SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 4
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Event Requiring Report: April 13, 2000
UNIVERSAL MEDIA HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-28459 22-3360133
(State of Incorporation) (Commission (IRS Employer
File Number) Identification #)
110 Smithtown, Nesconset, NY 11767
--------------------------------------------
(Address of Principal Executive Offices)
631.863.9898
----------------------------------------
(Registrant's telephone number, including area code)
Net-Tronics Communications Corporation
16910 Dallas Parkway, Ste. 100, Dallas, Texas 75248
---------------------------------------------------
(Registrant's Former Name and Address)
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On April 13, 2000, a change in control of the Registrant occurred in
conjunction with closing under an Agreement and Plan of Reorganization (the
"Reorganization Agreement") between the Registrant and Universal Media Holdings,
Inc., a Delaware corporation.
The closing under the Reorganization Agreement consisted of a stock for
stock exchange in which the Registrant acquired all of the issued and
outstanding common stock of Universal Medial Holdings, Inc. in exchange for the
issuance of 1,000,000 shares of its common stock. As a result of this
transaction, the Registrant became a wholly-owned subsidiary of the Company.
The Reorganization was approved by the unanimous consent of the Board
of Directors of Universal Media Holdings, Inc. on March 27, 2000. The
Reorganization is intended to qualify as a reorganization within the meaning of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
Prior to the Agreement, Universal Media Group had 11,209,346 shares of
common stock issued and outstanding. Following the Agreement, Registrant had
11,459,346 shares of common stock outstanding. Universal Media Holdings, Inc.,
was incorporated in the State of Delaware on August 23, 1995.
Upon effectiveness of the Reorganization Agreement, pursuant to Rule
12g-3(a) of the General Rules and Regulations of the Securities and Exchange
Commission, Universal Media Holdings, Inc. became the successor issuer to
Net-Tronics Communications Corporation, Inc. for reporting purposes under the
Securities Exchange Act of 1934 and elects to report under the Act effective
April 10, 2000.
A copy of the Agreement is filed as an exhibit to this Form 8-K and is
incorporated in its entirety herein. The foregoing description is modified by
such reference.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Not Applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Successor Issuer Election.
Pursuant to Rule 12g-3(a) of the General Rules and Regulations of the
Securities and Exchange Commission, and upon effectiveness of the Agreement, the
Company became the successor issuer to Net-Tronics Communications Corporation,
Inc. for reporting purposes under the Securities Exchange Act of 1934 and elects
to report under the Act effective April 14, 2000.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Pursuant to the terms of the aforementioned Agreement, the Registrant has
accepted the resignation of Kevin Halter and Kevin Halter Jr., as the
Registrant's Director and Officer as of April 10, 2000, and appointed
James Neebling as President and Director of the Registrant.
ITEM 7. FINANCIAL STATEMENTS
Financial statements for Net-Tronics Communications Corporation are filed
herewith. The Registrant is required to file consolidated financial statements
by amendment hereto not later than 60 days after the date that this Current
Report on Form 8-K must be filed.
ITEM 8. CHANGE IN FISCAL YEAR
Universal Media Holdings, Inc. has a September 30 fiscal year end. The fiscal
year of Net-Tronics Communications Corporation is December 31. The Company will
file a Transitional Report on Form 10-QSB, if required.
EXHIBITS
2.1 Agreement and Plan of Reorganization between Net-Tronics
Communications Corporation and Universal Media Holdings, Inc. as dated
March ____, 2000.
24.1 Consent of accountants
27.1 Financial Data Schedule for Net-Tronics Communications Corporation.
99.1 Financials for Net-Tronics Communications Corporation for 1998 and
1997.
99.2 Financials for Net-Tronics Communications Corporation for 1999 and
1998.
99.3 Financials for Net-Tronics Communications Corporation for 2000 and
1999.
99.4 Form 10-SB for Universal Media Holdings, Inc.
99.5 Pro Forma Consolidated Banalce Sheet & Statement of Operations for
September 30, 1999.
99.6 Pro Forma Consolidated Banalce Sheet & Statement of Operations for
December 31, 1999.
99.7 Certification letter from Interwest Transfer Company, Inc.
99.8 Reviewed Financial Statements for Universal Media Holdings, Inc.
December 31, 1999
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
By /s/ James Neebling
------------------------
James Neebling
CEO
President
Date: April 27, 2000
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, dated March 27th, 2000, between
Universal Media Holdings, Inc., ("UMH") a Delaware corporation and Net-Tronics
Communications Corp.. ("Net-Tronics"), a Delaware corporation.
PLAN OF REORGANIZATION
The reorganization will comprise in general, the acquisition of Net-Tronics by
UMH pursuant to an I.R.S. qualified tax free exchange whereupon Net-Tronics
shall become a wholly owned subsidiary of UMH, all subject to the terms and
conditions of the agreement hereinafter set forth. For purposes of this
Agreement, the terms "shares", "stock" and/or "common capital stock" shall be
interchangeable.
AGREEMENT
In order to consummate the foregoing Plan of Reorganization, and in
consideration of the premises and of the representations and undertakings herein
set forth, the parties agree as follows:
1. Transfer of shares. Upon and subject to the terms and conditions herein
stated, UMH shall acquire from Net-Tronics's shareholders, whose signatures
appear below, whom shall transfer, assign, and convey to UMH all of the
issued and outstanding shares of Net-Tronics's common stock to UMH in
exchange for the sum of $100,000.00 together with 250,000 shares of UMH
common capital stock. By virtue of the transaction, UMH shall acquire
Net-Tronics as a going concern, including all of the properties and assets
of Net-Tronics of every kind, nature, and description, tangible and
intangible, wherever situated, including, without limiting the generality
of the foregoing, its business as a going concern, its goodwill, and the
corporate name (subject to changes referred to or permitted herein or
occurring in the ordinary course of business prior to the time of closing
provided herein). Upon, and immediately subsequent to, the aforementioned
acquisition, UMH will merge into its wholly-owned subsidiary (Net-Tronics)
under Section 7-7106 of the Delaware Corporations Code.
2. Issuance and delivery of stock. In consideration of and in exchange for
the foregoing transfer, assignment, and conveyance, and subject to
compliance by UMH and Net-Tronics with their warranties and undertakings
contained herein, UMH shall issue and deliver to Net-Tronics the amount of
$100,000.00 together with one or more stock certificates registered in the
name of the undersigned shareholders of Net-Tronics, on a pro-rata basis
totaling 250,000 in exchange for 1,000,000 shares of Net-Tronics Common
stock constituting 100% of the issued and outstanding shares of Net-Tronics
including warrants, options, or claims regarding any other shares of
Net-Tronics. All of the shares exchanged shall, upon such issuance and
delivery, shall be fully paid and non-assessable.
3. Investment intent.
3.1 Each Net-Tronics Shareholder ("Subscriber") understands and
acknowledges that the UMH Shares being acquired hereunder have not
been registered under the Securities Act of 1933 (the "Act") or
applicable state securities laws; (ii) the Subscriber cannot sell such
Stock unless such securities are registered under the Act and any
applicable state securities laws or unless exemptions from such
<PAGE>
registration requirements are available; (iii) a legend will be placed
on any certificate or certificates evidencing the Stock, stating that
such securities have not been registered under the Act and setting
forth or referring to the restrictions on transferability and sales of
the securities.
3.2 Such Subscriber (i) is acquiring the Shares solely for the
Subscriber's own account for investment purposes only and not with a
view toward resale or distribution, either in whole or in part; (ii)
has no contract, undertaking, agreement or other arrangement, in
existence or contemplated, to sell, pledge, assign or otherwise
transfer the Shares to any other person; (iii) agrees not to sell or
otherwise transfer the Subscriber's Shares unless and until such
securities are subsequently registered under the Act and any
applicable state securities laws or unless an exemption from any such
registration is available.
3.3 Such Subscriber understands that an investment in the Shares
involves substantial risks and Subscriber recognizes and understands
the risks relating to this transaction and acquisition of the UMH
shares.
3.4 Such Subscriber has, either alone or together with the
Subscriber's Purchaser Representative (as that term is defined in
Regulation D under the Act), such knowledge and experience in
financial and business matters that the Subscriber is capable of
evaluating the merits and risks of the acquisition by UMH.
4. Dissenting shares: None. Net-Tronics represents and warrants that there are
no dissenting shareholders with respect to the proposed merger or acquisition.
5. Place of closing. The closing of this agreement and all deliveries hereunder
shall take place via electronic closing by fax or e-mail.
6. Time of closing. The closing shall be 3:00 PM, Central Standard time (or such
other time as may be mutually agreed upon) on the closing date which shall be
April 7, 2000, unless extended by mutual agreement of the parties. The last date
fixed by mutual agreement of the parties or otherwise becoming effective under
this paragraph shall constitute the closing date.
7. Representations and warranties of UMH. UMH and its shareholders represent and
warrant to Net-Tronics that:
(a) Corporate status. UMH is a corporation duly organized and existing
under the laws of the State of Delaware, with an authorized capital stock
consisting of 200,000,000 Common shares, of which 12,000,000 shares are
currently issued and outstanding. UMH has no subsidiary.
(b). The audited financial statements of UMH, through December 31, 1999,
are attached hereto. Since March 27, 2000, there has been no material
adverse change in the assets or liabilities or in the condition, financial
or other, of UMH, except changes occurring in the ordinary course of
business and changes referred to or permitted herein.
(c) Lawsuits and claims. UMH is not a party to or threatened by any
litigation, proceeding, or controversy before any court or administrative
agency which might result in any change in the business or properties of
UMH or which change would be substantially adverse taking into account the
entire business and properties of UMH; UMH is not in default with respect
to any judgment, order, writ, injunction, decree, rule, or regulation of
any court or administrative agency.
<PAGE>
(d) Taxes. UMH has filed with the appropriate governmental agencies all tax
returns required by such agencies to be filed by it and is not in default
with respect to any such filing. UMH has paid all taxes claimed to be due
by state and local taxing authorities and has not been examined by
representatives of the United States Internal Revenue Service for federal
taxes since inception.
8. Representations and warranties of Net-Tronics. Net-Tronics represents and
warrants to UMH that:
(a) Corporate status. Net-Tronics is a Delaware corporation duly organized
and existing under the laws of the State of Delaware, with an authorized
capital stock consisting of 100,000,000 shares of common stock, .00001 par
value, of which One Million (1,000,000) shares have been duly issued and
are outstanding fully paid and non-assessable; and no shares of preferred
stock, or any other form of stock or security, of which no shares are
issued or outstanding. Net-Tronics has no subsidiary.
(b) Corporate authority. Net-Tronics and its shareholders have the
corporate right and authority to acquire and operate the properties and
business now owned and operated by it and to issue and deliver the number
of shares of its Common stock required to be issued hereunder to UMH.
(c) Disposition of assets. Since December 31, 1999, there has been no
material adverse change in the assets or liabilities or in the condition,
financial or other, of Net-Tronics except changes occurring in the ordinary
course of business and changes referred to or permitted herein.
(d) Lawsuits and claims. Net-Tronics is not a party to or threatened by any
litigation, proceeding, or controversy before any court or administrative
agency which might result in any change in the business or properties of
Net-Tronics or which change would be substantially adverse, taking into
account the entire business and properties of Net-Tronics.
(e) Taxes. Net-Tronics has filed with the appropriate governmental agencies
all tax returns required by such agencies to be filed by it and is not in
default with respect to any such filing. UMH has paid all taxes claimed to
be due by state and local taxing authorities and has not been examined by
representatives of the United States Internal Revenue Service for federal
taxes during the past three fiscal years.
9. Interim conduct of business by Net-Tronics. Until the time of closing,
Net-Tronics will conduct its business in the ordinary and usual course, and
prior to the time of closing it will not, without the written consent of UMH,
borrow any money, incur any liability other than in the ordinary and usual
course of business or in connection with the performance or consummation of this
agreement, encumber or permit to be encumbered any of its properties and assets,
dispose or contract to dispose of any property except in the regular and
ordinary course of business, enter into any lease or contract for the purchase
of real estate, form or cause to be formed any subsidiary, pay any bonus or
special remuneration to any officer or employee, declare or pay any dividends,
make any other distributions to its shareholders, or issue, sell, or purchase
any stock, notes, or other securities.
<PAGE>
10. Access to information. From the date hereof each party shall allow the other
free access to its files and audits, including any and all information relating
to taxes, commitments, and contracts, real estate and personal property titles,
and financial condition. From the date hereof each party agrees to cause its
auditors to cooperate with the other in making available all financial
information requested, including the right to examine all working papers
pertaining to audits made by such auditors.
11. Conditions and obligations of UMH. Unless at the time of closing the
following conditions are satisfied, UMH shall not be obligated to make the
transfer, assignment and conveyance as set forth in Paragraph1 herein, and
otherwise to effectuate its part of the reorganization herein provided:
(a) The representations and warranties of Net-Tronics set forth herein,
are, on the date hereof and as of the time of closing, substantially
correct.
(b) The directors of Net-Tronics have approved the consummation of this
agreement and the matters herein provided.
(c) No litigation or proceeding is threatened or pending for the purpose of
with the probably effect of enjoining or preventing the consummation of
this agreement or which would materially affect Net-Tronics operation or
its assets.
(d) Net-Tronics has complied with its agreements herein to be performed by
it prior to the time of closing.
12. Conditions of obligations of Net-Tronics. Unless at the time of closing the
following conditions are satisfied, Net-Tronics shall not be obligated to issue
and deliver the shares of its Common stock as set forth in Paragraph 1 herein,
and otherwise to effectuate its part of the reorganization herein provided:
(a) The representations and warranties of UMH set forth in Paragraph 9 are,
on the date hereof and as of the time of closing, substantially correct
subject to any change made because of any action approved by Net-Tronics.
(b) The directors of UMH have approved and the holders of all of the
outstanding shares of UMH have voted in favor of the consummation of this
agreement and the matters herein provided.
(c) No litigation or proceeding is threatened or pending for the purpose or
with the probable effect of enjoining or preventing the consummation of
this agreement or which would materially affect UMH operation of the
properties and business to be acquired by it hereunder.
(d) UMH has complied with its agreements herein to be performed by it prior
to the time of closing, including payment of the $100,000.00 to the
undersigned shareholders and agreement to deliver 250,000 common capital
shares of UMH, Incorporated.
<PAGE>
13. Abandonment of agreement. If by reason of the provisions of Paragraphs 11 or
12 above either party is not obligated to effectuate the reorganization, then
either party which is not so obligated may terminate and abandon this agreement
by delivering to the other party written notice of termination prior to the time
of closing, and thereupon this agreement shall be terminated without further
obligation or liability upon either party in favor of the other.
14. Authorization by shareholders. Net-Tronics and UMH shall promptly take such
action as may be necessary to call special meetings of their respective
shareholders to authorize the consummation of this agreement and the matters
herein provided, and each will recommend to its shareholders that this agreement
and the matters herein provided, and all other matters necessary or incident
thereto, be approved, authorized, and consummated.
15. Listing of UMH stock issued to Net-Tronics. UMH shall not be required to
prepare and file a registration statement under the Securities Act of 1933
covering the shares of Common stock to be delivered hereunder; however, it shall
prepare an 8-K filing providing the requisite information on the acquisition.
16. Brokers' fees. Neither party has incurred nor will incur any liability for
brokerage fees or agents' commissions in connection with the transactions
contemplated hereby.
17. Execution of documents. At any time and from time to time after the time of
closing, UMH will execute and deliver to Net-Tronics and Net-Tronics will
execute and deliver to UMH such further conveyances, assignments, and other
written assurances as Net-Tronics or UMH shall reasonably request in order to
vest and confirm Net-Tronics's shareholders and UMH, respectively, title to the
shares and/or assets to be and intended to be transferred, assigned, and
conveyed hereunder.
18. Parties in interest. Nothing herein expressed or implied is intended or
shall be construed to confer upon or to give any person, firm, or corporation
other than the parties hereto any rights or remedies under or by reason hereof.
19. Completeness of agreement. This agreement contains the entire understanding
between the parties hereto with respect to the transactions contemplated hereby.
20. Survival of Representations and Warranties. Each of the parties hereto
hereby agrees that all representations and warranties made by or on behalf of
him or it in this Agreement or in any document or instrument delivered pursuant
hereto shall survive for a period of three (3) years following the Closing Date
and the consummation of the transactions contemplated hereby, except with
respect to the representation and warranties set forth in Sections 4 which shall
survive applicable statute of limitations period.
IN WITNESS HEREOF, the Parties hereto have hereunder set their hands and seals,
effective on the date above stated, as witnessed below:
UMH, INCORPORATED
A Delaware corporation
By: /S/ James W. Zimbler
- -------------------------------------
James W. Zimbler, CEO
NET-TRONICS PRESENTATION SYSTEMS, INC.
A Delaware corporation
By: /S/ Kevin B. Halter
- -------------------------------------
Kevin B. Halter, President
HALTER CAPITAL CORPORATION
By: /S/ Kevin B. Halter
- -------------------------------------
Kevin B. Halter, Shareholder
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
<CIK> 1100779
<NAME> Net-Tronics Communication Corporation
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 223
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 223
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 223
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 222
<TOTAL-LIABILITY-AND-EQUITY> 223
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
CONTENTS
Page
----
Report of Independent Certified Public Accountants F-3
Financial Statements
Balance Sheets as of June 30, 1999, December 31, 1998 and 1997 F-4
Statements of Operations and Comprehensive Income
for the six months ended June 30, 1999 and
for the years ended December 31, 1998 and 1997 F-5
Statement of Changes in Stockholder's Equity
for the six months ended June 30, 1999 and
for the years ended December 31, 1998 and 1997 F-6
Statements of Cash Flows
for the six months ended June 30, 1999 and
for the years ended December 31, 1998 and 1997 F-7
Notes to Financial Statements F-8
F-2
<PAGE>
S. W. HATFIELD, CPA
certified public accountants
Member: American Institute of Certified Public Accountants
SEC Practice Section
Information Technology Section
Texas Society of Certified Public Accountants
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
Board of Directors and Stockholders
Net-Tronics Communications Corporation
We have audited the accompanying balance sheets of Net-Tronics Communications
Corporation (a Delaware corporation and a wholly-owned subsidiary of Halter
Capital Corporation) as of June 30, 1999, December 31, 1998 and 1997 and the
related statements of operations and comprehensive income, changes in
stockholders' equity and cash flows for the six months ended June 30, 1999 and
for each of the years ended December 31, 1998 and 1997, respectively. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Net-Tronics Communications
Corporation as of June 30, 1999, December 31, 1998 and 1997, and the results of
its operations and its cash flows for the six months ended June 30, 1999 and
each of the years ended December 31, 1998 and 1997, respectively, in conformity
with generally accepted accounting principles.
S. W. HATFIELD, CPA
Dallas, Texas
September 14, 1999
P. O. Box 820395 9002 Green Oaks Circle, 2nd Floor
Dallas, Texas 75382-0395 Dallas, Texas 75243-7212
214-342-9635 (voice) (fax) 214-342-9601
800-244-0639 [email protected]
F-3
<PAGE>
<TABLE>
<CAPTION>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
BALANCE SHEETS
June 30, 1999, December 31, 1998 and 1997
June 30, December 31, December 31,
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
------
Current Assets
Cash on hand and in bank $ -- $ 223 $ 273
Advances to parent company 223 -- --
------------ ------------ ------------
Total Assets $ 223 $ 223 $ 273
============ ============ ============
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
Liabilities $ -- $ -- $ --
------------ ------------ ------------
Commitments and Contingencies
Stockholder's Equity
Preferred stock - $0.00001 par value
5,000,000 shares authorized; none
issued and outstanding -- -- --
Common stock - $0.00001 par value
10,000,000 shares authorized
100,000 issued and outstanding 1 1 1
Additional paid-in capital 999 999 999
Accumulated deficit (777) (777) (727)
------------ ------------ ------------
Total stockholders' equity 223 223 273
------------ ------------ ------------
Total Liabilities and Stockholder's Equity $ 223 $ 223 $ 273
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Six months ended June 30, 1999 and
Years ended December 31, 1998 and 1997
Six months Year Year
ended ended ended
June 30, December 31, December 31,
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Revenues $ -- $ -- $ --
------------ ------------ ------------
Expenses
General and administrative expenses -- 50 461
------------ ------------ ------------
Net Loss -- (50) (461)
Other Comprehensive Income -- -- --
------------ ------------ ------------
Comprehensive Income $ -- $ (50) $ (461)
============ ============ ============
Net loss per weighted-average
share of common stock
outstanding, calculated on
Net Loss - basic and fully diluted nil nil nil
=== === ===
Weighted-average number of shares
of common stock outstanding 100,000 100,000 100,000
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
Six months ended June 30, 1999 and
Years ended December 31, 1998 and 1997
Common Stock Additional
----------------- paid-in Accumulated
Shares Amount capital deficit Total
------- ------- ---------- ----------- -------
<S> <C> <C> <C> <C> <C>
Balances at January 1, 1997 100,000 $ 1 $ 999 $ (266) $ 734
Net loss for the year -- -- -- (461) (461)
------- ------- ---------- ----------- -------
Balances at December 31, 1997 100,000 1 999 (727) 273
Net loss for the year -- -- -- (50) (50)
------- ------- ---------- ----------- -------
Balances at December 31, 1998 100,000 1 999 (777) 223
Net loss for the period -- -- -- -- --
------- ------- ---------- ----------- -------
Balances at June 30, 1999 100,000 $ 1 $ 999 $ (777) $ 223
======= ======= ========== =========== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
<TABLE>
<CAPTION>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
STATEMENTS OF CASH FLOWS
Six months ended June 30, 1999 and
Years ended December 31, 1998 and 1997
Six months Year Year
ended ended ended
June 30, December 31, December 31,
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net loss for the period $ -- $ (50) $ (461)
Adjustments to reconcile net loss to
net cash provided by operating activities -- -- --
------------ ------------ ------------
Net cash used in operating activities -- (50) (461)
------------ ------------ ------------
Cash Flows from Investing Activities -- -- --
------------ ------------ ------------
Cash Flows from Financing Activities
Cash advanced to parent (223) -- --
------------ ------------ ------------
Net cash used in financing activities (223) -- --
------------ ------------ ------------
Decrease in Cash (223) (50) (461)
Cash at beginning of period 223 273 734
------------ ------------ ------------
Cash at end of period $ -- $ 223 $ 273
============ ============ ============
Supplemental Disclosure of
Interest and Income Taxes Paid
Interest paid for the period $ -- $ -- $ --
============ ============ ============
Income taxes paid for the period $ -- $ -- $ --
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
NOTES TO FINANCIAL STATEMENTS
NOTE A - Organization and Description of Business
Net-Tronics Communications Corporation (Company) was incorporated on August 22,
1995 under the laws of the State of Delaware as a wholly-owned subsidiary of
Halter Capital Corporation.
The Company has never had any operations or assets since inception. The current
business purpose of the Company is to seek out and obtain a merger, acquisition
or outright sale transaction whereby the Company's stockholders will benefit.
The Company is not engaged in any negotiations and has not undertaken any steps
to initiate the search for a merger or acquisition candidate.
The Company is fully dependent upon its current management and/or significant
stockholders to provide sufficient working capital to preserve the integrity of
the corporate entity during this phase. It is the intent of management and
significant stockholders to provide sufficient working capital necessary to
support and preserve the integrity of the corporate entity.
The Company has a year end of December 31 and follows the accrual method of
accounting.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE B - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
The Company considers all cash on hand and in banks, including accounts in
book overdraft positions, certificates of deposit and other highly-liquid
investments with maturities of three months or less, when purchased, to be
cash and cash equivalents.
2. Income taxes
------------
The Company provides deferred income taxes, where material, based on the
asset and liability method under the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes". At December
31, 1998 and 1997, respectively, the deferred tax asset and deferred tax
liability accounts, consisting solely of temporary differences in
accumulated depreciation, were not material to the financial statements and
no valuation allowance was provided against deferred tax assets.
The Company files its income tax returns as a component of its parent
company's consolidated tax return. Accordingly, all net operating losses
are offset against the tax liabilities of the Company's parent. No net
operating loss carryforwards exist as of December 31, 1998 and 1997,
respectively.
F-8
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE B - Summary of Significant Accounting Policies - Continued
3. Loss per share
--------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted-average number of shares of common stock and common
stock equivalents (primarily outstanding options and warrants). Common
stock equivalents represent the dilutive effect of the assumed exercise of
the outstanding stock options and warrants, using the treasury stock
method. The calculation of fully diluted earnings (loss) per share assumes
the dilutive effect of the exercise of outstanding options and warrants at
either the beginning of the respective period presented or the date of
issuance, whichever is later. As of June 30, 1999, December 31, 1998 and
1997, the Company has no warrants and/or options issued and outstanding.
NOTE C - Fair Value of Financial Instruments
The carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.
NOTE D - Related Party Transactions
As of June 30, 1999, the Company had advanced funds totaling approximately $223
to Halter Capital Corporation, the Company's parent. The advances are due upon
demand and are non-interest bearing.
F-9
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
BALANCE SHEETS
September 30, 1999 and 1998
(Unaudited)
1999 1998
----- -----
ASSETS
------
Current Assets
Cash on hand and in bank $ -- $ 223
Advances to parent company 223 --
----- -----
Total Assets $ 223 $ 223
===== =====
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
Liabilities $ -- $ --
----- -----
Commitments and Contingencies
Stockholder's Equity
Preferred stock - $0.00001 par value
5,000,000 shares authorized; none
issued and outstanding -- --
Common stock - $0.00001 par value
10,000,000 shares authorized
100,000 issued and outstanding 1 1
Additional paid-in capital 999 999
Accumulated deficit (777) (777)
----- -----
Total stockholders' equity 223 223
----- -----
Total Liabilities and Stockholder's Equity $ 223 $ 223
===== =====
The accompanying notes are an integral part of these financial statements.
F-10
<PAGE>
<TABLE>
<CAPTION>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Nine and Three months ended September 30, 1999 and 1998
(Unaudited)
Nine months Nine months Three months Three months
ended ended ended ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues $ -- $ -- $ -- $ --
------------- ------------- ------------- -------------
Expenses
General and administrative expenses -- 50 -- --
------------- ------------- ------------- -------------
Net Loss -- (50) -- --
Other Comprehensive Income -- -- -- --
------------- ------------- ------------- -------------
Comprehensive Income $ -- $ (50) $ -- $ --
============= ============= ============= =============
Net loss per weighted-average
share of common stock
outstanding, calculated on
Net Loss - basic and fully diluted nil nil nil nil
=== === === ===
Weighted-average number of shares
of common stock outstanding 100,000 100,000 100,000 100,000
============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-11
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
STATEMENTS OF CASH FLOWS
Nine months ended September 30, 1999 and 1998
(Unaudited)
Nine months Nine months
ended ended
September 30, September 30,
1999 1998
------------- -------------
Cash Flows from Operating Activities
Net loss for the period $ -- $ (50)
Adjustments to reconcile net loss to
net cash provided by operating activities -- --
------------- -------------
Net cash used in operating activities -- (50)
------------- -------------
Cash Flows from Investing Activities -- --
------------- -------------
Cash Flows from Financing Activities
Cash advanced to parent (223) --
------------- -------------
Net cash used in financing activities (223) --
------------- -------------
Decrease in Cash (223) (50)
Cash at beginning of period 223 273
------------- -------------
Cash at end of period $ -- $ 223
============= =============
Supplemental Disclosure of
Interest and Income Taxes Paid
Interest paid for the period $ -- $ --
============= =============
Income taxes paid for the period $ -- $ --
============= =============
The accompanying notes are an integral part of these financial statements.
F-12
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
NOTES TO FINANCIAL STATEMENTS
NOTE A - Organization and Description of Business
Net-Tronics Communications Corporation (Company) was incorporated on August 22,
1995 under the laws of the State of Delaware as a wholly-owned subsidiary of
Halter Capital Corporation.
The Company has never had any operations or assets since inception. The current
business purpose of the Company is to seek out and obtain a merger, acquisition
or outright sale transaction whereby the Company's stockholders will benefit.
The Company is not engaged in any negotiations and has not undertaken any steps
to initiate the search for a merger or acquisition candidate.
The Company is fully dependent upon its current management and/or significant
stockholders to provide sufficient working capital to preserve the integrity of
the corporate entity during this phase. It is the intent of management and
significant stockholders to provide sufficient working capital necessary to
support and preserve the integrity of the corporate entity.
The Company has a year end of December 31 and follows the accrual method of
accounting.
During interim periods, the Company follows the accounting policies set forth in
its annual audited financial statements contained elsewhere in this document.
The information presented herein does not include all disclosures required by
generally accepted accounting principles and the users of financial information
provided for interim periods should refer to the annual financial information
and footnotes contained in its annual audited financial statements contained
elsewhere in this document when reviewing the interim financial results
presented herein.
In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the instructions for Form 10-QSB, are unaudited and
contain all material adjustments, consisting only of normal recurring
adjustments necessary to present fairly the financial condition, results of
operations and cash flows of the Company for the respective interim periods
presented. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the full fiscal year
ending December 31, 1999.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
F-13
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE B - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
The Company considers all cash on hand and in banks, including accounts in
book overdraft positions, certificates of deposit and other highly-liquid
investments with maturities of three months or less, when purchased, to be
cash and cash equivalents.
2. Income taxes
------------
The Company provides deferred income taxes, where material, based on the
asset and liability method under the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes. At September
30, 1999 and 1998, respectively, the deferred tax asset and deferred tax
liability accounts, consisting solely of temporary differences in
accumulated depreciation, were not material to the financial statements and
no valuation allowance was provided against deferred tax assets.
The Company files its income tax returns as a component of its parent
company's consolidated tax return. Accordingly, all net operating losses
are offset against the tax liabilities of the Company's parent. No net
operating loss carryforwards exist as of September 30, 1999 and 1998,
respectively.
3. Loss per share
--------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted-average number of shares of common stock and common
stock equivalents (primarily outstanding options and warrants). Common
stock equivalents represent the dilutive effect of the assumed exercise of
the outstanding stock options and warrants, using the treasury stock
method. The calculation of fully diluted earnings (loss) per share assumes
the dilutive effect of the exercise of outstanding options and warrants at
either the beginning of the respective period presented or the date of
issuance, whichever is later. As of September 30, 1999 and 1998, the
Company has no warrants and/or options issued and outstanding.
NOTE C - Fair Value of Financial Instruments
The carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.
NOTE D - Related Party Transactions
As of September 30, 1999, the Company had advanced funds totaling approximately
$223 to Halter Capital Corporation, the Company's parent. The advances are due
upon demand and are non-interest bearing.
F-14
NET-TRONICS
COMMUNICATIONS
CORPORATION
(a wholly-owned subsidiary of
Halter Capital Corporation)
Financial Statements
and
Auditor's Report
December 31, 1999 and 1998
S. W. HATFIELD, CPA
certified public accountants
Use our past to assist your future sm
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
CONTENTS
Page
----
Report of Independent Certified Public Accountants F-3
Financial Statements
Balance Sheets
as of December 31, 1999 and 1998 F-4
Statements of Operations and Comprehensive Income
for the years ended December 31, 1999 and 1998 F-5
Statement of Changes in Stockholder's Equity
for the years ended December 31, 1999 and 1998 F-6
Statements of Cash Flows
for the years ended December 31, 1999 and 1998 F-7
Notes to Financial Statements F-8
F-2
<PAGE>
S. W. HATFIELD, CPA
certified public accountants
Member: American Institute of Certified Public Accountants
SEC Practice Section
Information Technology Section
Texas Society of Certified Public Accountants
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
Board of Directors and Stockholders
Net-Tronics Communications Corporation
We have audited the accompanying balance sheets of Net-Tronics Communications
Corporation (a Delaware corporation and a wholly-owned subsidiary of Halter
Capital Corporation) as of December 31, 1999 and 1998 and the related statements
of operations and comprehensive income, changes in stockholders' equity and cash
flows for each of the years then ended, respectively. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Net-Tronics Communications
Corporation as of December 31, 1999 and 1998, and the results of its operations
and its cash flows for each of the years then ended, respectively, in conformity
with generally accepted accounting principles.
S. W. HATFIELD, CPA
Dallas, Texas
January 3, 2000
Use our past to assist your future sm
P. O. Box 820395 9002 Green Oaks Circle, 2nd Floor
Dallas, Texas 75382-0395 Dallas, Texas 75243-7212
214-342-9635 (voice) (fax) 214-342-9601
800-244-0639 [email protected]
F-3
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
BALANCE SHEETS
December 31, 1999 and 1998
1999 1998
------- -------
ASSETS
------
Current Assets
Cash on hand and in bank $ -- $ 223
------- -------
Total Assets $ -- $ 223
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
Current Liabilities
Due to parent company $ 22 $ --
------- -------
Commitments and Contingencies
Stockholder's Equity
Common stock - $0.00001 par value
100,000,000 shares authorized
1,000,000 issued and outstanding 10 10
Additional paid-in capital 990 990
Accumulated deficit (1,022) (777)
------- -------
Total stockholder's equity (22) 223
------- -------
Total Liabilities and Stockholder's Equity $ -- $ 223
======= =======
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Years ended December 31, 1999 and 1998
1999 1998
----------- -----------
Revenues $ -- $ --
----------- -----------
Expenses
General and administrative expenses 245 50
----------- -----------
Net Loss (245) (50)
Other Comprehensive Income -- --
----------- -----------
Comprehensive Income $ (245) $ (50)
=========== ===========
Net loss per weighted-average
share of common stock
outstanding, calculated on
Net Loss - basic and fully diluted nil nil
=========== ===========
Weighted-average number of shares
of common stock outstanding 1,000,000 1,000,000
=========== ===========
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
Years ended December 31, 1999 and 1998
Common Stock Additional
------------ paid-in Accumulated
Shares Amount capital deficit Total
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balances at January 1, 1998,
as originally reported 100,000 $ 1 $ 999 $ (727) $ 273
Effect of 10 for 1 forward
split on December 8, 1999 900,000 9 (9) -- --
--------- --------- --------- --------- ---------
Balances at January 1, 1998,
as restated 1,000,000 10 990 (727) 273
Net loss for the year -- -- -- (50) (50)
--------- --------- --------- --------- ---------
Balances at December 31, 1998 1,000,000 10 990 (777) 223
Net loss for the year -- -- -- (245) (245)
--------- --------- --------- --------- ---------
Balances at December 31, 1999 1,000,000 $ 10 $ 990 $ (1,022) $ (22)
========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
STATEMENTS OF CASH FLOWS
Years ended December 31, 1999 and 1998
1999 1998
------ ------
Cash Flows from Operating Activities
Net loss for the period $ (245) $ (50)
Adjustments to reconcile net loss to
net cash provided by operating activities - -
------ ------
Net cash used in operating activities (245) (50)
------ ------
Cash Flows from Investing Activities - -
------ ------
Cash Flows from Financing Activities
Cash advanced by parent 22 -
------ ------
Net cash used in financing activities 22 -
------ ------
Decrease in Cash (223) (50)
Cash at beginning of year 223 273
------ ------
Cash at end of year $ - $ 223
====== ======
Supplemental Disclosure of
Interest and Income Taxes Paid
Interest paid for the period $ - $ -
====== ======
Income taxes paid for the period $ - $ -
====== ======
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
NOTES TO FINANCIAL STATEMENTS
NOTE A - Organization and Description of Business
Net-Tronics Communications Corporation (Company) was incorporated on August 22,
1995 under the laws of the State of Delaware as a wholly-owned subsidiary of
Halter Capital Corporation.
The Company has never had any operations or assets since inception. The current
business purpose of the Company is to seek out and obtain a merger, acquisition
or outright sale transaction whereby the Company's stockholders will benefit.
The Company is not engaged in any negotiations and has not undertaken any steps
to initiate the search for a merger or acquisition candidate.
The Company is fully dependent upon its current management and/or significant
stockholders to provide sufficient working capital to preserve the integrity of
the corporate entity during this phase. It is the intent of management and
significant stockholders to provide sufficient working capital necessary to
support and preserve the integrity of the corporate entity.
The Company has a year end of December 31 and follows the accrual method of
accounting.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE B - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
The Company considers all cash on hand and in banks, including accounts in
book overdraft positions, certificates of deposit and other highly-liquid
investments with maturities of three months or less, when purchased, to be
cash and cash equivalents.
2. Income taxes
------------
The Company provides deferred income taxes, where material, based on the
asset and liability method under the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes". At December
31, 1999 and 1998, respectively, the deferred tax asset and deferred tax
liability accounts, consisting solely of temporary differences in
accumulated depreciation, were not material to the financial statements and
no valuation allowance was provided against deferred tax assets.
The Company files its income tax returns as a component of its parent
company's consolidated tax return. Accordingly, all net operating losses
are offset against the tax liabilities of the Company's parent. No net
operating loss carryforwards exist as of December 31, 1999 and 1998,
respectively.
F-8
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Halter Capital Corporation)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE B - Summary of Significant Accounting Policies - Continued
3. Loss per share
--------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted-average number of shares of common stock and common
stock equivalents (primarily outstanding options and warrants). Common
stock equivalents represent the dilutive effect of the assumed exercise of
the outstanding stock options and warrants, using the treasury stock
method. The calculation of fully diluted earnings (loss) per share assumes
the dilutive effect of the exercise of outstanding options and warrants at
either the beginning of the respective period presented or the date of
issuance, whichever is later. As of December 31, 1999 and 1998, the Company
has no warrants and/or options issued and outstanding.
NOTE C - Fair Value of Financial Instruments
The carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.
NOTE D - Related Party Transactions
As of December 31, 1999, the Company's parent company had advanced funds
totaling approximately $22 for operating capital. The advances are due upon
demand and are non-interest bearing.
NOTE E - Common Stock Transactions
On December 10, 1999, the Company's Board of Directors approved a change in the
authorized number of shares which can be issued from 10,000,000 shares of
$0.00001 par value common stock and 5,000,000 shares of $0.00001 par value
preferred stock to a single class consisting of 100,000,000 shares of $0.00001
par value common stock. Further, the Board of Directors caused a 10 for 1
forward split of the issued and outstanding common stock. The effect of these
changes are reflected in the accompanying financial statements as of the first
day of the first period presented.
F-9
NET-TRONICS
COMMUNICATIONS
CORPORATION
(a wholly-owned subsidiary of
Universal Media Holdings, Inc.)
Financial Statements
and
Auditor's Report
March 31, 2000 and 1999
S. W. HATFIELD, CPA
certified public accountants
Use our past to assist your future sm
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Universal Media Holdings, Inc.)
CONTENTS
Page
----
Accountant's Review Report F-3
Financial Statements
Balance Sheets
as of March 31, 2000 and 1999 F-4
Statements of Operations and Comprehensive Income
for the three months ended March 31, 2000 and 1999 F-5
Statements of Cash Flows
for the three months ended March 31, 2000 and 1999 F-7
Notes to Financial Statements F-8
F-2
<PAGE>
S. W. HATFIELD, CPA
certified public accountants
Member: American Institute of Certified Public Accountants
SEC Practice Section
Information Technology Section
Texas Society of Certified Public Accountants
ACCOUNTANT'S REVIEW REPORT
--------------------------
Board of Directors and Stockholder
Net-Tronics Communications Corporation
We have reviewed the accompanying balance sheets of Net-Tronics Communications
Corporation (a Delaware corporation) as of March 31, 2000 and 1999 and the
accompanying statement of operations and comprehensive income and statements of
cash flows for the three months ended March 31, 2000 and 1999. These financial
statements are prepared in accordance with the instructions for Form 10-QSB, as
issued by the U. S. Securities and Exchange Commission, and are the sole
responsibility of the company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression on an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
S. W. HATFIELD, CPA
Dallas, Texas
May 3, 2000
Use our past to assist your future sm
P. O. Box 820395 9002 Green Oaks Circle, 2nd Floor
Dallas, Texas 75382-0395 Dallas, Texas 75243-7212
214-342-9635 (voice) (fax) 214-342-9601
800-244-0639 [email protected]
F-3
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Universal Media Holdings, Inc.)
BALANCE SHEETS
March 31, 2000 and 1999
(Unaudited)
2000 1999
------- -------
ASSETS
------
Current Assets
Cash on hand and in bank $ -- $ --
------- -------
Total Assets $ -- $ --
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
Current Liabilities
Due to parent company $ -- $ 223
------- -------
Commitments and Contingencies
Stockholder's Equity
Common stock - $0.00001 par value
100,000,000 shares authorized
1,000,000 issued and outstanding 10 10
Additional paid-in capital 1,589 990
Accumulated deficit (1,599) (777)
------- -------
Total stockholder's equity -- 223
------- -------
Total Liabilities and Stockholder's Equity $ -- $ 223
======= =======
See Accountant's Review Report.
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Universal Media Holdings, Inc.)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Three months ended March 31, 2000 and 1999
(Unaudited)
Three months Three months
ended ended
March 31, March 31,
2000 1999
----------- -----------
Revenues $ -- $ --
----------- -----------
Expenses
General and administrative expenses 577 --
----------- -----------
Loss from operations (577) --
Provision for income taxes -- --
----------- -----------
Net Loss (577) --
Other Comprehensive Income -- --
----------- -----------
Comprehensive Income $ (577) $ --
=========== ===========
Net loss per weighted-average
share of common stock
outstanding, calculated on
Net Loss - basic and fully diluted nil nil
=========== ===========
Weighted-average number of shares
of common stock outstanding 1,000,000 1,000,000
=========== ===========
See Accountant's Review Report.
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Universal Media Holdings, Inc.)
STATEMENTS OF CASH FLOWS
Three months ended March 31, 2000 and 1999
(Unaudited)
Three months Three months
ended ended
March 31, March 31,
2000 1999
------------ ------------
Cash Flows from Operating Activities
Net loss for the period $ (577) $ --
Adjustments to reconcile net loss to
net cash provided by operating activities -- --
------------ ------------
Net cash used in operating activities (577) --
------------ ------------
Cash Flows from Investing Activities -- --
------------ ------------
Cash Flows from Financing Activities
Cash advanced by (to) parent 577 (223)
------------ ------------
Net cash used in financing activities 577 (223)
------------ ------------
Decrease in Cash -- (223)
Cash at beginning of year -- 223
------------ ------------
Cash at end of year $ -- $ --
============ ============
Supplemental Disclosure of
Interest and Income Taxes Paid
Interest paid for the period $ -- $ --
============ ============
Income taxes paid for the period $ -- $ --
============ ============
Supplemental Disclosure of
Investing and Financing Activities
Forgiveness of amounts due to shareholder
as additional paid-in capital $ 22 $ --
============ ============
See Accountant's Review Report.
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Universal Media Holdings, Inc.)
NOTES TO FINANCIAL STATEMENTS
NOTE A - Organization and Description of Business
Net-Tronics Communications Corporation (Company) was incorporated on August 22,
1995 under the laws of the State of Delaware as a wholly-owned subsidiary of
Halter Capital Corporation.
The Company has never had any operations or assets since inception. The current
business purpose of the Company is to seek out and obtain a merger, acquisition
or outright sale transaction whereby the Company's stockholders will benefit.
The Company is not engaged in any negotiations and has not undertaken any steps
to initiate the search for a merger or acquisition candidate.
On December 10, 1999, the Company filed a Form 10-SB, General Form for
Registration of Securities of Small Business Issuers on a voluntary basis in
order to make the company's financial information equally available to all
parties, including potential investors, and to meet certain listing requirements
for publicly traded securities.
On April 13, 2000, a change in control of the Company occurred in conjunction
with closing under an Agreement and Plan of Reorganization (the "Reorganization
Agreement") between the Company and Universal Media Holdings, Inc., a Delaware
corporation. The closing under the Reorganization Agreement consisted of a stock
for stock exchange in which the Company acquired all of the issued and
outstanding common stock of Universal Media Holdings, Inc. in exchange for the
issuance of 1,000,000 shares of its common stock. As a result of this
transaction, the Company became a wholly-owned subsidiary of the Company. The
Reorganization was approved by the unanimous consent of the Board of Directors
of Universal Media Holdings, Inc. on March 27, 2000. The Reorganization is
intended to qualify as a reorganization within the meaning of Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended. Prior to the
Agreement, Universal Media Group had 11,209,346 shares of common stock issued
and outstanding. Following the Agreement, the Company had 11,459,346 shares of
common stock outstanding. Universal Media Holdings, Inc., was incorporated in
the State of Delaware on August 23, 1995. Upon effectiveness of the
Reorganization Agreement, pursuant to Rule 12g-3(a) of the General Rules and
Regulations of the Securities and Exchange Commission, Universal Media Holdings,
Inc. became the successor issuer to Net-Tronics Communications Corporation, Inc.
for reporting purposes under The Securities Exchange Act of 1934 and elected to
continue reporting under the Act, effective April 10, 2000.
Universal Media Holdings, Inc. has a September 30 fiscal year end. The fiscal
year of Net-Tronics Communications Corporation is December 31. As a result of
the Reorganization, as discussed above, the Company anticipates changing its
year-end to September 30 at a future date, prior to September 30, 2000. The
accompanying financial statements are presented using the Company's initial
year-end of December 31, as previously reported and included in the initial Form
10-SB filing with the U. S. Securities and Exchange Commission.
The Company is fully dependent upon its current parent company to provide
sufficient working capital to preserve the integrity of the corporate entity and
support all operating expenses. It is the intent of the parent company to
provide sufficient working capital necessary to support and preserve the
integrity of the corporate entity.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
F-7
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Universal Media Holdings, Inc.)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE B - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
The Company considers all cash on hand and in banks, including accounts in
book overdraft positions, certificates of deposit and other highly-liquid
investments with maturities of three months or less, when purchased, to be
cash and cash equivalents.
2. Income taxes
------------
The Company provides deferred income taxes, where material, based on the
asset and liability method under the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes". At March 31,
2000 and 1999, respectively, the deferred tax asset and deferred tax
liability accounts, where applicable, were not material to the financial
statements and any deferred tax asset was fully reserved with an offsetting
valuation allowance.
Through December 31, 1998, the Company filed as a component of its parent
company's consolidated tax return. Accordingly, all net operating losses
are offset against the tax liabilities of the Company's parent. Effective
December 31, 1999, the Company filed a separate company income tax return.
Due to the provisions of Section 338 of the Internal Revenue Code of 1986,
as amended, and the aforementioned April 2000 change in control, there are
no net operating loss carryforwards to offset future taxable income.
3. Loss per share
--------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted-average number of shares of common stock and common
stock equivalents (primarily outstanding options and warrants). Common
stock equivalents represent the dilutive effect of the assumed exercise of
the outstanding stock options and warrants, using the treasury stock
method. The calculation of fully diluted earnings (loss) per share assumes
the dilutive effect of the exercise of outstanding options and warrants at
either the beginning of the respective period presented or the date of
issuance, whichever is later. As of March 31, 2000 and 1999, the Company
has no warrants and/or options issued and outstanding.
NOTE C - Fair Value of Financial Instruments
The carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.
NOTE D - Related Party Transactions
As of December 31, 1999, the Company's parent company had advanced funds
totaling approximately $22 for operating capital. The advances were due upon
demand and were non-interest bearing. As of March 31, 2000, the Company's former
parent contributed these advances to additional paid-in capital and had paid
operating expenses of approximately $577 on the Company's behalf, which have
also been recorded as additional paid-in capital by the Company.
F-8
<PAGE>
NET-TRONICS COMMUNICATIONS CORPORATION
(a wholly-owned subsidiary of Universal Media Holdings, Inc.)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE E - Common Stock Transactions
On December 10, 1999, the Company's Board of Directors approved a change in the
authorized number of shares which can be issued from 10,000,000 shares of
$0.00001 par value common stock and 5,000,000 shares of $0.00001 par value
preferred stock to a single class consisting of 100,000,000 shares of $0.00001
par value common stock. Further, the Board of Directors caused a 10 for 1
forward split of the issued and outstanding common stock. The effect of these
changes are reflected in the accompanying financial statements as of the first
day of the first period presented.
F-9
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
UNDER SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
Universal Media Holdings, Inc.
- --------------------------------------------------------------------------------
(Name of Small Business Issuer in its charter)
Delaware 22-3360133
- --------------------------------------------------------------------------------
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
110 Smithtown, Nesconset, NY 11767
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (201) 804-8500
-------------------------------------------------------
Securities to be registered under Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of each class Name of each exchange on which
to be so registered each class is to be registered
<S> <C>
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
</TABLE>
Securities to be registered under Section 12(g) of the Act:
Common Stock
- --------------------------------------------------------------------------------
(Title of class)
- --------------------------------------------------------------------------------
(Title of class)
1
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I PAGE
<S> <C>
Item 1 Description of Business 2
Item 2 Management's Discussion and Analysis or Plan of Operation 7
Item 3 Description of Property 13
Item 4 Security Ownership of Certain Beneficial
Owners and Management 13
Item 5 Directors, Executive Officers, Promoters and Control Persons 14
Item 6 Executive Compensation 15
Item 7 Certain Relationships and Related Transactions 16
Item 8 Description of Securities 16
PART II
Item 1 Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters 17
Item 2 Legal Proceedings 18
Item 3 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 18
Item 4 Recent Sales of Unregistered Securities 18
Item 5 Indemnification of Directors and Officers 19
</TABLE>
FINANCIAL STATEMENTS
See attached Financial Statements
2
<PAGE> 3
EXHIBIT INDEX
<TABLE>
<CAPTION>
No. Description of Exhibit
- --- ----------------------
<S> <C>
3.1 Certificate of Incorporation of Tyconda Minerals Corp., dated December
24, 1969
3.2 Agreement of Merger of Tyconda Minerals Corporation (Nevada) with and
into Tyconda Minerals Corp.(Delaware) dated December 30, 1969
3.3 Certificate of Amendment of Certificate of Incorporation, changing
corporate name to Hy-Poll Technology, Inc. dated October 28, 1983.
3.4 Reorganization Agreement, dated August 10, 1995
3.5 Certificate of Amendment of Certificate of Incorporation of Hy-Poll
Technology, Inc., changing corporate name to Universal Turf, Inc.,
dated September 21, 1995.
3.6 Certificate of Amendment of Certificate of Incorporation, changing
corporate name to Universal Media Holdings, Inc. dated November 8,
1999.
3.7 By-Laws of Universal Turf, Inc.
10.1 Indemnification Agreement with Michael S. Krome
10.2 Indemnification Agreement with James E. Neebling
10.3 Indemnification Agreement with James W. Zimbler
21.1 Subsidiaries of Registrant
23.1 Consent of Auditors
27 Financial Data Schedule
</TABLE>
3
<PAGE> 4
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Office
Universal Media Holdings, Inc. ("we", "us" or "the Company") currently maintains
its principal office at 10 Industrial Road, Carlstadt, New Jersey 07726, where
its telephone number is (201) 804-8500 and its facsimile number is (201) 804-
8585. On February 14, 2000 ,we have recently entered into an agreement with
E-Trans Logistics, Inc. (E-Trans"), under which E-Trans became a wholly owned
subsidiary of United Media Holdings, Inc. Our new office is located at the
E-Trans facility at 10 Industrial Way, Carlstadt, New Jersey, where there are
offices and a warehouse.
Organization/Historical Background
The Company was originally incorporated in Delaware as Tyconda Minerals Corp. in
December of, 1969. On February 11, 1970, the Tyconda Minerals Corp. (Delaware)
merged with Tyconda Minerals Corporation (Nevada), with Tyconda Minerals Corp.
(Delaware) as the surviving corporation. On November 2, 1983, the Company filed
a Certificate of Amendment to its Certificate of Incorporation changing its
corporate name to Hy-Poll Technology, Inc. That Certificate of Amendment also
changed the capital structure of the corporation from an authorization to issue
5,000,000 shares of Common Stock with a par value of $.01 per share, to an
authorization to issue 200,000,000 shares of Common Stock with a par value of
$.0001 per share.
On December 21, 1995, the Company amended its Certificate of Incorporation
changing its corporate name to Universal Turf, Inc. The Company amended its
Certificate of Incorporation again on November 8, 1999, changing its corporate
name to Universal Media Holdings, Inc. ("UMH").
Business- Corporate Structure
As Universal Turf, Inc., our business was based on the marketing, installation
and maintenance of synthetic surface material for sports and recreational
fields. While that business has been profitable, we have changed our primary
business direction to the entertainment and Internet industries.
4
<PAGE> 5
On February 14, 2000, we entered into an agreement with E-Trans-Logistics, Inc.
("E-Trans") whereby we purchased all issued and outstanding shares or Common
Stock of E-Trans with Universal Media Holding, Inc. Common Stock. E-trans, now
our wholly owned subsidiary, is a trucking, transport and logistics company
having its offices and warehouse in Carlstadt, New Jersey. Since logistics and
transportation will be the focus of our business, we plan to rename the Company
E-Trans Logistics, Inc. sometime during the second quarter of 2000.
Business Operations
General Business Plan of UMH
Our business plan covers (i)the logistics field, (ii) the synthetic grass (turf)
business, and (iii)certain areas of the entertainment field. Because E-Trans,
our subsidiary, has a profitable and expanding business, we have made the
business of E-Trans our primary focus. We are in the process of moving our
office operations to their Carlstadt New Jersey location.
Logistics business
E-Trans (formerly Gerard Express, Inc.) is transport and trucking company with a
forty year history. As a general commodities carrier, it transports materials
and goods in the areas of Philadelphia, New Jersey, Connecticut and New York
metropolitan areas. E-Trans is able to service other markets through strategic
business alliances which it has formed with several like business in different
geographic regions. Presently, through these alliances, E-Trans is able to cover
Ohio, Virginia, Florida, Georgia, and will soon be covering the West Coast
The E-Trans strategic plan consists of the following:
a. Corporate positioning
b. Marketing/Sales
c. Operations/Services
d. Technology
e. Strategic Alliances
f. Acquisitions
Each segment of the plan outlines the specific investment, return on investment
and implementation needed to institute the plan.
Corporate Positioning
E-Trans is structured as a personalized logistics company with multiple
capabilities. The logistics and transport field is highly competitive on a
worldwide level, and Management believes that E-Trans is well equipped to
compete in the international marketplace. E-Trans is able to offer many of same
services offered by much larger logistics and trucking companies at a
competitive or greatly reduced cost to the customer.
5
<PAGE> 6
Our strategic plan to position E-Trans in the marketplace includes careful
staffing and thorough training of our personnel. E-Trans is on a course of
updating its customer accessibility and use by implementing the newest
technologies, and we intend to continue in that direction. A new systems
technology called "SHIP EGIS", which will be ready for installation during the
second quarter of 2000, will provide E-Trans with the ability to communicate
with its customers electronically, thereby optimizing routing and rapid
information exchange. (The "SHIP EGIS" system is actually scheduled for
installation in late April, 2000.) E-Trans will also rely on a marketing
campaign which will include direct mail, telemarketing and commissioned sales.
It is the intention of Management to encourage all levels of personnel,
particularly the senior management of E-Trans, participating in the building of
transportation organizations and industry associations and shipper-carrier
relationships.
Acquisitions
E-Trans is currently in negotiations with 3 small carriers with sales ranging
from 1.5 million to 6 million in revenue. Its objective is to acquire companies
that meet the following criteria.
a. A break-even to marginal profitability
b. A well positioned geographically (should be strategically
located, in the opinion of Management)
c. Minimal Assets
d. Ability to integrate into current infrastructure
Strategic Alliances
E-Trans intends to establish strategic alliances with competitors, not asset
based logistics providers, and shippers. It is Management's opinion that these
alliances will encourage a favorable market share impact in our core area.
E-Trans has recently completed its "Gateway Alliance" which immediately opened
lanes to the Midwest, West Coast, and Southern U.S. E-Trans is currently in
negotiations with other alliances in the following areas:
Air Freight Services
Major Third Party Logistics provider
Major Railroad
Steamship Line
Shippers
Improvements in Accessibility
Management believes that to be competitive in this industry, it is necessary to
upgrade the level of communication and accessibility. A new system that we will
be employing addresses that objective. The system, called SHIPEGIS will provide
the following:
Visual Mobile Communication
Visual Scheduling and Dispatch
Visual Job Tracking
Visual Mapping and Plotting
6
<PAGE> 7
Visual Customer Order Information
The "SHIP EGIS" system is scheduled to be integrated with the NEXTEL Radio
system in late May. This will allow for data transfer between central dispatch
and the E-Trans drivers.
Operations/Services
E-Trans will offer services in multiple transportation sectors which promote
multiple levels of services.
E-Trans menu includes:
Regional Truck Load
Tri-State LTL
Gateway Service LTL Alliance
Texas
Chicago
Florida
California
New England
Pennsylvania/Ohio
Consolidation Services
Warehousing
Pier Container Transfer
Expedited Freight
Each service will have a specific operating and financial model. The "SHIP EGIS"
routing software will assist in minimizing cost and improving equipment
utilization.
Synthetic grass (turf) business
We distribute synthetic grass surfaces for use in school fields, public and
private sports fields, and the like. We are the sole distributor and part equity
owner of Sportsfields Turf International, Inc., and as such, we offer synthetic
surfaces to the public and private sectors. In the public sector, the entity
specifies its required standards for minimum performance, and various
manufacturers and distributors respond with a bid. The public entity bases its
decision on a combination of factors, but most often, the award or contract goes
to the lowest bidder. The private sector does not follow a formal bid process.
Typically, potential purchasers review price quotations or literature and
negotiate with providers of synthetic grass.
We have entered into a Letter of Intent to sell this business to Elmar Holdings,
Inc., for stock.
Entertainment and media business
We were briefly engaged in the entertainment industry. As of the date of this
Registration Statement, an agreement that was executed between us and Fortune
Media has been rescinded.
7
<PAGE> 8
Competition
There are large numbers of competitors in the trucking and logistics business.
They range from the very small companies with one, two or a small number of
trucks to the very large, with hundreds of vehicles.
Number of Employees for UMH
<TABLE>
<CAPTION>
Department/Job Function Number of Employees
- ----------------------- -------------------
<S> <C>
Executives 3
Support Staff 1
---
Total 4
</TABLE>
Number of Employees for E-Trans
<TABLE>
<CAPTION>
Department/Job Function Number of Employees
- ----------------------- -------------------
<S> <C>
Executives 2
Support Staff 2
Drivers/Warehouseman/Mechanics 20
---
Total 24
</TABLE>
Cautionary Factors That May Affect Future Results
We undertake no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or otherwise. You are
advised, however, to consult any future disclosures we make on related subjects
in our 10-QSB, 8-KSB, and 10-KSB reports to the SEC.
We provide the following cautionary discussion of risks, uncertainties and
possible inaccurate assumptions relevant to our business and our products. These
are factors that we think could cause our actual results to differ materially
from expected results. Other factors besides those listed here could adversely
affect us.
Limited Operating History. Although we were organized in 1969, we have
redirected the focus of the company, and as a result, we have not yet been
profitable. Accordingly, investors should consider us to be essentially a new,
developing company. As a new, developing company, our operations are subject to
all of the risks inherent in the establishment of a new business enterprise,
including the lack of significant operating history. There can be no assurance
that our future operations will be profitable. Revenues and profits, if any,
will depend upon various factors, including our ability to finance mortgage
loans, secure mortgage loan applications, process mortgages, and generally do
business in a sufficient volume to provide sufficient cash margins
8
<PAGE> 9
to cover our operating costs. Our securing of sufficient capital is crucial.
Without sufficient capital we cannot meet our projected goals or accomplish our
business plans; and such failure could have a material adverse affect on us and
the value and price of our publicly traded securities.
Liquidity and Working Capital Risks; Need for Additional Capital to Finance
Growth and Capital Requirements. We will seek additional funds and seek to raise
additional capital from public or private equity or debt sources to: (i) provide
working capital to meet our general and administrative costs until net revenues
make the business self-sustaining; (ii) make acquisitions of media properties
(film, Internet properties, music) and small companies engaged in producing or
distributing media properties; and (iii) exploit and expand such acquisitions.
We cannot give assurance that we will be able to raise any such capital on terms
acceptable to us or at all. Such financing may be upon terms that are dilutive
or potentially dilutive to our stockholders. If alternative sources of financing
are required, but are insufficient or unavailable, we will be required to modify
our growth and operating plans in accordance with the extent of available
funding.
Limitation of Liability and Indemnification of Officers and Directors. Our
officers and directors are required to exercise good faith and high integrity in
the management of Company affairs. Our Articles of Incorporation provide,
however, that the officers and directors shall have no liability to the
shareholders for losses sustained or liabilities incurred which arise from any
transaction in their respective managerial capacities unless they violated it in
good faith, engaged in intentional misconduct or knowingly violated the law,
approved an improper dividend or stock repurchase, or derived an improper
benefit from the transaction. As a result, a purchaser of the shares may have a
more limited right to action than he would have had if such provision were not
present. Our Articles and By-Laws also provide for the indemnification by the
Company of the officers and directors against any losses or liabilities they may
incur as a result of the manner in which they operate the Company's business or
conduct the internal affairs, provided that in connection with these activities
they act in good faith and in a manner which they reasonably believe to be in,
or not opposed to, the best interests of the Company, and their conduct does not
constitute gross negligence, misconduct or breach of fiduciary obligations. To
further implement the permitted indemnification, we have entered into Indemnity
Agreements with our current officers and directors and we will provide similar
agreements for future officers and directors.
Dependence on Key Personnel. Our future success will depend largely on the
efforts and abilities of our management, including especially Messrs. Zimbler,
Krome and Neebling. The loss of any of them or the inability to attract
additional, experienced management personnel could have a substantial adverse
affect on the Company; we have not obtained "key man" insurance policies on any
of our management and do not expect to obtain it on any of our future management
personnel, as employed. Our ability to implement our strategies depends upon our
ability to attract highly talented managerial personnel. There can be no
assurance that we will attract and retain such employees in the future. The
inability to hire and/or loss of key management or technical personnel could
materially and adversely affect our business, results of operations and
financial condition.
Government Regulation. Our business is subject to government regulation. (e.g.,
occupational safety and health acts, workmen's compensation statutes,
9
<PAGE> 10
unemployment insurance legislation, income tax and social security laws and
regulations, environmental laws and regulations, consumer safety laws and
regulations, etc.) as well as to governmental laws and regulations applicable to
small public companies and their capital formation efforts. Although we will
make every effort to comply with applicable laws and regulations, we can provide
no assurance of our ability to do so, nor can we predict the effect of those
regulations on our proposed business activities.
Anticipated Operating Losses. Assuming that we can obtain the financing to make
acquisitions and exploit them, we most likely will continue to suffer operating
losses until we can achieve a sufficient volume of mortgage loans to cover our
operating costs.
Competition. The logistics and transport industry is very competitive. Also,
entertainment industry is extremely competitive. We compete with other companies
that have greater technical expertise, financial resources and marketing
capabilities than us, and we may not be able to overcome competitive
disadvantages.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis should be read in conjunction with the
financial statements of the Company and summary of selected financial data for
United Media Holdings, Inc. as shown below. This discussion should not be
construed to imply that the results discussed herein will necessarily continue
into the future, or that any conclusion reached herein will necessarily be
indicative of actual operating results in the future. Such discussion represents
only the best present assessment of the management of the Company.
Overview
As indicated prior, the company's efforts have been redirected from the
synthetic grass business to that of transportation. Thus, the decline in
operational activities of the company is a result of this reduction in the its
efforts in the selling of synthetic grass surfaces and its acquisition of
E-Translogitics subsequent to the year end of the company.
Results of Operations
1999 Compared with 1998
Total revenues decreased to $241,207 from $1,753,096 as a result of the company
reducing its efforts from in the sale of synthetic grass surfaces, its primary
business during this period. Accordingly, the cost of revenues dropped from
$1,735,786 to $337,680 due to the decline in sales. General and Administrative
expenses only declined from $241,599 to $211,103 due to the fixed nature of
these items. The company has taken steps to reduce these expenses currently.
Also, during the year the company disposed of most of it fixed assets resulting
in a loss of $15,729.
Liquidity and Capital Resources
September 30, 1999 the company had cash and equivalents of $1012. Its cash
requirements for the next twelve months is $1,000,000, which the company
believes it can raise through financing secured by accounts receivables of its
acquisition, E-Translogistics and financing E-Translogistics has in place. Of
the $1,000,000, $550,000 is intended for the purchase of small logistic
companies with the remainder for working capital purposes including settling
debts with existing creditors. The company has no plans to purchase or sell
significant equipment or to increase personnel, except in conjunction with the
above acquisitions that have not yet be identified.
Plan of Operations
Our plan of operations for the next twelve months involves the expansion of the
transportation and logistics operations of the E-Trans-Logistics, Inc.
subsidiary. Our plan is threefold:
1. Build and expand the existing logistics operation through traditional
methods of acquiring.
2. Acquire additional companies in the logistics and web-servicing business.
3. Institute a web related services which we will provide for our customers.
It is our intention to merge the subsidiary, E-Trans Logistics, Inc., with and
into Universal Media Holdings, Inc. and to rename the surviving corporation
E-Trans Logistics, Inc.
Cash Requirements Our cash requirement for the next twelve months is $1,000,000,
which we believe we can raise through receivables and financing already in
place. These funds will be allocated as follows:
10
<PAGE> 11
<TABLE>
<S> <C>
Research and development of e-commerce: $ 200,000
Acquisition of small logistics companies and e-commerce website based
businesses: $ 550,000
General and Administrative: $ 150,000
Working Capital: $ 100,000
----------
$1,000,000
</TABLE>
During the next twelve months, we have no plans to purchase or sell significant
equipment. Nor do we plan to increase personnel by adding employees
Fiscal Condition for Prior 2 Years
Prior to 1999, our turf related operations was our main business.
11
<PAGE> 12
Selected Summary Financial Data of UMH (formerly Universal Turf, Inc.)
<TABLE>
<CAPTION>
YEAR ENDED: YEAR
----------------------- --------------
<S> <C> <C>
DEC. 31, DEC 31, DEC. 31
1997 1998 1999
</TABLE>
12
<PAGE> 13
ITEM 3. DESCRIPTION OF PROPERTY
Offices
The Executive Office is Nesconset. Operations are currently conducted out of 60
Brunswick Avenue, Edison, New Jersey. The space consists of office space and
warehouse space consisting of approximately 1,000 square feet. The Company also
uses the parking yard to park trailers. The building is shared with National
Expedite, Inc. The rent for the Company is $2,500.00 per month.
The executive offices consist of approximately 600 square feet, and include
three offices. The annual rent for 2000 is $7,200. The lease lasts for another
two years after October 1, 2000, with rent increases of $600, per annum for the
last two years.
The Company expects that the space for its executive office is sufficient for
its needs for the next twelve months. The space for its E-Trans Logistics
operations is expected to be sufficient for the next twelve months, unless the
Company makes a significant acquisition.
Warehouse
Our warehouse space is approximately 70,800 square feet and will be used for
storage and the loading of the trailers as well as mechanical repairs. Presently
it contains the following equipment; tools and other mechanical equipment, and
the necessary equipment to run a warehouse. All other equipment needed for our
operations is leased on an as needed basis in the following manner: Leasing of
trailers and tractors.
We anticipate that the office and warehouse space is adequate for the next
twelve months.
Real Estate Investments
At the present time, we have no intention or any interest in making investments
in real estate (except for our own offices). Therefore, we have no policy with
respect to any investments in real estate or interests in real estate,
investments in real estate mortgages, and securities of or interests in persons
primarily engaged in real estate activities.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT PRINCIPAL SHAREHOLDERS
The following table sets forth, as of 3/16/00 regarding the beneficial ownership
of shares of our Common Stock by each person known by us to own five percent or
more of the outstanding shares of Common Stock, by each of our Officers, by each
of our Directors, and by our Officers and Directors as a group. As of 3/16/00,
there were 12,059,346 shares issued and outstanding of record.
13
<PAGE> 14
<TABLE>
<CAPTION>
SHARES OF PERCENTAGE
NAME & ADDRESS OF COMMON AS OF 3/16/00(1)
BENEFICIAL OWNERS STOCK
- ----------------- --------- ----------------
<S> <C> <C>
Michael Krome -0-(2) -0-
8 Teak Court
Lake Grove, NY 11755
James Neebling 2,257,000 18.7
18 Perrine Circle
Perrineville, NJ 08535
Zimvestments 2,657,000 22.0
1 Diane Court
Nesconset, NY 11767
James W. Zimbler -0- -0-
1 Diane Court
Nesconset, NY
All Executive Officers and
Directors as a group (3 persons) 4,914,000(2) 40.7
</TABLE>
- - - - - - - - - - - - - - - - - - - - - - - - - - -
(1) Based upon 12,059,346 shares issued and outstanding on 3/16/00.
(2) Does not include 427,500 shares of Common Stock owned by Two Plus Twins
Consulting, Inc., a company owned by Mr. Krome's wife.
(2) Includes Mr. Zimbler's indirect ownership of 2,657,000 shares owned by
Zimvestments, Inc. of which Mr. Zimbler is an officer and director.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
Directors and Executive Officers of Universal Media Holdings, Inc.(formerly
Universal Turf, Inc.)
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Michael Krome 39 Director/Vice-
President/Secretary/Treasurer
James Zimbler 35 Chairman of the Board of Directors/CEO
James Neebling 37 Director/President
</TABLE>
Michael Krome is a Vice President, Secretary, Treasurer and a Director of our
Company. He is an attorney and has managed his own law practice, Michael S.
Krome, P.C., since 1991. Mr. Krome was named to the Board of Directors on
November 4, 1999, and has provided corporate and legal services to our Company.
From February of 1999 through November of 1999, Mr Krome was the Vice President,
Secretary and a Director of Fortune Media, Inc. Although he ceased to be an
officer of Fortune Media, Inc. In November of 1999, he continues to be a
14
<PAGE> 15
Director of that company. Mr. Krome is a graduate of the University at Albany in
Albany New York with a Bachelors Degree, and he received his J.D. from the
Bengamin N. Cordozo School of Law in 1990. Mr. Krome was admitted to the N.Y.S.
Bar in February of 1991.
James Zimbler is our C.E.O. and a Director, serving in this capacity since
November 4, 1999. He came to our Company as a result of our Purchase Agreement
with E-Trans Logistics, Inc., where he served as C.E.O. since December of 1995.
In December 1998, Mr. Zimbler was also named Chairman of the Board of Directors
of IntermediaNet, Inc, a public company that has been recently renamed "Fortune
Media, Inc." In February of 1999, he ceased to be an officer of that company,
but continues to be a director. From December of 1996 through November of 1998,
Mr. Zimbler was President and Chief Operating Officer for Total Freight
Solutions America, Inc. (T.F.S. America, Inc.) There, he managed the day to day
operations of company. Mr. Zimbler was employed by Packaging Plus Services,
Inc. from August of 1994 through December of 1996. Mr. Zimbler attended Suffolk
Community College from 1983 through 1985 where he majored in Business
Administration.
James Neebling is President and a Director, being first named to the Board of
Directors on November 4, 1999. Also, Mr. Neebling is the President of National
Expedite, Inc., a transportation and logistics company which he founded in 1996.
National Expedite has grown from a regional provider to a national
transportation company, having contracts with several Fortune 100 companies.
>From 1995 to present, Mr. Neebling continues to be an employee of Novacare
Employee Services (formerly H.R. Logic, Inc.) an employment and equipment
leasing company. In 1992, Mr. Neebling formed Systems Logistics, Inc., a
company which specialized in fulfillment and warehousing for primarily Fortune
100 clients. Systems Logistics, Inc. was purchased by U.S. Delivery Systems, a
public company, in 1994. Mr. Neebling remained with U.S. Delivery Systems as an
officer of the company, assisting the company through the transition period. He
ceased to be an officer and employee in 1996, but provided consulting services
for the U.S. Delivery Systems through late 1997. From 1992 to 1996, Mr.
Neebling was President of National Dedication Fleet, Inc. Mr. Neebling
attended Glassboro State College.
ITEM 6. EXECUTIVE COMPENSATION
Compensation of Directors
Currently, our Directors are not compensated for their services, although their
expenses are reimbursed.
Compensation of Management
<TABLE>
<CAPTION>
Title 1999 1998 1997
----- ---- ---- ----
<S> <C> <C> <C> <C>
Michael Krome Vice President, -0- -0- -0-
Secretary and Treasurer
James Zimbler Chief Executive -0- -0- -0-
Officer
</TABLE>
15
<PAGE> 16
<TABLE>
<S> <C> <C> <C> <C>
James E. Neebling President -0- -0- -0-
</TABLE>
None of the named persons has received stock options or other such non-cash
compensation. No one has received an annual compensation package of $100,000 or
more.
Employment Agreements
Presently, we have not entered into any employment agreements with anyone
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On February 14, 2000, we entered into an agreement with E-Trans-Logistics, Inc.
("E-Trans") whereby we purchased all issued and outstanding shares or Common
Stock of E-Trans with Universal Media Holding, Inc. Common Stock. E-trans, now
our wholly owned subsidiary, is a trucking, transport and logistics company
having its offices and warehouse in Carlstadt, New Jersey.
ITEM 8. DESCRIPTION OF SECURITIES
Our capital structure consists of shares of Preferred Stock with a par value of
$.01 per share, and Common Stock, with a par value of $.0001 per share. The
authorized classes, and the amount or number of each which are authorized and
outstanding as of the date of this Memorandum, are as follows:
<TABLE>
<CAPTION>
AUTHORIZED OUTSTANDING
---------- -----------
<S> <C> <C>
Common Stock 200,000,000 12,059,356
</TABLE>
Common Stock
The authorized common equity of the Company consists of 200,000,000 shares of
Common Stock, with a $.001 par value, of which 12,059,356 shares of Common Stock
are issued and outstanding. Shareholders (i) have general ratable rights to
dividends from funds legally available therefor, when, as and if declared by the
Board of Directors; (ii) are entitled to share ratably in all assets of the
16
<PAGE> 17
Company available for distribution to shareholders upon liquidation, dissolution
or winding up of the affairs of the Company; (iii) do not have preemptive,
subscription or conversion rights, nor are there any redemption or sinking fund
provisions applicable thereto; and (iv) are entitled to one vote per share on
all matters on which shareholders may vote at all shareholder meetings. All
shares of Common Stock now outstanding are fully paid and nonassessable and all
shares of Common Stock to be sold in this offering will be fully paid and
nonassessable when issued.
The Common Stock does not have cumulative voting rights, which means that the
holders of more than fifty percent of the Common Stock voting for election of
directors can elect one hundred percent of the directors of the Company if they
choose to do so. The Company, which has had no earnings, has not paid any
dividends on its Common Stock and it is not anticipated that any dividends will
be paid in the foreseeable future. Dividends upon Preferred shares must have
been paid in full for all past dividend periods before distribution can be made
to the holders of Common Stock. In the event of a voluntary or involuntary
liquidation, all assets and funds of the Company remaining after payments to the
holders of Preferred Stock will be divided and distributed among the holders of
Common Stock according to their respective shares.
PART II
ITEM 1.MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND OTHER
SHAREHOLDER MATTERS
The Company's Common Stock is traded on the NASDAQ Bulletin Board under the
symbol "UVTFD" now "UVTF." To maintain that listing, we must become a
fully-reporting company to the SEC under the Securities Exchange Act of 1934 on
or before May 3, 2000. We anticipate accomplishing such filing by April 3,2000
Based on that time line, the filing will be effective on or about May 26, 2000.
We fully intend to respond to any and all comments quickly in an effort to clear
comments prior to May 3, 2000.
Our initial market maker was authorized to commence the trading of our stock on
the OTC Bulletin Board on ______, 1998, but actual trading began on
approximately _____________. The range of our prices since then is:
<TABLE>
<CAPTION>
Quarter High Bid Low Bid
- ------- -------- -------
<S> <C> <C>
2000
1st Qtr. '00 0.625 0.43.7
</TABLE>
<TABLE>
<CAPTION>
Quarter High Bid Low Bid
- ------- -------- -------
<S> <C> <C>
1999
1st Qtr. '99 0.02 0.009
2nd Qtr. '99 0.025 0.01
3rd Qtr, '99 0.02 0.009
4th Qtr '99 1.5875 0.007
</TABLE>
17
<PAGE> 18
<TABLE>
<CAPTION>
Quarter High Bid Low Bid
- ------- -------- -------
<S> <C> <C>
1998
1st Qtr '98 0.16 0.04
2nd Qtr '98 0.07 0.035
3rd Qtr '98 0.065 0.01
4th Qtr '98 0.04 0.005
</TABLE>
The forgoing quotations reflect inter-dealer prices, without retail mark-up,
mark-down, or commission and may not represent actual transactions.
On March 31,2000, the closing prices of the Company's Common Stock were $.625
Bid and $1.03 Asked, as quoted on the NASDAQ Bulletin Board.
Dividend Policy
We have not had any earnings or profits and have not paid any dividends. Our
proposed operations are capital intensive and we need working capital. Therefore
we will be required to reinvest any future earnings in the Company's operations.
Our Board of Directors has no present intention of declaring any cash dividends,
as we expect to re-invest all profits in the business for additional working
capital for continuity and growth. The declaration and payment of dividends in
the future will be determined by our Board of Directors considering the
conditions then existing, including the Company's earnings, financial condition,
capital requirements, and other factors.
ITEM 2. LEGAL PROCEEDINGS
We are not engaged in any pending legal proceedings. We are not aware of any
legal proceedings pending, threatened or contemplated, against any of our
officers and directors, respectively, in their capacities as such.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
We selected Aaron Stein, C.P.A. as our independent auditor and accountant. We
have included our audited financial statements for the calendar years ended 1998
and 1999. We have made this filing in reliance upon the authority of that firm
as expert in auditing and accounting. There have been no changes in, nor have
there been disagreements with our independent auditors.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
We were incorporated on December 29, 1969 under the name Tyconda Minerals Corp.
In October of 1993, we changed our name to Hy-Poll Technology, Inc. ("Hy-Poll").
In August of 1995, Hy-Poll acquired all of the issued and outstanding shares of
the Company's Common Stock (the "Reorganization") in a tax-free, stock-for-stock
exchange under Section 351(a)1(B) of the Internal Revenue Code. Pursuant to the
terms of the Reorganization, Hy-Poll issued 10,000,000 shares of Hy-Poll common
stock for all the issued and outstanding shares of the Company's Common Stock.
This issuance was considered exempt under Section 4(2) of the Securities Act.
18
<PAGE> 19
In August of 1997, we issued 250,000 shares to Jean Lampert, Susan Lampert and
Michael H. Ference as compensation for legal services valued at $13,775.75. This
issuance was considered exempt under Section 4(2) of the Securities Act.
On May 7, 1997, we authorized the issuance of 1,336,000 shares of our Common
Stock to Robert Narozanick, sole shareholder of Athletic Surfaces International,
Inc. (ASI) for all of the issued and outstanding shares of ASI in a tax free
reorganization pursuant to Section 368(a)1(B) of the Internal Revenue Code. This
issuance was considered exempt under Section 4(2) of the Securities Act.
In June of 1997, Messrs DiGeronimo, Lombardi and Naraznick were issued 60,000
shares of our Common Stock in exchange for their installation services. This
issuances were considered exempt under Section 4(2) of the Securities Act.
In July of 1997, we issued 500,000 shares of our Common Stock to West Market
Industries, Inc. In exchange for financial and public relations services. This
issuance was considered exempt under Section 4(2) of the Securities Act.
In December of 1997, the holders of Convertible Debentures exercised the
conversion privilege as to a total for $150,000 in principal plus accrued
interest thereon, and we issued a total of 375,000 shares of our Common Stock.
These issuances were considered exempt by reason of Sections 3(a)(9) and 4(2) of
the Securities Act.
In March of 1998, we issued 7,500,000 shares of Common Stock to Messrs David
Dinallo, Perry DiPiaszza, Joseph Lombardi and Joseph DiGeronimo in lieu of
salary and for services rendered. We also issued 4,500,000 shares of Common
Stock to Nancy Murphy in two private placements; the first being 4,000,000
shares at a price of $0.01 per share, and the other 500,000 shares at a price of
$.02 per share. We consider these issuances to be exempt under Section 4(2) of
the Securities Act.
In April of 1998, we issued 100,000 shares of Common Stock to John B. Lowy, P.C.
in exchange for legal services and pursuant to a Rule 504 Offering under
Regulation D of the Securities Act. This issuance was considered exempt under
Section 3(b) of the Securities Act and Rule 504 of Regulation D promulgated
thereunder, as well as under Section 4(2) of the Securities Act.
In June of 1998, we offered 2,682,000 shares of Common Stock to 15 persons
pursuant to Rule 504 of Regulation D at an offering price of $.05 per share. The
total proceeds from the sale of those shares was $134,000. This issuance was
considered exempt under Section 3(b) of the Securities Act and Rule 504 of
Regulation D promulgated thereunder.
Also in June of 1998, we issued 175,000 shares of Common Stock to Marc Son and
Parallax Group, Inc. in exchange for services previously rendered, and 200,000
shares of Common Stock to Messrs. Andrew Governale and Frank Solimando is
settlement of a judgement against Universal Turf, Inc. in the amount of $22,672
plus interest thereon. These issuances were considered exempt under Section 4(2)
of the Securities Act.
In August of 1998, we issued 1,100,000 shares of Common Stock to certain persons
in settlement of a debt with MRG, Inc. (600,000) and for construction services
rendered by Bella Vista Industries (500,000). We consider these issuances to be
exempt under Section 4(2) of the Securities Act.
19
<PAGE> 20
Also in August of 1998, we offered 7,520,251 shares of Common Stock to 24
persons pursuant to Rule 504 of Regulation D, 1,170,000 at an offering price of
$.05 per share with proceeds of $58,500, and the remaining 6,350,251 shares in
exchange for services, broken down as follows: 333,333 shares in exchange for
legal services; 2,000,000 shares in exchange for consulting services, and
4,4,016,918 in settlement of various outstanding debts for services previously
rendered to the Company (the total issuance valued at $317,513, or $.05 per
share). This issuance was considered exempt under Section 3(b) of the Securities
Act and Rule 504 of Regulation D promulgated thereunder, as well as under
Section 4(2) of the Securities Act.
In October of 1998, an additional 144,000 shares were issued pursuant to Rule
504 of Regulation D is exchange for services (issuance valued at $7,200, or $.05
per share). This issuance was considered exempt by reasons of Rule 504 of
Regulation D, and under Section 4(2) of the Securities Act.
In December of 1998, 500,000 shares were issued to Joseph Lombardi in exchange
for services previously rendered as Director of Sales. This issuance was
considered exempt under Rule 701 of the Securities Act.
On November 3, 1999, the Board of Directors unanimously consented to reverse
spit our issued and outstanding stock on a 1 for 200 basis (1:200). The Board
decided to perform this stock split in anticipation of our then agreement with
Fortune Media, Inc.
In November of 1999, we issued 900,000 shares (post split) to 3 entities for
consulting services valued at $90,000,pursuant to a Rule 504 Offering, as
promulgated under Regulation D. These issuances were considered exempt under
Section 3(b) of the Securities Act and Rule 504 of Regulation D, as well as
under Section 4(2) of the Securities Act.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Delaware Corporation Law
Section 145 of the Delaware Laws (8 Del. C. 1953, Section 145; 56 Del. Laws, c.
50) contains provisions authorizing indemnification by the Company of directors,
officers, employees or agents against certain liabilities and expenses which
they may incur as directors, officers, employees or agents of the Company or of
certain other entities. Section 145(c) provides for mandatory indemnification,
including attorney's fees, if the director, officer, employee or agent has been
successful on the merits or otherwise in defense of any action, suit or
proceeding or in defense of any claim, issue or matter therein. Section 145(f)
provides that such indemnification may include payment by the Company of
expenses incurred in defending a civil or criminal action or proceeding in
advance of the final disposition of such action or proceeding upon receipt of an
undertaking by the person indemnified to repay such payment if he shall be
ultimately found not to be entitled to indemnification under the Section.
Indemnification may be provided even though the person to be indemnified is no
longer a director, officer, employee or agent of the Company or such other
entities. Section 145(g) authorizes the Company to obtain insurance on behalf of
any such director, officer employee or agent against liabilities, whether or not
the Company would have the power to indemnify such person against such
liabilities under section 145(g).
20
<PAGE> 21
Under Section 145(f) the indemnification and advancement of expenses provided
pursuant to Sections 145(e) and 145(i) are not exclusive, and subject to certain
conditions, the Company may make other or further indemnification or advancement
of expenses of any of its directors, officers, employees or agents. Because
neither the Articles of Incorporation, as amended, nor the By-Laws of our
Company otherwise provide, notwithstanding the failure of the Company to provide
indemnification and despite a contrary determination by the Board of Directors
or its shareholders in a specific case, a director, officer, employee or agent
of the Company who is or was a party to a proceeding may apply to a court of
competent jurisdiction for indemnification or advancement of expenses or both,
and the court may order indemnification and advancement of expenses, including
expenses incurred in seeking court-ordered indemnification or advancement of
expenses if it determines that the petitioner is entitled to mandatory
indemnification pursuant to Section 145(c) because he has been successful on the
merits, or because the Company has the power to indemnify on a discretionary
basis pursuant to Section 145(a) or because the court determines that the
petitioner is fairly and reasonably entitled indemnification or advancement of
expenses or both in view of all the relevant circumstances.
Articles of Incorporation and By-Laws
Our Articles of Incorporation and By-Laws empower us to indemnify current or
former directors, officers, employees or agents of the Company or persons
serving by request of the Company in such capacities in any other enterprise or
persons who have served by the request of the Company is such capacities in any
other enterprise to the full extent permitted by the laws of the State of
Delaware.
Officers and Directors Liability Insurance
At present, we do not maintain Officers and Directors Liability Insurance and,
because of the anticipated cost of such insurance, we have no present plans to
obtain such insurance.
Indemnity Agreements
In order to induce and encourage highly experienced capable persons to serve as
directors and officers, we have entered into an Indemnity Agreement with each
director and officer presently serving us and will provide the same agreement to
future directors and officers as well as certain agents and employees. The
Agreement provides that we shall indemnify the director and /or officer, or
other person, when he or she is a party to, or threatened to be made a party to,
a proceeding by, or in the name of, we. Expenses incurred by the indemnified
person in any proceeding are to be paid to the fullest extent permitted by
applicable law. The Agreement may at some time require us to pay out funds which
might otherwise be utilized to further our business objectives, thereby reducing
our ability to carry out our projected business plans.
Sec Position on Indemnification for Security Act Liability
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to directors, officers, and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that is the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933, as amended, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
21
<PAGE> 22
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suite
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933, as amended, and will be governed by the final adjudication of such
issue.
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.
Date: April 3, 2000
Universal Media Holdings, Inc.
/s/ James Neebling
-------------------------------------------
James Neebling, President
/s/ Michael Krome
-------------------------------------------
Michael Krome, Vice President, Secretary
/s/ James Zimbler
-------------------------------------------
James Zimbler, Chief Executive Officer
22
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
AUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
REPORT OF INDEPENDENT AUDITOR 1
FINANCIAL STATEMENTS
Balance Sheet 2
Statements of Operations 3
Statements of Stockholders' Equity 4
Statements of Cash Flows 5
NOTES TO THE FINANCIAL STATEMENTS 6
</TABLE>
<PAGE>
AARON STEIN
CERTIFIED PUBLIC ACCOUNTANT
REPORT OF INDEPENDENT AUDITOR
To the Board of directors and stockholders of Universal Media Holdings, Inc.
I have audited the accompanying balance sheet of Universal Media Holdings, Inc.
as of September 30, 1999, and the related statements of operations,
stockholders' equity, and cash flows for each of the two years ended September
30, 1999 and 1998. These financial statements are the responsibility of the
Corporation's management. My responsibility is to express an opinion of these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, such financial statements present fairly, in all material
respects, the financial position of Universal Media Holdings, Inc. as of
September 30, 1999 and the results of their operations and their cash flows for
each of the two years ended September 30, 1999 and 1998 in conformity with
generally accepted accounting principles.
/s/ AARON STEIN
------------
April 3, 2000
534 WILLOW AVENUE - PO BOX 315 - CEDARHURST, NY - 11516
PHONE: 516.569.0520
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
BALANCE SHEET
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,012
---------
$ 1,012
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 348,645
Accrued payroll taxes 19,465
------------
Total Current Liabilities $ 368,110
Stockholders' Equity
Preferred Stock, No par value
2,000,000 shares authorized, 0 shares issued -
Common stock, $.001 par value
200,000,000 shares authorized, 12,059,356 issued
and outstanding 12,059
Additional-paid-in-capital 2,007,679
Retained earnings (2,386,836)
------------
Total Stockholders' Equity (367,098)
---------
$ 1,012
=========
</TABLE>
The notes are an integral part of these financial statements.
2
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
1999 1998
---- ----
<S> <C> <C>
REVENUES EARNED $ 241,207 $ 1,753,096
COST OF REVENUES EARNED 337,680 1,735,786
------------ ------------
GROSS (LOSS) PROFIT (96,473) 17,310
GENERAL AND ADMINISTRATIVE EXPENSES 211,103 241,599
------------ ------------
OPERATING LOSS (307,576) (224,289)
OTHER EXPENSES
Interest expense (669) (2,091)
Loss on disposal of fixed assets (15,729)
------------ ------------
Total other expenses (16,398) (2,091)
------------ ------------
LOSS BEFORE PROVISION FOR
INCOME TAXES (323,974) (226,380)
INCOME TAX EXPENSE -- --
------------ ------------
NET LOSS $ (323,974) $ (226,380)
============ ============
EARNINGS PER SHARE
BASIC $ (0.03) $ (0.02)
============ ============
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
BASIC 12,059,356 12,059,356
============ ============
</TABLE>
The notes are an integral part of these financial statements.
3
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional-
Preferred Stock Common Stock Paid-in- Retained
Shares Amount Shares Amount Capital Earnings Total
------ ------ ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1997 - $ - 11,936,375 $ 2,112 $1,717,626 $(1,836,482) $(116,744)
Convertible debentures exercised - - 1,875 - - - -
Issuance of common stock - - 117,886 9,947 290,053 - 300,000
Net Loss - - - - - (226,380) (226,380)
--- ---- ----------- --------- ----------- ------------ ----------
Balance at September 30, 1998 - - 12,056,136 12,059 2,007,679 (2,062,862) (43,124)
Issuance of common stock - - 3,220 - - - -
Net Loss - - - - - (323,974) (323,974)
--- ---- ----------- --------- ----------- ------------ ----------
Balance at September 30, 1999 - $ - 12,059,356 $ 12,059 $2,007,679 $(2,386,836) $(367,098)
=== ==== =========== ========= =========== ============ ==========
</TABLE>
The notes are an integral part of these financial statements.
4
<PAGE> 29
UNIVERSAL MEDIA HOLDINGS, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
1999 1998
---- ----
<S> <C> <C>
NET LOSS $(323,974) $(226,380)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation and amortization 2,500 12,560
Loss on disposal of fixed assets 15,729
Changes in:
Accounts receivables 691,789 (691,789)
Other assets -- 16,350
Accounts payable and accrued expenses (300,832) 525,706
--------- ---------
Cash used in operating activities 85,212 (363,553)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in bank overdraft (84,200) 63,553
Proceeds from issuance of common stock 300,000
--------- ---------
Cash provided by financing activities (84,200) 363,553
--------- ---------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 1,012 --
CASH AND CASH EQUIVALENTS, beginning -- --
--------- ---------
CASH AND CASH EQUIVALENTS, ending $ 1,012 $ --
========= =========
ADDITIONAL SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION
Interest paid $ 669 $ 2,091
========= =========
Income taxes paid $ -- $ --
========= =========
</TABLE>
The notes are an integral part of these financial statements.
5
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION, NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Universal Media Holdings, Inc. ("the Company") was originally incorporated in
Delaware as Tyconda Minerals Corp. in December of, 1969. In February 1970, the
Company merged leaving Tyconda Minerals Corp. as the surviving corporation. In
November 1983 the Company filed a Certificate of Amendment to its Certificate of
Incorporation changing its corporate name to Hy-Poll Technology, Inc. That
amendment also changed the capital structure of the corporation from an
authorization to issue 5,000,000 shares of Common Stock with a par value of $.01
per share, to an authorization to issue 200,000,000 shares of Common Stock with
a par value of $.0001 per share.
In August of 1995, Hy-Poll acquired all of the issued and outstanding shares of
the Company's Common Stock. On December 21, 1995 the Company amended its
Certificate of Incorporation changing its corporate name to Universal Turf, Inc.
The Company then amended the name again on November 8, 1999, changing its
corporate name to Universal Media Holdings, Inc.
On February 14, 2000, the Company has recently entered into an agreement with
E-Trans Logistics, Inc. ("E-Trans"), formerly know as Gerard, under which
E-Trans became a wholly owned subsidiary of United Media Holdings, Inc.
NATURE OF OPERATIONS
As Universal Turf, Inc., the Company was based on the marketing, installation
and maintenance of synthetic surface material for sports and recreational fields
mainly in the Northeast section of the United States. The Company's business
plan now covers (i) the logistics field, which plans to be the major
concentration, (ii) the synthetic grass (turf) business, and (iii) certain areas
of the entertainment and Internet fields.
SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES IN FINANCIAL STATEMENTS - Management uses estimates and
assumptions in preparing these financial statements in accordance with generally
accepted accounting principles. Those estimates and assumptions affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities, and the reported revenues and expenses. Actual results could
vary from the estimates that were used.
CASH AND CASH EQUIVALENTS - For purposes of reporting cash flows, the Company
considers all cash accounts, which are not subject to withdrawal restrictions or
penalties, as cash and cash equivalents in the accompanying balance sheet.
6
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
ORGANIZATIONAL COSTS - Organizational costs are stated net of accumulated
amortization. Amortization is computed using the straight-line method over the
estimated useful lives of the assets. Total amortization in 1999 and 1998
totaled $2,500 and $500, respectively.
FIXED ASSETS - For assets sold or otherwise disposed of, the cost and related
accumulated depreciation are removed from the accounts and any related gain or
loss is reflected in income for the period. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets. Depreciation
in 1999 and 1998 totaled $0 and $12,060, respectively.
REVENUE AND COST RECOGNITION - Revenues for the years 1999 and 1998 are
generated mainly from the turf business, in which revenues are recognized as
product is delivered to the customers or installed for the customers, net of
applicable discounts and allowances. Revenues earned from services is recognized
ratably over the contractual period or as the services are performed.
ADVERTISING COSTS - Advertising costs are charged to operations when incurred.
Advertising expenses for 1999 and 1998 were $0 and $12,786, respectively.
INCOME TAXES - The provision for income taxes are computed based on the pretax
loss included in the Statement of Income. The asset and liability approach is
used to recognize deferred tax assets and liabilities for the expected future
tax consequences of temporary differences between the carrying amounts and the
tax bases of assets and liabilities.
EARNINGS PER COMMON SHARE - Basic loss per common share is computed using the
weighted average number of common shares outstanding during the year. Earnings
per share amounts have been adjusted for all years presented to reflect the
one-for-two hundred split of the Company's common shares effective November 3,
1999.
NOTE 2 - STOCKHOLDERS' EQUITY
STOCK SPLIT - On November 3, 1999, the Company consented to a one-for-two
hundred reverse stock split of its common stock. Stockholders' equity has been
restated to give retroactive recognition to the reverse stock split in prior
periods.
PREFERRED STOCK - 2,000,000 shares of Preferred Stock authorized are
undesignated as to preferences, privileges and restrictions. As the shares are
issued, the Board of Directors must establish a "series" of the shares to be
issued and designate the preferences, privileges and restrictions applicable to
that series. To date, the Board of Directors has not designated or issued any
series of Preferred Stock.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
Included in the accounts payable is approximately $80,500 which represent
judgements brought against the company. These judgements are related to unpaid
invoices.
7
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - SUBSEQUENT EVENT
On February 14, 2000, the Company entered into an agreement with E-Trans
Logistics, Inc. ("E-Trans"), a trucking, transport and logistics company, under
which E-Trans became a wholly owned subsidiary of Universal Media Holdings, Inc.
The new office is located at the E-Trans facility, where there are offices and a
warehouse. Sometime during the second quarter of 2000, the Company plans to
rename itself to E-Trans Logistics, Inc.
8
<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF TYCONDA MINERALS CORP.
<PAGE> 2
CERTIFICATE OF INCORPORATION
OF
TYCONDA MINERALS CORP.
First: The name of the corporation is TYCONDA MINERALS CORP.
Second: The address of its registered office in the State of
Delaware is No. 100 West Tenth Street, in the City of Wilmington, County of New
Castle. The name of its registered agent at such address is The Corporation
Trust Company.
Third: The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
Fourth: The total number of shares of capital stock which the
corporation shall have authority to issue is five million (5,000,000) shares of
common stock and the par value of each of such shares is One Cent ($.01).
Fifth: The name and mailing address of each incorporator is as
follows:
NAME MAILING ADDRESS
---- ---------------
B. J. Consono 100 West Tenth Street
Wilmington, Delaware
F. J. Obara, Jr. 100 West Tenth Street
Wilmington, Delaware
J. L. Rivera 100 West Tenth Street
Wilmington, Delaware
<PAGE> 3
Sixth: The name and mailing address of each person who is to serve as a
director until the first annual meeting of the stockholders or until a successor
is elected and qualified, is as follows:
NAME MAILING ADDRESS
---- ---------------
Martin B. Miller Suite 206 50 E. Wynnewood Road
Wynnewood, Pennsylvania 19096
Alan M. Moskowitz Suite 206 50 E. Wynnewood Road
Wynnewood, Pennsylvania 19096
Samuel Kleiman 10 Union Avenue
Bala Cynwyd, Pennsylvania 19004
Seventh: The Board of Directors shall have the power to make, alter or
repeal the By-Laws of the corporation.
Eighth: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them, and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or
<PAGE> 4
of the stockholders or class of stockholders of this corporation, as the case
may be, to be summoned in such manner as the said court directs. If a majority
in number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
Ninth: Elections of directors need not be by written ballot unless the
by-laws of this corporation shall so provide.
Tenth: The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
WE, THE UNDERSIGNED, being each of the incorporators named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this certificate, hereby declaring and certifying
that this is our act and deed and the facts herein stated are true, and
accordingly have hereunto set our hands this 24th day of December, 1969.
/s/ [ILLEGIBLE]
----------------------------
/s/ [ILLEGIBLE]
----------------------------
<PAGE> 5
State of Delaware )
) ss:
County of New Castle )
BE IT REMEMBERED that on this 24th day of December A.D. 19__, personally
came before me, a Notary Public for the State of Delaware, B. J. Consono, F. J.
Obara, Jr. and J. L. Rivera, all of the parties to the foregoing certificate of
incorporation, known to me personally to be such, and severally acknowledged the
said certificate to be the act and deed of the signers respectively that the
facts stated therein are true.
GIVEN under my hand and seal of office the day and year aforesaid.
/s/ G. Dana Atwill
-------------------------
Notary Public
[SEAL]
<PAGE> 1
EXHIBIT 3.2
AGREEMENT OF MERGER OF TYCONDA MINERALS
CORPORATION (NEVADA) WITH AND INTO
TYCONDA MINERALS (DELAWARE)
<PAGE> 2
AGREEMENT OF MERGER
AGREEMENT OF MERGER dated as of December 30, 1969 between TYCONDA MINERALS
CORPORATION, a Nevada corporation ("Tyconda"), and TYCONDA MINERALS CORP., a
Delaware corproation wholly-owned by Tyconda ("Tyconda (Delaware)"), (said
corporations being herein something collectively called the "Constituent
Corporations").
W I T N E S S E T H :
WHEREAS, Tyconda is a corporation duly organized and existing under the
laws of the state of Nevada having an authorized capital stock consisting solely
of 20,000,000 shares of Common Stock, par value $.25 per share, of which 395,288
shares are validly authorized, issued and outstanding; and
WHEREAS, Tyconda (Delaware) is a corporation duly organized and existing
under the laws of the state of Delaware, having an authorized capital stock
consisting solely of 5,000,000 shares of Common Stock, par value $.01 per share,
of which 100 shares are validly authorized, issued and outstanding and owned by
Tyconda; and
WHEREAS, the respective Boards of Directors of Tyconda and Tyconda
(Delaware) have determined that it is in the best interest of each corporation
and its stockholders that Tyconda be merged into Tyconda (Delaware) on the terms
and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, it is agreed that, in
accordance with the applicable laws of the States of Nevada and Delaware,
Tyconda shall be and hereby is, at the effective date of the merger, merged into
Tyconda (Delaware), which shall be the surviving corporation, and that the terms
and conditions of such merger and the mode of carrying it into effect shall be
as follows:
ARTICLE I
On the effective date of the merger, Tyconda shall be merged into Tyconda
(Delaware) (hereinafter sometimes referred to as the "Surviving Corporation"),
the separate existence of Tyconda shall cease and the Surviving Corporation
shall continue to exist as a corporation created and governed by the laws of the
State of Delaware and the Surviving Corporation shall possess all the rights,
privileges, powers and franchises, and shall be subject to all of the
liabilities, obligations, restrictions, disabilities
<PAGE> 3
and duties, of each of the Constituent Corporations; and all the property, real
and personal, including subscriptions to shares, causes of action and every
other asset of each of the Constituent Corporations shall be vested, or continue
to be vested, in the Surviving Corporation without further act or deed.
ARTICLE II
The Certificate of Incorporation of Tyconda (Delaware) as in effect
immediately prior to the effective date of the merger, shall be the Certificate
of Incorporation of the Surviving Corporation until the same shall thereafter be
amended in accordance with the provisions thereof and of applicable law.
ARTICLE III
At the effective date of the merger the By-Laws of Tyconda (Delaware)
shall be the By-Laws of the Surviving Corporation until the same shall
thereafter be altered, amended or repealed in accordance with law, the
Certificate of Incorporation and said By-Laws.
ARTICLE IV
1. The Directors of the Surviving Corporation shall be the Directors of
Tyconda (Delaware) at the effective date of the merger, each to hold office
until his successor has been elected and qualified.
2. The officers of the Surviving Corporation shall be the officers of
Tyconda (Delaware) at the effective date of the merger, each to hold office in
accordance with the By-Laws of the Surviving Corporation.
ARTICLE V
1. Each share of Common Stock, par value $.25 per share, of Tyconda
outstanding on the effective date of the merger and all rights in respect
thereof shall, by virtue of the merger and without any action on the part of the
holder thereof, be converted, forthwith upon the merger becoming effective, into
one share of Common Stock, par value $.01 per share, of the Surviving
Corporation which shall be full paid and non-assessable and free of any taxes,
liens, and claims up to the time of such conversion. Outstanding certificates
representing shares of Common Stock of Tyconda shall thenceforth represent the
same number of shares of Common Stock of the Surviving Corporation, and the
holder thereof shall be entitled to precisely the same rights which he would
enjoy if he held certificates issued by the Surviving Corporation. Each share
<PAGE> 4
of Common Stock of Tyconda held in its treasury, if any, on the effective date
of the merger shall be canceled.
2. Forthwith upon the merger becoming effective, the shares of Common
Stock, par value $.01, of Tyconda (Delaware) which shall be outstanding
immediately prior to the effective date of the merger shall be canceled and
retired, and no new shares of Common Stock or other securities of the Surviving
Corporation shall be issuable with respect thereto.
3. The Common Stock of Tyconda specified in paragraph 1 of this Article is
herein sometimes referred to as "Outstanding Tyconda Stock". The Common Stock of
the Surviving Corporation specified in paragraph 1 of this Article is
hereinafter sometimes referred to as "Tyconda (Delaware) Stock". As promptly as
practicable after the effective date of the merger, each holder of an
outstanding certificate or certificates theretofore representing shares of
"Outstanding Tyconda Stock" shall surrender the same to an agent or agents
designated by the Surviving Corporation, and such holder shall be entitled upon
such surrender to receive in exchange therefor a certificate or certificates
representing the number of whole shares of Tyconda (Delaware) Stock into which
the shares of "Outstanding Tyconda Stock" theretofore represented by the
certificate or certificates so surrendered shall have been exchanged and
converted as aforesaid. Dividends payable after the effective date to holders of
record in respect of such shares of Tyconda (Delaware) Stock shall not be paid
to holders of such certificates until such certificates are surrendered for
exchange as aforesaid.
4. In the event any certificates formerly representing shares of
Outstanding Tyconda Stock are not surrendered for exchange as provided in
paragraph 3 of this Article at the time of the first public offering of
securities of the Surviving Corporation occurring more than two years after the
effective date, the Surviving Corporation, as agent for the holders of the
shares represented by such unsurrendered certificates, shall sell the shares of
Tyconda (Delaware) Stock which would have been delivered in exchange for such
unsurrendered certificates formerly representing Outstanding Tyconda Stock and
shall hold the net proceeds of such sale for the holders of such unsurrendered
outstanding certificates to be paid to them upon the surrender of such
outstanding certificates. From and after such sale the sole right of the holders
of the unsurrendered outstanding certificates shall be the right to collect the
net sales proceeds, without interest, held for their account.
5. In the event that Tyconda shall be obligated by contract immediately
prior to the effective date of issue any shares of Oustanding Tyconda Stock, the
Surviving Corporation shall be obligated to deliver Tyconda (Delaware) Stock as
set forth in paragraph 1 hereof in lieu of each share of Outstanding Tyconda
Stock.
ARTICLE VI
For accounting purposes, the merger shall be treated as a "pooling of
interests".
-3-
<PAGE> 5
ARTICLE VII
This Agreement of Merger shall be submitted to the stockholders of each of
the Constituent Corporations as provided by the applicable laws of the States of
Nevada and Delaware. If this Agreement of Merger is duly adopted by the
requisite votes of such stockholders and is not terminated or abandoned as
contemplated by the provisions of Article VIII hereof, as soon as practicable
thereafter this Agreement of Merger, certified executed and acknowledged in
compliance with the provisions of applicable law, shall be filed and recorded in
all such offices, and all such other actions shall be taken with respect
thereto, as may be required under the applicable laws of Nevada and Delaware to
cause this Agreement of Merger to become effective.
The merger shall become effective immediately prior to the close of
business on the day on which this Agreement of Merger is filed with the
Secretary of State of Delaware, herein sometimes referred to as the "effective
date of the merger." The Constituent Corporations shall do all such acts and
things as shall be necessary or desirable in order to effectuate the merger.
ARTICLE VIII
This Agreement of Merger may be terminated at any time before or after
adoption thereof by the stockholders of Tyconda or Tyconda (Delaware) or both,
but not later than the effective date of the merger, by the mutual consent of
the Boards of Directors of the Constituent Corporation, expressed in an
instrument in writing executed by the President of each corporation. This
Agreement of Merger may be amended or modified at any time prior to the
effective date of the merger by resolutions of the Boards of Directors of
Tyconda and Tyconda (Delaware), or by officers authorized by such Boards, at any
time before or after adoption thereof by the stockholders of Tyconda or Tyconda
(Delaware) or both; provided, however, that no such amendment or modification
shall affect the rights of the stockholders of Tyconda or Tyconda (Delaware) in
a manner which is materially adverse to such stockholders in the judgment of the
respective Boards of Directors.
ARTICLE IX
From time to time as and when requested by the Surviving Corporation or by
its successors or assigns, the proper officers and directors of Tyconda shall
execute and deliver any and all deeds and other instruments and shall take or
cause to be taken all such other and further actions as the Surviving
Corporation may deem necessary or appropriate in order more fully to invest in
and confirm to the Surviving Corporation title to and possession of all the
property, rights, privileges, powers and franchises of Tyconda on the effective
date of the merger and otherwise to carry out the provisions hereof.
-4-
<PAGE> 6
ARTICLE X
This Agreement of Merger is signed by the directors of Tyconda, or a
majority of them, and by the directors of Tyconda (Delaware), or a majority of
them, in their capacity as directors of their respective corporations in order
to comply with the requirements of the Nevada General Corporation Law (Nevada
Revised Statutes, 1957, $ 78.455). By executing this Agreement no director of
either corporation undertakes, either as an individual or otherwise, any
obligation or liability which is not imposed upon him as a director of a merging
corporation by the aforesaid statute.
ARTICLE XI
The Surviving Corporation may be served with process in the State of
Nevada in any proceeding for enforcement of any obligation of Tyconda, including
any amount fixed by appraisers or the district court pursuant to the provisions
of Section 510 of the Nevada General Corporation Law; and it does hereby
irrevocably appoint the Secretary of State of Nevada as its agent to accept
service of process in any action for the enforcement of payment of any such
obligation or any such amount fixed by appraisers. The address to which a copy
of such process shall be mailed by the Secretary of State of Nevada to the
Surviving Corporation is Suite 206 50 E. Wynnewood Road, Wynnewood, Pennsylvania
19096, until the Surviving Corporation shall have hereafter designated in
writing to the said Secretary of State a different address for such purpose.
Service of such process may be made by personally delivering to and leaving with
the Secretary of State of Nevada duplicate copies of such process, one of which
copies the Secretary of State of Nevada shall forthwith send by registered mail
to say Buyer at the above address.
ARTICLE XII
This Agreement of Merger may be executed in counterparts, each of which
when so executed shall be deemed to be an original, and such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, each of the Constituent Corporations has caused this
Agreement of Merger to be executed by its President
-5-
<PAGE> 7
and a majority of its directors, attested by its Secretary and its corporate
seal affixed.
TYCONDA MINERALS CORPORATION
[Seal] By /s/ [Illegible]
-----------------------------------
Attest: President
/s/ [Illegible] /s/ Martin B. Miller
- --------------------------- -------------------------------------
Secretary Martin B. Miller, as Director
/s/ Alan M. Moskowitz
-------------------------------------
Alan M. Moskowitz, as Director
/s/ Samuel Kleinman
-------------------------------------
Samuel Kleiman, as Director
TYCONDA MINERS CORP.
[Seal] By /s/ [Illegible]
-----------------------------------
Attest: President
/s/ [Illegible] /s/ Martin B. Miller
- --------------------------- -------------------------------------
Secretary Martin B. Miller, as Director
/s/ Alan M. Moskowitz
-------------------------------------
Alan M. Moskowitz, as Director
/s/ Samuel Kleinman
-------------------------------------
Samuel Kleiman, as Director
<PAGE> 8
THE ABOVE AGREEMENT OF MERGER OF TYCONDA MINERALS CORPORATION WITH AND
INTO TYCONDA MINERALS CORP., having been executed on behalf of each corporate
party thereto in accordance with the provisions of the General Corporation Law
of the State of Delaware and the General Corporation Law of the State of Nevada,
the President of each corporate party thereto does now hereby execute the said
Agreement of Merger and the Secretary of each corporate party attests thereto,
under the corporate seals of the respective corporations, by authority of the
Directors and Stockholders thereof as the respective act, deed and agreement of
each of said corporations on this 11th day of February, 1970.
TYCONDA MINERALS CORP.
By /s/ Alan M. Moskowitz
-----------------------------------
President
/s/ [Illegible]
CORPORATE SEAL -----------------------------------
Secretary
TYCONDA MINERALS CORPORATION
By /s/ Alan M. Moskowitz
-----------------------------------
President
/s/ [Illegible]
CORPORATE SEAL -----------------------------------
Secretary
<PAGE> 1
EXHIBIT 3.3
CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF INCORPORATION OF
TYCONDA MINERALS CORP. CHANGING CORPORATE
NAME TO HY-POLL TECHNOLOGY, INC.
<PAGE> 2
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
TYCONDA MINERALS CORP.
Pursuant to the applicable provisions of the Delaware Business
Corporations act, the undersigned corporation adopts the following Certificate
of Amendment to its Certificate of Incorporation by stating the following:
1. The present name of the corporation is Tyconda Minerals Corp.
2. The following amendments to its Certificate of Incorporation were
adopted by the shareholders of the corporation on October 10, 1983, in the
manner prescribed by Delaware law.
3. Certain provisions of the Certificate of Incorporation are amended as
follows:
FIRST: The name of the corporation is Hy-Poll Technology, Inc.
FOURTH: The total number of shares of capital stock which the corporation
shall have authority to issue is 200,000,000 shares of voting common stock and
the par value of each such share is $.0001.
4. The number of shares of the Corporation outstanding at the time of the
adoption of said amendment was 2,765,288 and the number of shares [ILLEGIBLE]
2,765,288.
5. The number of shares voted for such amendments was 1,870,000 and the
number voted against such amendments was -0-.
DATED this [ILLEGIBLE] day of May, 1983.
<PAGE> 3
Attest: TYCONDA MINERALS CORP.
/s/ [Illegible] By: /s/ [Illegible]
- --------------------------- ----------------------------
Secretary President
STATE OF NEW JERSEY )
) ss.
COUNTY OF CAMDEN )
Before me the undersigned Notary Public in and for the said County and
State, personally appeared the President and Secretary of Tyconda Minerals
Corp., a Delaware corporation, known to me personally to be such, and signed the
foregoing Certificate of Amendment as their own free and voluntary act and deed
pursuant to a corporate resolution for the uses and purposes set forth and
acknowledge the said Certificate to be the act and deed of the signers
respectively and that the facts stated therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 28th day of
October, 1983.
My Commission Expires: /s/ [ILLEGIBLE]
---------------------------------------
[Notary Seal] NOTARY PUBLIC, residing at
[Illegible]
---------------------------------------
CERTIFICATION
STATE OF NEW JERSEY )
) ss.
COUNTY OF CAMDEN )
The undersigned being first duly sworn, deposes and states that she is the
Secretary of Tyconda Minerals Corp., that she has
-2-
<PAGE> 4
read the Articles of Amendment and knows the contents thereof and that the same
contains a truthful statement of the amendment duly adopted by the stockholders
of the Corporation on October 10, 1983, and that these amendments have been duly
adopted in accordance with Sectin 242 (as amended) of the Delaware Business
Corporation Act.
/s/ [ILLEGIBLE]
---------------------
Secretary
<PAGE> 1
EXHIBIT 3.5
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION CHANGING CORPORATE
NAME TO UNIVERSAL TURF, INC.
<PAGE> 2
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
HY-POLL TECHNOLOGY, INC. a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of HY-POLL TECHNOLOGY, INC.
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that the Certificate of Incorporation of this corporation be amended
by changing the Article thereof numbered "FIRST" so that, as amended, said
Article shall be and read as follows:
THE NAME OF THE CORPORATION IS UNIVERSAL TURF, INC.
SECOND: That thereafter, pursuant to resolution of its Board of Directors, a
special meeting of the stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware at which [ILLEGIBLE] the necessary number of shares as
required by statute were voted in favor of the amendment.
THIRD: The said amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
FOURTH: That the capital of said corporation shall not be reduced under or by
reason of said amendment.
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09.01 ON 09/22/1996
950217704-736113
<PAGE> 1
EXHIBIT 3.6
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION CHANGING CORPORATE
NAME TO UNIVERSAL MEDIA HOLDINGS, INC.
<PAGE> 1
EXHIBIT 3.7
BY-LAWS
OF
UNIVERSAL TURF, INC.
(A Delaware Corporation)
ARTICLE I
Officer and Agents
Section 1.1. Registered Office. The corporation shall have and maintain in
the State of Delaware a registered office which may, but need not be, the same
as its place of business.
Section 1.2. Other Offices. The corporation may also have offices and
places of business at such places within or without the State of Delaware as the
Board of Directors may from time to time determine or the business of the
corporation may require.
Section 1.3. Registered Agent. The corporation shall have and maintain in
the State of Delaware a registered agent, which agent may be either an
individual resident in the State of Delaware whose business office is identical
with the corporation's registered office, or a Delaware corporation (which may
be itself) or a foreign corporation authorized to transact business in the State
of Delaware, having a business office identical with such registered office.
ARTICLE II
Stock and Stockholders
Section 2.1. Certificates Representing Stock. Every holder of stock in the
corporation shall be entitled to have a certificate signed by, or in the name
of, the corporation by the Chairman or Vice-Chairman of the Board or by the
President or Executive Vice-President and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of the corporation,
certifying the number of shares owned by him in the corporation. The
certificates for shares of stock of the corporation shall be in such form as
shall be determined by the Board of Directors, shall have set forth thereon any
statements prescribed by statute, and shall be numbered and entered in the stock
ledger of the corporation as they are issued. Any and all signatures on any such
certificate may be facsimiles. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
<PAGE> 2
Section 2.2. Lost Certificates. The Board of Directors may direct that a
new share certificate be issued in place of any certificate theretofore issued
by the corporation which has been mutilated or which is alleged to have been
lost, stolen or destroyed, upon presentation of each such mutilated certificate
or the making by the person claiming any such certificate to have been lost,
stolen or destroyed of an affidavit as to the fact and circumstance of the loss,
theft or destruction thereof, or complying with such other procedures as may be
established by the Board of Directors. The Board of Directors, in its discretion
and as a condition precedent to the issuance of any new certificate, may require
the owner of any certificate alleged to have been lost, stolen or destroyed, or
his legal representative, to furnish the corporation with a bond, in such sum
and with such surety or sureties as it may direct, as indemnity against any
claim that may be made against the corporation on account of the alleged loss,
theft or destruction of such certificate or the issuance of such new
certificate.
Section 2.3. Fractions of Shares. The corporation may, but shall not be
required to, issue fractions of a share. If the corporation does not issue
fractions of a share, it shall (1) arrange for the disposition of fractional
interests by those entitled thereto, (2) pay in cash the fair value of fractions
of a share as of the time when those entitled to receive such fractions are
determined, or (3) issue scrip or warrants in registered or bearer form which
shall entitle the holder to receive a certificate for a full share upon the
surrender of such scrip or warrants aggregating a full share. A certificate for
a fractional share shall, but scrip or warrants shall not unless, otherwise
provided therein, entitle the holder to exercise voting rights, to receive
dividends thereon, and to participate in any of the assets of the corporation in
the event of liquidation. The Board of Directors may cause scrip or warrants to
be issued subject to the conditions that they shall become void if not exchanged
for certificates representing full shares before a specified date, or subject to
the conditions that the shares for which scrip or warrants are exchangeable may
be sold by the corporation and the proceeds thereof distributed to the holders
of scrip or warrants, or subject to any other conditions with the Board of
Directors may impose.
Section 2.4. Stock Transfers. Upon compliance with provisions restricting
the transfer or registration of transfer of shares of stock, if any, transfers
or registration of transfers of shares of stock of the corporation shall be made
only on the stock ledger of the corporation by the registered holder thereof, or
by his attorney thereunto authorized by power of attorney duly executed and
filed with the Secretary of the corporation or with a transfer agent or a
registrar, if any, and on surrender of the certificate or certificates for such
shares of stock properly endorsed and the payment of all taxes due thereon.
Section 2.5. Record Date. For the purpose of determining the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or the allotment of any rights, or entitled to exercise any rights
in respect of any change, conversion, or exchange of stock or for the purpose of
any other lawful action, the Board of Directors may fix in advance, a record
date, which shall not be more than sixty (60) days nor less than ten (10) days
before the date of such meeting, nor more than sixty(60) days prior to any other
action. If no record date is fixed, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at
<PAGE> 3
CERTIFICATE of AMENDMENT of
CERTIFICATE of INCORPORATION of
UNIVERSAL TURF, INC.
Pursuant to ss. 242 of the General Corporation Law of the State of Delaware
The undersigned, pursuant to the provisions of the General Corporation Law
of the State of Delaware, do hereby certify and set forth as follows:
FIRST: That at a meeting of the Board of Directors of Universal Turf, Inc.
(the "Corporation"), the following resolutions were duly adopted setting forth a
proposed amendment of the Certificate of Incorporation of said corporation,
declaring said amendment to be advisable:
RESOLVED, that the Board of Directors hereby declares it advisable
and in the best interests of the Company that Article FIRST of the
Certificate of Incorporation be amended to read as follows:
"FIRST: The name of the Corporation shall be, UNIVERSAL MEDIA
HOLDINGS, INC."
SECOND: That the said amendment has been consented to and authorized by
the holders of a majority of the issued and outstanding stock entitled to vote
by written consent in accordance with the provisions of Section 228 of the
General Corporation Law of the State of Delaware.
THIRD: That the aforesaid amendment was duly adopted with the applicable
provisions of Section 242 and 228 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said corporation has caused this Certificate to be
signed by James W. Zimbler, this [ILLEGIBLE] Day of November, A.D., 1999.
/s/ James W. Zimbler
-------------------------------------
James W. Zimbler
Authorized Officer
STATE OF DELAWARE
SECRETARY OF STATE
[ILLEGIBLE] DIVISION OF CORPORATIONS
FILED 09:01 AM 11/10/1999
991535640 - 0738110
<PAGE> 1
EXHIBIT 10.1
INDEMNITY AGREEMENT
WITH MICHAEL KROME
<PAGE> 2
INDEMNITY AGREEMENT
This Indemnity Agreement ("Agreement") is made as of April 3, 2000, by
and between Universal Media Holdings, Inc., a Delaware corporation ("Company"),
and Michael Krome ("Indemnitee"), a director and/or officer or key executive,
employee or consultant of the Company, or a person serving at the request of the
Company as a director, officer, employee or agent of another enterprise.
RECITALS
A. The Indemnitee is currently serving or has agreed to serve as a
director and/or officer of the Company and in such capacity has rendered and/or
will render valuable services to the Company.
B. The Company has investigated the availability and sufficiency of
liability insurance and applicable statutory indemnification provisions to
provide its directors and officers with adequate protection against various
legal risks and potential liabilities to which such individuals are subject due
to their positions with the Company and has concluded that such insurance may be
unavailable or too costly, and even if purchased it, and the statutory
provisions, may provide inadequate and unacceptable protection to certain
individuals requested to serve as its directors and/or officers.
C. It is essential to the Company that it attract and retain as
officers and directors the most capable persons available and in order to induce
and encourage highly experienced and capable persons such as the Indemnitee to
serve or continue to serve as a director and/or officer of the Company, the
Board of Directors has determined, after due consideration and investigation of
the terms and provisions of the Agreement and the various other options
available to the Company and the Indemnitee in lieu hereof, that this Agreement
is not only reasonable and prudent but necessary to promote and ensure the best
interests of the Company and its stockholders.
NOW, THEREFORE, in consideration of the services or continued services
of the Indemnitee and in order to induce the Indemnitee to serve or continue to
serve as director and/or officer, the Company and the Indemnitee do hereby agree
as follows:
1
<PAGE> 3
1. Definitions. As used in this Agreement:
(a) The term "Proceeding" shall include any threatened,
pending or completed inquiry, hearing, investigation, action, suit, arbitration
or other alternative dispute resolution mechanism or proceeding, formal or
informal, whether brought in the name of the Company or otherwise and whether of
a civil, criminal or administrative or investigative nature, by reason of the
fact that the Indemnitee is or was a director and/or officer of the Company, or
is or was serving at the request of the Company as a director, officer, employee
or agent of another enterprise, whether or not he/she is serving in such
capacity at the time any liability or expense is incurred for which
indemnification or reimbursement is to be provided under this Agreement.
(b) The term "Expenses" includes, without limitation:
attorneys' fees, costs, disbursements and retainers; accounting and witness
fees; fees of experts; travel and deposition costs; transcript costs, filing
fees, telephone charges, postage, copying costs, delivery service fees and other
expenses and obligations of any nature whatsoever paid or incurred in connection
with any investigations, judicial or administrative proceedings and appeals,
amounts paid in settlement by or on behalf of Indemnitee, and any expenses of
establishing a right to indemnification, pursuant to this Agreement or
otherwise, including reasonable compensation for time spent by the Indemnitee in
connection with the investigation, defense or appeal of a Proceeding or action
for indemnification for which he/she is not otherwise compensated by the Company
or any third party. The term "Expenses" does not include the amount of
judgments, fines, penalties or ERISA excise taxes actually levied against the
Indemnitee.
2. Agreement to Serve. The Indemnitee agrees to serve or to continue to
serve as a director and/or officer of the Company for so long as he/she is duly
elected or appointed or until such time as he/she tenders his/her resignation in
writing or is removed as a director and/or officer. However, nothing contained
in this Agreement shall be construed as giving Indemnitee any right to be
retained in the employ of the Company, any subsidiary or any other person.
3. Indemnification in Third Party Actions. The Company shall indemnify
the Indemnitee if the Indemnitee is a party to or threatened to be made a party
to or is otherwise involved in any Proceeding (other that a Proceeding by or in
the name of the Company to procure a judgment in its favor), by reason of the
fact that the Indemnitee is or was a director
2
<PAGE> 4
and/or officer of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another enterprise, against
all Expenses, judgments, fines, penalties and ERISA excise taxes actually and
reasonably incurred by the Indemnitee in connection with the defense or
settlement of such a Proceeding, to the fullest extent permitted by applicable
corporate law and the Company's Articles of Incorporation; provided that any
settlement of a Proceeding be approved in writing by the Company.
4. Indemnification in Proceedings by or In the Name of the Company. The
Company shall indemnify the Indemnitee if the Indemnitee is a party to or
threatened to be made a party to or is otherwise involved in any Proceeding by
or in the name of the Company to procure a judgment in its favor by reason of
the fact that the Indemnitee was or is a director and/or officer of the Company,
or is or was serving at the request of the Company as a director, officer,
employee or agent of another enterprise, against all Expenses, judgments, fines
penalties and ERISA excise taxes actually and reasonably incurred by the
Indemnitee in connection with the defense or settlement of such a Proceeding, to
the fullest extent permitted by applicable corporate law and the Company's
Articles of Incorporation.
5. Conclusive Presumption Regarding Standards of Conduct. The
Indemnitee shall be conclusively presumed to have met the relevant standards of
conduct, if any, as defined by applicable corporate law, for indemnification
pursuant to this Agreement, unless a determination is made that the Indemnitee
has not met such standards (i) by the Board of Directors by a majority vote of a
quorum thereof consisting of directors who were not parties to the Proceeding
due to which a claim is made under this Agreement, (ii) by the shareholders of
the Company by majority vote of a quorum thereof consisting of shareholders who
are not parties to the Proceeding due to which a claim is made under this
Agreement, (iii) in a written opinion by independent counsel, selection of whom
has been approved by the Indemnitee in writing, or (iv) by a court of competent
jurisdiction.
6. Indemnification of Expenses of Successful Party. Notwithstanding any
other provision of the Agreement, to the extent that the Indemnitee has been
successful in defense of any Proceeding or in defense of any claim, issue or
matter therein, on the merits or otherwise,
3
<PAGE> 5
including the dismissal of a Proceeding without prejudice or the settlement of a
Proceeding without an admission of liability, the Indemnitee shall be
indemnified against all Expenses incurred in connection therewith to the fullest
extent permitted by applicable corporate law.
7. Advances of Expenses. The Expenses incurred by the Indemnitee in any
Proceeding shall be paid promptly by the Company in advance of the final
disposition of the Proceeding at the written request of the Indemnitee to the
fullest extent permitted by applicable corporate law; provided that the
Indemnitee shall undertake in writing to repay any advances if it is ultimately
determined that the Indemnitee is not entitled to indemnification.
8. Partial Indemnification. If the Indemnitee is entitled under any
provision of the Agreement to indemnification by the Company for a portion of
the Expenses, judgments, fines, penalties or ERISA excise taxes actually and
reasonably incurred by him/her in the investigation, defense, appeal or
settlement of any Proceeding but not, however, for the total amount of his/her
Expenses, judgments, fines, penalties or ERISA excise taxes, the Company shall
nevertheless indemnify the Indemnitee for the portion of Expenses, judgments,
fines, penalties or ERISA excise taxes to which the Indemnitee is entitled.
9. Indemnification Procedure; Determination of Right to
Indemnification.
(a) Promptly after receipt by the Indemnitee of notice of the
commencement of any Proceeding, the Indemnitee shall, if a claim in respect
thereof is to be made against the Company under this Agreement, notify the
Company of the commencement thereof in writing. The omission to so notify the
Company, however, shall not relieve it from any liability which it may have to
the Indemnitee otherwise than under this Agreement.
(b) If a claim for indemnification or advances under this
Agreement is not paid by the Company within thirty (30) days of receipt of
written notice, the rights provided by this Agreement shall be enforceable by
the Indemnitee in any court of competent jurisdiction. The burden of proving by
clear and convincing evidence that indemnification or advances are not
appropriate shall be on the Company. Neither the failure of the directors or
stockholders of the Company or its independent legal counsel to have made a
determination prior to the commencement of such action that indemnification or
advances are proper in the circumstances
4
<PAGE> 6
because the Indemnitee has met the applicable standard of conduct, if any, nor
an actual determination by the directors or shareholders of the Company or
independent legal counsel that the Indemnitee has not met the applicable
standard of conduct, shall be a defense to the action or create a presumption
for the purpose of an action that the Indemnitee has not been the applicable
standard of conduct.
(c) The Indemnitee's Expenses incurred in connection with any
Proceeding concerning his/her right to indemnification or advances in whole or
part pursuant to this Agreement shall also be indemnified by the Company
regardless of the outcome of such Proceeding.
(d) With respect to any Proceeding for which indemnification
is requested, the Company will be entitled to participate therein at its own
expense and, except as otherwise provided below, to the extent that it may wish,
the Company may assume the defense thereof, with counsel satisfactory to the
Indemnitee. After notice from the Company to the Indemnitee of its election to
assume the defense of a Proceeding, the Company will not be liable to the
Indemnitee for any Expenses subsequently incurred by the Indemnitee in
connection with the defense thereof, other than as provided below. The Company
shall not settle any Proceeding in any manner which would impose any penalty or
limitation on the Indemnitee without the Indemnitee's written consent. The
Indemnitee shall have the right to employee his/her counsel in any Proceeding,
but the fees and expenses of such counsel incurred after notice from the Company
of its assumption of the defense of the Proceeding shall be at the expense of
the Indemnitee, unless (i) the employment of counsel by the Indemnitee has been
authorized by the Company, (ii) the Indemnitee shall have reasonably concluded
that there may be a conflict of interest between the Company and the Indemnitee
in the conduct of the defense of a Proceeding, in each of which cases the fees
and expenses of the Indemnitee's counsel shall be advances by the Company. The
Company shall not be entitled to assume the defense of any Proceeding brought by
or on behalf of the Company or as to which the Indemnitee has concluded that
there may be a conflict of interest between the Company and the Indemnitee.
10. Limitations on Indemnification. No payments pursuant to this
Agreement shall be made by the Company:
(a) To indemnify or advance funds to the Indemnitee expenses
with respect to
5
<PAGE> 7
Proceeding initiated or brought voluntarily by the Indemnitee and not by way of
defense, except with respect to Proceedings brought to establish or enforce a
right to indemnification under this Agreement or any other statute or law or
otherwise as required under applicable corporate law, but such indemnification
or advancement of expenses may be provided by the Company in specific cases if
the Board of Directors finds it to be appropriate;
(b) To indemnify the Indemnitee for any Expenses, judgment,
fines, penalties or ERISA excise taxes sustained in any Proceeding for which
payment is actually made to the Indemnitee under a valid and collectible
insurance policy, except in respect of any excess beyond the amount of payment
under such insurance;
(c) To indemnify the Indemnitee for any Expenses, judgment,
fines, and/or penalties sustained in any Proceeding for an accounting of profits
made from the purchase or sale by the Indemnitee of securities of the Company
pursuant to the provisions of Section 16(b) of the Securities Exchange Act of
1934, the rules and regulations promulgated thereunder and amendments thereto or
similar provisions of any federal, state or local statutory law; and
(d) If a court of competent jurisdiction finally determines
that any indemnification hereunder is unlawful.
11. Maintenance of Liability Insurance.
(a) The Company hereby covenants and agrees that, as long as
the Indemnitee continues to serve as a director and/or officer of the Company
and thereafter as long as the Indemnitee may be subject to any possible
Proceeding, the Company, subject to subsection (c), shall promptly obtain and
maintain in full force and effect directors' and officers' liability insurance
("D&O Insurance") in reasonable amounts from established and reputable insurers.
(b) In all D&O insurance policies, the Indemnitee shall be
named as an insured in such a manner as to provide the Indemnitee the same
rights and benefits as are accorded to the most favorably insured of the
Company's directors and/or officers.
(c) Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain D&O Insurance if the Company determines, in its
sole discretion, that such insurance is not reasonably available, the premium
costs for such insurance is so limited by exclusions that it provides an
insufficient benefit, or the Indemnitee is covered by similar insurance
maintained by a subsidiary of the Company.
6
<PAGE> 8
12. Indemnification Hereunder Not Exclusive. The indemnification
provided by this Agreement shall not be deemed exclusive of any other rights to
which the Indemnitee may be entitled under the Articles of Incorporation,
Bylaws, any agreement, vote of shareholders or disinterested directors,
provision of applicable corporate law, or otherwise, both as to action in
his/her official capacity and as to action in another capacity on behalf of the
Company while holding such office.
13. Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of the Indemnitee and his/her heirs, executors,
administrators and assigns, whether or not Indemnitee has ceased to be a
director or officer, and the Company and its successors and assigns.
14. Severability. Each and every paragraph, sentence, term and
provision hereof is separate and distinct so that if any paragraph, sentence,
term or provision hereof shall be held to be invalid or unenforceable for any
reason, such invalidity or unenforceability shall not affect the validity or
enforceability of any other paragraph, sentence, term or provision hereof. To
the extent required, any paragraph, sentence, term or provision of this
Agreement shall be modified by a court of competent jurisdiction to preserve its
validity and to provide the Indemnitee with the broadest possible
indemnification permitted under applicable corporate law.
15. Savings Clause. If this Agreement or any paragraph, sentence, term
or provision hereof is invalidated on any ground by any court of competent
jurisdiction, the Company shall nevertheless indemnify the Indemnitee as to any
Expenses, judgments, fines, penalties for ERISA excise taxes incurred with
respect to any Proceeding to the full extent permitted by any applicable
paragraph, sentence, term or provision of this Agreement that has not been
invalidated or by any other applicable provision of applicable corporate law.
16. Interpretation; Governing Law. This Agreement shall be construed as
a whole and in accordance with its fair meaning. Headings are for convenience
only and shall not be used in construing meaning. This Agreement shall be
governed and interpreted in accordance with the laws of the State of Delaware.
17. Amendments. No amendment, waiver, modification, termination or
cancellation of this
7
<PAGE> 9
Agreement shall be effective unless in writing signed by the party against whom
enforcement is sought. The indemnification rights afforded to the Indemnitee
hereby are contract rights and may not be diminished, eliminated or otherwise
affected by amendments to the Articles of Incorporation, Bylaws, or by other
agreements, including D&O Insurance policies.
18. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
party and delivered to the other.
19. Notices. Any notice required to be given under this Agreement shall
be directed:
TO: Universal Media Holdings. INc.
10 Industrial Road
Carlstadt, NJ 07726
With a copy to:
Andrea Cataneo, Esq.
12 South Third Avenue
Mine Hill, NJ 07803
TO: Michael Krome
8 Teak Court
Lake Grove, NY 11755
or to such other address as either shall designate in writing.
IN WITNESS WHEREOF, the parties have executed this Indemnity Agreement
as of the date first written above.
INDEMNITEE: /s/ Michael Krome
------------------
Michael Krome
Universal Media Holdings, Inc.
By: /s/ James Neebling
-------------------------
James Neebling, President
8
<PAGE> 1
EXHIBIT 10.2
INDEMNITY AGREEMENT WITH
JAMES NEEBLING
<PAGE> 2
INDEMNITY AGREEMENT
This Indemnity Agreement ("Agreement") is made as of April 3, 2000, by
and between Universal Media Holdings, Inc., a Delaware corporation ("Company"),
and James Neebling ("Indemnitee"), a director and/or officer or key executive,
employee or consultant of the Company, or a person serving at the request of the
Company as a director, officer, employee or agent of another enterprise.
RECITALS
A. The Indemnitee is currently serving or has agreed to serve as a
director and/or officer of the Company and in such capacity has rendered and/or
will render valuable services to the Company.
B. The Company has investigated the availability and sufficiency of
liability insurance and applicable statutory indemnification provisions to
provide its directors and officers with adequate protection against various
legal risks and potential liabilities to which such individuals are subject due
to their positions with the Company and has concluded that such insurance may be
unavailable or too costly, and even if purchased it, and the statutory
provisions, may provide inadequate and unacceptable protection to certain
individuals requested to serve as its directors and/or officers.
C. It is essential to the Company that it attract and retain as
officers and directors the most capable persons available and in order to induce
and encourage highly experienced and capable persons such as the Indemnitee to
serve or continue to serve as a director and/or officer of the Company, the
Board of Directors has determined, after due consideration and investigation of
the terms and provisions of the Agreement and the various other options
available to the Company and the Indemnitee in lieu hereof, that this Agreement
is not only reasonable and prudent but necessary to promote and ensure the best
interests of the Company and its stockholders.
NOW, THEREFORE, in consideration of the services or continued services
of the Indemnitee and in order to induce the Indemnitee to serve or continue to
serve as director and/or officer, the Company and the Indemnitee do hereby agree
as follows:
1
<PAGE> 3
1. Definitions. As used in this Agreement:
(a) The term "Proceeding" shall include any threatened,
pending or completed inquiry, hearing, investigation, action, suit, arbitration
or other alternative dispute resolution mechanism or proceeding, formal or
informal, whether brought in the name of the Company or otherwise and whether of
a civil, criminal or administrative or investigative nature, by reason of the
fact that the Indemnitee is or was a director and/or officer of the Company, or
is or was serving at the request of the Company as a director, officer, employee
or agent of another enterprise, whether or not he/she is serving in such
capacity at the time any liability or expense is incurred for which
indemnification or reimbursement is to be provided under this Agreement.
(b) The term "Expenses" includes, without limitation:
attorneys' fees, costs, disbursements and retainers; accounting and witness
fees; fees of experts; travel and deposition costs; transcript costs, filing
fees, telephone charges, postage, copying costs, delivery service fees and other
expenses and obligations of any nature whatsoever paid or incurred in connection
with any investigations, judicial or administrative proceedings and appeals,
amounts paid in settlement by or on behalf of Indemnitee, and any expenses of
establishing a right to indemnification, pursuant to this Agreement or
otherwise, including reasonable compensation for time spent by the Indemnitee in
connection with the investigation, defense or appeal of a Proceeding or action
for indemnification for which he/she is not otherwise compensated by the Company
or any third party. The term "Expenses" does not include the amount of
judgments, fines, penalties or ERISA excise taxes actually levied against the
Indemnitee.
2. Agreement to Serve. The Indemnitee agrees to serve or to continue to
serve as a director and/or officer of the Company for so long as he/she is duly
elected or appointed or until such time as he/she tenders his/her resignation in
writing or is removed as a director and/or officer. However, nothing contained
in this Agreement shall be construed as giving Indemnitee any right to be
retained in the employ of the Company, any subsidiary or any other person.
3. Indemnification in Third Party Actions. The Company shall indemnify
the Indemnitee if the Indemnitee is a party to or threatened to be made a party
to or is otherwise involved in any Proceeding (other that a Proceeding by or in
the name of the Company to procure a judgment in its favor), by reason of the
fact that the Indemnitee is or was a director
2
<PAGE> 4
and/or officer of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another enterprise, against
all Expenses, judgments, fines, penalties and ERISA excise taxes actually and
reasonably incurred by the Indemnitee in connection with the defense or
settlement of such a Proceeding, to the fullest extent permitted by applicable
corporate law and the Company's Articles of Incorporation; provided that any
settlement of a Proceeding be approved in writing by the Company.
4. Indemnification in Proceedings by or In the Name of the Company. The
Company shall indemnify the Indemnitee if the Indemnitee is a party to or
threatened to be made a party to or is otherwise involved in any Proceeding by
or in the name of the Company to procure a judgment in its favor by reason of
the fact that the Indemnitee was or is a director and/or officer of the Company,
or is or was serving at the request of the Company as a director, officer,
employee or agent of another enterprise, against all Expenses, judgments, fines
penalties and ERISA excise taxes actually and reasonably incurred by the
Indemnitee in connection with the defense or settlement of such a Proceeding, to
the fullest extent permitted by applicable corporate law and the Company's
Articles of Incorporation.
5. Conclusive Presumption Regarding Standards of Conduct. The
Indemnitee shall be conclusively presumed to have met the relevant standards of
conduct, if any, as defined by applicable corporate law, for indemnification
pursuant to this Agreement, unless a determination is made that the Indemnitee
has not met such standards (i) by the Board of Directors by a majority vote of a
quorum thereof consisting of directors who were not parties to the Proceeding
due to which a claim is made under this Agreement, (ii) by the shareholders of
the Company by majority vote of a quorum thereof consisting of shareholders who
are not parties to the Proceeding due to which a claim is made under this
Agreement, (iii) in a written opinion by independent counsel, selection of whom
has been approved by the Indemnitee in writing, or (iv) by a court of competent
jurisdiction.
6. Indemnification of Expenses of Successful Party. Notwithstanding any
other provision of the Agreement, to the extent that the Indemnitee has been
successful in defense of any Proceeding or in defense of any claim, issue or
matter therein, on the merits or otherwise,
3
<PAGE> 5
including the dismissal of a Proceeding without prejudice or the settlement of a
Proceeding without an admission of liability, the Indemnitee shall be
indemnified against all Expenses incurred in connection therewith to the fullest
extent permitted by applicable corporate law.
7. Advances of Expenses. The Expenses incurred by the Indemnitee in any
Proceeding shall be paid promptly by the Company in advance of the final
disposition of the Proceeding at the written request of the Indemnitee to the
fullest extent permitted by applicable corporate law; provided that the
Indemnitee shall undertake in writing to repay any advances if it is ultimately
determined that the Indemnitee is not entitled to indemnification.
8. Partial Indemnification. If the Indemnitee is entitled under any
provision of the Agreement to indemnification by the Company for a portion of
the Expenses, judgments, fines, penalties or ERISA excise taxes actually and
reasonably incurred by him/her in the investigation, defense, appeal or
settlement of any Proceeding but not, however, for the total amount of his/her
Expenses, judgments, fines, penalties or ERISA excise taxes, the Company shall
nevertheless indemnify the Indemnitee for the portion of Expenses, judgments,
fines, penalties or ERISA excise taxes to which the Indemnitee is entitled.
9. Indemnification Procedure; Determination of Right to
Indemnification.
(a) Promptly after receipt by the Indemnitee of notice of the
commencement of any Proceeding, the Indemnitee shall, if a claim in respect
thereof is to be made against the Company under this Agreement, notify the
Company of the commencement thereof in writing. The omission to so notify the
Company, however, shall not relieve it from any liability which it may have to
the Indemnitee otherwise than under this Agreement.
(b) If a claim for indemnification or advances under this
Agreement is not paid by the Company within thirty (30) days of receipt of
written notice, the rights provided by this Agreement shall be enforceable by
the Indemnitee in any court of competent jurisdiction. The burden of proving by
clear and convincing evidence that indemnification or advances are not
appropriate shall be on the Company. Neither the failure of the directors or
stockholders of the Company or its independent legal counsel to have made a
determination prior to the commencement of such action that indemnification or
advances are proper in the circumstances
4
<PAGE> 6
because the Indemnitee has met the applicable standard of conduct, if any, nor
an actual determination by the directors or shareholders of the Company or
independent legal counsel that the Indemnitee has not met the applicable
standard of conduct, shall be a defense to the action or create a presumption
for the purpose of an action that the Indemnitee has not been the applicable
standard of conduct.
(c) The Indemnitee's Expenses incurred in connection with any
Proceeding concerning his/her right to indemnification or advances in whole or
part pursuant to this Agreement shall also be indemnified by the Company
regardless of the outcome of such Proceeding.
(d) With respect to any Proceeding for which indemnification
is requested, the Company will be entitled to participate therein at its own
expense and, except as otherwise provided below, to the extent that it may wish,
the Company may assume the defense thereof, with counsel satisfactory to the
Indemnitee. After notice from the Company to the Indemnitee of its election to
assume the defense of a Proceeding, the Company will not be liable to the
Indemnitee for any Expenses subsequently incurred by the Indemnitee in
connection with the defense thereof, other than as provided below. The Company
shall not settle any Proceeding in any manner which would impose any penalty or
limitation on the Indemnitee without the Indemnitee's written consent. The
Indemnitee shall have the right to employee his/her counsel in any Proceeding,
but the fees and expenses of such counsel incurred after notice from the Company
of its assumption of the defense of the Proceeding shall be at the expense of
the Indemnitee, unless (i) the employment of counsel by the Indemnitee has been
authorized by the Company, (ii) the Indemnitee shall have reasonably concluded
that there may be a conflict of interest between the Company and the Indemnitee
in the conduct of the defense of a Proceeding, in each of which cases the fees
and expenses of the Indemnitee's counsel shall be advances by the Company. The
Company shall not be entitled to assume the defense of any Proceeding brought by
or on behalf of the Company or as to which the Indemnitee has concluded that
there may be a conflict of interest between the Company and the Indemnitee.
10. Limitations on Indemnification. No payments pursuant to this
Agreement shall be made by the Company:
(a) To indemnify or advance funds to the Indemnitee expenses
with respect to
5
<PAGE> 7
Proceeding initiated or brought voluntarily by the Indemnitee and not by way of
defense, except with respect to Proceedings brought to establish or enforce a
right to indemnification under this Agreement or any other statute or law or
otherwise as required under applicable corporate law, but such indemnification
or advancement of expenses may be provided by the Company in specific cases if
the Board of Directors finds it to be appropriate;
(b) To indemnify the Indemnitee for any Expenses, judgment,
fines, penalties or ERISA excise taxes sustained in any Proceeding for which
payment is actually made to the Indemnitee under a valid and collectible
insurance policy, except in respect of any excess beyond the amount of payment
under such insurance;
(c) To indemnify the Indemnitee for any Expenses, judgment,
fines, and/or penalties sustained in any Proceeding for an accounting of profits
made from the purchase or sale by the Indemnitee of securities of the Company
pursuant to the provisions of Section 16(b) of the Securities Exchange Act of
1934, the rules and regulations promulgated thereunder and amendments thereto or
similar provisions of any federal, state or local statutory law; and
(d) If a court of competent jurisdiction finally determines
that any indemnification hereunder is unlawful.
11. Maintenance of Liability Insurance.
(a) The Company hereby covenants and agrees that, as long as
the Indemnitee continues to serve as a director and/or officer of the Company
and thereafter as long as the Indemnitee may be subject to any possible
Proceeding, the Company, subject to subsection (c), shall promptly obtain and
maintain in full force and effect directors' and officers' liability insurance
("D&O Insurance") in reasonable amounts from established and reputable insurers.
(b) In all D&O insurance policies, the Indemnitee shall be
named as an insured in such a manner as to provide the Indemnitee the same
rights and benefits as are accorded to the most favorably insured of the
Company's directors and/or officers.
(c) Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain D&O Insurance if the Company determines, in its
sole discretion, that such insurance is not reasonably available, the premium
costs for such insurance is so limited by exclusions that it provides an
insufficient benefit, or the Indemnitee is covered by similar insurance
maintained by a subsidiary of the Company.
6
<PAGE> 8
12. Indemnification Hereunder Not Exclusive. The indemnification
provided by this Agreement shall not be deemed exclusive of any other rights to
which the Indemnitee may be entitled under the Articles of Incorporation,
Bylaws, any agreement, vote of shareholders or disinterested directors,
provision of applicable corporate law, or otherwise, both as to action in
his/her official capacity and as to action in another capacity on behalf of the
Company while holding such office.
13. Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of the Indemnitee and his/her heirs, executors,
administrators and assigns, whether or not Indemnitee has ceased to be a
director or officer, and the Company and its successors and assigns.
14. Severability. Each and every paragraph, sentence, term and
provision hereof is separate and distinct so that if any paragraph, sentence,
term or provision hereof shall be held to be invalid or unenforceable for any
reason, such invalidity or unenforceability shall not affect the validity or
enforceability of any other paragraph, sentence, term or provision hereof. To
the extent required, any paragraph, sentence, term or provision of this
Agreement shall be modified by a court of competent jurisdiction to preserve its
validity and to provide the Indemnitee with the broadest possible
indemnification permitted under applicable corporate law.
15. Savings Clause. If this Agreement or any paragraph, sentence, term
or provision hereof is invalidated on any ground by any court of competent
jurisdiction, the Company shall nevertheless indemnify the Indemnitee as to any
Expenses, judgments, fines, penalties for ERISA excise taxes incurred with
respect to any Proceeding to the full extent permitted by any applicable
paragraph, sentence, term or provision of this Agreement that has not been
invalidated or by any other applicable provision of applicable corporate law.
16. Interpretation; Governing Law. This Agreement shall be construed as
a whole and in accordance with its fair meaning. Headings are for convenience
only and shall not be used in construing meaning. This Agreement shall be
governed and interpreted in accordance with the laws of the State of Delaware.
17. Amendments. No amendment, waiver, modification, termination or
cancellation of this
7
<PAGE> 9
Agreement shall be effective unless in writing signed by the party against whom
enforcement is sought. The indemnification rights afforded to the Indemnitee
hereby are contract rights and may not be diminished, eliminated or otherwise
affected by amendments to the Articles of Incorporation, Bylaws, or by other
agreements, including D&O Insurance policies.
18. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
party and delivered to the other.
19. Notices. Any notice required to be given under this Agreement shall
be directed:
TO: Universal Media Holdings. INc.
10 Industrial Road
Carlstadt, NJ 07726
With a copy to:
Andrea Cataneo, Esq.
12 South Third Avenue
Mine Hill, NJ 07803
TO: James Neebling
18 Perrine Circle
Perrineville, NJ 08535
or to such other address as either shall designate in writing.
IN WITNESS WHEREOF, the parties have executed this Indemnity Agreement
as of the date first written above.
INDEMNITEE: /s/ James Neebling
------------------
James Neebling
------------------------------
Universal Media Holdings, Inc.
By: /s/ James Zimbler
------------------
James Zimbler, CEO
8
<PAGE> 1
EXHIBIT 10.3
INDEMNITY AGREEMENT WITH
JAMES ZIMBLER
<PAGE> 2
INDEMNITY AGREEMENT
This Indemnity Agreement ("Agreement") is made as of April 3, 2000, by
and between Universal Media Holdings, Inc., a Delaware corporation ("Company"),
and James Zimbler ("Indemnitee"), a director and/or officer or key executive,
employee or consultant of the Company, or a person serving at the request of the
Company as a director, officer, employee or agent of another enterprise.
RECITALS
A. The Indemnitee is currently serving or has agreed to serve as a
director and/or officer of the Company and in such capacity has rendered and/or
will render valuable services to the Company.
B. The Company has investigated the availability and sufficiency of
liability insurance and applicable statutory indemnification provisions to
provide its directors and officers with adequate protection against various
legal risks and potential liabilities to which such individuals are subject due
to their positions with the Company and has concluded that such insurance may be
unavailable or too costly, and even if purchased it, and the statutory
provisions, may provide inadequate and unacceptable protection to certain
individuals requested to serve as its directors and/or officers.
C. It is essential to the Company that it attract and retain as
officers and directors the most capable persons available and in order to induce
and encourage highly experienced and capable persons such as the Indemnitee to
serve or continue to serve as a director and/or officer of the Company, the
Board of Directors has determined, after due consideration and investigation of
the terms and provisions of the Agreement and the various other options
available to the Company and the Indemnitee in lieu hereof, that this Agreement
is not only reasonable and prudent but necessary to promote and ensure the best
interests of the Company and its stockholders.
NOW, THEREFORE, in consideration of the services or continued services
of the Indemnitee and in order to induce the Indemnitee to serve or continue to
serve as director and/or officer, the Company and the Indemnitee do hereby agree
as follows:
1
<PAGE> 3
1. Definitions. As used in this Agreement:
(a) The term "Proceeding" shall include any threatened,
pending or completed inquiry, hearing, investigation, action, suit, arbitration
or other alternative dispute resolution mechanism or proceeding, formal or
informal, whether brought in the name of the Company or otherwise and whether of
a civil, criminal or administrative or investigative nature, by reason of the
fact that the Indemnitee is or was a director and/or officer of the Company, or
is or was serving at the request of the Company as a director, officer, employee
or agent of another enterprise, whether or not he/she is serving in such
capacity at the time any liability or expense is incurred for which
indemnification or reimbursement is to be provided under this Agreement.
(b) The term "Expenses" includes, without limitation:
attorneys' fees, costs, disbursements and retainers; accounting and witness
fees; fees of experts; travel and deposition costs; transcript costs, filing
fees, telephone charges, postage, copying costs, delivery service fees and other
expenses and obligations of any nature whatsoever paid or incurred in connection
with any investigations, judicial or administrative proceedings and appeals,
amounts paid in settlement by or on behalf of Indemnitee, and any expenses of
establishing a right to indemnification, pursuant to this Agreement or
otherwise, including reasonable compensation for time spent by the Indemnitee in
connection with the investigation, defense or appeal of a Proceeding or action
for indemnification for which he/she is not otherwise compensated by the Company
or any third party. The term "Expenses" does not include the amount of
judgments, fines, penalties or ERISA excise taxes actually levied against the
Indemnitee.
2. Agreement to Serve. The Indemnitee agrees to serve or to continue to
serve as a director and/or officer of the Company for so long as he/she is duly
elected or appointed or until such time as he/she tenders his/her resignation in
writing or is removed as a director and/or officer. However, nothing contained
in this Agreement shall be construed as giving Indemnitee any right to be
retained in the employ of the Company, any subsidiary or any other person.
3. Indemnification in Third Party Actions. The Company shall indemnify
the Indemnitee if the Indemnitee is a party to or threatened to be made a party
to or is otherwise involved in any Proceeding (other that a Proceeding by or in
the name of the Company to procure a judgment in its favor), by reason of the
fact that the Indemnitee is or was a director
2
<PAGE> 4
and/or officer of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another enterprise, against
all Expenses, judgments, fines, penalties and ERISA excise taxes actually and
reasonably incurred by the Indemnitee in connection with the defense or
settlement of such a Proceeding, to the fullest extent permitted by applicable
corporate law and the Company's Articles of Incorporation; provided that any
settlement of a Proceeding be approved in writing by the Company.
4. Indemnification in Proceedings by or In the Name of the Company. The
Company shall indemnify the Indemnitee if the Indemnitee is a party to or
threatened to be made a party to or is otherwise involved in any Proceeding by
or in the name of the Company to procure a judgment in its favor by reason of
the fact that the Indemnitee was or is a director and/or officer of the Company,
or is or was serving at the request of the Company as a director, officer,
employee or agent of another enterprise, against all Expenses, judgments, fines
penalties and ERISA excise taxes actually and reasonably incurred by the
Indemnitee in connection with the defense or settlement of such a Proceeding, to
the fullest extent permitted by applicable corporate law and the Company's
Articles of Incorporation.
5. Conclusive Presumption Regarding Standards of Conduct. The
Indemnitee shall be conclusively presumed to have met the relevant standards of
conduct, if any, as defined by applicable corporate law, for indemnification
pursuant to this Agreement, unless a determination is made that the Indemnitee
has not met such standards (i) by the Board of Directors by a majority vote of a
quorum thereof consisting of directors who were not parties to the Proceeding
due to which a claim is made under this Agreement, (ii) by the shareholders of
the Company by majority vote of a quorum thereof consisting of shareholders who
are not parties to the Proceeding due to which a claim is made under this
Agreement, (iii) in a written opinion by independent counsel, selection of whom
has been approved by the Indemnitee in writing, or (iv) by a court of competent
jurisdiction.
6. Indemnification of Expenses of Successful Party. Notwithstanding any
other provision of the Agreement, to the extent that the Indemnitee has been
successful in defense of any Proceeding or in defense of any claim, issue or
matter therein, on the merits or otherwise,
3
<PAGE> 5
including the dismissal of a Proceeding without prejudice or the settlement of a
Proceeding without an admission of liability, the Indemnitee shall be
indemnified against all Expenses incurred in connection therewith to the fullest
extent permitted by applicable corporate law.
7. Advances of Expenses. The Expenses incurred by the Indemnitee in any
Proceeding shall be paid promptly by the Company in advance of the final
disposition of the Proceeding at the written request of the Indemnitee to the
fullest extent permitted by applicable corporate law; provided that the
Indemnitee shall undertake in writing to repay any advances if it is ultimately
determined that the Indemnitee is not entitled to indemnification.
8. Partial Indemnification. If the Indemnitee is entitled under any
provision of the Agreement to indemnification by the Company for a portion of
the Expenses, judgments, fines, penalties or ERISA excise taxes actually and
reasonably incurred by him/her in the investigation, defense, appeal or
settlement of any Proceeding but not, however, for the total amount of his/her
Expenses, judgments, fines, penalties or ERISA excise taxes, the Company shall
nevertheless indemnify the Indemnitee for the portion of Expenses, judgments,
fines, penalties or ERISA excise taxes to which the Indemnitee is entitled.
9. Indemnification Procedure; Determination of Right to
Indemnification.
(a) Promptly after receipt by the Indemnitee of notice of the
commencement of any Proceeding, the Indemnitee shall, if a claim in respect
thereof is to be made against the Company under this Agreement, notify the
Company of the commencement thereof in writing. The omission to so notify the
Company, however, shall not relieve it from any liability which it may have to
the Indemnitee otherwise than under this Agreement.
(b) If a claim for indemnification or advances under this
Agreement is not paid by the Company within thirty (30) days of receipt of
written notice, the rights provided by this Agreement shall be enforceable by
the Indemnitee in any court of competent jurisdiction. The burden of proving by
clear and convincing evidence that indemnification or advances are not
appropriate shall be on the Company. Neither the failure of the directors or
stockholders of the Company or its independent legal counsel to have made a
determination prior to the commencement of such action that indemnification or
advances are proper in the circumstances
4
<PAGE> 6
because the Indemnitee has met the applicable standard of conduct, if any, nor
an actual determination by the directors or shareholders of the Company or
independent legal counsel that the Indemnitee has not met the applicable
standard of conduct, shall be a defense to the action or create a presumption
for the purpose of an action that the Indemnitee has not been the applicable
standard of conduct.
(c) The Indemnitee's Expenses incurred in connection with any
Proceeding concerning his/her right to indemnification or advances in whole or
part pursuant to this Agreement shall also be indemnified by the Company
regardless of the outcome of such Proceeding.
(d) With respect to any Proceeding for which indemnification
is requested, the Company will be entitled to participate therein at its own
expense and, except as otherwise provided below, to the extent that it may wish,
the Company may assume the defense thereof, with counsel satisfactory to the
Indemnitee. After notice from the Company to the Indemnitee of its election to
assume the defense of a Proceeding, the Company will not be liable to the
Indemnitee for any Expenses subsequently incurred by the Indemnitee in
connection with the defense thereof, other than as provided below. The Company
shall not settle any Proceeding in any manner which would impose any penalty or
limitation on the Indemnitee without the Indemnitee's written consent. The
Indemnitee shall have the right to employee his/her counsel in any Proceeding,
but the fees and expenses of such counsel incurred after notice from the Company
of its assumption of the defense of the Proceeding shall be at the expense of
the Indemnitee, unless (i) the employment of counsel by the Indemnitee has been
authorized by the Company, (ii) the Indemnitee shall have reasonably concluded
that there may be a conflict of interest between the Company and the Indemnitee
in the conduct of the defense of a Proceeding, in each of which cases the fees
and expenses of the Indemnitee's counsel shall be advances by the Company. The
Company shall not be entitled to assume the defense of any Proceeding brought by
or on behalf of the Company or as to which the Indemnitee has concluded that
there may be a conflict of interest between the Company and the Indemnitee.
10. Limitations on Indemnification. No payments pursuant to this
Agreement shall be made by the Company:
(a) To indemnify or advance funds to the Indemnitee expenses
with respect to
5
<PAGE> 7
Proceeding initiated or brought voluntarily by the Indemnitee and not by way of
defense, except with respect to Proceedings brought to establish or enforce a
right to indemnification under this Agreement or any other statute or law or
otherwise as required under applicable corporate law, but such indemnification
or advancement of expenses may be provided by the Company in specific cases if
the Board of Directors finds it to be appropriate;
(b) To indemnify the Indemnitee for any Expenses, judgment,
fines, penalties or ERISA excise taxes sustained in any Proceeding for which
payment is actually made to the Indemnitee under a valid and collectible
insurance policy, except in respect of any excess beyond the amount of payment
under such insurance;
(c) To indemnify the Indemnitee for any Expenses, judgment,
fines, and/or penalties sustained in any Proceeding for an accounting of profits
made from the purchase or sale by the Indemnitee of securities of the Company
pursuant to the provisions of Section 16(b) of the Securities Exchange Act of
1934, the rules and regulations promulgated thereunder and amendments thereto or
similar provisions of any federal, state or local statutory law; and
(d) If a court of competent jurisdiction finally determines
that any indemnification hereunder is unlawful.
11. Maintenance of Liability Insurance.
(a) The Company hereby covenants and agrees that, as long as
the Indemnitee continues to serve as a director and/or officer of the Company
and thereafter as long as the Indemnitee may be subject to any possible
Proceeding, the Company, subject to subsection (c), shall promptly obtain and
maintain in full force and effect directors' and officers' liability insurance
("D&O Insurance") in reasonable amounts from established and reputable insurers.
(b) In all D&O insurance policies, the Indemnitee shall be
named as an insured in such a manner as to provide the Indemnitee the same
rights and benefits as are accorded to the most favorably insured of the
Company's directors and/or officers.
(c) Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain D&O Insurance if the Company determines, in its
sole discretion, that such insurance is not reasonably available, the premium
costs for such insurance is so limited by exclusions that it provides an
insufficient benefit, or the Indemnitee is covered by similar insurance
maintained by a subsidiary of the Company.
6
<PAGE> 8
12. Indemnification Hereunder Not Exclusive. The indemnification
provided by this Agreement shall not be deemed exclusive of any other rights to
which the Indemnitee may be entitled under the Articles of Incorporation,
Bylaws, any agreement, vote of shareholders or disinterested directors,
provision of applicable corporate law, or otherwise, both as to action in
his/her official capacity and as to action in another capacity on behalf of the
Company while holding such office.
13. Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of the Indemnitee and his/her heirs, executors,
administrators and assigns, whether or not Indemnitee has ceased to be a
director or officer, and the Company and its successors and assigns.
14. Severability. Each and every paragraph, sentence, term and
provision hereof is separate and distinct so that if any paragraph, sentence,
term or provision hereof shall be held to be invalid or unenforceable for any
reason, such invalidity or unenforceability shall not affect the validity or
enforceability of any other paragraph, sentence, term or provision hereof. To
the extent required, any paragraph, sentence, term or provision of this
Agreement shall be modified by a court of competent jurisdiction to preserve its
validity and to provide the Indemnitee with the broadest possible
indemnification permitted under applicable corporate law.
15. Savings Clause. If this Agreement or any paragraph, sentence, term
or provision hereof is invalidated on any ground by any court of competent
jurisdiction, the Company shall nevertheless indemnify the Indemnitee as to any
Expenses, judgments, fines, penalties for ERISA excise taxes incurred with
respect to any Proceeding to the full extent permitted by any applicable
paragraph, sentence, term or provision of this Agreement that has not been
invalidated or by any other applicable provision of applicable corporate law.
16. Interpretation; Governing Law. This Agreement shall be construed as
a whole and in accordance with its fair meaning. Headings are for convenience
only and shall not be used in construing meaning. This Agreement shall be
governed and interpreted in accordance with the laws of the State of Delaware.
17. Amendments. No amendment, waiver, modification, termination or
cancellation of this
7
<PAGE> 9
Agreement shall be effective unless in writing signed by the party against whom
enforcement is sought. The indemnification rights afforded to the Indemnitee
hereby are contract rights and may not be diminished, eliminated or otherwise
affected by amendments to the Articles of Incorporation, Bylaws, or by other
agreements, including D&O Insurance policies.
18. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
party and delivered to the other.
19. Notices. Any notice required to be given under this Agreement shall
be directed:
TO: Universal Media Holdings. INc.
10 Industrial Road
Carlstadt, NJ 07726
With a copy to:
Andrea Cataneo, Esq.
12 South Third Avenue
Mine Hill, NJ 07803
TO: James Zimbler
1 Diane Court
Nesconset, NY 07726
or to such other address as either shall designate in writing.
IN WITNESS WHEREOF, the parties have executed this Indemnity Agreement
as of the date first written above.
INDEMNITEE: /s/ James Zimbler
-----------------
James Zimbler
------------------------------
Universal Media Holdings, Inc.
By: /s/ James Neebling
-------------------------
James Neebling, President
8
<PAGE> 1
AARON STEIN
CERTIFIED PUBLIC ACCOUNTANT
INDEPENDENT AUDITORS' CONSENT
To the Board of Directors and Stockholders'
of Universal Media Holdings, Inc.
I consent to the use in this Registration Statement of Universal Media Holdings,
Inc. on Form 10 SB of our report dated April 3, 2000, appearing in the General
Form for Registration of Securities of Small Business Issuers, which is part of
this Registration Statement, and of our report dated April 3, 2000 relating to
the financial statement schedules appearing elsewhere in this Registration
Statement.
I also consent to the reference to me under the headings "Selected Financial
Data" and "Experts" in such General form for Registration of Securities of Small
Business Issuers.
/s/ AARON STEIN
------------
April 3, 2000
534 WILLOW AVENUE - PO BOX 315 - CEDARHURST, NY - 11516
PHONE: 516.569.0520
<TABLE>
<CAPTION>
PRO FORMA CONSOLIDATED BALANCE SHEET
(UNAUDITED)
The following unaudited pro forma consolidated balance sheet has been derived
from the balance sheets of the combining entities at September 30, 1999 and
adjusts such information to give effect to the business combination as had it
occurred at September 30, 1999. The pro forma balance sheet is presented for
informational purposes only and does not purport to be indicative of the
financial condition that actually would have resulted if the business
combination had been consummated at September 30, 1999. The pro forma balance
sheet should be read in conjunction with the notes thereto and the entities
financial statements and related notes thereto contained elsewhere in this form
8-K.
September 30, 1999
-----------------------------------------------------------------------
Actual
Actual Universal Pro Forma
Net-Tronics Media Adjustments Pro Forma
--------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ -- $ 1,012 $ 100,000 (a) $ 1,012
(100,000) (b)
Investment in subsidiary 100,000 (b)
25 (b)
(100,025) (c)
Other current assets 223 -- -- 223
--------------- --------------- --------------- --------------
Total current assets 223 1,012 -- 1,235
GOODWILL -- -- 99,802 99,802
--------------- --------------- --------------- --------------
$ 223 $ 1,012 $ 99,802 $ 101,037
=============== =============== =============== ==============
LIABILITIES AND
STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Notes payable - stockholders $ -- $ -- $ 100,000 $ 100,000
Accounts payable and
accrued expenses -- 348,645 -- 348,645
Accrued payroll taxes -- 19,465 -- 19,465
--------------- --------------- --------------- --------------
Total current liabilities -- 368,110 100,000 468,110
STOCKHOLDERS' EQUITY
Preferred stock -- -- -- --
Common stock 1 12,059 25 (b) 12,084
(1) (c)
Additional paid-in capital 999 2,007,679 (999) (c) 2,007,679
Retained earnings (777) (2,386,836) 777 (c) (2,386,836)
--------------- --------------- --------------- --------------
Total stockholder's equity 223 (367,098) (198) (367,073)
--------------- --------------- --------------- --------------
$ 223 $ 1,012 $ 99,802 $ 101,037
=============== =============== =============== ==============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTES TO PRO FORMA STATEMENT OF OPERATIONS
(UNAUDITED)
The following unaudited pro forma statement of operations have been derived from
the statement of operations of the combining entities for the fiscal year ended
September 30, 1999 and adjusts such information to give effect to the business
combination as had it occurred at October 1, 1998. The financial information for
Net-Tronics was derived from its year ended December 31, 1998 (audited) which
management believes is representation of its operations for the year ended
September 30, 1999. The pro forma statements of operation are presented for
informational purposes only and does not purport to be indicative of the results
of operation that actually would have resulted if the business combination had
been consummated at October 1, 1998. The pro forma balance sheet should be read
in conjunction with the entities financial statements and related notes thereto
contained elsewhere in the Form 8-K.
Year ended September 30, 1999
------------------------------------------------------------------
Actual
Actual Universal Pro Forma
Net-Tronics Media Adjustments Pro Forma
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES EARNED $ -- $ 241,207 $ -- $ 241,207
COST OF REVENUES EARNED -- 337,680 -- 337,680
------------ ------------ ------------ ------------
GROSS PROFIT (LOSS) -- (96,473) -- (96,473)
GENERAL AND
ADMINISTRATIVE EXPENSES 245 211,103 (6,667) (a) 217,806
------------ ------------ ------------ ------------
OPERATING LOSS (245) (307,576) 6,667 (314,279)
OTHER EXPENSES -- 16,398 -- 16,398
------------ ------------ ------------ ------------
LOSS BEFORE PROVISION
FOR INCOME TAXES (245) (323,974) 6,667 (330,677)
INCOME TAX EXPENSE -- -- -- --
------------ ------------ ------------ ------------
NET LOSS $ (245) $ (323,974) $ 6,667 $ (330,677)
============ ============ ============ ============
EARNINGS PER SHARE
Basic and fully diluted nil (0.03) nil (0.03)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING
Basic and fully diluted 1,000,000 11,159,356 250,000 12,409,356
============ ============ ============ ============
</TABLE>
NOTES TO PRO FORMA STATEMENT OF OPERATIONS
(a) To record amortization of goodwill on the straight-line method over its
estimated useful life of 15 years.
<PAGE>
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
(a) Advance by stockholders to Universal Media Holdings, Inc.
(b) Purchase of 100 percent of the outstanding stock of Net-Tronics by
Universal Media Holdings, Inc. for following consideration:
Cash $ 100,000
250,000 shares of stock of
Universal Media Holdings, Inc. 25
---------
$ 100,025
=========
(c) To eliminate investment of Universal Media Holdings, Inc., its wholly owned
subsidiary, stockholders' equity of Net-Tronics Communication Corporation
and recognize goodwill of $99,802.
<TABLE>
<CAPTION>
PRO FORMA CONSOLIDATED BALANCE SHEET
(UNAUDITED)
The following unaudited pro forma consolidated balance sheet has been derived
from the balance sheets of the combining entities at December 31, 1999 and
adjusts such information to give effect to the business combination as had it
occurred at December 31, 1999. The pro forma balance sheet is presented for
informational purposes only and does not purport to be indicative of the
financial condition that actually would have resulted if the business
combination had been consummated at December 31, 1999. The pro forma balance
sheet should be read in conjunction with the notes thereto and the entities
financial statements and related notes thereto contained elsewhere in this form
8-K.
December 31, 1999
-------------------------------------------------------
Actual
Actual Universal Pro Forma
Net-Tronics Media Adjustments Pro Forma
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ - $ 1,012 $ 100,000 (a) $ 1,012
(100,000) (b)
Investment in subsidiary 100,000 (b)
25 (b)
(100,025) (c)
Other current assets - - - -
---------- ---------- ---------- ----------
Total current assets - 1,012 - 1,012
GOODWILL - - 100,000 (c) 100,000
---------- ---------- ---------- ----------
$ - $ 1,012 $ 100,000 $ 101,012
========== ========== ========== ==========
LIABILITIES AND
STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Notes payable - stockholders $ - $ - $ 100,000 $ 100,000
Accounts payable and
accrued expenses - 348,645 - 348,645
Accrued payroll taxes - 19,465 - 19,465
---------- ---------- ---------- ----------
Total current liabilities - 368,110 100,000 468,110
---------- ---------- ---------- ----------
STOCKHOLDERS' EQUITY
Preferred stock - - - -
Common stock 10 12,059 (10) (c) 12,059
Additional paid-in capital 1,589 2,097,679 (1,589) (c) 2,097,679
Retained earnings (1,599) (2,476,836) 1,599 (c) (2,476,836)
---------- ---------- ---------- ----------
Total stockholder's equity - (367,098) - (367,098)
---------- ---------- ---------- ----------
$ - $ 1,012 $ 100,000 $ 101,012
========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTES TO PRO FORMA STATEMENT OF OPERATIONS
(UNAUDITED)
The following unaudited pro forma statement of operations have been derived from
the statement of operations of the combining entities for the three months ended
December 31, 1999 and adjusts such information to give effect to the business
combination as had it occurred at October 1, 1999. The financial information for
Net-Tronics was derived from its three months ended March 31, 2000 which
management believes is representation of its operations for the three months
ended December 31, 1999. The pro forma statements of operation are presented for
informational purposes only and does not purport to be indicative of the results
of operation that actually would have resulted if the business combination had
been consummated at October 1, 1999. The pro forma balance sheet should be read
in conjunction with the entities financial statements and related notes thereto
contained elsewhere in the Form 8-K.
Three months ended December 31, 1999
------------------------------------------------------------------
Actual
Actual Universal Pro Forma
Net-Tronics Media Adjustments Pro Forma
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES EARNED $ -- $ -- $ -- $ --
COST OF REVENUES EARNED -- -- -- --
------------ ------------ ------------ ------------
GROSS PROFIT (LOSS) -- -- -- --
GENERAL AND
ADMINISTRATIVE EXPENSES 245 90,000 (1,667) (a) 88,578
------------ ------------ ------------ ------------
OPERATING LOSS (245) (90,000) 1,667 (88,578)
OTHER EXPENSES -- -- -- --
------------ ------------ ------------ ------------
LOSS BEFORE PROVISION
FOR INCOME TAXES (245) (90,000) 1,667 (88,578)
INCOME TAX EXPENSE -- -- -- --
------------ ------------ ------------ ------------
NET LOSS $ (245) $ (90,000) $ 1,667 $ (88,578)
============ ============ ============ ============
EARNINGS PER SHARE
Basic and fully diluted nil nil nil (0.01)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING
Basic and fully diluted 1,000,000 12,059,356 250,000 13,309,356
============ ============ ============ ============
</TABLE>
NOTES TO PRO FORMA STATEMENT OF OPERATIONS
(a) To record amortization of goodwill on the straight-line method over its
estimated useful life of 15 years.
<PAGE>
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(a) Advance by stockholders to Universal Media Holdings, Inc.
(b) Purchase of 100 percent of the outstanding stock of Net-Tronics by
Universal Media Holdings, Inc. for following consideration:
Cash $ 100,000
250,000 shares of stock of
Universal Media Holdings, Inc. 25
---------
$ 100,025
=========
(c) To eliminate investment of Universal Media Holdings, Inc., its wholly owned
subsidiary, stockholders' equity of Net-Tronics Communication Corporation
and recognize goodwill of $99,802.
INTERWEST TRANSFER COMPANY, INC.
April 25, 2000
Universal Turf, Inc.
Attn: Mr. Michael Krome
Via Facsimile: (631) 863.9898
Re: Shareholders of record
Dear Mr. Krome,
This letter is to certify that as of April 26, 2000, Universal Turf, Inc.
has a total of 11,284,346 shares issued and outstanding held of record by 790
shareholders.
Please let know if you need any further information.
Sincerely,
/s/ Kristi Kunz
- --------------------
Kristi Kunz
Account Executive
UNIVERSAL MEDIA HOLDINGS, INC.
REVIEWED FINANACIAL STATEMENTS
(UNAUDITED)
DECEMBER 31, 1999
<PAGE>
TABLE OF CONTENTS
REPORT OF INDEPENDENT AUDITOR 1
FINANCIAL STATEMENTS
Balance Sheet 2
Statements of Operations 3
Statements of Stockholders' Equity 4
Statements of Cash Flows 5
NOTES TO THE FINANCIAL STATEMENTS 6
<PAGE>
aaron stein
certified public accountant
REPORT OF INDEPENDENT AUDITOR
534 willow avenue o po box 315 o cedarhurst, ny o 11516
Phone: 516.569.0520
To the Board of directors and stockholders of Universal Media Holdings, Inc.
I have reviewed the accompanying balance sheet of Universal Media Holdings, Inc.
as of December 31, 1999, and the related statement of operations, stockholders'
equity, and cash flows for each of the three months then ended. These financial
statements are the responsibility of the Corporation's management.
I conducted my review in accordance with the standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, I do not express such an opinion.
Based on my review, I am not aware of any material modifications that should be
made to the accompanying financial statements for them to be in conformity with
generally accepted accounting principles.
/s/ AARON STEIN, CPA
-----------------
AARON STEIN, CPA
May 3, 2000
1
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
BALANCE SHEET
December 31, 1999
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash and cash equivilents $ 1,012
-----------
$ 1,012
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 348,645
Accrued payroll taxes 19,465
-----------
Total Current Liabilities $ 368,110
Stockholders' Equity
Preferred Stock, No par value
2,000,000 shares authorized, 0 shares issued --
Common stock, $.001 par value
200,000,000 shares authorized, 12,059,356 issued
and outstanding 12,059
Additional-paid-in-capital 2,097,679
Retained earnings (2,476,836)
-----------
Total Stockholders' Equity (367,098)
-----------
$ 1,012
===========
2
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
STATEMENTS OF OPERATIONS
Three months ended December 31, 1999
(UNAUDITED)
1999
------------------
REVENUES EARNED $ -
COST OF REVENUES EARNED -
------------------
GROSS (LOSS) PROFIT -
GENERAL AND ADMINISTRATIVE EXPENSES 90,000
------------------
OPERATING LOSS (90,000)
OTHER EXPENSES
Interest expense -
Loss on disposal of fixed assets -
------------------
Total other expenses -
------------------
LOSS BEFORE PROVISION FOR
INCOME TAXES (90,000)
INCOME TAX EXPENSE -
------------------
NET LOSS $ (90,000)
==================
EARNINGS PER SHARE
BASIC $ (0.01)
==================
AVEREAGE NUMBER OF COMMON
SHARES OUTSTANDING
BASIC 12,059,356
==================
3
<PAGE>
<TABLE>
<CAPTION>
UNIVERSAL MEDIA HOLDINGS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
Three Months Ended December 31, 1999
(UNAUDITED)
Additional-
Preferred Stock Common Stock Paid-in- Retained
----------------------- --------------------------
Shares Amount Shares Amount Capital Earnings Total
---------- ------------ ------------- ------------ --------------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1999 - $ - 11,159,356 $11,159 $2,008,579 $ (2,386,836) $(367,098)
Issuance of common stock - - 900,000 900 89,100 - 90,000
Net Loss - - - - - (90,000) (90,000)
---------- ------------ ------------- ------------ --------------- ---------------- --------------
Balance at December 31, 1999 - $ - 12,059,356 $12,059 $2,097,679 $ (2,476,836) $(367,098)
========== ============ ============= ============ =============== ================ ==============
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
UNIVERSAL MEDIA HOLDINGS, INC.
STATEMENTS OF CASH FLOWS
Three Months Ended December 31, 1999
(UNAUDITED)
1999
------------------
<S> <C>
NET LOSS $ (90,000)
Adjustments to receoncile net loss to cash flows from operating activities:
Depreciation and amortization -
Loss on disposal of fixed assets -
Changes in:
Accounts receivables -
Other assets -
Accounts payable and accrued expenses -
------------------
Cash used in operating activities (90,000)
------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in bank overdraft -
Proceeds from issuance of common stock 90,000
------------------
Cash provided by financing activities 90,000
------------------
NET INCREASE IN CASH AND
CASH EQUIVILENTS -
CASH AND CASH EQUIVILENTS, beginning 1,012
------------------
CASH AND CASH EQUIVILENTS, ending $ 1,012
==================
ADDITIONAL SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid $ -
==================
Income taxes paid $ -
==================
</TABLE>
5
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION, NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Organization
Universal Media Holdings, Inc. ("the Company") was originally incorporated in
Delaware as Tyconda Minerals Corp. in December of, 1969. In February 1970, the
Company merged leaving Tyconda Minerals Corp. as the surviving corporation. In
November 1983 the Company filed a Certificate of Amendment to its Certificate of
Incorporation changing its corporate name to Hy-Poll Technology, Inc. That
amendment also changed the capital structure of the corporation from an
authorization to issue 5,000,000 shares of Common Stock with a par value of $
.01 per share, to an authorization to issue 200,000,000 shares of Common Stock
with a par value of $ .0001 per share.
In August of 1995, Hy-Poll acquired all of the issued and outstanding shares of
the Company's Common Stock. On December 21, 1995 the Company amended its
Certificate of Incorporation changing its corporate name to Universal Turf, Inc.
The Company then amended the name again on November 8, 1999, changing its
corporate name to Universal Media Holdings, Inc.
On February 14, 2000, the Company entered into an agreement with E-Trans
Logistics, Inc. ("E-Trans"), formerly known as Gerard, under which E-Trans
became a wholly owned subsidiary of United Media Holdings, Inc.
Nature of Operations
As Universal Turf, Inc., the Company was based on the marketing, installation
and maintenance of synthetic surface material for sports and recreational fields
mainly in the Northeast section of the United States. The Company's business
plan now covers (i) the logistics field, which plans to be the major
concentration, (ii) the synthetic grass (turf) business, and (iii) certain areas
of the entertainment and Internet fields.
Significant Accounting Policies
Use of Estimates in Financial Statements - Management uses estimates and
assumptions in preparing these financial statements in accordance with generally
accepted accounting principles. Those estimates and assumptions affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities, and the reported revenues and expenses. Actual results could
vary from the estimates that were used.
Cash and Cash Equivalents - For purposes of reporting cash flows, the Company
considers all cash accounts, which are not subject to withdrawal restrictions or
penalties, as cash and cash equivalents in the accompanying balance sheet.
6
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
Fixed Assets - For assets sold or otherwise disposed of, the cost and related
accumulated depreciation are removed from the accounts and any related gain or
loss is reflected in income for the period. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets. There was no
depreciation for three months ended December 31, 1999.
Advertising Costs - Advertising costs are charged to operations when incurred.
There was no advertising expenses for the three months ended December 31, 1999.
Income Taxes - The provision for income taxes are computed based on the pretax
loss included in the Statement of Income. The asset and liability approach is
used to recognize deferred tax assets and liabilities for the expected future
tax consequences of temporary differences between the carrying amounts and the
tax bases of assets and liabilities.
Earnings Per Common Share - Basic loss per common share is computed using the
weighted average number of common shares outstanding during the year. Earnings
per share amounts have been adjusted for to reflect the one-for-two hundred
split of the Company's common shares which occurred on November 3, 1999.
NOTE 2 - STOCKHOLDERS' EQUITY
Stock Split - On November 3, 1999, the Company consented to a one-for-two
hundred reverse stock split of its common stock. Stockholders' equity has been
restated to give retroactive recognition to the reverse stock split in prior
periods.
Preferred Stock - 2,000,000 shares of Preferred Stock authorized are
undesignated as to preferences, privileges and restrictions. As the shares are
issued, the Board of Directors must establish a "series" of the shares to be
issued and designate the preferences, privileges and restrictions applicable to
that series. To date, the Board of Directors has not designated or issued any
series of Preferred Stock.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
Included in the accounts payable is approximately $80,500 which represent
judgements brought against the company. These judgements are related to unpaid
invoices.
7
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - SUBSEQUENT EVENT
On February 14, 2000, the Company entered into an agreement with E-Trans
Logistics, Inc. ("E-Trans"), a trucking, transport and logistics company, under
which E-Trans became a wholly owned subsidiary of Universal Media Holdings, Inc.
The new office is located at the E-Trans facility, where there are offices and a
warehouse. Sometime during the second quarter of 2000, the Company plans to
rename itself to E-Trans Logistics, Inc.
8
