FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
Under Section 12(b) of (g) of the Securities Exchange Act of 1934
ACCESS NETWORK CORPORATION
____________________________________________
(Name of Small Business Issuer in its charter)
Nevada 88-0409450
________________________________ ___________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
6357 Vicuna Drive, Las Vegas, Nevada 89146
_______________________________________ __________
(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number: (702) 247-4474
________________
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be registered Each class is to be registered
None None
______________________ ______________________________
Securities to be registered under Section 12(g) of the Act:
Common
________________
(Title of class)
PART I
Item 1. DESCRIPTION OF BUSINESS
BUSINESS DEVELOPMENT
Inception and Offering of Common Stock
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ACCESS NETWORK CORPORATION (the "Company" and/or the "Registrant") was
incorporated in the State of Nevada on September 8, 1998, with 25,000,000
shares of common stock authorized, par value $0.001 per share. The Company's
business purpose is the marketing and sale of specialty gift packaging to
small businesses, especially independent sales personnel of direct marketing
entities. The Company intends to act as a "wholesale distributor, that is, it
will purchase its chosen product line from a manufacturer or supplier and sell
the same to small businesses/individuals interested in reselling or utilizing
the same in the course of their business operations. The Company's business
purpose grew out of Management's belief that there is a substantial niche in
the packaging industry for specialty and fashion packaging especially for
giftware. The Company currently has two products that it markets: its
specialty gable boxes (with coordinated wrap and ribbon) and its "Twelve Days
of Christmas" video. For a complete discussion of the Company's business,
see "BUSINESS".
At inception, the Company issued 200,000 "unregistered", "restricted"
shares to its founders in connection with the initial funding of the Company
of $10,000. On April 5, 1999 the Company commenced an offering of its common
stock pursuant to an exemption from the registration requirements of Section 5
of the Securities Act of 1933, as amended (the "Act"), under Section 3(b),
Regulation D, Rule 504, whereby it offered for sale up to 400,000 of its
unregistered common shares at an offering price of $0.25 per share. The
offering was also registered with the State of Nevada and was declared
effective by the Nevada Securities Division on February 8, 1999. The purpose
of the offering was to raise a minimum of $50,000 to fund the start-up-phase
of its business operations, that is, the wholesale marketing and distribution
of specialty and fashion packaging. The offering closed on April 6, 1999
with 201,200 shares sold, for gross proceeds of $50,300.
Forward Looking Information
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This registration statement contains certain forward-looking statements
information relating to the Company that are based upon beliefs of the
Company's Management as well as assumptions made by and information currently
available to the Management. When used in this registration statement, the
words anticipate, believe, estimate, expect, and similar expressions, as they
related to the Company and the Company's Management, are intended to identify
forward-looking statements. Such statements reflect the current view of the
Company with respect to the future events and are subject to certain risks,
uncertainties, and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described herein as anticipated,
believed, estimated or expected. The Company does not intend to update these
forward looking statements.
Risk Factors Which Could Affect Future Profitability
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*Lack of Operating History* The Company was only recently organized
in September of 1998, and has conducted minimal operations since that date.
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The Company has limited assets of approximately $50,000 most of which is
comprised of cash from its recent offering. (The Company booked $30,000 as
subscription receivables on its audited statements contained herein, however,
the funds were received by the Company subsequent to the audit date, April 30,
1999.) The Company conducted operations during the last quarter of 1998 to
test its ability to market specialty packaging and met with some limited
success with gross revenues for that quarter of approximately $8,600 and net
revenues of $2,100. Subsequent to that date, the Company conducted an
offering to provide working capital for the continuation of its marketing of
specialty packaging. Because of its limited capital and its lack of
significant operating history, the Company must be considered a development
stage company. Development stage companies are inherently more risky than
established companies because there is no earnings history and no assurance
that future revenues will develop. The Company's potential profitability is
questionable. (See "BUSINESS OF THE REGISTRANT".)
*Competition* The Company plans to develop a niche in a market, that is
the specialty packaging business, which is highly competitive with respect to
name recognition, volume discounts, and quality of experienced service. There
are many well established competitors possessing substantially greater
financial, marketing, personnel and other resources than the Company. The
Company can expect to face significant competition from a broad range of
companies involved in the wholesale distribution and sales of specialty
packaging. Many of these competitors are innovators in the area of single-ply
paperboard folding cartons in the packing industry and represent years of
research in products and services. The Company, therefore, expects intense
competition from such companies involved in the paper goods markets which have
already achieved success in the industry and also have the resources,
technology and marketing know-how to readily address changes in the industry.
(See "BUSINESS OF THE REGISTRANT, Competitive Business Conditions/Competitive
Position in the Industry/Methods of Competition".)
*No Formal Market Feasibility Study* The Company has not conducted a
formal market feasibility study or analysis to see if the product/services the
Company proposes to offer will be widely accepted locally or nationally. This
lack of market analysis poses an additional risk to the Company. The Company
has based its decision to continue forward in the specialty packaging business
on one quarter of operations during the fourth quarter of 1998 which was
comprised of very limited product line marketed to a limited number of small
business users. The Company does not consider its limited success during last
year's fourth quarter to be indicative of what it can expect in the future,
nor of the feasibility of the Company to be able to succeed with its business
purposes. (See "BUSINESS OF THE REGISTRANT, Principal Products or Services and
Their Market.")
*Conflicts of Interest and Potential Conflicts of Interest* All of the
Company's officers/directors are involved with other business and/or interests
which will take a portion of their time. (See "Item 5. DIRECTORS, EXECUTIVE
OFFICERS, PROMOTERS AND CONTROL PERSONS".) Although these individuals are
willing to work full-time for the Company, they may not be able to devote 100%
of their time to the Company. Marci Evans, the Company's President, Secretary,
and a Director, is an independent Senior Sales Director for Mary Kay Cosmetics
and such position will require a portion of her time and efforts; Susan
Stankiewicz currently serves as Vice-President and a Director of another
corporation, which will require a portion of her time; and, Michael
Stankiewicz intends to attend school at the University of Nevada at least
part-time. Each of the directors, therefore, has other interests which will
demand a certain amount of their time, which, in some instances, could be
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substantial. There is no assurance, therefore, if a conflict of interest
arose, that it would be resolved in favor of the Company. In addition, members
of Management may become involved in other business entities which have the
same or similar activities as the Company and unforseen conflicts of interest
could develop.
*Inexperience of Management* Although Ms. Evans and Ms. Stankiewicz
have a varied background and business experience between them, and both have
served in various capacities with other start-up companies in the past,
neither have had experience in running a company in the start-up and
development stage, nor has either of these individuals had any experience in
the marketing, on a wholesale basis, of specialty packaging. Mr. Stankiewicz
has had no business experience. This lack of experience provides for
considerable risk to the Company's ultimate success.
*No Public Market for Company's Securities* At the present time there
is no public market for the Company's common stock, and there can be no
assurance that a public market will develop. Although the Company intends to
apply for a listing on the National Association of Securities Dealer's Inc.
Over-the-Counter Bulletin Board (the "NASD OTC Bulletin Board"), there is no
guarantee that such will be the case, or that if the Company succeeds in
listing its common stock on the NASD OTC Bulletin Board that a market for the
Company's common stock will develop. Even if the Company is able to develop a
market for its common stock, there can be no assurance that the price per
share in such market will be equal to or greater than the price paid by
investors in its offering which closed on April 6, 1999, in which investors
paid $.25 per share, and, in fact, it could be substantially less.
*Sales of Shares by "Insiders"* - Of the 401,200 common shares of the
Company's common stock currently issued and outstanding, 201,200 unregistered
common shares are owned by public investors in the Company's offering, and
200,000 unregistered common shares are considered "restricted" and are held by
the Company's founders: its President, Secretary, and Chairman of the Board of
Directors, Marci Evans, and its Vice-President/Director, Michael Stankiewicz.
Their 200,000 initial shares were issued in reliance on the "private
placement" exemption of Section 4(2) of the Securities Act of 1933, as
amended. If a market for the Company's common shares were to develop, such
"restricted" shares will not be available for sale in the open market without
registration, except in reliance upon Rule 144 under the Act or some other
applicable exemption. In general, under Rule 144, a person or persons whose
shares are aggregated, who beneficially owned shares acquired in a non-public
transaction for at least one year, including persons who may be deemed
"affiliates" of the Company as that term is defined under the 1933 Act, would
be entitled to sell within any three-month period, a number of shares that
does not exceed the greater of 1% of the then outstanding shares of Common
Stock or the average weekly reported trading volume on all national securities
exchanges and through NASDAQ during the four calendar weeks preceding such
sale provided current public information is then available. If a substantial
number of the shares owned by the initial shareholders were sold in the
market, the market price of the common stock could be adversely affected. As
of the date hereof, the founders' 200,000 shares issued in reliance upon
Section 4(2)and considered "restricted", have been beneficially owned for
approximately 9 months (since September 8, 1998) which will make them eligible
for resale under Rule 144 on September 9, 1999 provided all of the applicable
terms and conditions are met, and provided a public market existed for the
Company's common shares. (See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT", under Part I, Item 4 of this Registration Statement; also see
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Part II, Item 1. "MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS.")
*Penny Stock Regulation* If the Company succeeds in developing a
market for its common shares, it will be subject to the penny stock rules. The
Securities and Exchange Commission (the "SEC")has adopted rules that regulate
broker dealer practices in connection with penny stocks. Penny stock are
generally equity securities with a price of less than $5.00 (other than
securities registered on certain national securities exchanges or quoted on
the NASDAQ system, provided current price and volume information with respect
to transactions in such securities is provided by the exchange system.) The
penny stock rule requires that a broker/dealer, prior to a transaction in a
penny stock not otherwise exempt under the rules, to deliver a standardized
risk disclosure document prepared by the SEC that provides information about
penny stocks and the nature and level of risks in the penny stock market. The
broker dealer must also provide the customer with bid and offer quotations for
the penny stock, the compensation to the broker dealer and its salesperson in
the transaction, and monthly account statements showing the market value of
each penny stock held in the customer account. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise
exempt from such rules, the broker dealer must make a special written
determination that a penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction. These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for a stock that becomes subject to the penny
stock rules. The Company's common stock is currently subject to the penny
stock rules, and, accordingly, investors may find it difficult to sell their
shares, if at all, when and if a public market develops.
*Need for Additional Financing* Unless the Company is able to generate
sufficient revenues to successfully develop and sustain its business
operations, the survival of the Company will likely depend on additional
financing. No assurance can be made that such financing would be available,
and, if available, whether it would take the form of debt or equity financing.
In either case, additional financing could have a negative impact on the
Company's shareholders. The Company may seek financing in the form of debt
financing in the form of a loan which could be from an individual or financial
institution. Such loan could put the Company at risk for amounts greater than
its assets, and, if not promptly repaid, could result in bankruptcy. If the
Company attempted equity financing in the form of either a private placement
or a another type of offering, there can be no assurance that the Company
would be successful in selling such an offering or finding an underwriter
willing to do; such an offering could result in further dilution to present
shareholders.
*Dependence on Management/Key Personnel* The Company is extremely
dependent on Management. The loss of any of its officers could have a
material adverse effect on the Company's business. Because of the Company's
limited resources, no key person insurance has been, or will be purchased on
any of its officers. In addition, the future success of the Company is
dependent on the performance of Management, especially Marci Evans, and her
ability to attract and motivate and retain highly qualified employees, when
and if the Company has sufficient funds to do so. In the meantime, the
Company's business plan is based almost entirely on Marci Evans' analysis of
market trends, her product choices in response to such marketing analysis, her
ability to attract and maintain a steady customer base, and her ability to
market the product line to such clientele. The Company, as of this date cannot
afford to hire additional personnel to perform marketing services and all will
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be performed by Management, mostly Ms. Evans. The Company is highly dependent,
therefore, on Ms. Evans ability to market its products. Because substantially
all of the Company's current customers are a result of Ms. Evans business and
personal contacts in the Mary Kay network, the loss of Marci Evans' services
would have a material adverse effect on the Company. In addition, in the
start-up phase, Management will continue to provide the Company, without
charge, the usage of a personal computer, copier, miscellaneous office
equipment, and a vehicle.
* Lack of Market Definition and Plan* Defining and measuring the
wholesale distribution of specialty packaging market has been difficult.
Wholesale trade is immense and almost all products sold to retail, commercial,
institutional and industry markets move through wholesale trade. The industry
has evolved into six distinct areas, one of which is wholesale paper goods and
services. The Company believes there is a specialty niche within the paper
goods market: specialty packaging. Although the Company has established that
a market for its goods and services exists, it has had no experience in
wholesale marketing nor in packaging and may have a difficult time defining
its market and narrowing the scope of its focus in order to best penetrate a
highly competitive industry with the limited funds available to it. The
Company must be able to identity and recognize industry trends, which change
frequently, and be flexible enough to address changes to meet customers'
needs. Although Management has formulated certain approaches it has used on a
limited basis and intends to continue to use regarding product line and
initial marketing approach, the Company has no definitive overall marketing
approach which will evolve as the Company conducts operations.
*Dependence on Suppliers* Management believes that in order to compete
in the wholesale marketing and distribution of specialty packaging, it must
offer products which are readily available, high in quality and competitively
priced. The Company has begun establishing relationships with a number of
manufacturer/suppliers which it believes can meet the foregoing criteria. It
has not entered into nor plans to enter into any long term purchase contracts
with any of these manufacturer/suppliers. Nonetheless, the Company has not
yet utilized the services of any of these suppliers (other than MK Resources,
Inc.), and there is no assurance that they will actually be able to provide
the timely service and quality product which the Company needs in order to
successfully establish and maintain a customer base.
* Seasonality of Specialty Packaging * Distribution of specialty
packaging is extremely seasonable especially in the target market niche the
Company is soliciting. In general, traditional holidays spur seasonal
consumer buying. The fourth calendar quarter is typically the highest sales
volume quarter for sales in the industry as a whole. The Company will have a
more difficult type forecasting purchasing and sales patterns, and, as a
result, it may be very difficult for the Company to survive the seasonableness
of the industry.
BUSINESS OF REGISTRANT
Principal Products or Services and Their Market
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** Principal Product/Service **
-- Introduction -- The Company's business purpose is the marketing and
sale of specialty gift packaging to small businesses and individuals acting as
independent sales agents for direct marketing entities. The Company acts as a
"wholesale distributor", that is, it purchases its chosen product line from a
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manufacturer(s)/supplier(s) and sells the same to small businesses and or
individuals interested in reselling or utilizing the same in the course of
their business operations. As of the date hereof, the Company has
concentrated its efforts on sales of specialty boxes and wrap, mainly through
mail order, to individuals acting as independent sales agents/directors for
direct marketing companies. The Company has had some revenues from its
initial product line although the same are relatively insignificant. (See
below: "Product: Specialty Gourmet Gift Boxes" and under Item 2. "MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION".) Other than certain limited
marketing efforts commenced during the fourth quarter of 1998, its offering
conducted in early April 1999, and the establishment of relationships with
potential suppliers, the Company has conducted little business since its
inception.
Management believes that the Company's current marketing strategy must
remain flexible as its product line may change frequently to meet the demands
of its clientele unless certain of its products prove to be popular and
successful for its customers regardless of industry trends. Management further
believes that in order to be succeed in its business purpose it must (1)
recognize industry trends and make product choices in response to such market
analysis, (2) attract a steady clientele and be able to analyze and meet the
needs of such clientele in light of market trends at a competitive price; and
(3) market the product line to such clientele.
-- Product: Special "Gourmet" Gift Boxes The Company currently offers
for sale two different styles of "gourmet" gift boxes known as the one piece
"Gable Box(es)". The colors of the Gable Boxes consist of metallic white and
gold and the dimensions are 3.5" X 3.5" X 13". These boxes were specifically
chosen to satisfy the needs of the Company's initial target market, that is
independent sales directors for Mary Kay, Inc., and were utilized as seasonal
gift boxes by such individuals in their sales of Mary Kay Cosmetics during the
1998 Christmas season. The Company also offers other related merchandise
including wrap, tissue and ribbon. The Company's Gable Boxes and related
merchandise lend itself well to coordinated gift wrapping. The Company
believes that a beautifully wrapped gift package (ie. a well designed and
produced package) will do the following for the Company's clients: (1)
generate repeat business for the client; (2) add to the value of the gift
itself; and (3) enhance the client's image. The Company realized approximately
$8,000 in gross proceeds from its Gable Boxes and related products (including
videos as discussed below) during its first quarter of operations (4th quarter
of 1998) with a net profit of approximately 24%. The Company currently has a
limited inventory on hand of approximately 1,000 Gable Boxes and will purchase
additional inventory and other types of product inventory when and as needed.
Marci Evans, the Company's President and CEO, attends to most of the marketing
of the Gable Boxes and intends to sell the same line of Gable Boxes to the
Company's current and new customers during the 1999 Christmas season because
such customers have indicated satisfaction with the product and a willingness
to repurchase.
Product: "Twelve Days of Christmas" Video -- Also, on a limited/test
basis, during the 1998 Christmas season, the Company offered a demonstration
video, on the preparation of the "Twelve Days of Christmas" for the Company's
clientele. The video was produced by the Company's President, Marci Evans, in
response to customers questions on the use of the Gable Boxes in connection
with the "12 Days of Christmas" gift set, a high ticket specialty gift item
marketed by Mary Kay independent sales directors during the 1998 Christmas
season. The videos provided a means to demonstrate how to use the specialty
gift boxes to best advantage and sold for $5.00. The response from the
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Company's clients was favorable with several videos sold. Ms. Evans believe
the concept is worthwhile for the Company to pursue and intends to produce the
video a second time for the 1999 season on a more professional basis. The
Company has been seeking professional assistance in producing the video at a
cost effective price, and has contacted Steve Lemon of Hurricane, Utah, owner
of "The Studio" for complete production. No agreement with Mr. Lemon has been
signed as of the date of this registration statement for the production of the
video, nor has a definitive date been set to begin the same.
** Target Markets**
-- Wholesale Trade Industry Overview -- The Company considers itself a
wholesale marketer in the distribution industry. In a traditional distribution
channel, raw material moves from supplier to manufacturer (which fabricates
the finished product), then from manufacturer to a distributor such as the
Company, for distribution to points of purchase. The most popular channel for
moving product from manufacturer/supplier to the retailer, has been wholesale
distribution. The type of distributor most familiar to the public is the
merchant wholesale distributor, who buys the product outright from a supplier
(usually the manufacturer) and attempts to move inventory from their warehouse
to businesses interested in reselling the products or using them in the course
of their operations. The US Department of Commerce defines merchant
wholesalers as establishments primarily engaged in buying and selling
merchandise for their own account. Wholesale distributors are full service
distributors who in addition to taking title to the products, also take
responsibility for delivery to the buyer. The wholesale distribution industry
has evolved into six distinct areas, one of which is wholesale paper goods and
services. The Company believes there is a specialty niche within the paper
goods market: specialty packaging. This is the main area where the Company
will concentrate its business operations, that is, it intends to act as a
wholesale distributor of specialty packaging including related products such
as wrap and ribbon. The wholesale packaging industry has grown in recent years
and the Company's business is based on its belief that a substantial "niche"
market exists within the industry for companies willing to specialize in
unique paper goods products. As it achieves a client base, the Company
intends to tailor its products to meet client needs in light of industry
trends which tend to change rapidly.
-Target Markets for the Company- The Company will target small business,
especially independent sales agents for companies in the direct sales industry
such as Mary Kay, Inc., NuSkin, Avon, and Amway, which might have the use of
specialty packaging in connection with either resales or as part of their own
overall business marketing approach. The Company has been and will continue
to be reliant on contacts that Ms. Evans has made during her years as a Mary
Kay, Inc. Independent Sales Director, as part of its marketing approach.
Currently, as a result of Evans marketing efforts in last year's fourth
quarter, the Company has 25 retail clients in 12 different states. Most of
these clients are comprised of Independent Mary Kay Cosmetics Sales Directors.
Ms. Evans intends to continue to pursue these Independent Sales
Directors at Mary Kay as the Company's target market almost exclusively during
the next 12 months, although the she will investigate other potential markets,
such as:
1. Sales Directors of Other Direct Marketing Companies The Company
will pursue sales directors with other direct marketing companies, such as
NuSkin and Avon, as one of its priority target markets.
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2. Direct Marketing Companies -- The Company hopes that the inroads it
makes with sales associates of direct marketing companies may lead to
potential sales or sales contracts with the direct marketing companies
themselves. It is Management's belief that if it can provide a product which
assists the independent sales associates with boosting sales of their product,
the same could be a means of achieving certain referrals and recommendations
with the company itself, especially for specialty, seasonal packaging.
3. Maintaining a Wholesale/Retail Store Front the Company will
investigate the potential of this market although it is not a priority.
Maintaining a store front will require a large outlay of capital and is
something which will be looked at in connection with the Company's
investigation of marketing opportunities in the greater Las Vegas area.
4. Purchasing and Reselling Overstock Merchandise From Suppliers as
Ms. Evans establishes relationships with various manufacturers/suppliers, she
will be able to analyze overstock merchandise opportunities if they become
available. Such over-stock may be marketed in connection with a current
customer list, e-commerce, or a wholesale retail front.
5. Investing in Other Related Specialty Packaging Businesses.
6. Local Specialty Businesses in the Greater Las Vegas Area -- The
Company will investigate marketing opportunities in its own locale, that is
the greater Las Vegas area. Because Management is familiar with local
economy, and because southern Nevada is seeing a large economic growth, there
appears to be a substantial opportunity to provide local services including
specialty products such as the Company's to local businesses. Ms. Evans has
been making numerous contacts with manufacturers and suppliers in order to be
aware of inventory and product lines. By doing so, she hopes to be prepared
to exploit local marketing opportunities for specialty packaging if and when
such opportunities arise.
7. The Internet Market the Company will pursue the Internet market
in general by establishing a web site for its products when and if it has
sufficient products available to warrant on-line marketing. Much of this
course of action will depend on the Company's ability to purchase inventory or
have inventory readily available to it to at a competitive price to make it
attractive to Internet customers. The Internet market is not a priority,
although, because web sites are inexpensive to set up, the Company may
establish a web site for its products shortly. It does not, however, intend
to depend on such web site as a primary revenue source.
The Company will rely on: (1) quality of service; (2) competitive
pricing to its clients and potential clients through volume purchase of
products from suppliers; (3) timely response to customers needs; and (4)
ability to recognize and anticipate market trends to help make inroads into
its target market.
Distribution Methods of the Products or Service/ Status of any Publicly
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Announced New Product or Service
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The Company currently relies upon direct sales approach by Ms. Evans and
business referrals to distribute its products. Its current method involves:
(1) selecting a product which it believes will satisfy the needs of current
and potential clients with similar specialty packing needs; (2) volume
purchase of such products from suppliers which meet the Company's
specifications at a cost to the Company which will allow resale of such
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products at a competitive price; and (3) marketing and distributing the same
to clients. The Company will concentrate on resellers and small business/
individuals working for direct sales corporation which use specialty packaging
as part of their own sales activities rather than on individual consumers. The
Company will use the following methods to market its products:
1. Mail Order -- The Company has utilized mail order to achieve its
limited sales to date and plans to continue with mail order sales. To date,
Ms. Evans has sent flyers to Mary Kay independent sale directors whom she
personally knows. Because such directors "network", the Company has received
many referrals from those independent sales directors who tried, and liked,
the Company's Gable Boxes. Ms. Evans then mails flyers to the referred
businesses. All of the Company's current customers were solicited in this
manner. Ms. Evans does not make general solicitations of the Mary Kay
Independent Sales Directors, nor does she intend to follow that approach in
the immediate future.
2. Web Site -- The Company also intends to set up a web site and hopes
it will achieve sales of its products in this manner. Web sites can be set up
relatively inexpensively and the Company believes it will be worthwhile to
investigate this method of marketing its product. The Company is aware that
currently the worldwide web has some 50 million potential customers looking at
their computers to find products and services they need. The cost for the
Company to advertise on the web is relatively low compared to its potential
return. Most advertisements on the web are presented in the form of banner
ads, small graphical files hyper-linked to the advertiser's web site. The
Company intends to use on-line advertising provided free by local Internet
providers. Local providers offer banner ads, and yellow page services for
local businesses by offering advertising and unlimited access to the
subscriber for 1 year for under $200 with no set-up fee. Internet providers
offer at least 20 of the most popular search engines at no additional cost.
Some providers provide a client with a showcase spot on their home page on a
rotating basis. The Company believe it is worthwhile to investigate this
marketing method and plans to shop for a local service which will provide the
best service.
3. Repeat business The Company believes that if it satisfies the
needs of existing customers, and keeps its product line fresh, competitive in
price, and in tune with popular trends, it will be able to rely on repeat
business from its customers.
4. Referrals The Company will also rely on business referrals within
certain specialty areas to help promote its products.
Currently the Company has an inventory of approximately 1,000 Gable
Boxes. It maintains its inventory at the Company's office which is currently
at the home of Marci Evans, the Company's President and CEO. The Company
utilizes United Parcel Service ground shipping to move inventory from supplier
to "warehouse" to customer.
Competitive Business Conditions/Competitive Position in the Industry/Methods
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of Competition
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There are a large number of companies and individuals engaged in the
specialty packaging industry which is highly competitive with respect to name
recognition, quality of products, Internet and mail order presentation, and
advertising. The Company faces competition from a broad range of companies
in the retail packaging and fashion packaging industry, from retail packaging
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stores and companies which offer products similar to the Company's. Many of
these competitors have achieved national, regional and local recognition and
engage in extensive advertising and promotional programs. The Company has
identified one local competitor in the greater Las Vegas area: Floral Supply
Syndicate. The Company anticipates that most of its competition will come
from small to medium size manufacturers and distributors of paperboard boxes
such as Floral Supply Syndicate, Premier Packaging, and Nashville Wraps. If
the Company establishes a web site for Internet sales, it can expect to
compete with over 65,000 companies which currently advertise specialty packing
on the Internet. The Company does not intend to directly compete with similar
entities but rather intends to attempt to carve a niche of its own in the
industry by marketing specialized products to a fairly narrow target market.
When and if the Company achieves success, it may expand into other markets as
revenues from operations become available; or, it may choose to expand by
raising additional funding. (See above: "Target Markets for the Company" for a
discussion on those markets the Company may pursue at a later date.)
Management believes that the larger, established wholesale packaging
companies do not the enjoy the same advantage in the "niche" markets in the
industry due to their more traditional sales approach. While the Company
realizes that it has a significant disadvantage in the marketplace due to its
limited resources and experience, it believes that it will be able to compete
in the market due to its unique target market, which it believes has remained
relatively untapped. Marci Evans, as an independent sales director of
Mary Kay, Inc., has a certain amount of insight into the needs of independent
sales agents in the direct marketing industry and believes that the Company
can identify and provide for those needs. The Company believes that its
competitive advantages are as follows:
1. Pricing: the Company prices its products at 25% over its cost,
depending on the cost of the product. The Company utilizes this pricing
strategy to attract volume buyers vs. one-item purchasers. The Company also
offers a price break on certain items when one or more cases are purchased.
2. Product Line: The Company believes its largest advantage is its
specialization in specialty packaging for giftware and fashion packaging
market, especially Christmas products. Management acknowledges that it must
anticipate and recognize industry trends in specialty packaging in order to be
competitive. The Company believes its narrow market approach will help the
Company penetrate the packaging market and it will be able to then expand and
broaden its product lines to increase revenues. The Company also believes
that it can provide a product that is high in quality and that it can do so at
an affordable price by purchasing directly from the manufacturer/supplier.
3. Lower Overhead: The operating costs for national competitors can be
very expensive. Management believes that its lower operational costs will
enable the Company to compete because the lower overhead will keep prices to
clients down and allow for extra funds to be targeted where needed. In
addition, the Company is relying on business referral advertising and
"networking" which it believes will be effective due to the specialized
customer base it is trying to attract.
Sources and Availability of Raw Materials/Names of Principal Suppliers
- -----------------------------------------------------------------------
To date, the Company obtains its products from only one source: MK
Resources, Inc. ("MK"). MK is a Las Vegas based distributor of retail
specialty packaging. MK is owned by Marci Evans, the Company's President,
and her husband, Dennis Evans. (See "CERTAIN RELATIONSHIPS AND RELATED
11
<PAGE>
TRANSACTIONS"). The Company, however, has not signed an agreement with MK or
any other company regarding the purchase of products and has no exclusive
arrangements with any entity and may therefore purchase its products from any
source. The Company used MK for its initial product purchases only and is
currently negotiating with different suppliers for the purchase of the Gable
Box and other products. One of these potential suppliers has indicated that
they will be able to provide the Gable Box for between $.10 and $.20 per box
less than the Company is currently paying MK. The Company has established
relationships with numerous potential suppliers and has received pricing from
several different sources on different product lines. The Company plans to
utilize the distributor which provides the most competitive prices.
Dependence on a Few Major Customers
- -----------------------------------
The Company currently has approximately 25 customers and is dependent on
such customers for any of its limited revenues. The Company will be dependent
on these customers to provide business referrals which can be contacted by the
Company. Although the Company believes there is a large potential market out
there for its products both at the retail and wholesale level including
Internet markets, its immediate future is dependent on maintaining its current
client list and expanding the same. The Company, therefore, is not dependent
on any major customer although it is dependent on its current customer list to
provide introductions to new potential customers.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalties Agreements,
- -----------------------------------------------------------------------------
Labor Contracts
- ---------------
None
Need for Government Approval
- ----------------------------
None
Effect of Existing or Probable Government Regulations
- -----------------------------------------------------
The only government regulations which may affect the Company would be
those federal, state and local regulatory standards regarding distribution and
shipping of the Company's products.
Research and Development Activities in the Past Two Years
- ----------------------------------------------------------
The Company has been in business only since September of 1998. No money
has been spent on research and development. The Company's business development
will be initially funded by capital raised in its recent offering.
Total Number of Employees
- -------------------------
The Company has no employees as of this date other than Marci Evans who
is also the Company's President, Secretary, CEO, CFO, and a Director. The
Company, upon commencement of substantive business operations, intends to
compensate Ms. Evans at a rate of $1,000 per month. The Company also intends
to compensate Ms. Stankiewicz when and if she begins performing services for
the Company beyond those required in her capacity as a director. The Company
has no plans to hire any additional employees during the next twelve months.
Once the Company is established, it may hire some additional part-time
employee to assist Ms. Evans.
12
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company had total revenues during the period ended December 31, 1998,
of $8,592, the majority of which were received during its fourth quarter.
Total costs of sales for that same period was $6,509 with a net income for the
period ended December 31, 1998 of $2,083. The Company's goal is to continue
with the same net profit margin of approximately 24% in order to be
competitive and will rely on volume for revenues. The Company does not
necessarily believe that revenues received during the Company's first full
fiscal quarter of operation is in any way indicative of future results of
operations. The Company recognizes that its business is seasonal and such
initial fourth quarter operations were during the Christmas season which the
Company believes will always be its highest quarter for sales volume. (The
specialty packaging industry and fashion packaging industry in general rely on
traditional holidays which spur consumer buying.) In addition, the Company
acknowledges that it has a very limited product line during its first quarter
of operation. The Company has had no revenues during its second quarter of
operations which is the first quarter of 1999. The Company therefore does
not make any estimates or predictions as to its future revenues, if any.
During the next twelve months, its cash requirements will include the
following: (1) $500 per month to its consultant, Progressive Management.
Progressive Management takes care of the Company's bookkeeping, audit
preparation and SEC filings and is controlled by the husband of Marci Evans,
Mr. Dennis Evans. (See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS"); (2)
compensation to Marci Evans of $1,000 per month; (3) an estimated $500 per
month for office lease expenses when and if the Company acquires office space;
and (4) miscellaneous overhead. The Company, therefore, will require a
minimum of $24,000 for the next 12 month for compensation for services and
lease payments. The Company believes that the funds it raised in its offering
in April of 1999 ($50,300 in gross proceeds), which are largely not yet
expended, will be sufficient to provide for the foregoing cash requirements
of $24,000 for day to day operations in the next twelve months. It will also
provide for the costs of implementing its business plan, that is: $4,700 has
been budgeted for purchase of supplies and equipment, and approximately
$19,000 has been budgeted for general working capital which will include costs
of advertising, mailings, Internet access and web site, and purchase of some
inventory. The Company may also elect to rent a storage unit in addition to or
in lieu of office space to store seasonal inventory.
There is no guarantee that the funds available to the Company will be
sufficient to achieve the Company's goal of penetrating the highly competitive
market of specialty packaging. The Company will use every effort to minimize
its expenses during its first year of operations. It has no plans for
additional employees until or unless warranted due to business needs. The
Company will utilize the services of Susan Stankiewicz, if needed, when and if
business is such that it requires additional employees especially to take and
process orders. Management believes that it will not achieve profitability
until it is able to realize approximately $5,000 in gross sales per month.
The Company has no guarantee that it will be able to achieve this goal in the
next twelve months. Marci Evans has indicated that she is willing to forego
her salary of $1,000 per month, if necessary. Ms. Evans has not yet started
receiving such salary.
If the Company does not succeed in seeing limited revenues or, at
minimum, the potential of limited revenues, in the next twelve months, it may
be forced to discontinue operations unless it is able to raise sufficient
capital to continue pursuing its business plan. Management is not experienced
13
<PAGE>
in developmental companies and may not have estimated its needs for
advertising and associated expenses in acquiring a client base accurately.
The Company may require additional funds and time to achieve these goals.
Even if the Company begins generating revenues, it could require additional
funding for expansion. It may be difficult for the Company to succeed in
securing additional financing. The Company may be able to attract some private
investors, or officers and directors may be willing to make additional cash
contributions, advancements or loans. Or, in the alternative, the Company
could attempt some form of debt or equity financing. However, there is no
guarantee that any of the foregoing methods of financing would be successful.
If the Company fails to achieve at least a portion of its business goals in
the next twelve months with the funds available to it, there is substantial
uncertainty as to whether it will continue operations.
Ms Evans intends to aggressively pursue a customer base of independent
sales directors for Mary Kay Inc. and other direct marketing companies over
the next 12 months.
The Company does not believe it will have any material Year 2000
problems although it may suffer certain delays if manufacturers/suppliers of
its products are not Y2K compliant. Because there are several suppliers which
can provide the Company with its products, the Company believes that it can
switch suppliers if need be should Year 2000 cause any problems with existing
suppliers at that time. The Company's own internal systems are Year 2000
compliant and the Company's main shipping source, United Parcel Service, is
Year 2000 compliant. The Company will make every effort to purchase its
supplies from manufacturers/suppliers which are Y2K compliant to eliminate any
potential problems or delays.
Item 3. DESCRIPTION OF PROPERTY
The Company does not own any property. The Company utilizes office space
in the home of Ms. Evans sufficient to conduct its day to day operations. Ms.
Evans does not charge the Company any rent. The Company intends to lease
office space in the near future and does not anticipate paying more than $500
per month for such space. It may also, in addition to or in place of office
space, lease storage space for its inventory.
Item 4. SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the amount and nature of beneficial
ownership of each person known to a beneficial owner of more than five percent
of the issued and outstanding shares of the Company. The following
information is based on 401,200 shares issued and outstanding as of the date
hereof .
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
_____________________________________________________________________________
Name and Amount and
Address of Nature of
Title of Beneficial Beneficial Percent of
Class Owner Owner Class
- --------- ------------- -------------- ----------
Common Marci Evans(1) 150,000 Shares 37.39%
6357 Vicuna Drive, Sole Voting Power
Las Vegas, Nevada
89146
14
<PAGE>
Common Michael Stankiewicz(2) 50,000 Shares 12.46%
6357 Vicuna Drive Sole Voting Power
Las Vegas, NV 89146
____________________________________________________________________________
(1) Also an officer and director
(2) Also an officer and director
_____________________________________________________________________________
The following table sets forth the amount and nature of beneficial
ownership of each of the executive officers and directors of the Company. The
information below is based on 401,200 shares issued and outstanding as of the
date hereof.
SECURITY OWNERSHIP OF MANAGEMENT
_____________________________________________________________________________
Name and Amount and
Address of Nature of
Title of Beneficial Beneficial Percent of
Class Owner Owner(1) Class
- -------- ------------------- ---------------- ------------
Common Marci Evans 150,000 Shares 37.39%
6357 Vicuna Drive Sole Voting Power
Las Vegas, NV 89146
Common Michael Stankiewicz 50,000 Shares 12.46%
6357 Vicuna Drive Sole Voting Power
Las Vegas, NV 89146
Common Susan Stankiewicz(2) -0- Shares(2) -0-
5800 W. Charleston
#1035
Las Vegas, 89146
_____________________________________________________________________________
Officers & Directors as a group 200,000 shares 49.85%
_____________________________________________________________________________
(1) None of the Company's officer or directors have any rights to acquire
additional shares of the Company's common stock, beneficially or otherwise.
(2) Susan Stankiewicz currently resides with her daughter, Rachel Burton, who
owns 800 shares of the Company. Rachel Burtons retains sole voting power over
her shares.
_____________________________________________________________________________
CHANGES IN CONTROL
The Company has no arrangements which might result in a change in
control of the Company.
Item 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
OFFICERS AND DIRECTORS
The names and ages of all directors and executive officers of the
Company, along with their respective positions, term of office and period such
position(s) was held, is as follows:
15
<PAGE>
Name Age Position Held & Since
- -------------------- --- ---------------------
Marci Evans 37 President/Secretary, Chairman of
the Board of Directors, Chief Executive
Officer, Chief Financial Officer
----------------------
Since September 8, 1998(1)
Susan Stankiewicz 42 Director
------------------------
Since September 8, 1998(1)
Michael Stankiewicz 21 Director, Vice President
------------------------
Since September 8, 1998(1)
(1) Each of the above individuals will serve in their respective capacities
until the next annual meeting of the shareholders or until a successor is duly
qualified and elected.
- ------------------------
BIOGRAPHICAL INFORMATION ON OFFICERS AND DIRECTORS
MARCI EVANS, age 37, currently acts as the Company's President, Secretary,
Director, and Chief Financial and Executive Officer. Currently she is also
and Independent Senior Sales Director of Mary Kay Cosmetics, Inc., since 1994.
During 1996-98, Ms Evans acted as the Secretary and a director of the
following corporations: Image Perfect Incorporated, a Nevada company engaged
in the artwork industry; Express Entry Systems, another Nevada corporation
engaged in providing graphic design to individuals, small businesses and
organizations; and All-Wrapped Up, a Nevada corporation involved in providing
retail gift services. Ms. Evans acted in such capacities only in the start-up
phase and performed only her required duties in her respective positions as an
executive officer and director with those three companies. Each of those
corporations has new management. From 1994-96, she was the Secretary and a
Director of Gem Source Incorporated, a Nevada corporation engaged in the
jewelry business where she performed only such minimal duties as required as
in her position as a executive officer and director of such corporation. From
1987 through 1995, Ms. Evans was Vice President of Sensuous Sandwich Shoppes
of Nevada, Inc., a company which owns retail delis in Las Vegas, Nevada and
Salt Lake City, Utah. Ms. Evans was the owner/operator of the Las Vegas,
Nevada location and operational consultant to the Salt Lake City location.
From 1985 through 1987, Evans was secretary of Brian-Evans Inc., a partnership
which owned retail bakery operations in Las Vegas, Nevada. From 1984 through
1985, Marci Evans worked for American Savings Bank in Salt Lake City, Utah, as
a Construction Loan Officer, and from 1978 through 1983, she worked for First
Security Bank of Utah, N.A. in Salt Lake City as a Foreign Exchange
Administrator. Marci Evans attended the University of Utah in connection with
the American Institute of Banking from 1978-82.
MICHAEL STANKIEWICZ, age 21, serves as the Company's Vice-President and a
director. From 1994 - 1996, Mr. Stankiewicz was self-employed as a commercial
fisherman in the State of Alaska. After some time off, from 1998 through the
present date, he is again employed as a commercial fisherman in Alaska. Mr.
16
<PAGE>
Stankiewicz graduated from Haltom High School in 1994 and is currently
applying for enrollment at the University of Nevada Las Vegas.
SUSAN STANKIEWICZ, age 40, is a Director of the Company. Since September of
1998, Ms. Stankiewicz has also been a director and Vice President of Millennia
Automated Products, Inc. a company in the vending business in the greater Las
Vegas area. During 1997 and 1998, Susan Stankiewicz was employed as office
manager of Apple Orthodontix she managed three different locales of Apple
Orthodontix in the Dallas/Ft. Worth area. From 1993 through 1998, Ms.
Stankiewicz was the owner/operator of Sweet Stuff Vending, based in Dallas,
Texas. Ms. Stankiewicz attended Brigham Young University during 1974 and 1975
where she studied General Business.
FAMILY RELATIONSHIPS
Michael Stankiewicz is the son of Susan Stankiewicz and nephew to Marci
Evans. Susan Stankiewicz is the sister of Marci Evans. There are no other
familial relationships between officers and directors.
INVOLVEMENT IN OTHER PUBLIC COMPANIES. None of the Company's directors are
involved in other public companies that would be described as "reporting"
companies, except Susan Stankiewicz. Ms. Stankiewicz is a director of
Millennia Automated Products, Inc. ("Millennia"), a Nevada public company
which has recently became a reporting issuer. Millennia is seeking a listing
on the NASD OTC Bulletin Board and filed its Form 10SB General Form for
Registration of Securities of Small Business Issuers with the Securities and
Exchange Commission on April 19, 1999. Generally, an issuer is subject to
reporting obligations sixty (60) days after such filing. Millennia became a
reporting company on June 19, 1999.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
Except as indicated below and/or hereinbefore, to the knowledge of
Management, during the past five years, no present or former director,
executive officer, or person nominated to become a director or executive
officer of the Company:
(1) Filed a petition under federal bankruptcy laws or any state
insolvency law, nor had a receiver, fiscal agent or similar officer appointed
by a court for the business or property of such person, or any partnership in
which he was a general partner at or within two years before the time of such
filing, or any corporation or business association of which he was an
executive officer at or within two years before the time of such filing;
(2) Was convicted in a criminal proceeding or named subject of a
pending criminal proceeding (excluding traffic violations and other minor
offences);
(3) Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him or her from or
otherwise limiting his/her involvement in any type of business, securities or
banking activities;
(4) Was found by a court of competent jurisdiction in a civil
action, by the Securities and Exchange Commission or the Commodity Futures
Trading Commission, to have violated any federal or state securities law, and
17
<PAGE>
the judgment in such civil action or finding by the Securities and Exchange
Commission has not been subsequently reversed, suspended, or vacated.
Item 6. EXECUTIVE COMPENSATION
The following table sets forth certain information as to compensation
received by the Company's Chief Executive Officer who is also a director of
the Company and its President and Secretary, as of December 31, 1998.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
----------------------------------------------------------------------
Annual Compensation Awards Payouts
- ------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other All
Name Annual Restricted Other
and Compensa- Stock Underlying LTIP Compensa-
Principal sation Award Options/ Payouts tion
Position Year Salary($) Bonus($) ($) ($) SAR's(#) ($) ($)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Marci Evans(1) 1998 -0- -0- -0- -0- -0- -0- -0-
President, CEO, CFO
Secretary
Director
- ------------------------------------------------------------------------------------------------
(1) The Company intends to compensate Ms. Evans $1,000 per month at such time as the Company
actually commences conducting operations. (See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.")
Ms. Evans has not yet started receiving such monthly compensation. Ms. Evans has not yet
received any compensation from the Company as of the date of this registration statement.
</TABLE>
OPTIONS/SAR GRANTS
There were no stock options or stock appreciation rights granted to any
executive officer since its inception through present date.
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR END OPTION/SAR VALUE TABLE
Not applicable.
LONG TERM INCENTIVE PLANS
There are no long term incentive plans in effect and therefore no awards
have been given to any executive officer in the past year.
COMPENSATION OF DIRECTORS
The Company pays no fees to members of the Company's Board of Directors
for the performance of their duties as directors. The Company has not
established committees of the Board of Directors.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
The Company has no employment contracts in effect with any of the members
of its Board of Directors or its executive officers nor are there any
18
<PAGE>
agreements or understandings with such persons regarding termination of
employment or change-in-control arrangements. The Company has agreed to
compensate Ms. Evans $1,000 per month for services rendered in her capacity as
Secretary and President of the Company, and in the marketing of the Company's
products, and such time as the Company actually commences substantive
operations. Because much of the Company's business will rely on Ms. Evans'
knowledge and business contacts, Ms. Evans may be entitled to additional
compensation at a future date. Such compensation will be at the discretion of
the Board of Directors and will be authorized based on several different
factors such as, the nature and quantity of work Ms. Evans performs, the
results of her marketing efforts, and the amount of revenues, if any, which
may result from her efforts, etc. Such compensation could take the form of
cash bonuses, or salary arrangements over and above of the current agreed upon
salary of $1,000 per month; or it could take the form of restricted stock
awards, or option grants. If Ms. Evans' efforts have positive results, it is
likely that the Company will enter into some sort of employment agreement with
her. The same holds true for Ms. Stankiewicz. (See "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS".)
Item 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Two of the Company's officers received an aggregate of 200,000 common
shares of the Company's stock at inception for a $10,000 cash contribution.
The Company has also agreed to compensate Ms. Evans for services performed for
the Company in the future at a rate of $1,000 per month. Because the Company's
business plan will rely mostly on Ms. Evans' efforts, there is the possibility
that Ms. Evans will receive additional compensation in the future for her
contributions to the Company. This compensation may be substantial. The
Board of Directors has the authority to approve additional compensation for
Mr. Evans if she performs substantial services to the Company in its initial
phase of operations. The amount and type of such compensation will depend on
the amount and success of Ms. Evans' services and as well as the Company's
cash flow. The Board of Directors has authorized and Management has budgeted
only $12,000 for Ms. Evans' salary for the next 12 months. Because the Company
does not intend to hire additional personnel within that time period, it will
be mostly reliant on Ms. Evans abilities to make decisions regarding specialty
packaging products, and the combined efforts of Ms. Evans and Ms. Stankiewicz
to market such packaging. Additional compensation to Ms. Evans and Ms.
Stankiewicz, if any, could be substantial, and could take the form of salary
increases, cash bonuses, restricted stock awards, or stock options. The
potential for Ms. Evans and Ms. Stankiewicz to benefit personally from their
contributions to the Company exists, therefore, although the amount and nature
of such benefit has yet to be determined. (See "Executive Compensation".)
The Company has entered into two contracts which could be construed as a
related party transactions: one with MK Resources, Inc., a Nevada corporation
("MK") which is 100% owned by Marci Evans and her husband, Dennis Evans; and
one with Progressive Management, of which Dennis Evans, Marci Evans' husband
is President. The MK contract, which is a contract for credit card processing
services, provides that MK will provide credit card processing to the Company
for a fee of 2.5% of the orders processed, deducted on a monthly basis. The
effective date of the contract is September 15, 1998, and it may be
terminated by either party with 30 days written notice. In addition, MK has
acted as a supplier of the specialty packaging which the Company has marketed
to date; there is no contract between MK and the Company regarding MK's
supplying such packaging, and the Company is free to purchase its specialty
packaging products from whatever source it believes offers the Company the
19
<PAGE>
best deal. It is likely that the Company will not continue to utilize MK as
it has already actively solicited other entities for the purchase of products.
The Progressive Management agreement is a consulting agreement entered
into on January 1, 1999 whereby Progressive has agreed to provide the
following services to the Company: bookkeeping, audit preparations and SEC
filing preparations for $500 per month.
Item 8. DESCRIPTION OF SECURITIES
COMMON STOCK
The authorized capital stock of the Company consists of 25,000,000 shares
of Common Stock, $.001 par value per share. The holders of Common Stock (i)
have equal ratable rights to dividends from funds legally available therefore,
when, as and if declared by the Board of Directors of the Company; (ii) are
entitled to share ratably in all of the assets of the Company available for
distribution or winding up of the affairs of the Company; (iii) do not have
preemptive subscription or conversion rights and there are no redemption or
sinking fund applicable thereto; and (iv) are entitled to one non-cumulative
vote per share, on all matters which shareholders may vote on at all meetings
of shareholders. The Company, however, does not anticipate paying
dividends on its Common Stock in the foreseeable future but plans to retain
earnings, if any, for the operation and expansion of its business.
There are no provisions in the Company's charter or bylaws which would
delay, defer, or prevent a change in control of the Company.
NON-CUMULATIVE VOTING
The holders of shares of Common Stock of the Company do not have
cumulative voting rights which means that the holders of more than fifty
percent (50%) of such outstanding shares, voting for the election of
directors, can elect all of the directors to be elected, if they so choose,
and, in such event, the holders of the remaining shares will not be able to
elect any of the Company's directors. Management currently owns 49.85% of the
outstanding shares of the Company.
PART II
Item 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
The Company has no public trading market for its common stock. Although
the Company intends to seek a quotation for its common shares on the NASD
Over-the-Counter Bulletin Board in the future, there is no assurance the
Company will do so, nor is there any assurance that should the Company
succeed in obtaining a listing for its securities on the NASD OTC Bulletin
Board or on some other exchange, that a trading market for the Company's stock
will develop. There are no outstanding options, warrants to purchase, or
securities convertible into common equity of the Company outstanding. The
Company has not agreed to register any shares of its common stock for any
shareholder.
Of the 401,200 common shares of the Company's common stock currently
issued and outstanding, 201,200 are owned by public investors purchased in the
20
<PAGE>
Company's offering conducted in reliance upon the exemption provided for under
Section 3(b), Regulation D, Rule 504 and registered with the State of Nevada,
and closed on April 6, 1999; and 200,000 are held by two of the Company's
officers and directors and issued in reliance on the "private placement"
exemption of Section 4(2)of the Securities Act of 1933, as amended. If a
market for the Company's common shares were to develop, such 200,000
"restricted" shares, held by the two officers/directors would not be available
for sale in the open market without registration, except in reliance upon Rule
144 under the Act or some other applicable exemption. In general, under Rule
144, a person or persons whose shares are aggregated, who beneficially owned
shares acquired in a non-public transaction for at least one year, including
persons who may be deemed "affiliates" of the Company as that term is defined
under the 1933 Act, would be entitled to sell within any three-month period a
number of shares that does not exceed the greater of 1% of the then
outstanding shares of Common Stock or the average weekly reported trading
volume on all national securities exchanges and through NASDAQ during the four
calendar weeks preceding such sale provided current public information is then
available. As of the date hereof, the 200,000 shares issued in reliance upon
Section 4(2)and therefore considered "restricted", have been beneficially
owned since September 8, 1998 which would make them eligible for resale under
Rule 144 as of September 9, 1999, provided all of the applicable terms and
conditions of Rule 144 were met, and provided a public market existed for the
Company's common shares.
HOLDERS
There are 35 shareholders of record of the Company's common stock.
DIVIDENDS
The payment by the Company of dividends, if any, in the future, rests
within the discretion of its Board of Directors and will depend among other
things, upon the Company's earnings, its capital requirements and its
financial condition, as well as other relevant factors. The Company has not
paid or declared any dividends to date due to its present financial status.
The Company does not anticipate paying dividends on its common stock in the
foreseeable future but plans to retain earnings, if any, for the operation and
expansion of its business. There are no restrictions that limit the ability to
pay dividends on common equity or that are likely to limit the same in the
near future.
Item 2. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings and, to the
best of its knowledge, no such action by or against the Company has been
threatened. None of the Company's officers, directors, or beneficial owners
of 5% or more of the Company's outstanding securities is a party to a
proceeding adverse to the Company nor do any of the foregoing individuals have
a material interest in a proceeding adverse to the Company.
Item 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
None
Item 4. RECENT SALES OF UNREGISTERED SECURITIES
The Company has issued the following unregistered common shares in the
past three years.
21
<PAGE>
(1) On September 8, 1998, at the Company's organizational meeting, the
Company issued 200,000 unregistered common shares to its founders, Marci Evans
and Michael Stankiewicz. Such shares were issued for a $10,000 capital
contribution. The shares were issued pursuant to the exemption provided for
under Section 4(2) of the Securities Act of 1933, as amended, to the two
individuals, as a "transaction not involving a public offering." Ms. Evans is
the Company's President/Secretary, Chief Executive Officer, Chief Financial
Officer and a Director of the Company and Mr. Stankiewicz is a Director and
the Company's Vice-President.
(2) On April 5, 1999, the Company commenced an offering of up to 400,000
of its unregistered common shares at an offering price of $0.25 per share.
The offering was conducted in reliance on an exemption from the registration
requirements of Section 5 of the Act as promulgated under Section 3(b),
Regulation D, Rule 504, and pursuant to registration by qualification with the
State of Nevada in accordance with the requirements of Nevada Revised Statutes
90.490 and 90.500 with offers and sales made only to residents of the State of
Nevada, which offering was approved by the Nevada Securities Division on
February 8, 1999. The offering closed on April 6, 1999 with 201,200 shares
sold to 33 individuals and gross proceeds of $50,300.00. A commission of 5%,
or $2,515, was paid to the Company's licensed sales agent in the offering, Mr.
Kenneth Hofert, Jr. The Company believes it was entitled to rely on the
exemption provided under Rule 504 of Regulation D at the time of the offering
because it was not: (a)subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934; (b) an investment company, nor was it (c) a development
stage company that had no specific business plan or purpose or whose only
purpose was to engage in a merger with an unidentified company(s). The
Company also believes that its offering otherwise met all of the terms and
conditions of Rule 504 of Regulation D, including those adopted by the
Securities and Exchange Commission in February of 1999, and the applicable
provisions of Rules 501 through 503, as well as the applicable provisions of
Nevada Revised Statutes 90.490 and 90.500.
Item 5. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The only statutes, charter provisions, by-laws, contracts or other
arrangements under which any controlling person, director or officer of the
Company is insured or indemnified in any manner against any liability which he
may incur in his capacity as such, are as follows:
A. Indemnification provided by statute:
Sections 78.037, 78.751 and 78.752 of the Nevada Revised Statutes offer
limitation of liability protection for officers and directors and/or
indemnification protection of officers, directors, employees and agents of the
Company, and provide as follows:
78.037. Articles of incorporation: Optional provisions.
The articles of incorporation may also contain:
1. A provision eliminating or limiting the personal liability of a
director officer to the corporation or its stockholders for damages for breach
of fiduciary duty as a director or officer, but such a provision must not
eliminate or limit the liability of a director or officer for:
(a) Acts or omissions which involve intentional misconduct, fraud
or a knowing violation of law; or
23
<PAGE>
(b) The payment of distributions in violation of NRS 78.300.
2. Any provision, not contrary to the laws of this state, for the
management of the business and for the conduct of the affairs of the
corporation, and any provision creating, defining, limiting or regulating the
powers of the corporation or the rights, powers or duties of the directors,
and the stockholders, or any class of the stockholders, or the holders of
bonds or other obligations of the corporation, or governing the distribution
or division of the profits of the corporation.
78.751. Indemnification of officers, directors, employees and agents;
advancement of expenses.
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement actually and reasonably incurred by him
in connection with the action, suit or proceeding if he acted in good faith
and in a manner which is reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation or is or was serving at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses, including amounts paid in settlement and attorneys' fees actually
and reasonably incurred by him in connection with the defense or settlement of
the action or suit if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation. Indemnification may not be made for any claim, issue or matter
as to which such a person has been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable to the
corporation or for amounts paid in settlement to the corporation, unless and
only to the extent that the court in which the action or suit was brought or
other court of competent jurisdiction determines upon application that in view
of all the circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense
of any claim, issue or matter therein, he must be indemnified by the
23
<PAGE>
corporation against expenses, including attorneys' fees, actually and
reasonably incurred by him in connection with the defense.
4. Any indemnification under subsections 1 and 2, unless ordered by a
court or advanced pursuant to subsection 5, must be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances. The determination must be made:
a. By the stockholders;
b. By the board of directors by majority vote of a quorum
consisting of directors who were not parties to the act, suit or proceeding;
c. If a majority vote of a quorum consisting of directors who
were not parties to the act, suit or proceeding so orders, by independent
legal counsel in a written opinion; or
d. If a quorum consisting of directors who were not parties to
the act, suit or proceeding cannot be obtained, by independent legal counsel
in a written opinion.
5. The articles of incorporation, the bylaws or an agreement made
by the corporation may provide that the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking
by or on behalf of the director or officer to repay the amount if it is
ultimately determined by a court of competent jurisdiction that he is not
entitled to be indemnified by the corporation. The provisions of this
subsection do not affect any rights to advancement of expenses to which
corporate personnel other than directors or officers may be entitled under any
contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section:
a. Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles
of incorporation or any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, for either an action in his official
capacity or an action in another capacity while holding his office, except
that indemnification, unless ordered by a court pursuant to subsection 2 or
for the advancement of expenses made pursuant to subsection 5, may not be made
to or on behalf of any director or officer if a final adjudication establishes
that his acts or omissions involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action.
b. Continues for a person who has ceased to be a director,
officer, employee or agent and inures to the benefit of the heirs, executors
and administrators of such a person.
78.752. Insurance and other financial arrangements against liability of
directors, officers, employees and agents.
1. A corporation may purchase and maintain insurance or make other
financial arrangements on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
24
<PAGE>
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise for
any liability asserted against him and liability and expenses incurred by him
in his capacity as a director, officer, employee or agent, or arising out his
status as such, whether or not the corporation has the authority to indemnify
him against such liability and expenses.
2. The other financial arrangements made by the corporation pursuant
to subsection 1 may include the following:
a. The creation of a trust fund.
b. The establishment of a program of self-insurance.
c. The securing of its obligation of indemnification by
granting a security interest or other lien on any assets of the corporation.
d. The establishment of a letter of credit, guaranty or surety.
No financial arrangement made pursuant to this subsection may provide
protection for a person adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable for intentional misconduct,
fraud or a knowing violation of law, except with respect to the advancement of
expenses or indemnification ordered by a court.
3. Any insurance or other financial arrangement made on behalf of a
person pursuant to this section may be provided by the corporation or any
other person approved by the board of directors, even if all or part of the
other person's stock or other securities is owned by the corporation.
4. In the absence of fraud:
a. The decision of the board of directors as to the propriety of
the terms and conditions of any insurance or other financial arrangement made
pursuant to this section and the choice of the person to provide the insurance
or other financial arrangement is conclusive; and
b. The insurance or other financial arrangement:
(1) Is not void or voidable; and
(2) Does not subject any director approving it to
personal liability for his action, even if a director approving the insurance
or other financial arrangement is a beneficiary of the insurance or other
financial arrangement.
5. A corporation or its subsidiary which provides self-insurance for
itself or for another affiliated corporation pursuant to this section is not
subject to the provisions of Title 57 of NRS.
B. The TWELFTH article of the Company's Articles of Incorporation limits
the liability exposure of officers and directors of the Company for damages.
It provides as follows: No director or officer of the Corporation shall be
personally liable to the Corporation or any of its stockholders for damages
for breach of fiduciary duty as a director or officer involving any act or
omission of any such director of officer; provided however, that the foregoing
provision shall not eliminate or limit the liability or a director or officer
(i) for acts or omissions which involve intentional misconduct, fraud or a
25
<PAGE>
knowing violation of law, or (ii) the payment of dividends in violation of
Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of
this Article by the stockholders of the Corporation shall be prospective only
and shall not adversely affect any limitation on the personal liability of a
director or officer of the Corporation for acts of omissions prior to such
repeal or modification.
C. Article VI, INDEMNIFICATION OF OFFICERS AND DIRECTORS, of the Company's
By-Laws provides for the following indemnification protections: Except as
hereinafter stated otherwise, the Corporation shall indemnify all of its
officers and directors, past, present and future, against any and all expenses
incurred by them, and each of them including but not limited to legal fees,
judgments and penalties which may be incurred, rendered or levied in any legal
action brought against any or all of them for or on account of any act or
omission alleged to have been committed while acting within the scope of their
duties as officers or directors of this Corporation.
As of the date hereof, the Company has no contracts in effect
providing any indemnitee with any specific rights of indemnification although
the Company's bylaws authorize its Board of Directors to enter into and
deliver such contracts to provide an indemnitee with specific rights of
indemnification in addition to the rights provided in the Articles and Bylaws
to the fullest extent provided under Nevada law. The Company has no special
insurance against liability although the Company's bylaws provide that the
Company may, unless prohibited by Nevada law, maintain such insurance.
Indemnification for liabilities arising under the Act may be
permitted for directors, officers and controlling persons of the Company
pursuant to the foregoing or otherwise. However, the Company has been advised
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
PART F/S
The following financial statements are included herewith: the Company's
audited financial statements for the period ended December 31, 1998, and the
audited financial statements for the interim period ended April 30, 1999.
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 1998
TABLE OF CONTENTS
Page Number
ACCOUNTANT'S REPORT............................................. 1
FINANCIAL STATEMENT:
Balance Sheet ................................................ 2
Statement of Income and Income
Accumulated During the Development Stage...................... 3
Statement of Changes in Stockholders' Equity................... 4
Statement of Cash Flows........................................ 5
Notes to the Financial Statements.............................. 6-7
<PAGE> 26
DAVID E. COFFEY 3651 Lindell Rd. - Suite H Las Vegas, NV 89103
_____________________________________________________________________________
CERTIFIED PUBLIC ACCOUNTANT (702) 871-3979
To the Board of Directors and Stockholders
of Access Network Corporation
Las Vegas, Nevada
I have audited the accompanying balance sheet of Access
Network Corporation (a development stage company) as of December
31, 1998 and the related statements of income, cash flows and
changes in stockholders' equity for the period from September 8,
1998 (date of inception) to December 31, 1998. These financial
statements are the responsibility of Access Network Corporation's
management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I plan and perform
the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit of the
financial statements provide a reasonable basis for my opinion.
In my opinion, the accompanying financial statements present
fairly, in all material respects, the financial position of Access
Network Corporation as of December 31, 1998 and the results of
income cash flows and changes in stockholders' equity for the
period then ended in conformity with generally accepted accounting
principles.
/s/ DAVID COFFEY C.P.A.
David Coffey C.P.A.
January 8, 1999
-2-
<PAGE> 27
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1998
ASSETS
Cash $ 7,474
Organizational costs less accumulated
amortization of $12 173
Accounts receivable 1,087
Inventory 201
Prepaid offering costs 3,000
----------
Total Assets 11,935
==========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable:
Trade $ 500
Provision for income taxes 220
----------
Total Liabilities 720
Stockholders' Equity
Common stock, authorized 25,000,000 shares
at $.001 par value, issued and outstanding
200,000 shares 200
Additional paid-in capital 9,800
Income accumulated during
the development stage 1,215
----------
Total Stockholders' Equity 11,215
Total Liabilities and Stockholders' Equity $ 11,935
==========
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE> 28
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF INCOME AND INCOME
ACCUMULATED DURING THE DEVELOPMENT STAGE
FOR PERIOD ENDED FROM September 8, 1998
To December 31, 1998
Sales $ 8,592
Cost of sales (6,509)
-----------
Gross margin 2,083
Expenses
Amortization 12
Fees 100
Office expenses 536
-----------
Total expenses 648
Net income before income taxes 1,435
Provision for income taxes (220)
-----------
Net income 1,215
Retained earnings,
beginning of period 0
-----------
Income accumulated during
the development stage $ 1,215
===========
The accompanying notes are an integral part of
these financial statements.
-4-
<PAGE> 29
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
PERIOD From September 8, 1998 (Date of Inception)
To December 31, 1998
Additional
Common Stock Paid-in
Shares Amount Capital Total
---------- ------------ ------------ -----------
Balance,
September 8, 1998 --- $ --- $ -- $ ---
Issuance of common
stock for cash 200,000 200 9,800 10,000
Net income --- --- 1,215
---------- ------------ ------------ -----------
Balance,
December 31, 1998 200,000 $ 200 $ 9,800 $ 11,215
========== ============ ============ ===========
The accompanying notes are an integral part of
these financial statements.
-4-
<PAGE> 30
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FROM September 8, 1998
To December 31, 1998
CASH FLOWS USED BY OPERATING ACTIVITIES
Net income $ 1,215
Noncash items included in net income
Amortization 12
Increase in accounts receivable (1,087)
Increase in inventory (201)
Increase in prepaid offering costs (3,000)
Increase in accounts payable 720
-----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES (2,341)
CASH FLOWS USED BY INVESTING ACTIVITIES
Organizational costs 185
-----------
NET CASH USED BY
INVESTING ACTIVITIES 185
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock 200
Additional paid-in capital 9,800
-----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 10,000
NET INCREASE IN CASH 7,474
CASH AT BEGINNING OF PERIOD ---
-----------
CASH AT END OF PERIOD $ 7,474
===========
The accompanying notes are an integral part of
these financial statements.
-5-
<PAGE> 31
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1998
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated on September 8, 1998 under
the laws of the state of Nevada. The business purpose of
the Company is to distribute, on a wholesale basis,
specialty packaging for small businesses nation wide.
The Company will adopt accounting policies and procedures
based upon the nature of future transactions.
NOTE B ORGANIZATION COSTS
Organization costs are capitalized and amortized over 60
months.
NOTE C ACCOUNTS RECEIVABLE
As of December 31, 1998, the Company's management has
determined that no allowance for doubtful accounts was
necessary. All of the outstanding receivables were
collected in January of 1999.
NOTE D INVENTORY
Inventory is stated at the lower of cost or market
determined on a first-in, first-out basis.
NOTE E PREPAID OFFERING COSTS
The offering costs were incurred by the Company in
connection with a public stock offering will be deducted
from the net proceeds of that offering.
NOTE F PUBLIC STOCK OFFERING
The Company approved the sale of a maximum of 400,000
shares with a minimum of 200, 000 shares of its common stock
at $.25 per share. As of December 31, 1998 the sale of the
stock had not been completed. The net proceeds of the
offering will be used by the Company to distribute, on
a wholesale basis, specialty packaging for small businesses
nation wide.
-6-
<PAGE> 32
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE G RELATED PARTY TRANSACTIONS
The Company has entered into an agreement with a company in
which one of its shareholders have a controlling interest
for the processing of credit card sales of their products.
Under the terms of that agreement, the Company will pay
2.5% of all of the sales processed by the company using
credit cards as a method of payment. This agreement is on
a month-to-month basis commencing December 1, 1998.
-7-
<PAGE> 33
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
APRIL 30, 1999
TABLE OF CONTENTS
Page Number
-----------
ACCOUNTANT'S REPORT................................................. 1
FINANCIAL STATEMENT:
Balance Sheet.................................................. 2
Statement of Operations and Deficit
Accumulated During the Development Stage...................... 3
Statement of Changes in Stockholders' Equity .................. 4
Statement of Cash Flows........................................ 5
Notes to the Financial Statements ............................. 6-7
34
<PAGE>
DAVID E. COFFEY 3651 Lindell Rd. - Suite H Las Vegas, NV 89103
_____________________________________________________________________________
CERTIFIED PUBLIC ACCOUNTANT (702) 871-3979
To the Board of Directors and Stockholders
of Access Network Corporation
Las Vegas, Nevada
I have audited the accompanying balance sheet of Access
Network Corporation (a development stage company) April 30,1999 and the
related statements of operations, cash flows and changes in stockholders'
equity for the period from September 8, 1998 (date of inception) to April 30,
1999. These financial statements are the responsibility of Access Network
Corporation's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the-accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit of the financial statements
provide a reasonable basis for my opinion.
In my opinion, the accompanying financial statements present fairly, in
all material respects, the financial position of Access Network Corporation as
of April 30, 1999 and the operations, cash flows and changes in stockholders'
equity for the period then ended in conformity with generally accepted
accounting principles.
/s/David Coffey C.P.A.
David Coffey C.P.A.
May 18, 1999
35
<PAGE>
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
APRIL 30, 1999
ASSETS
Cash $ 22,781
Organizational costs less accumulated
amortization of $24 161
Subscriptions receivable 30,000
Income taxes receivable 220
Inventory 201
Total Assets $ 53,363
==========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable $ 505
----------
Total Liabilities 505
Stockholders' Equity
Common stock, authorized 25,000,000 shares
at $.001 par value, issued and outstanding
401,200 shares 401
Additional paid-in capital 53,034
Deficit accumulated during the
development stage (577)
----------
Total Stockholders' Equity 52,858
Total Liabilities and Stockholders Equity $ 53,363
==========
The accompanying notes are an integral part of
these financial statements.
-2-
<PAGE> 36
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
FOR THE PERIOD ENDED April 30, 1999
(with Cumulative Figures From Inception)
From Inception,
January 1, 1999 Sept. 8, 1999
To April 30, 1999 To April 30, 1999
---------------------- ------------------
Sales $ 0 $ 8,592
Cost of sales 0 (6,509)
----------- ------------
Gross margin 0 2,083
Expenses
Amortization 12 24
Consulting 2,000 2,000
Fees 0 100
Office supplies 0 536
----------- ------------
Total expenses 2,012 2,660
Net loss before income taxes (2,012) (577)
Income taxes receivable 220 0
----------- ------------
Net loss (1,792) $ (577)
============
Retained earnings,
beginning of period 1,215
-----------
Deficit accumulated during
the development stage $ (577)
===========
Earnings (loss) per share
assuming dilution:
Net loss $ (.00) $ (.00)
=========== ============
Weighted average shares outstanding 205,000 202,100
=========== ============
The accompanying notes are an integral part of
these financial statements.
-3-
<PAGE> 37
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS'
EQUITY PERIOD FROM September 8, 1998 (Date of Inception)
To April 30, 1999
Additional
Common Stock Paid-in
Shares Amount Capital Total
------- ------- ------- ---------
Balance,
September 8,1998 --- $ --- $ $ ---
Issuance of Common
stock for cash 200,000 200 9,800 10,000
Net income --- --- --- 1,215
------- ------- -------- ---------
Balance,
December 31, 1998 200,000 200 9,800 11,215
Issuance of common
stock for cash 201,200 201 50,099 50,300
Less offering costs 0 0 (6,865) (6,865)
Less net loss --- --- --- (1,792)
------- ------- -------- ---------
Balance,
April 30, 1999 401,200 $ 401 $ 53,034 $ 52,858
======= ======= ======== =========
The accompanying notes are an integral part of
these financial statements.
-4-
<PAGE> 38
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED April 30, 1999
(With Cumulative Figures From Inception)
From Inception,
January 1, 1999 Sept. 8, 1999
To April 30, 1999 To April 30, 1999
------------------ -----------------
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES
Net Loss $ (1,792) $ (577)
Non-cash items included in net loss
Amortization 12 24
Adjustments to reconcile net loss to
cash used by operating activity
Accounts receivable 1,087 0
Subscriptions receivable (30,000) (30,000)
Income taxes receivable (220) (220)
Inventory 0 (201)
Accounts payable (215) 505
------------------ -----------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES (31,128) (30,469)
CASH FLOWS USED BY
INVESTING ACTIVITIES
Organizational costs 0 185
------------------ -----------------
NET CASH USED BY
INVESTING ACTIVITIES 0 185
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock 201 401
Paid-in capital 50,099 59,899
Less offering costs (3,865) (6,865)
------------------ -----------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 46,435 53,435
NET INCREASE IN CASH 15,307 $ 22,781
================
CASH AT BEGINNING OF PERIOD 7,474
-----------------
CASH AT END OF PERIOD $ 22,781
=================
The accompanying notes are an integral part of
these financial statements.
-5-
<PAGE> 39
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
April 30, 1999
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated on September 8, 1998 under the laws of the state
of Nevada. The business purpose of the Company is to distribute, on a
wholesale basis, specialty packaging for small businesses nation wide.
The Company will adopt accounting policies and procedures based upon the
nature of future transactions.
NOTE B ORGANIZATION COSTS
Organization costs are capitalized and amortized over 60 months.
NOTE C INVENTORY
Inventory is stated at the lower of cost or mar determined on a first-in,
first-out basis.
NOTE D OFFERING COSTS
The offering costs were incurred by the Company in connection with a public
stock offering were deducted from the net proceeds of that offering.
NOTE E PUBLIC STOCK OFFERING
The Company completed the sale of 201,200 shares of its common stock at $.25
per share. The net proceeds of the offering will be used by the Company to
distribute, on a wholesale basis, specialty packaging for small businesses
nation wide.
NOTE F EARNING (LOSS) PER SHARE
Basic EPS is determined using net income divided by the weighted average
shares outstanding during the period. Diluted EPS is computed by dividing net
income by the weighted average shares outstanding, assuming all dilutive
potential common shares were issued. Since the Company has no common shares
that are potentially issuable, such as stock options, convertible preferred
stock and warrants, basic and diluted earnings per share are the same.
-6-
<PAGE> 40
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
APRIL 30, 1999
NOTE G RELATED PARTY TRANSACTIONS
The Company has entered into an agreement with a company in which one of its
shareholders have a controlling interest for the processing of credit card
sales of their products. Under the terms of that agreement, the Company will
pay 2.5% of all of the sales processed by the company using credit cards as a
method of payment. This agreement is on a month-to-month basis commencing
December 1, 1998.
-7-
<PAGE> 41
PART III
Item 1. INDEX TO EXHIBITS
No. Description
- ---- ------------
3.1 Articles of Incorporation
3.2 Bylaws
10.1 Agreement with MK Resources, Inc.
10.2 Agreement with Progressive Management Consulting Inc.
27 Financial Data Schedule
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized.
Registrant:
ACCESS NETWORK CORPORATION
Date: June 28, 1999 By: /s/ Marci Evans
-----------------------------
Marci Evans
President, Secretary
Chief Executive Officer, Chief
Financial Officer, Chairman of
the Board of Directors
/s/ Susan Stankiewicz
Date: June 28, 1999 By: -------------------------------
Susan Stankiewicz
Director
Exhibit 3.1
<Great Seal of the State of Nevada appears here>
CORPORATE CHARTER
1, DEAN HELLER, the duly elected and qualified Nevada Secretary of State, do
hereby certify that ACCESS NETWORK CORPORATION did on September 8,1998, file
in this office the original Articles of Incorporation; that said Articles are
now on file and of record in the office of the Secretary of State of the State
of Nevada, and further, that said Articles contain all the provisions required
by the law of said State of Nevada.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Great Seal of
State, at my office, in. Las-Vegas, Nevada, on September 8,1998.
/s/Dean Heller
Secretary of State
By
/s/Delaina Mazuer
Certification Clerk
<PAGE>
FILED
In the office of the
Secretary of State of the
STATE OF NEVADA
Sep 08 1998
No. C21255-98
/s/ Dean Heller
Dean Heller, Secretary of State
ARTICLES OF INCORPORATION
OF
ACCESS NETWORK CORPORATION
FIRST. The name of the corporation is:
ACCESS NETWORK CORPORATION
SECOND. Its registered office in the State of Nevada is located at 5015
W. Sahara Ave., #184, Las Vegas, Nevada 89102, that this Corporation may
maintain an office, or offices, insuch other place within or without the State
of Nevada as may be from time to time designated by the Board of Directors, or
by the By-Laws of said Corporation, and that this Corporation may conduct all
Corporation business of every kind and nature, including the holding of all
meetings of Directors and Stockholders, outside the State of Nevada as well as
within the State of Nevada.
THIRD. The objects for which this Corporation is formed are: To engage
in any lawful activity, including, but not limited to the following:
(A) Shall have such rights, privileges and powers as may be
conferred upon corporations by any existing law.
(B) May at any time exercise such rights, privileges and powers,
when not inconsistent with the purposes and objects for which this corporation
is organized.
(C) Shall have power to have succession by its corporate name for
the period limited in its certificate or articles of incorporation, and when
no period is limited, perpetually, or until dissolved and its affairs wound up
according to law.
(D) Shall have the power to effect litigation in its own behalf and
interest in any court of law.
(E) Shall have power to make contracts.
(F) Shall have power to hold, purchase and convey real and personal
estate and mortgage or lease any such real and personal estate with its
franchises. The power to hold real and personal estate shall include the power
to take the same by devise or bequest in the State of Nevada, or in any other
state, territory or country.
1
(G) Shall have power to appoint such officers and agents as the
affairs of the corporation shall require, and to allow them suitable
compensation.
(H) Shall have power to make By-Laws not inconsistent with the
constitution or laws of the United States, or of the State of Nevada, for the
management, regulation and government of its affairs and property, the
transfer of its stock, the transaction of its business, and the calling and
holding of meetings of its stockholders.
(I) Shall have power to dissolve itself.
(J) Shall have power to adopt and use a common seal or stamp, and
alter the same. The use of a seal or stamp by the corporation on any corporate
documents is not necessary. The corporation may use a seal or stamp, if it
desires, but such use or nonuse shall not in any way affect the legality or
the document.
(K) Shall have power to borrow money and contract debts when
necessary for the transaction of its business, or for the exercise of its
corporate rights, privileges or franchises, of for any other lawful purpose of
its incorporation; to issue bonds, promissory notes, bills or exchange,
debentures, and other obligations and evidences of indebtedness, payable at a
specified time or times, or payable upon the happening of a specified event or
events, whether secured by mortgage, pledge or otherwise, or unsecured, for
money borrowed, or in payment for property purchased, or acquired, or for any
other lawful object.
(L) Shall have power to guarantee, purchase, hold, sell, assign,
transfer, mortgage, pledge or otherwise dispose of the shares of the capital
stock of, or any bonds, securities or evidences of the indebtedness created
by, any other corporation or corporations of the State of Nevada, or any other
state or government, and, while owners of such stock, bonds, securities or
evidences of indebtedness, to exercise all the rights, powers and privileges
of ownership, including the right to vote, if any.
(M) Shall have power to purchase, hold, sell and transfer shares of
its own capital stock and use therefor its capital, capital surplus, surplus,
or other property or fund.
(N) Shall have power to conduct business, have one or more offices,
and hold, purchase mortgage and convey real and personal property in the State
of Nevada, and in any of the several states, territories, possessions and
dependencies of the United
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States, the District of Columbia, and foreign countries.
(O) Shall have power to do all and everything necessary and proper
for the accomplishment of the objects enumerated in its certificate or
incidental to the protection and benefit of the corporation, and, in general
to carry on any lawful business necessary or incidental to the attainment of
the objects of the corporation, whether or not such business is similar in
nature to the objects set forth in the certificate or articles of
incorporation of the corporation, or any amendment thereof.
(P) Shall have power to make donations for the public welfare or
for charitable scientific or educational purposes.
(Q) Shall have power to enter into partnerships, general or
limited, or joint ventures in connection with any lawful activities.
FOURTH. The aggregate number of shares the corporation shall have
authority to issue shall be TWENTY FIVE MILLION (25,000,000) shares of common
stock, par value one mil ($.001) per share, each share of common stock having
equal rights and preferences, voting privileges and preferences.
FIFTH. The governing board of this corporation shall be known as
directors, and the number of directors may from time to time be increased or
decreased in such manner as shall be provided by the By-Laws of this
Corporation, providing that the number of directors shall not be reduced to
fewer than one (1).
The name and post office address of the first Board of Directors shall be
one (1) in number and listed as follows:
NAME ADDRESS
- ---- ---------
Susan Stankiewicz 638 Lacy Lane
Las Vegas, NV. 89102
SIXTH. The capital stock, after the amount of the subscription price, or
par value, has been paid in, shall not be subject to assessment to pay the
debts of the corporation.
SEVENTH. The name and post office address of the Incorporator signing
the Articles of Incorporation is as follows:
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NAME ADDRESS
- ----- --------
Progressive Management & Consulting, Inc. 5015 W. Sahara Ave., #184
Las Vegas, Nevada 89102
EIGHTH. The resident agent for this corporation shall be:
PROGRESSIVE MANAGEMENT & CONSULTING, INC.
The address of said agent, and the registered or statutory address of this
corporation in the State of Nevada shall be:
5015 W. Sahara Ave., #184
Las Vegas, Nevada 89102
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
Subject to the By-Laws, if any, adopted by the Stockholders, to make,
alter of amend the By-Laws of the Corporation.
To fix the amount to be reserved as working capital over and above its
capital stock paid in to authorize and cause to be executed, mortgages and
liens upon the real and personal property of this Corporation.
By resolution passed by a majority of the whole Board, to designate one
(1) or more committees, each committee to consist of one or more of the
Directors of the Corporation, which, to the extent provided in the resolution,
or in the By-Laws of the Corporation, shall have and may exercise the powers
of the Board of Directors in the management of the business and affairs of the
Corporation. Such committee, or committees shall have such name, or names as
may be stated in the By-Laws of the Corporation, or as may be determined from,
time to time by resolution adopted by the Board of Directors.
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When and as authorized by the affirmative vote of the Stockholders
holding stock entitling them to exercise at least a majority of the voting
power given at a Stockholders meeting called for that purpose, or when
authorized by the written consent of the holders of at least a majority of the
voting stock issued and outstanding, the Board of Directors shall have power
and authority at any meeting to sell, lease or exchange all of the property
and assets of the Corporation, including its good will and its corporate upon
such terms and conditions as its Board of Directors deems expedient and for
the best interests of the Corporation.
ELEVENTH. No shareholder shall be entitled as a matter of right to
subscribe for or receive additional shares of any class of stock of the
Corporation, whether now or hereafter authorized, or any bonds, debentures or
securities convertible into stock, but such additional shares of stock or
other securities convertible into stock may be issued or disposed of by the
Board of Directors to such persons and on such terms as in its discretion it
shall deem advisable.
TWELFTH. No director or officer of the Corporation shall be personally
liable to the Corporation or any of its stockholders for damages for breach of
fiduciary duty as a director or officer involving any act or omission of any
such director of officer; provided however, that the foregoing provision shall
not eliminate or limit the liability or a director or officer (i) for acts or
omissions which involve intentional misconduct, fraud or a knowing violation
of law, or (ii) the payment of dividends in violation of Section 78.300 of the
Nevada Revised Statutes. Any repeal or modification of this Article by the
stockholders of the Corporation shall be prospective only and shall not
adversely affect any limitation on the personal liability of a director or
officer of the Corporation for acts of omissions prior to such repeal or
modification.
THIRTEENTH. This Corporation reserves the right to amend, alter, change
or repeal any provision contained in the Articles of Incorporation, in the
manner now or hereafter prescribed by statute, or by the Articles of
Incorporation, and all rights conferred upon Stockholders herein are granted
subject to this reservation.
<PAGE> 5
I, THE UNDERSIGNED, being the Incorporator hereinbefore named for the
purpose of forming a Corporation pursuant to the General Corporation Law of
the State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and
accordingly have hereunto set my hand this 8th day of September, 1998.
/s/ Dennis D. Evans
--------------------
Dennis D. Evans
STATE OF NEVADA )
COUNTY OF CLARK )
On this the 8th day of September, 1998, in Las Vegas, Nevada before me,
the undersigned, a Notary Public in and for Clark County, State of Nevada
personally appeared Dennis D. Evans, Known to me to be the person whose name
is subscribed to the foregoing document and acknowledged to me that he
executed the same.
/s/ Johnsie J. Gallant
Notary Public
<Notary seal of Johnsie J. Gallant appears here: State of Nevada
Appointment expires July 15, 2000>
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<PAGE>
FILED
In the Office of the
Secretary of State of the
State of Nevada
Sep 08 1998
C 21255-98
/s/ Dean Heller
Dean Heller, Secretary of State
CERTIFICATE OF ACCEPTANCE
OF APPOINTMENT BY RESIDENT AGENT
IN THE MATTER OF ACCESS NETWORK CORPORATION
I, Progressive Management & Consulting, Inc., do hereby certify that on
the 8th day of September, 1998, I accepted the appointment as Resident Agent
of the above-entitled corporation in accordance with Sec. 78.090, NRS 1957.
Furthermore, That the Principal office in this state is located at 5015
W. Sahara Ave., #184, City of Las Vegas 89102, County of Clark, State of
Nevada.
IN WITNESS WHEREOF, I have hereunto set my hand this 8th day of
September, 1998.
PROGRESSIVE MANAGEMENT & CONSULTING, INC.
By:/s/ Progressive Management and Consulting, Inc.
----------------------------------------------
Progressive Management & Consulting, Inc.
Resident Agent
Exhibit 3.2
BY LAWS
OF
ACCESS NETWORK CORPORATION
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL OFFICE. The principal office of the
Corporation shall be located in the City of Las Vegas, Nevada, Clark County.
SECTION 2. OTHER OFFICES. In addition to the principal office at
5015 W. Sahara Ave., #184, Las Vegas, Nevada 89102 other offices may also be
maintained at such other place or places, either within or without the State
of Nevada, as may be designed from time to time by the Board of Directors,
where meetings of the stockholders and of the Directors may be held with the
same effect as though done or held at said principal office.
ARTICLE II
MEETING OF STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. The annual meeting of the
shareholders, commencing with the year 1998, shall be held at the registered
office of the corporation, or at such other place as may be specified or fixed
in the notice of such meetings in the month of or the month preceding the due
date of the annual list of the officers and directors of the corporation at
such time as the shareholders shall decide, for the election of directors and
for the transaction of such other business as may properly come before said
meeting.
SECTION 2. NOTICE OF ANNUAL MEETINGS. The Secretary shall mail,
in the manner provided in Section 5 of Article II of these Bylaws, or deliver
a written or printed notice of each annual meeting to each stockholder or
record, entitled to vote thereat, or may notify by telegram, as least ten and
not more than sixty (60) days before the date of such meeting.
SECTION 3. PLACE OF MEETINGS. The Board of Directors may
designate any place either within or without the State of Nevada as the place
of meeting for annual meeting or for any special meeting called by the Board
of Directors. A waiver of notice signed by all stockholders may designate
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<PAGE>
any place either within or without the State of Nevada, as the place for the
holding of such meeting. If no designation is made, or it a special meeting be
otherwise called, the place of meeting shall be the principal office of
Corporation in the State of Nevada, except as otherwise provided in Section 6,
Article II of these Bylaws, entitled "Meeting of All Stockholders".
SECTION 4. SPECIAL MEETINGS. Special meetings of the stockholders
shall be held at the principal office of the Corporation or at such other
place as shall be specified or fixed in a notice thereof. Such meetings of the
stockholders may be called at any time by the President or Secretary, or by a
majority of the Board of Directors then in office, and shall be called by the
President with or without Board approval on the written request of the holders
of record of at least fifty percent (50%) of the number of shares of the
Corporation then outstanding and entitled to vote, which written request shall
state the object of such meeting.
SECTION 5. NOTICE OF MEETING. Written or printed notice stating
the place, day and hour of the meeting and, in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not
less than ten (10) nor more than sixty (60) days before the date of the
meeting, either personally or by mail, by or at the direction of the President
or the Secretary to each stockholder or record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail, addressed to the stockholder at his address as it
appears on the records of the Corporation, with postage prepaid. Any
stockholder may at any time, by duly signed statement in writing to that
effect, waive any statutory or other notice of any meeting, whether such
statement be signed before or after such meeting.
SECTION 6. MEETING OF ALL STOCKHOLDERS. If all the stockholders
shall meet at any time and place, either within or without the State of
Nevada, and consent to the holding of the meeting at such time and place, such
meeting shall be valid without call or notice and at such meeting any
corporate action may be taken.
SECTION 7. QUORUM. At all stockholder's meetings, the
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presence in person or by proxy of the holders of a majority of the outstanding
stock entitled to vote shall be necessary to constitute a quorum for the
transaction of business, but a lesser number may adjourn to some future time
not less than seven (7) no more than twenty-one (21) days later, and the
Secretary shall thereupon give at least three (3) days notice by mail to each
stockholder entitled to vote who is absent from such meeting.
SECTION 8. MODE OF VOTING. At all meetings of the stockholders the
voting may be voice vote, but any qualified voter may demand a stock vote
whereupon such stock vote shall be taken by ballot, each of which shall state
the name of the stockholder voting and the number of shares voted by him and,
if such ballot be cast by proxy, it shall also state the name of such proxy;
provided, however, that the mode of voting prescribed by statute for any
particular case shall be in such case followed.
SECTION 9. PROXIES. At any meeting of the stockholders, any
stockholder may be represented and vote by a proxy or proxies appointed by an
instrument in writing. In the event any such instrument in writing shall
designate two or more persons to act as proxies, a majority of such persons
present at the meeting, or, if only one shall be present, then that one shall
have and may exercise all of the powers conferred by such written instrument
upon all of the persons so designated unless the instrument shall otherwise
provide. No such proxy shall be valid after the expiration of six months from
the date of its execution, unless coupled with an interest, or unless the
person executing it specified therein the length of time for which it is to
continue in force, which in no case shall exceed seven years from the date of
its execution. Subject to the above, any proxy duly executed is not revoked
and continues in full force and effect until any instrument revoking it or a
duly executed proxy bearing a later date is filed with the secretary of the
Corporation. At no time shall any proxy be valid which shall be filed less
than ten (10) hours before the commencement of the meeting.
SECTION 10. VOTING LISTS. The officer or agent in charge of the
transfer books for shares of the corporation shall make, at least three days
before each meeting of stockholders, a complete list of the stockholders
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<PAGE>
entitled to vote at such meeting, arranged in alphabetical order with the
number of shares held by each, which list for a period of two days prior to
such meeting shall be kept on file at the registered office of the corporation
and shall be subject to inspection by any stockholder at any time during the
whole time of the meeting. The original share ledger or transfer book, or
duplicate thereof, kept in this state, shall be prima facie evidence as to who
are the stockholder entitled to examine such list or share ledger or transfer
book or to vote at any meeting of stockholders.
SECTION 11. CLOSING TRANSFER BOOKS OR FIXING OF RECORD DATE. For
the purpose of determining stockholders entitled to notice or to vote for any
meeting of stockholders, the Board of Directors of the Corporation may provide
that the stock transfer books be closed for a stated period but not to exceed
in any case sixty (60) days before such determination. If the stock transfer
books be closed for the purpose of determining stockholders entitled to notice
of a meeting of stockholders, such books shall be closed for at least fifteen
days immediately preceding such meeting. In lieu of closing the stock transfer
books, the Board of Directors may fix in advance a date in any case to be not
more than sixty (60) days, not less than ten (10) days prior to the date on
which the particular action, requiring such determination of stockholders, is
to be taken. If the stock transfer books are not closed and no record date is
fixed for determination of stockholders entitled to notice of a meeting of
stockholders, or stockholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the. Board of Directors declaring such dividend is adopted, as
the case may be, shall be the record of date for such determinations of
shareholders.
SECTION 12. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing
in the name of another corporation, domestic or foreign, may be voted by such
officer, agent or proxy as the Bylaws of such corporation by prescribe, or, in
the absence of such provisions, as the Board of Directors of such corporation
may determine.
Shares standing in the name of a deceased person may be voted
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<PAGE>
by his administrator or executor, either in person or by proxy. Shares
standing in the name of a guardian, conservator or trustee may be voted by
such fiduciary either in person or by proxy, but no guardian, conservator, or
trustee shall be entitled, as such fiduciary, to vote shares held by him
without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted
by such receiver without the transfer thereof into his name if authority so to
do be contained in an appropriate order of the court at which such receiver
was appointed.
A stockholder whose shares are pledged shall be entitled to vote
such shares until shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote the shares so
transferred.
Shares of its own stock belonging to this corporation shall not
voted, directly or indirectly, at any meeting and shall not be counted in
determining the total number of outstanding shares at any time, but shares of
its own stock held by it in a fiduciary capacity may be voted and shall be
counted in determining the total number of outstanding shares at any given
time.
SECTION 13. INFORMAL ACTION BY STOCKHOLDERS. Any action is
required to be taken at a meeting of the stockholders or any other action
which may be taken at a meeting of the stockholders except the election of
directors may be taken without a meeting if a consent in writing setting forth
the action so taken shall be signed by all of the stockholders entitled to
vote with respect to the subject matter thereof.
SECTION 14. VOTING OF SHARES. Each outstanding share entitled to
vote shall be entitled to one vote upon each matter submitted to vote at a
meeting of stockholders.
ARTICLE III
DIRECTORS
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SECTION 1. GENERAL POWERS. The Board of Directors shall have the
control and general management of the affairs and business
of the Corporation. Such directors shall in all cases act as Board, regularly
convened, by a majority, and they may adopt such rules and regulations for the
conduct of their meetings and the management of the Corporation, as they may
deem proper, not inconsistent with these Bylaws, Articles of Incorporation and
the laws of the State of Nevada. The Board of Directors shall further have
the, right to delegate certain other powers to the Executive
Committee as provided in these Bylaws.
SECTION 2. NUMBER OF DIRECTORS. The affairs and business of this
Corporation shall be managed by a Board of Directors consisting of at least
one (1) and no more than five (5) Directors, until changed by amendment of the
Articles of Incorporation or by an amendment to these Bylaws adopted by the
shareholders amending this Section 2, Article III, and except as authorized by
the Nevada Revised Statutes, there shall in no event be less than one (1)
Director.
SECTION 3. ELECTION. The Directors of the Corporation shall be
elected at the annual meeting of the stockholders except as hereinafter
otherwise provided for the filling of vacancies. Each director shall hold
office for a term of one year and until his successor shall have been duly
chosen and shall have qualified, or until his death, or until he shall resign
or shall have been removed in the manner hereinafter provided.
SECTION 4. VACANCIES IN THE BOARD. Any vacancy in the Board of
Directors occurring during the year through death, resignation, removal or
other cause, including vacancies caused by an increase in the number of
directors, shall be filled for the unexpired portion they constitute a quorum,
at any special meeting of the Board called for that purpose, or at any regular
meeting thereof; provided, however, that in the event the remaining directors
do not represent a quorum of the number set forth in Section 2 hereof, a
majority of such remaining directors may elect directors to fill any vacancies
then existing.
SECTION 5. DIRECTORS MEETINGS. Annual meeting of
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the Board of Directors shall be held each year immediately following the
annual meeting of the stockholders. Other regular meetings of the Board of
Directors shall from time to time by resolution be prescribed. No further
notice of such annual or regular meeting of the Board of Directors need be
given.
SECTION 6. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by or at the request of the President or any director.
The person or persons authorized to call special meetings of the Board of
Directors may fix any place, either within or without the. State of Nevada, as
the place for holding any special meeting of the Board of Directors called by
them.
SECTION 7. NOTICE. Notice of any special meeting shall be given at
least twenty-four hours previous thereto by written notice if personally
delivered, or five days previous thereto if mailed to each director at his
business address, or by telegram. If mailed, such notice shall be deemed to
have been delivered when deposited in the United States mail so addressed with
postage thereon prepaid. If notice is given by telegram, such notice shall be
deemed to be delivered when the telegram is delivered to the telegraph
company. Any director may waive notice of any meeting. The attendance of a
director at any meeting shall constitute a waive of notice of such meeting,
except where a director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not lawfully called
or convened.
SECTION 8. CHAIRMAN. At all meetings of the Board of Directors,
the President shall serve as Chairman, or in the absence of the President, the
directors present shall choose by majority vote a director to preside as
Chairman.
SECTION 9. QUORUM AND MANNER OF ACTING. A majority of the
directors, whose number is designated in Section 2 herein, shall constitute a
quorum for the transaction of business at any meeting and the act of a
majority of the directors present at any meeting at which a quorum is present
shall be the act of the Board of Directors. In the absence of a quorum,
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the majority of the directors present may adjourn any meeting from time to
time until a quorum be had. Notice of any adjourned meeting need not be given.
The directors shall act only as a Board and the individual directors shall
have no power as such.
SECTION 10. REMOVAL OF DIRECTORS. Any one or more of the
directors may be removed either with or without cause at any time by the vote
or written consent of the stockholders representing not less than two-thirds
(2/3) of the issued and outstanding capital stock entitled to voting power.
SECTION 11. VOTING. At all meetings of the Board of Directors,
each director is to have one vote, irrespective of the number of shares of
stock that he may hold.
SECTION 12. COMPENSATION. By resolution of the Board of
Directors, the directors may be paid their expenses, if any of attendance at
each meeting of the Board, and may be paid a fixed sum for attendance at
meetings or a stated salary of directors. No such payment shall preclude any
director from serving the corporation in any other capacity and receiving
compensation therefor.
SECTION 13. 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 conclusively presumed to have assented to
the action unless his dissent shall be entered in the minutes of the meeting
or unless he shall file his written dissent to such action with the person
acting as the secretary of the meeting before the adjournment thereof or shall
file forward such dissent by certified or registered mail to the Secretary of
the Corporation immediately after the adjournment of the meeting. Such right
to dissent shall not apply to a director who voted in favor of such action.
ARTICLE IV
EXECUTIVE COMMITTEE
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SECTION 1. NUMBER AND ELECTION. The Board of Directors may, in
its discretion, appoint from its membership an Executive Committee of one or
more directors, each to serve at the pleasure of the Board of Directors.
SECTION 2. AUTHORITY. The Executive Committee is authorized to
take any action which the Board of Directors could take, except that the
Executive Committee shall not have the power either to issue or authorize the
issuance of shares of capital stock, to amend the Bylaws, or a resolution
of the Board of Directors. Any authorized action taken by the Executive
Committee shall be as effective as if it had been taken by the full Board of
Directors.
SECTION 3. REGULAR MEETINGS. Regular meetings of the Executive
Committee may be held within or without the State of Nevada at such time and
place as the Executive Committee may provide from time to time.
SECTION 4. SPECIAL MEETINGS. Special meetings of the executive
committee may be called by or at the request of the President or any member of
the Executive Committee.
SECTION 5. NOTICE. Notice of any special meeting shall be given
at least one day previous thereto by written notice, telephone, telegram or in
person. Neither the business to be transacted, nor the purpose of a regular or
special meeting of the Executive Committee need be specified in the notice or
waiver of notice of such meeting. A member may waive notice of any meeting of
the Executive Committee. The attendance of a member at any meeting shall
constitute a waiver of notice of such meeting, except where a member attends a
meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened.
SECTION 6. QUORUM. A majority of the members of the
Executive Committee shall constitute a quorum for the transaction of business
at any meeting of the Executive Committee; provided that if fewer than a
majority of the members are present at said meeting a majority of the members
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present may adjourn the meeting from time to time without further notice.
SECTION 7. MANNER OF ACTING. The act of the majority of the
members present at a meeting at which a quorum is present shall be the act of
the Executive Committee, and said Committee shall keep regular minutes of its
proceedings which shall at all times be open for inspection by the Board of
Directors.
SECTION 8. PRESUMPTION OF ASSENT. A member of the Executive
Committee who is present at a meeting of the Executive
Committee at which action on any corporate matter is taken, shall be
conclusively presumed to have assented to the action taken unless his dissent
shall be entered in the minutes of the meeting or unless he shall file his
written dissent to such action with the person acting as secretary of the
meeting before the adjournment thereof, or shall forward such dissent by
certified or registered mail to the Secretary of the Corporation immediately
after the adjournment of the meeting. Such right to dissent shall not apply to
a member of the Executive Committee who voted in favor of such action.
ARTICLE V
OFFICERS
SECTION 1. NUMBER. The officers of the corporation shall be a
President, Vice President, a Treasurer and a Secretary and such other or
subordinate officers as the Board of Directors may from time to time elect.
One person may hold the office and perform the duties of one or more of said
officers. No officer need be a member of' the Board of Directors.
SECTION 2. ELECTION TERM OF OFFICE, QUALIFICATIONS. The officers
of the Corporation shall be chosen by the Board of Directors and they shall be
elected annually at the meeting of the Board of Directors held immediately
after each annual meeting of the stockholders except as hereinafter otherwise
provided for filling vacancies. Each officer shall hold his office until his
successor has been duly chosen and has qualified, or until his death, or until
he resigns or has been removed in the manner hereinafter provided.
10
<PAGE>
SECTION 3. REMOVALS. Any officer or agent elected or appointed
by the Board of Directors may be removed by the Board of Directors at any time
whenever in its judgment the best interests of the Corporation would be served
thereby, and such removal shall be without prejudice to the contract rights,
if any, or the person so removed.
SECTION 4. VACANCIES. All vacancies in any of office shall be
filled by the Board of Directors without undue delay, at any regular meeting,
or at a meeting specially called for that purpose.
SECTION 5. PRESIDENT. The President shall be the chief
executive officer of the corporation and shall have general supervision over
the business of the corporation and over its several officers, subject,
however, to the control of the Board of Directors. He may sign, with the
Treasurer or with the Secretary or any other proper officer of the Corporation
thereunto authorized by the Board of Directors, certificates for shares
of the capital stock of the Corporation; may sign and execute in the name of
the Corporation deeds, mortgages, bonds, contracts or other instruments
authorized by the Board of Directors, except in cases where signing and
execution thereof shall be expressly delegated by the Board of Directors or by
these Bylaws to some other officer or agent of the Corporation; and in general
shall perform all duties incident to the duties of the President, and such
other duties as from time to time may be assigned to him by the Board of
Directors.
SECTION 6. VICE PRESIDENT. The Vice President shall in the
absence or incapacity of the President, or as ordered by the Board of
Directors, perform the duties of the President, or such other duties or
functions as may be given to him by the Board of Directors from time to time.
SECTION 7. TREASURER. The Treasurer shall have the care and
custody of all the funds and securities of the Corporation and deposit the
same in the name of the Corporation in such bank or trust company as the Board
of Directors may designate; he may sign or countersign all checks, drafts and
orders for the payment of money and may pay out and dispose of same under the
direction of the Board of Directors, and may sign or countersign all notes or
other obligations of indebtedness of the Corporation;
11
<PAGE>
he may sign with the President or Vice President, certificates for shares of
stock of the Corporation; he shall at all reasonable times exhibit the books
and accounts to any director or stockholder of the Corporation under
application at the office of the company during business hours; and he shall,
in general, perform all duties as from time to time may be assigned to him by
the President or by the Board of Directors. The Board of Directors may at its
discretion require that each officer authorized to disburse the funds of
the Corporation be bonded in such amount as it may deem adequate.
SECTION 8. SECRETARY. The Secretary shall keep the minutes of the
meetings of the Board of Directors and also the minutes of the meetings of the
stockholders; he shall attend to the giving and serving of all notices of the
Corporation and shall affix the seal of the Corporation to all certificates of
stock, when signed and countersigned by the duly authorized officers; he may
sign certificates for shares of stock of the Corporation; he may sign or
countersign all checks, drafts and orders for the payment of money; he shall
have charge of the certificate book and such other books and papers as the
Board may direct; he shall keep a stock book containing the names
alphabetically arranged, of all persons who are stockholders of the
Corporation, showing their places of residence, the number of shares of stock
held by them respectively, the time when they respectively became the owners
thereof, and the amount paid thereof; and he shall, in general, perform all
duties incident to the office of Secretary and such other duties as from time
to time may be assigned to him by the President or by the Board of Directors.
SECTION 9. OTHER OFFICERS. The Board of Directors may authorize
and empower other persons or other officers appointed by it to perform the
duties and functions of the officers specifically designated above by special
resolution in each case.
SECTION 10. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The
Assistant Treasurers shall respectively, as may be required by the Board of
Directors, give bonds for the faithful discharge of their duties, in such sums
and with such sureties as the Board of Directors
12
<PAGE>
shall determine. The Assistant Secretaries as thereunto authorized by the
Board of Directors may sign with the President or Vice President certificates
for shares of the capital stock of the Corporation, issue of which shall have
been authorized by resolution of the Board of Directors. The Assistant
Treasurers and Assistant Secretaries shall, in general, perform such duties as
may be assigned to them by the Treasurer or the Secretary respectively, or by
the President or by the Board of Directors.
ARTICLE VI
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Except as hereinafter stated otherwise, the Corporation shall
indemnify all of its officers and directors, past, present and future, against
any and all expenses incurred by them, and each of them including but not
limited to legal fees, judgments and penalties which may be incurred, rendered
or levied in any legal action brought against any or all of them for or on
account of any act or omission alleged to have been committed while acting
within the scope of their duties as officers or directors of this Corporation.
ARTICLE VII
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The Board of Directors may authorize
any officer or officers, agent or agents, to enter into any contract or
execute and deliver any instrument in the name of and on behalf of the
Corporation, and such authority may be general or confined to specific
instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the
Corporation and no evidence of indebtedness shall be issued in its name unless
authorized by the Board of Directors or approved by loan committee appointed
by the Board of Directors and charged with the duty of supervising
investments. Such authority may be general or confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. A checks, drafts or other orders for
payment of money, notes or other evidences of indebtedness issued
13
<PAGE>
in the name of the Corporation shall be signed by such officer or officers,
agent or agents of the Corporation and in such manner as shall from time to
time be determined by resolutions of the Board of Directors.
SECTION 4. DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board of Directors
may select.
ARTICLE VIII
CAPITAL STOCK
SECTION 1. CERTIFICATES FOR SHARES. Certificates for shares of
stocks of the Corporation shall be in such form as shall be approved by the
incorporators or by the Board of Directors. The certificates shall be numbered
in the order of their issue, shall be signed by the President or the Vice
President and by the Secretary or the Treasurer, or by such other person or
officer as may be designated by the Board of Directors; and the seal of the
Corporation shall be affixed thereto, which said signatures of the
duly designated officers and of the seal of the Corporation. Every certificate
authenticated by a facsimile of such signatures and seal must be countersigned
by a Transfer Agent to be appointed by the Board of Directors, before
issuance.
SECTION 2. TRANSFER OF STOCK. Shares of the stock of the Corporation
may be transferred by the delivery of the certificate accompanied either by an
assignment in writing on the back of the certificate or by written power of
attorney to sell, assign, and transfer the same on the books of the
Corporation, signed by the person appearing by the certificate to the owner of
the shares represented thereby, together with all necessary federal and state
transfer tax stamps affixed and shall be transferable on the books of the
Corporation upon surrender thereof so signed or endorsed. The person
registered on the books of the Corporation as the owner of any shares of stock
shall be entitled to all rights of ownership with respect to such shares.
SECTION 3. REGULATIONS. The Board of Directors may
14
<PAGE>
make such rules and regulations as it may deem expedient not inconsistent with
the Bylaws or with the Articles of Incorporation, concerning the issue,
transfer and registration of the certificates for shares of stock of the
Corporation. It may appoint a transfer agent or a registrar of transfers, or
both, and it may require all certificates to bear the signature of either or
both.
SECTION 4. LOST CERTIFICATES. The Board of Directors may direct a
new certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost
or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost or destroyed. When authorizing
such issue of a new certificate or certificates, the Board of Directors may,
in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost or destroyed certificate or certificates, or
his legal representative, to advertise the same in such manner as it shall
require and/or give the Corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the Corporation with
respect to the certificate alleged to have been lost or destroyed.
ARTICLE IX
DIVIDENDS
SECTION 1. The Corporation shall be entitled to treat
the holder of any share or shares of stock as the holder in fact thereof
and, accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such shares on the part of' any other person, whether
or not it shall have express or other notice thereof, except as expressly
provided by the laws of Nevada.
SECTION 2. Dividends on the capital stock of the Corporation,
subject to the provisions of the Articles of Incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting, pursuant
to law.
SECTION 3. The Board of Directors may close the transfer books
in its discretion for a period not exceeding fifteen days preceding
15
<PAGE>
the date fixed for holding any meeting, annual or special of the stockholders,
or the day appointed for the payment of a dividend.
SECTION 4. Before payment of any dividend or making any
distribution of profits, there may be set aside out of funds of the
Corporation available for dividends, such sum or sums as the directors may
from time to time, in their absolute discretion, think proper as a reserve
fund to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for any such other purpose as
the directors shall think conducive to the interest of the Corporation, and
the directors may modify or abolish any such reserve in the manner in which it
was created.
ARTICLE X
SEAL
The Board of Directors shall provide a Corporate seal which shall be
in the form of a Circle and shall bear the full name of the Corporation, the
year of its incorporation and the words "Corporate Seal, State of Nevada".
ARTICLE XI
FISCAL YEAR
The fiscal year of the Corporation shall end on the 31st day of
December of each year.
ARTICLE XII
WAIVER OF NOTICE
Whenever any notice whatever is required to be given under the
provisions of these Bylaws, or under the laws of the State of Nevada, or under
the provisions of the Articles of Incorporation, a waiver in writing signed by
the person or persons entitled to such notice, whether before or after the
time stated therein, shall be deemed equivalent to the giving of such notice.
ARTICLE XIII
AMENDMENTS
These Bylaws may be altered, amended or repealed and new Bylaws may
be adopted at any regular or special meeting of the Stockholders by a vote of
the stockholders owning a majority of the shares and entitled to vote thereat.
These Bylaws may also be altered, amended or repealed and new
16
<PAGE>
Bylaws may be adopted at any regular or special meeting of the Board of
Directors of the Corporation (If notice of such alteration or repeal be
contained in the notice of such special meeting) by a majority vote of the
directors present at the meeting at which a quorum is present, but any such
amendment shall not be inconsistent with or contrary to the provision of any
amendment adopted by the stockholders.
KNOW ALL MEN BY THESE PRESENTS that the undersigned, being the
Secretary of Access Network Corporation, a Nevada corporation, hereby
acknowledges that the above and foregoing Bylaws were duly adopted as the
Bylaws of said Corporation on
IN WITNESS WHEREOF, I here unto subscribe my name this
8th day of September, 1998.
/s/Marci Evans
- ---------------
Marci A. Evans
Exhibit 10.1
CONTRACT for CARD CREDIT PROCESSING SERVICES
This Agreement is made effective as of September 15, 1998, by and between
Access Network Corp. of 638 Lacy Lane, Las Vegas, NV. 89107, and MK Resources,
Inc of 5015 W. Sahara Ave., Suite # 184, Las Vegas, NV. 89102. In this
Agreement the party who is contracting to receive services shall be referred
to as "the Company", and the party who will be providing the services shall be
referred to as "MK Resources".
MK Resources is willing to provide services to the Company for credit card
processing services.
The Company desires to have services provided by MK Resources.
Therefore, the parties agree as follows:
1. DESCRIPTION OF SERVICES. Beginning on September 15, 1998, MK Resources,
will provide the following services, (collectively the "Services"): the
processing of credit card orders provided by the Company.
2. PAYMENT. The Company will receive a monthly billing statement and a
check for processed orders beginning December 1, 1998, at which time a fee of
2.5% of orders processed will be assessed to the Company. This fee shall be
deducted on a monthly bases and deducted from the month check received by the
Company.
Upon termination of this Agreement, payments under this paragraph shall
cease-, provided, however, MK Resources shall be entitled to payments for
processed orders or partial periods that occurred prior to the date of
termination and for which MK Resources, Inc., has not yet been paid.
3. TERMINATION. This Agreement may be terminated by either party upon 30
days written notice to the other party
4. RELATIONSHIP OF PARTIES. It is understood by the parties that MK
Resources is an independent contractor with respect to the Company, and not an
employee of the Company. the Company will not provide fringe benefits,
including health insurance benefits, paid vacation, or any other employee
benefit, for the benefit of Consultant.
5. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any
provision of this Agreement shall not be construed as a waiver or limitation
of that party's right to subsequently enforce and compel strict compliance
with every provision of this Agreement.
APPROVED BY:
Access Network Corp.
/s/ Michael Stankiewicz
- -----------------------
Michael Stankiewicz
MK Resources, Inc.
/s/ Dennis Evans
- ----------------
Dennis D. Evans
President
Exhibit 10.2
Consulting Agreement
This Agreement is made effective as of January 01, 1999, by and between Access
Network Corporation, of 6357 Vicuna Drive, Las Vegas, NV 89146, and
Progressive Management & Consulting, Inc., of 5015 W. Sahara Ave., #184, Las
Vegas, NV 89102.
In this Agreement, the party who is contracting to receive services shall be
referred to as ""ANC"", and the party who will be providing the services shall
be referred to as ""PM&C"".
"PM&C" has a background in business consulting and is willing to provide
services to "ANC" based on this background.
"ANC" desires to have services provided by "PM&C".
Therefore, the parties agree as follows:
1. DESCRIPTION OF SERVICES. Beginning on January 01, 1999, "PM&C" will
provide the following services (collectively, the "Services"):
Bookkeeping services
Audit preparations
SEC filing preparations
2. PERFORMANCE OF SERVICES. The manner in which the Services are to be
performed and the specific hours to be worked by "PM&C" shall be determined by
"PM&C". "ANC" will rely on "PM&C" to work as many hours as may be reasonably
necessary to fulfill "PM&C"'s obligations under this Agreement.
3. PAYMENT. "ANC" will pay a fee to "PM&C" for the Services based on $
500.00 per month. This fee shall be payable monthly, no later than the last
day of the month following the period during which the Services were
performed. Upon termination of this Agreement, payments under this paragraph
shall cease; provided, however, that "PM&C" shall be entitled to payments for
periods or partial periods that occurred prior to the date of termination and
for which "PM&C" has not yet been paid.
4. TERM/TERMINATION. This Agreement shall terminate by either party upon 30
days written notice to the other party.
5. RELATIONSHIP OF PARTIES. It is understood by the parties that "PM&C" is
an independent contractor with respect to "ANC", and not an employee of "ANC".
"ANC" will not provide fringe benefits, including health insurance benefits,
paid vacation, or any other employee benefit, for the benefit of "PM&C".
<PAGE>
6. DISCLOSURE. "PM&C" is required to disclose any outside activities or
interests, including ownership or participation in the development of prior
inventions, that conflict or may conflict with the best interests of "ANC".
Prompt disclosure is required under this paragraph if the activity or interest
is related, directly or indirectly, to:
- - any activity that "PM&C" may be involved with on behalf of "ANC"
7. CONFIDENTIALITY. "PM&C" recognizes that "ANC" has and will have the
following information:
- business affairs
- process information
- technical information
and other proprietary information (collectively, "Information") which are
valuable, special and unique assets of "ANC" and need to be protected from
improper disclosure. In consideration for the disclosure of the Information,
"PM&C" agrees that "PM&C" will not at any time or in any manner, either
directly or indirectly, use any Information for "PM&C"'s own benefit, or
divulge, disclose, or communicate in any manner any Information to any third
party without the prior written consent of "ANC". "PM&C" will protect the
Information and treat it as strictly confidential. A violation of this
paragraph shall be a material violation of this Agreement.
8. UNAUTHORIZED DISCLOSURE OF INFORMATION. If it appears that "PM&C" has
disclosed (or has threatened to disclose) Information in violation of this
Agreement, "ANC" shall be entitled to an injunction to restrain "PM&C" from
disclosing, in whole or in part, such Information, or from providing any
services to any party to whom such Information has been disclosed or may be
disclosed. "ANC" shall not be prohibited by this provision from pursuing
other remedies, including a claim for losses and damages.
9. RETURN OF RECORDS. Upon termination of this Agreement, "PM&C" shall
deliver all records, notes, data, memoranda, models, and equipment of any
nature that are in "PM&C"'s possession or under "PM&C"'s control and that are
"ANC"'s property or relate to "ANC"'s business.
10. NOTICES. All notices required or permitted under this Agreement shall be
in writing and shall be deemed delivered when delivered in person or deposited
in the United States mail, postage prepaid, addressed as follows:
IF for "ANC":
Marci A. Evans
President
6357 Vicuna Drive
Las Vegas, NV. 89146
- 2 -
<PAGE>
IF for "PM&C":
Dennis D. Evans
President
5015 W. Sahara Ave., #184
Las Vegas, NV 89102
Such address may be changed from time to time by either party by providing
written notice to the other in the manner set forth above.
11. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties and there are no other promises or conditions in any other agreement
whether oral or written. This Agreement supersedes any prior written or oral
agreements between the parties.
12. AMENDMENT. This Agreement may be modified or amended if the amendment is
made in writing and is signed by both parties.
13. SEVERABILITY. If any provision of this Agreement shall be held to be
invalid or unenforceable for any reason, the remaining provisions shall
continue to be valid and enforceable. If a court finds that any provision of
this Agreement is invalid or unenforceable, but that by limiting such
provision it would become valid and enforceable, then such provision shall be
deemed to be written, construed, and enforced as so limited.
14. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any
provision of this Agreement shall not be construed as a waiver or limitation
of that party's right to subsequently enforce and compel strict compliance
with every provision of this Agreement.
15. APPLICABLE LAW. This Agreement shall be governed by the laws of the
State of Nevada.
Party receiving services:
Access Network Corporation
/s/ Marci Evans
By: ____________________________________
Marci A. Evans
President
- 3 -
<PAGE>
Party providing services:
Progressive Management & Consulting, Inc.
/s/ Dennis D. Evans
By: ____________________________________
Dennis D. Evans
President
- 4 -
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