
to recover the unpaid amount of the claim. If successful, in whole or in
part, in any suit or in a suit brought by the corporation to recover an
Advancement of Expenses pursuant to the terms of a Guarantee, the Indemnitee
shall be entitled to be paid also the expense of prosecuting or defending
such suit.
(1) in any suit brought by the Indemnitee to enforce a right
to indemnification hereunder (but not in a suit brought by the
Indemnitee to enforce a right to an Advancement of Expenses), it shall
be a defense that the Indemnitee has not met the applicable standard of
conduct set forth in the Florida General Corporation Act; and
(2) in any suit by the corporation to recover an Advancement
of Expenses, pursuant to the terms of a Guarantee, the corporation shall
be entitled to recover such expenses upon a final adjudication that the
Indemnitee has not met the applicable standard of conduct set forth in
the Florida General Corporation Act.
<PAGE>
Neither the failure of the corporation (including its board of
directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification of
the Indemnitee is proper in the circumstances because the Indemnitee has met
the applicable standard of conduct set forth in the Florida General
Corporation Act, nor an actual determination by the corporation (including
its board of directors, independent legal counsel, or its stockholders) that
the Indemnitee has not met such applicable standard of conduct (or in the
case of such a suit brought by the Indemnitee) shall be a defense to such
suit. In any suit brought by the Indemnitee to enforce a right hereunder, or
by the corporation to recover an Advancement of Expenses pursuant to the
terms of a Guarantee, the burden of proving that the Indemnitee is not
entitled to be indemnified or to such Advancement of Expenses under this
Section or otherwise shall be on the corporation.
(c) The rights to indemnification and to the Advancement of
Expenses conferred in this Article shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, these
Articles of Incorporation, bylaws, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) The corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, true or other
enterprise against any expenses, liability or loss, whether or not the
corporation would have the power to indemnify such persona against such
expense, liability or loss under the Florida General Corporation Act.
(e) The corporation may, to the extent authorized from time to
time by the Board of Directors, grant rights to indemnification and to the
Advancement of Expense, to any employee or agent of the corporation to the
fullest extent of the provisions of this Article with respect to the
indemnification and Advancement of Expenses of directors, and executive
officers of the corporation.
ARTICLE XII
AFFILIATED TRANSACTIONS
This corporation expressly elects not to be governed by the provisions
of Florida Statutes Section 607.0901. A director or officer of the
corporation shall not be disqualified by virtue of their office from dealing
or contracting with the corporation either as a vendor, purchaser or
otherwise, nor shall any transaction or contract of the corporation be void
or voidable by reason of the fact that any director or officer, or any firm
of which any director or officer is a member, or any corporation of which any
director or officer is a shareholder, officer or director is in any way
interested in such transaction or contract, nor director or officer shall be
liable to account to the corporation for any profits realized by or from or
through any such transaction or contract authorized, ratified or approved as
herein provided by reason of the fact that they, or any firm or entity of
which any director or officer is a member, or any corporation of which any
director or officer is a shareholder, officer of director or in any
interested in such transaction or contract, nor shall any director or officer
be liable to amount to the corporation for any profits realized by or from or
through any such transaction or contract authorized, ratified or approved as
herein provided by reason of the fact that they, or any firm of which they
are a member, or any corporation of which they are a shareholder, officer or
director interest in such transaction or contract Said interested officer or
director of this corporation may be counted in determining the existence of a
quorum at any meeting of the Board of Directors of this corporation which
shall authorize any such contract or transaction with like force and effect
as if they were not so interested. Nothing herein contained shall create
liability in the events above described or prevent the authorized approval of
such contracts in any manner permitted by law.
<PAGE>
ARTICLE XIII
VACANCY OF THE BOARD OF DIRECTORS
Vacancies on the Board of Directors may only be filled by a vote of the
then remaining directors, or if no directors are then remaining, by a vote of
the majority of the shareholders.
IN WITNESS WHEREOF, the undersigned has made, subscribed and
acknowledged these Amended and Restated Articles of Incorporation.
Dated: August 24, 1995 MERCUR ENTERPRISES, INC.
By: /s/ Edward H. Gilbert
--------------------------------------
Edward H. Gilbert, President
<PAGE>
EXHIBIT 3.3
Amendment of Articles of Incorporation, dated October 19, 1995
<PAGE>
ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION
OF
MERCUR ENTERPRISES, INC.
Pursuant to the provisions of Section 607.1003 of the Florida Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to the Articles of Incorporation:
1. Article III of the Articles of Incorporation shall be deleted and
the following Article I shall be inserted in its place:
ARTICLE III
CAPITALIZATION
The total number of shares of all classes that the Corporation shall
have authority to issue is one hundred million (100,000,000) shares, of which
twenty million (20,000,000) shares at $.0001 par value shall be a class
designated "Preferred Shares" and eighty million (80,000,000) shares at
$.0001 par value shall be a class designated "Common Shares".
A. PREFERRED SHARES.
1. Preferred Shares may be issued from time to time in one or more
series, each such series to have distinctive serial designations, as same
shall hereafter be determined in the resolution or resolutions providing for
the issuance of such Preferred Shares from time to time as adopted by the
Board of Directors pursuant to the authority to do so, which authority is
hereby vested in the Board of Directors.
2. Subject to the provisions of the Florida Business Corporation Act,
each series of Preferred Shares:
(a) may have such number of shares;
(b) may have such voting powers, full or limited, or may be
without voting power;
(c) may be redeemable or convertible at such time or times and at
such prices;
(d) may entitle the holders thereof to receive distributions
calculated in any manner, including but not limited to dividends, which may
be cumulative, non-cumulative or partially cumulative; at such rate or rates,
on such conditions, from such date or dates, at such times, and payable in
preference to, or in such relations to, the dividends payable on any other
class or classes or series of shares;
(e) may have such preference over any other class of shares with
respect to distributions, including but not limited to dividends and
distributions upon dissolution of the Corporation
(f) may be made convertible into, or exchangeable for, shares of
any other class or classes (except the class having prior or superior rights
and preferences as to the dividends or distribution assets upon liquidation)
or to any other series of the same or any other class or classes of shares of
the Corporation at such price or prices or at such rates of exchange, and
with such adjustments;
(g) may be entitled to the benefit of a sinking fund or purchase
fund to be applied to the purchase or redemption of shares of such series in
such amount or amounts;
<PAGE>
(h) may be entitled to the benefit of conditions and restrictions
upon the creation of indebtedness of the Corporation or any subsidiary, upon
the issue of any additional shares (including additional shares of such
series or of any other series) and upon the payment of dividends or the
making of other distributions on, and the purchase, redemption or other
acquisition by the Corporation or any subsidiary of any outstanding shares of
the Corporation; and
(i) may have such other relative, participating, optional or
other special rights, and qualifications, limitations or restrictions; all as
may be stated in said resolution or resolutions providing for the issuance of
such Preferred Shares.
3. Except where otherwise set forth in the resolution or resolutions
adopted by the Board of Directors providing for the issuance of any series of
Preferred Shares, the number of shares comprised in such series may be
increased or decreased (but not below the number of shares then outstanding)
from time to time by like action of the Board of Directors.
4. Shares of any series of Preferred Shares which have been redeemed
(whether through the operation of a sinking fund or otherwise) or purchased
by the Corporation, or which, if convertible, were exchangeable, have been
converted into or exchanged for shares of any other class or classes, shall
have the status of authorized and unissued Preferred Shares and may be
reissued as a part of the series of which they were originally a part of may
be reclassified and reissued as part of a new series of Preferred Shares to
be created by resolution or resolutions of the Board of Directors or as part
of any other series of Preferred Shares, all subject to the conditions or
restrictions on issuance set forth in the resolution of resolutions adopted
by the Board of Directors providing for the issue of any series of Preferred
Shares and to any filing required by law.
B. COMMON SHARES.
The par value of the Common Shares shall be payable:
(a) in lawful money of the United States of America; or
(b) in other property, tangible or intangible; or
(c) in labor or services actually performed; or
(d) in labor or services to be performed as evidenced by a
written contract to or for the Corporation at a just valuation to be fixed by
the Board of Directors or the Shareholders of this Corporation. The Common
Shares of the Corporation may be increased or decreased at any time as
provided by the laws of the State of Florida.
Subject to all the rights of the Preferred Shares or any series thereof,
the holders of the Common Shares shall be entitled to receive when, as and if
the declared by the Board of Directors, out of funds legally available
therefor, dividends payable in cash, shares or otherwise, as provided by
Florida law.
Upon any liquidation, dissolution or winding-up of the Corporation,
whether voluntary or involuntary, and after the holders of the Preferred
Shares of each series shall have been paid in full the amounts to which they
respectively shall be entitled or a sum sufficient for such payment in full
shall have been set aside, the remaining assets of the Corporation shall be
distributed pro rata to the holders of all common shares in accordance with
their respective rights and interest, to the exclusion of the holders of the
Preferred Shares.
<PAGE>
Each share of Common Stock of this Corporation shall entitle the holder
thereof to one vote upon each proposal presented at the lawful meetings of
the Shareholders. No holder of Common Stock of this Corporation shall be
entitled to any right of cumulative voting.
Each share of common stock, $0.01 par value, outstanding on August 25,
1995 shall be exchanged for twenty (20) shares of common stock, $0.0001 par
value. The authorized shares of common stock, $0.0001, par value, shall
remain the same as set forth above.
2. Article XII entitled AFFILIATED TRANSACTIONS is renumbered to be
Article XIII.
3. Article XIII entitled VACANCY ON THE BOARD OF DIRECTORS is
renumbered to be Article XIV.
4. The Amendment was adopted on August 25, 1995.
5. The Amendment was duly adopted unanimously by the Board of
Directors and by the shareholders owing a majority of the outstanding voting
stock of the corporation and such majority of votes was sufficient for
approval.
Dated: October 17, 1995 MERCUR ENTERPRISES, INC.
By: /s/ Edward H. Gilbert
--------------------------------------
Edward H. Gilbert, President
<PAGE>
EXHIBIT 3.4
Articles of Amendment to the Articles of Incorporation, dated January 3,
1997
<PAGE>
ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION
OF
MERCUR ENTERPRISES, INC.
Pursuant to the provisions of Section 607.1003 of the Florida Businesss
Corporation Act, the undersigned corporation adopts the folloiwing Articles of
Amendment tothe Articles of Incorporation:
FIRST, Article I of the Corporation's Articles of Incorporation is hereby
amended to read as follows:
"ARTICLE I
NAME
The name of the Corporation shall be Auto Metriks, Inc."
SECOND: The outstanding common stock of the Corporation ("Common Stock"),
as of the Record Date hereinafter provided for, shall be adjusted and decreased
in a reverse stock split so that each 25 shares of Common Stock outstanding as
of the close of business on the Record Date shall become one share of Common
Stock as of the close business on the record Date, subject to and in accordance
with the following:
(1) No fractional shares will be issued or created in this stock split and
each holder of Common Stock as of the Record Date who would be entitled to a
fractional share after dividing the number of shares held prior to the stock
split by 25 shall be credited with and entitled to a full share in lien of the
fractional share;
(2) The Record Date for the reverse stock plit authorized in this
resolution shall be January 10, 1997;
(3) The authorized shares of $.0001 par value Common Stock shall remain
unchanged;
(4) The Amendment was adopted on December 31, 1996; and
(5) The Amendment was duly adopted unanimously by the Board of Directors
and by the shareholders owning an excess of ninety percent of the outstanding
voting stock of the corporation and such vote was sufficient for approval.
<PAGE>
EXHIBIT 3.5
Amendment of Articles of Incorporation, dated April 5, 1999
<PAGE>
ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION
OF
AUTO METREKS, INC.
Pursuant to the provisions of Section 607.1003 of the Florida Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to the Articles of Incorporation.
FIRST, Article I of the Corporation's Articles of Incorporation is hereby
amended to read as follows:
"ARTICLE I
NAME
The name of the Corporation shall be "Online Hearing Dot Com, Co."
SECOND, the outstanding common stock of the Corporation ("Common Stock"),
as of the Record Date hereinafter provided for, shall be adjusted and decreased
in a reverse stock split so that each 30 shares of Common Stock outstanding as
of the close of business on the Record Date shall become one share of Common
Stock as of the close business on the Record Date, subject to and in accordance
with the following:
(1) No fractional shares will be issued or created in this stock split and
each holder of Common Stock as of the Record Date who would be entitled to a
fractional share after dividing the number of shares held prior to the stock
split by 30 shall be credited with and entitled to a full share in lien of the
fractional share;
(2) The Record Date for the reverse stock split authorized in this
resolution shall be April 5, 1999;
(3) The authorized shares of $.0001 par value Common Stock shall remain
unchanged;
(4) The Amendment was adopted on April 5, 1999, and
(5) The Amendment was duly adopted unanimously by the Board of Directors
and by the shareholders owning an excess of sixty-six percent of the outstanding
voting stock of the corporation and such vote was sufficient for approval.
FURTHER RESOLVED, that the Board of Directors and the officers of the
Corporation be and they hereby are authorized and directed to take all actions
necessary and appropriate to complete the name change and revers stock split
which are the subject of this Resolution.
Executed as of the date set forth below.
Dated: April 5, 1999 By: /s/ Bradley R. Wilson
------------------------------
Bradley R. Wilson, President
<PAGE>
EXHIBIT 3.6
Articles of Incorporation, dated July 28, 1999
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
ONLINE HEARING DOT COM, CO.
Pursuant to the provisions of Section 607.1003 of the Florida Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to the Articles of Incorporation.
FIRST, Article 1 of the Corporation's Articles of Incorporation is hereby
amended to read as follows:
"ARTICLE 1
NAME
The name of the Corporation shall be "Rompus Interactive Corp."
FURTHER RESOLVED, that the Board of Directors and the Officers of the
Corporation be and they hereby are authorized and directed to take all actions
necessary and appropriate to complete the name change which is the subject of
this Resolution.
Executed as of the date set forth below.
Dated: July 26, 1999 By: /s/ Bradley R. Wilson
-------------------------------
Bradley R. Wilson
President
<PAGE>
EXHIBIT 3.7
Amendment of Articles of Incorporation, dated July 28, 1999
<PAGE>
AMENDMENT TO THE ARTICLES OF INCORPORATION
BY
ACTION BY UNANIMOUS WRITTEN CONSENT
OF
BOARD OF DIRECTORS
OF
ONLINE HEARING DOT COM, CO.
The undersigned constituting all of the directors of Online Hearing Dot
Com, Co., a Florida corporation ("Corporation") hereby adopt the Resolutions
set forth below, upon their unanimous written consent under the applicable
provisions of Florida law.
RESOLVED, that the Board of Directors does hereby create and designate
out of the Corporation's authorized 20,000,000 shares of $.0001 par value
preferred stock, a new class of stock known as the "series A Special Voting
Preferred Shares" by amending the Corporation's Articles of Incorporation to
add thereto a new section as follows:
4.4 Series A Special Voting Preferred Share
(a) Designation and Amount. Pursuant to a resolution adopted by the
Board of Directors of the Corporation on July 28, 1999, 9,000,000
preferred shares (of $.0001 par value) is hereby constituted as a
series of preferred shares of the Corporation which shall be
designated as the "Series A Special Voting Preferred Shares" (the
"Series A Preferred Shares"), the preferences and relative, optional
and other special rights of which and the qualifications,
limitations or restrictions of which shall be as set forth herein.
(b) Dividends and Distributions. The holder of the Series A Preferred
Shares shall not be entitled to receive any portion of any dividend
or distribution at any time.
(c) Voting Rights. The holder of the Series A Preferred Shares shall
have the following voting rights:
(I) The Series A Preferred Shares shall entitle the holders
thereof to one vote for each Series A Preferred held by
such holder. (Such number is equal to the number of
Exchangeable Shares of Rompus CD-Rom Production Ltd.
("Rompus") outstanding as of the date hereof).
(ii) Except as otherwise provided herein or by law, the holder
of the Series A Preferred Shares and the holders of Common
Shares shall vote together as one class on all matters
submitted to a vote of shareholders of the Corporation.
(iii) Except as set forth herein, the holders of the Series A
Preferred Shares shall have no special voting rights, and
their consent shall not be required (except to the extent
they are entitled to vote with holders of Common Shares as
set forth herein) for taking any corporate action.
(d) Additional Provisions
(I) The holder of the Series A Preferred Shares are entitled to
exercise the voting rights attendant thereto in such manner
as such holders desire.
<PAGE>
(ii) At such time as (A) the Series A Preferred Shares entitle
their holder to a number of votes equal to zero because
there are no Exchangeable Shares of Rompus outstanding
which are not owned by the corporation or any of its
direct or indirect subsidiaries, and (B) there are no share
of stock, debt, option or other agreement, obligation or
commitment of Rompus which could by its terms require
Rompus to issue any Exchangeable Shares to any person other
than the Corporation or any of its direct or indirect
subsidiaries, then the Series A Preferred Shares shall
thereupon be retired and canceled promptly thereafter.
Such share shall upon its cancellation, and upon the taking,
of any such action required by applicable law, become an
authorized but unissued preferred share and may be reissued
as part of a new series of preferred shares to be created
by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set
forth herein.
(e) Required Shares
If the Series A Preferred Shares should be purchased or otherwise
acquired by the Corporation in any manner whatsoever, then the
Series A preferred Shares shall be retired and canceled promptly
after the acquisition thereof. Such shares shall upon its
cancellation and upon the taking of any action required by
applicable law, become an authorized but unissued preferred share
and may be reissued as part of a new series of preferred shares to
be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuances set forth
herein.
(f) Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the Corporation,
the holders of the Series A Preferred Shares shall not be entitled
to any portion of any distribution.
(e) No Redemption or Conversion.
The Series A Preferred Shares shall not be redeemable or
convertible.
3. This amendment was duly adopted by the Board of Directors of the
Corporation without shareholder action, and shareholder action was
not required.
Executed on the dates set forth below.
ONLINE HEARING DOT COM, CO.
July 28, 1999 /s/ Bradley R. Wilson
----------------------------------
Bradley R. Wilson
July 28, 1999 /s/ Patti Cooke
----------------------------------
Patti Cooke
<PAGE>
EXHIBIT 3.8
Bylaws of Mercur Enterprises, Inc.
<PAGE>
BYLAWS OF
MERCUR ENTERPRISES, INC.
ARTICLE A.
OFFICES
The principal office of the Corporation shall be established and maintained
in the State of Florida. The Corporation may also have offices at such places
within or without the State of Florida as the board may, from time to time,
establish.
ARTICLE B.
SHAREHOLDERS
1. ANNUAL MEETING. The annual meeting of the shareholders of this
corporation shall be held annually on a date and a time and place designated
from time to time by the Board of Directors of the Corporation. Business
transacted at the annual meeting shall include the election of Directors of the
Corporation and the transaction of any other proper business. If the designated
day shall fall on a Sunday or legal holiday, then the meeting shall be held on
the first business day thereafter.
2. SPECIAL MEETINGS. Special meetings of the shareholders shall be held
when directed by the President or the Board of Directors, or when requested in
writing by the holders of not less than ten percent (10%) of all the shares
entitled to vote at the meeting. Such written request must be signed, dated and
delivered to the Secretary of the Corporation. A meeting requested by
Shareholders shall be called for a date not less than ten (10) nor more than
sixty (60) days after the request is made unless the Shareholders requesting the
meeting designate a later date. The call for the special Meeting shall be
issued by the Secretary, unless the President, Board of Directors, or
Shareholders requesting the Special Meeting shall designate another person to do
so. Such a request for a Special Meeting shall state the purpose of the
proposed Special Meeting. Business transacted at any Special Meeting shall be
limited to the purpose stated in the notice thereof.
3. PLACE OF MEETING. Meetings of Shareholders shall be held at the
principal place of business of the Corporation or at such other place as may be
designated by the Board of Directors.
4. NOTICE OF MEETING. Written notice to each Shareholder of record
entitled to vote stating the place, day and hour of the meeting, and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called, shall be delivered not less than ten (10) nor more than sixty (60) days
before the meeting either personally, by mail, telegram or overnight carrier.
If mailed, such notice shall be deemed to be delivered when deposited in the
United States mail, addressed to the Shareholder at the Shareholder's address as
it appears on the stock transfer books of the corporation, with postage prepaid.
If notice is given by telegram or overnight courier, such notice shall be deemed
to be delivered when the telegram or overnight carrier is delivered to the
telegraph company or overnight carrier. If any Shareholder shall transfer such
Shareholder's stock after notice, it shall not be necessary to notify the
transferee. Any shareholder may waive notice of any meeting either before,
during or after the meeting. The attendance of a shareholder at a meeting shall
constitute a waiver of notice of such meeting, except here a shareholder attends
a meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened.
<PAGE>
5. NOTICE OF ADJOURNED MEETING. When a meeting is adjourned to another
time or place, it shall not be necessary to give any notice of the adjourned
meeting if the time and place to which the meeting is adjourned are announced at
the meeting at which the adjournment is taken; and any business may be
transacted at the adjourned meeting that might have been transacted on the
original date of the meeting. If, however, after adjournment the Board of
Directors fixes a new record date for the adjourned meeting, a notice of the
adjourned meeting shall be given as provided in paragraph 4 of this Article to
each Shareholder of record on the new record date entitled to vote at such
meeting.
6. VOTING LISTS. The officer or agent having charge of the Stock
transfer book of the corporation shall make, at least ten (10) days before each
meeting of shareholders, a complete list of shareholders entitled to vote at
such meeting, or any adjournment thereof, arranged in alphabetical order, with
the address and number of shares held by each, which list, for a period of ten
(10) days prior to such meeting, 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 book shall be prima facie evidence as to who are the shareholders
entitled to examine such list or to vote at any meeting of the shareholders.
7. TRANSFER BOOK AND RECORD DATE. For the purposes of determining
shareholders entitled to notice of, or to vote at any meeting, or entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other purpose, the Board of Directors may close the stock
transfer book of the Corporation as provided by law.
8. QUORUM. Except as otherwise provided in these bylaws, or as required
by the Articles of Incorporation, the majority of the shares entitled to vote
(50% + 1), represented in person or by Proxy, shall constitute a Quorum at a
meeting of shareholders, but in no event shall a Quorum consist of less than
one-third (1/3) of the shares entitled to vote at the meeting.
After a Quorum has been established at a shareholder's meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of shares
entitled to vote at the meeting below the number required for a Quorum, shall
not effect the validity of any action taken at the meeting or any adjournment
thereof.
9. VOTING OF SHARES. Each shareholder entitled to vote shall at every
meeting of shareholders be entitled to one (1) vote for each share of voting
stock held by them.
10. PROXY. Every shareholder entitled to vote at a meeting of
shareholders, or to express consent or dissent without a meeting, or the
shareholder's duly authorized attorney-in-fact, may authorize another person or
persons to act for the shareholder by Proxy. The proxy must be signed by the
shareholders or their attorney-in-fact. No proxy shall be valid after the
expiration of eleven (11) months from the date thereof, unless otherwise
provided in the Proxy or by Florida law.
11. INFORMAL ACTION BY SHAREHOLDERS. Unless otherwise provided by law or
by the Articles of Incorporation, any action required to be taken at a regular
meeting of the Shareholders, or any other action which may be taken at a Special
Meeting of the Shareholders may be taken without a meeting if a consent in
writing setting for the action so taken shall be
<PAGE>
signed by holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize such action at a meeting
at which all shares entitled to vote thereon were present and voted. Within
ten (1) days after obtaining such authorization by written consent, notice
must be given to those Shareholders who have not consented in writing. The
notice shall fairly summarize the material features of the authorized action
and, if the action shall have been such that dissenters' rights are provided
under Florida law, the notice shall contain a clear statement of the right of
Shareholders dissenting therefrom to be paid the fair value of their shares
upon compliance with certain further provisions of such Florida law regarding
the rights of dissenting Shareholders.
ARTICLE C.
BOARD OF DIRECTORS
1. GENERAL POWERS. The business of the Corporation shall be managed and
its corporate powers exercised by its Board of Directors.
2. NUMBER, TENURE AND QUALIFICATIONS. The Board of Directors shall
consist of at least one (1) director. The number may be altered from time to
time by either the Directors or the Shareholders; however, there shall always be
an odd number of Directors. Directors shall be elected at the annual meeting of
Shareholders and each Director elected shall hold office until such Director's
successor has been elected and qualified, or until their prior resignation or
removal. It shall not be necessary for Directors to be Shareholders.
3. VACANCIES. If the office of any Director, member of a committed or
other officer becomes vacant, the remaining Directors in office, by a majority
(50% +1) vote, though this may constitute less than a quorum of the Board of
Directors, may appoint any qualified person to fill such vacancy, who shall hold
office for the unexpired term and until their successor shall be duly elected
and has qualified.
4. REMOVAL OF DIRECTORS. Any or all of the Directors may be removed with
or without cause by vote of a majority (50% + 1) of all of the shares
outstanding and entitled to vote at a Special Meeting of Shareholders called for
that purpose.
5. RESIGNATION. A Director may resign at any time by giving written
notice to the Board, the President or the Secretary of the Corporation. Unless
otherwise specified in the notice, the resignation shall take effect upon
receipt thereof by the Board of Directors or of such officer, and the acceptance
of the resignation shall not be necessary to make it effective.
6. QUORUM OF DIRECTORS. A majority of the Directors (50% +1) shall
constitute a quorum for the transaction of business. If at any meeting of the
Board there shall be less than a quorum present, a majority of those present may
adjourn the meeting from time to time until a quorum is obtained, and no further
notice thereof need be given other than by announcement at the meeting which
shall be so adjourned. 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.
7. PLACE AND TIME OF BOARD MEETINGS. The Board may hold its meetings at
the office of the Corporation or at such other place, either within or without
the State of Florida as it may, from time to time, determine.
<PAGE>
8. NOTICE OF MEETINGS OF THE BOARD. A regular annual meeting of the
Board may be held without notice at such time and place as it shall, from time
to time, determine. Special Meetings of the Board shall be held upon notice to
the Directors and may be called by the President upon two (2) days' notice to
each Director, either personally or by mail or by wire. Special Meetings shall
be called by the President or by the Secretary in a like manner on written
request of a Director. Any Special Meeting may be held by telephone conference
as set forth in Section 11 hereof. Notice of a meeting need not be given to any
Director who submits a waiver of notice whether before or after the meeting, or
who attends the meeting without protecting prior thereto, or at its
commencement, the lack of notice to him.
9. ANNUAL MEETING. An annual meeting of the Board shall be held
immediately following, and at the same place as, the annual meeting of
Shareholders.
10. COMPENSATION. No compensation shall be paid to Directors, as such,
for their services, but by resolution of the Board, a fixed sum and expenses for
actual attendance, at each regular or Special Meeting of the Board may be
authorized. Nothing herein contained shall be construed to preclude any
Director from serving the Corporation in any other capacity and receiving
compensation therefor.
11. ACTION BY TELEPHONIC CONFERENCE. The Directors may act at a meeting
by means of a conference by telephone or similar communications equipment by
means of which all persons participating in the meeting can communicate with
each other at the same time. Participation by such means shall constitute
presence in person at a meeting.
12. PRESUMPTION OF ASSENT. A Director of the Corporation who is present
at a meeting of the Board of Directors at which action on any corporate matter
is taken shall be presumed to have assented to the action unless he voted
against such action or abstains from voting in respect thereto because of an
asserted conflict of interest.
13. INFORMAL ACTION BY BOARD. Any action required or permitted to be
taken by any provision of law, of the Articles of Incorporation or of these
Bylaws at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting, if a written consent thereto is signed by all
members of the Board or of such committee, as the case may be.
ARTICLE D.
OFFICERS
1. OFFICERS, ELECTION AND TERM. The Board may elect or appoint a
President, one or more Vice Presidents, a Secretary, a Treasurer, and such other
officers as it may determine, who shall have such duties and powers as
hereinafter provided.
All officers shall be elected or appointed to hold office until the meeting
of the Board following the next annual meeting of Shareholders and until their
successors have been elected or appointed and qualified.
Any two (2) or more offices may be held by the same person.
2. REMOVAL, RESIGNATION, SALARY, ETC. Any officer elected or appointed
by the Board may be removed by the Board with or without cause.
<PAGE>
In the event of the death, resignation or removal of an officer, the Board,
in its discretion, may elect or appoint a successor to fill the unexpired term.
Any officer elected by the Shareholders may be removed only by vote of the
Shareholders unless otherwise provided by the Shareholders.
The salaries of all officers shall be fixed by the Board.
The Directors may require any Officer to give security for the faithful
performance of his duties.
3. DUTIES. The officers of this Corporation shall have the following
duties:
The President shall be the chief executive officer of the Corporation and
shall have general and active management of the business and affairs of the
Corporation subject to the directions of the Board of Directors, and shall
preside at all meetings of the Shareholders and Board of Directors.
The Vice-President shall possess and may exercise, such power and
authority, and shall perform such duties as may from time to time be assigned to
him or her by the Board of Directors or the President.
The Secretary shall have custody of and maintain all of the corporate
records except the financial records; shall record the minutes of all meetings
of the Shareholders and Board of Directors, and send all notices of all meetings
and perform such other duties as may be prescribed by the Board of Directors or
the President and shall perform such duties as may from time to time be assigned
to him or her by the Board of Directors or the President.
The Treasurer shall have custody of all corporate funds and maintain all of
the financial records and shall keep accurate financial records and shall render
reports thereof of the annual meetings of Shareholders and at other times when
requested to do so by the Board of Directors and shall perform such duties as
may from time to time be assigned to him or her by the Board of Directors or the
President.
4. REMOVAL OF OFFICERS. An officer or agent elected or appointed by the
Board of Directors may be removed with or without cause by the Board whenever in
the Board's judgment, the best interest of the Corporation will be served
thereby.
Any vacancy in any office may be filled by the Board of Directors for the
unexpired term.
ARTICLE E.
EXECUTIVE AND OTHER COMMITTEES
1. CREATION OF COMMITTEES. The Board of Directors may, by resolution,
passed by a majority of the Board, designate and executive committee and one or
more other committees.
2. EXECUTIVE COMMITTEE. The executive committee, if there shall be one,
shall consult with and advise the officers of the Corporation int he management
of its business and shall have and may exercise, to the extent provided in the
resolution of the Board of Directors creating such executive committee, such
powers of the Board of Directors as can be lawfully delegated by the Board.
<PAGE>
3. OTHER COMMITTEES. Such other committees shall have such functions and
may exercise the powers of the Board of Directors as can be lawfully delegated
and to the extent provided in the resolution or resolutions crating such
committee or committees.
4. MEETINGS OF COMMITTEES. Regular meetings of the executive committee
and other committees may be held without notice at such time and at such place
as shall from time to time be determined by the executive committee or such
other committees, and Special Meetings of the executive committee or such other
committees may be called by any member thereof upon two (2) days' notice to each
of the other members of such committee, or on such shorter notice as may be
agreed to in writing by each of the members of such committee, given either
personally or in the manner provided in Section 8 of Article III of these Bylaws
(pertaining to notice for Directors' meetings).
5. VACANCIES ON COMMITTEES. Vacancies on the executive committee or on
such other committees shall be filed by the Board of Directors then in office at
any regular or Special Meeting.
6. QUORUM ON COMMITTEES. At all meetings of the executive committee or
such other committees, a majority (50% +1) of the committee's members then in
office shall constitute a quorum for the transaction of business.
7. MANNER OF ACTION OF COMMITTEES. The acts of a majority (50% +1) of
the members of the executive committee or such other committees, present at any
meeting at which there is a quorum, shall be the act of such committee.
8. MINUTES OF COMMITTEES. The executive committee, if there shall be
one, and such other committees shall keep regular minutes of their proceedings
and report the same to the Board of Directors when requested.
9. COMPENSATION. Members of the executive committee and such other
committees may be paid compensation in accordance with the provisions of
Articles III, Section 10 of these Bylaws (pertaining to compensation of
Directors).
ARTICLE F.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Corporation shall indemnify any person made or threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by< or in the right of, the Corporation), brought to impose a liability or
penalty on such person in his capacity of Director, officer, employee or agent
of this corporation, or of any other corporation which such person serves as
such at the request of this Corporation, against judgements, fines, amounts paid
in settlement and expenses, including attorney's fees, actually and reasonably
incurred as a result of such action, suit or proceeding, or any appeal thereof,
if they acted in good faith in the reasonable belief that such action was in the
best interest of this Corporation, and in criminal actions or proceedings
without reasonable ground for belief that such action was unlawful. The
termination of any such civil or criminal action, suit or proceedings by
judgement, settlement, conviction or upon a plea of nolo contendere shall not in
itself create a presumption that any Director or officer did not act in good
faith in the reasonable belief that such action was in the best interest of this
Corporation or that they had reasonable ground for belief that such action was
unlawful. The foregoing rights of indemnification shall apply tot he heirs and
personal representatives of any such Director, officer, employee or agent and
shall not be exclusive of other rights to which they may be entitled.
<PAGE>
ARTICLE G.
CERTIFICATE OF STOCK
1. ISSUANCE. Unless otherwise determined by the Board of Directors,
every holder of shares in this Corporation shall be entitled to have a
certificate representing all shares of which they are entitled. No certificate
shall be issued for any share until such share is fully paid.
2. FORM. Certificates representing shares in this Corporation shall be
signed by the President or Vice President and the Secretary or an Assistant
Secretary and may be sealed with the seal of this Corporation or a facsimile
thereof; or in any other manner as prescribed by law.
3. TRANSFER OF SHARES. Transfers of shares of the Corporation shall be
made upon the Corporation's books by the holder of the shares in person or by
the holder's lawfully constituted representative, upon surrender of the
certificate of stock for cancellation. The person in whose name shares stand on
the books of the Corporation shall be deemed by the Corporation to be the owner
thereof for all purposes and the Corporation shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person whether or not the Corporation shall have express or other notice
thereof, unless otherwise provided by the laws of the State of Florida. Every
certificate representing shares which are restricted as to sale, disposition or
other transfer shall state that such shares are restricted as to such transfer
or disposition and shall set forth or fairly summarize upon the certificate, or
state that the Corporation will furnish to any holder thereof, upon request and
without charge, a full statement of such restrictions.
4. FACSIMILE SIGNATURE. Where a certificate is signed (1) by a transfer
agent or an assistant transfer agent or (2) by a transfer clerk acting on behalf
of the Corporation and a registrar, the signature of any such Chairman of the
Board, President, Vice President, Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary may be facsimile. In case any officer or officers who have
signed, or whose facsimile signature or signatures have been used on, any such
certificate or certificates may nevertheless be adopted by the Corporation and
be issued and delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures have been
used thereon had not ceased to be such officer or officers of the Corporation.
5. LOST, STOLEN OR DESTROYED CERTIFICATES. If a Shareholder shall claim
to have lost or destroyed a certificate of shares issued by the Corporation, a
new certificate shall be issued upon the making of an affidavit of that fact by
the person claiming the certificate of stock to be lost, stolen or destroyed,
and at the discretion of the Board of Directors, upon the deposit of a bond or
other indemnity in such amount and with such sureties, if any, as the Board may
reasonably require.
<PAGE>
ARTICLE H.
BOOKS AND RECORDS
1. GENERAL. This Corporation shall keep correct and complete books and
records of account and shall keep minutes of the proceedings of its
Shareholders.
Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
2. INSPECTION. All Shareholders who are entitled to inspect the
Corporation's books and records pursuant to Florida law shall have such
inspection rights as prescribed by the most recent Florida law available when
the request is made.
ARTICLE I.
DISTRIBUTIONS
The Board of Directors of the Corporation may, from time to time, declare,
and the Corporation may make, distributions to the Shareholders, subject to the
restrictions of applicable law.
ARTICLE J.
CORPORATE SEAL
The seal of the Corporation shall be circular in form and bear the name of
the Corporation, the year of its organization and the words, "CORPORATE SEAL,
FLORIDA." The seal may be sued by causing it to be impressed directly on the
instrument or writing to be sealed, or upon adhesive substance affixed thereto.
The seal on the certificates for shares or on any corporate obligation for the
payment of money may be facsimile, engraved or printed.
ARTICLE K.
EXECUTION
All corporate instruments and documents shall be signed or countersigned,
executed, verified or acknowledged by such officer or officers or other person
or persons as the Board may, from time to time, designate.
ARTICLE L.
FISCAL YEAR
The fiscal year of the Corporation shall be the 12-month period selected by
the Board of Directors as the taxable year of the Corporation for federal income
tax purposes.
ARTICLE M.
NOTICE AND WAIVER OF NOTICE
Whenever any notice is required by these Bylaws to be given, personal
notice is not meant unless expressly so stated, and any notice so required shall
be deemed to be sufficient if given by depositing the same in the post office
box in a sealed post-paid wrapper, addressed to the person entitled thereto at
his last known post office address, and such notice shall be deemed to have been
given on the day of such mailing.
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Shareholders not entitled to vote shall not be entitled to receive notice of
any meetings except as otherwise provided by Florida law.
Whenever any notice is required to be given under the provisions of any law
or under the provisions of the Articles of Incorporation of the Corporation, or
these Bylaws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE N.
CONSTRUCTION
Whenever a conflict arises between the language of these Bylaws and the
Articles of Incorporation, the Articles of Incorporation shall govern.
ARTICLE O.
BUSINESS
1. CONDUCT OF BUSINESS WITHOUT MEETINGS. Any action of the Shareholders,
Directors and nay committee may be taken without a meeting if consent in writing
setting forth the action so taken shall be signed by all persons who would be
entitled to vote on such action at a meeting and filed with the Secretary of the
Corporation as part of the proceedings of the Shareholders, Directors or
committees, as the case may be.
2. MANAGEMENT BY SHAREHOLDERS. In the event the Shareholders are named
in the Articles of Incorporation and are empowered therein to manage the affairs
of the Corporation in lieu of Directors, the Shareholders of the Corporation
shall be deemed Directors for the purposes of these Bylaws, and wherever the
words "directors," "Board of Directors" or "Board" appear in these Bylaws, these
words shall be taken to mean Shareholders.
The Shareholders may, by majority vote (50% +1), create a Board of
Directors to manage the business of the Corporation and exercise its corporate
powers.
ARTICLE P.
AMENDMENTS
1. BY SHAREHOLDERS. The Bylaws shall be subject to alteration or repeal,
and new Bylaws may be made, by the affirmative vote of Shareholders holding of
record in the aggregate at least a majority of the outstanding shares entitled
to vote in the election of Directors at any annual or Special Meeting of
Shareholders, provided that the notice or waiver of notice of such meeting shall
have summarized or set forth in full therein the proposed amendment.
2. BY DIRECTORS. The Board of Directors shall have the power to make,
adopt, alter, amend and repeal, from time to time, the Bylaws of the
Corporation.
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EXHIBIT 4.1
Specimen of Common Stock Certificate
<PAGE>
SPECIMEN
ROMPUS INTERACTIVE CORPORATION INCORPORATED
UNDER THE LAWS OF THE STATE OF FLORIDA
80,000,000 Shares Common Stock Authorized, $.001 Par Value
THIS CERTIFIES THAT _______________ is the owner of _________ fully paid
and non-assessable shares of common stock of ROMPUS INTERACTIVE CORPORATION
Common Stock transferable on the books of the corporation in person or by
duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate and the shares represented hereby are subject to
the laws of the State of Florida, and to the Certificate of Incorporation and
Bylaws of the Corporation, as now or hereafter amended . This
certificate____________
WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated:
_____________________________ _______________________________
Secretary President
<PAGE>
EXHIBIT 4.2
Specimen of Series A Preferred Stock Certificate
<PAGE>
SPECIMEN
ROMPUS INTERACTIVE CORPORATION
A Florida Corporation
Capitalization: 80,000,000 Shares at $.001 Par Value Common Stock
20,000,000 Shares $.0001 par value Preferred Stock
THIS CERTIFIES THAT ______________ is the owner of _________ Shares of
$.0001 par value series A Special Voting Preferred Shares of ROMPUS
INTERACTIVE CORPORATION, a Florida Corporation, transferrable only on the
books of the Corporation by the holder hereof in person or by Attorney upon
surrender of this Certificate property endorsed.
IN WITNESS WHEREOF the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated:
_____________________________ _______________________________
Secretary President
