UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Augrid of Nevada, Inc.
(Name of Small Business Issuer in its charter)
Nevada 34-1878390
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
140 Public Square, Suite 208, Cleveland, Ohio 44114
(Address of principal executive offices) (zip code)
Issuer's telephone number: (216) 344-9800
Securities to be registered under section 12(b) of the Act:
Title of Each Class Name on each exchange on which
to be so registered each class is to be registered
______________________ ______________________
______________________ ______________________
Securities to be registered under section 12(g) of the Act:
Common Stock, $.001 par value per share, 90,000,000 shares authorized,
49,389,348 issued and outstanding as of September 30, 1999.
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Part I......................................................................3
Item 1. Description of Business............................3
Item 2. Management's Discussion and Analysis or Plan of
Operation..........................................10
Item 3. Description of Property............................12
Item 4. Security Ownership of Management and Others and
Certain Security Holders...........................13
Item 5. Directors, Executives, Officers and
Significant Employees..............................14
Item 6. Executive Compensation.............................16
Item 7. Certain Relationships and Related Transactions.....16
Part II.....................................................................18
Item 1. Legal Proceedings..................................18
Item 2. Market for Common Equity and Related Stockholder Matters..........18
Item 3. Recent Sales of Unregistered Securities............19
Item 4. Description of Securities..........................19
Item 5. Indemnification of Directors and Officers..........21
Part F/S....................................................................22
Item 1. Financial Statements...............................22
Item 2. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure................23
Part III....................................................................24
Item 1. Index to Exhibits..................................24
Item 2. Description of Exhibits............................69
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Part I
Item 1. Description of Business
A. Business Development and Summary
Augrid of Nevada, Inc., hereinafter referred to as the "Company," "Augrid", or
"AGRD" was organized by the filing of articles of incorporation with the
Secretary of State of the State of Nevada on August 4, 1995. The Company was
formerly known as Ironwood Ventures, Inc., hereinafter referred to as "Ironwood,
" and changed its name in February of 1998 after a change of control. The
original articles of incorporation of the Company authorized the issuance of
seven million five hundred thousand (7,500,000) shares of Common Stock at a par
value of $0.01. The articles of the Company were amended on March 2, 1998, and
the Company's amended articles authorized the issuance of ninety million (90,
000,000) shares of Common Stock at a par value of $0.001 per share.
The Company is a developmental stage company with a business objective to
develop, acquire and manage development stage technologies that assist in the
process of developing proprietary flat panel display technology. The Company,
although in its development stages, is currently a research and development
company which has licensing of what management of the Company believes is the
first truly operational flat panel display technology. The Company believes
that the uniqueness of the proprietary technology lies with the incorporation of
a proprietary ceramic interconnect which the Company's management believes will
allow its manufacturing division to overcome pricing, power and size obstacles
currently facing all other competitors in the flat panel display industry.
The Company designates as its priorities for its next approximately twelve (12)
months of operations as developing and emphasizing the flat panel display
technology to the point where production of a flat panel display product off of
an assembly line is possible. The Company believes that if it is successful in
accomplishing this goal - assuming that a competitor cannot develop a similar
product or technology with the same power consumption, clarity and size,
utilizing a different technology - over the next approximately twelve (12)
months, that the Company will have enough time to create brand loyalty and a
sizeable market share allowing the Company to produce competitive flat panel
technology products at competitive profit margins. Of this, however, the
Company can give no assurance.
The Company does not expect to generate any significant revenues over the next
approximately twelve (12) months of operations ending September 30, 2000.
However, the Company does expect to generate more substantial revenues after
that date, i.e., in the last approximately three (3) months of its fiscal year
ending December 31, 2000. The Company expects to generate these revenues via
the following primary means: (i) development, manufacture and sale of the flat
panel display technology products as an original equipment manufacturer (OEM);
and (ii) through the development, manufacture and sale of technologies and
products related to the flat panel display technology and products.
Headquartered in Cleveland, Ohio, the Company is currently involved in the
research, development and to be soon manufacturing of flat panel display
technology utilizing the Thin Cathode Ray Tube (TCRT). The Company's current,
projected product line offerings utilizing the licensed technology includes, but
is not limited to: video billboards, television monitors, automobile Global
Positioning Satellite (GPS) screens, computer monitors, laptops, medical
monitors, and various military applications. On March 12, 1998, the Company
entered into an Asset Purchase Agreement to purchase all of the technology and
assets, including machinery and equipment, furniture and fixtures, office
equipment, cash, accounts receivable, investments, and deposits of Augrid
Corporation ("Augrid Delaware"), a Delaware corporation, for 1,000,000 newly
issued common shares of the Company. See "Item 2-Management's Discussion and
Analysis or Plan of Operation" and "Item 7-Certain Relationships and Related
Transactions" for more information regarding the asset purchase.
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On September 24, 1998, the Company entered into an Exclusive Research and
Development Agreement relating to Flat Screen Monitors with Ceravision Limited
("Ceravision"), a company incorporated in England and Wales. Ceravision had
developed and was in the process of developing certain technology relating to
flat-screen displays, while Augrid wished to have such technology developed by
Ceravision for Augrid to extent that it related to desk-top monitors and the
eventual manufacture of such monitors for sale and distribution by Augrid.
The Company's executive offices are located at 140 Public Square, The Park
Building, Suite 208, Cleveland, Ohio 44114, telephone number (216) 344-9800, and
fax number (216) 344-9008.
The Company's fiscal year end is December 31.
B. Business of Issuer
(1) Principal Products and Services and Principal Markets
Products and Services
The Company will develop - via its Exclusive Research and Development Agreement
with Ceravision Limited - and manufacture flat panel displays, of many different
varieties, utilizing what management believes is a new technology called Thin
Cathode Ray Tube (TCRT) technology. Management believes what makes this product
and technology unique is the incorporation of a proprietary ceramic technology
which will allow AuGRID as the manufacturer to overcome pricing, power and size
obstacles currently faced by U.S. and all other foreign competitors.
The Company currently sees an immediate market in the automobile industry as the
Company believes the current technology that is being utilized by competitors in
this field is out-dated. Management of the Company believes that this advantage
may allow it an opportunity to design and manufacture a product of much higher
quality, while at the same time achieving a significantly lower manufacturing
cost and a higher retail price. Of this, however, the Company can give no
assurance.
Despite the Company's plans for product and service development, manufacture and
roll-out over the next twelve (12) months of operations, the Company does not
expect to generate any material revenues during that time.
Product and Service Description
The Company is currently involved in the research, development and manufacture
of flat panel display technology utilizing the Thin Cathode Ray Tube (TCRT).
The Company expects to complete the manufacturer of its first TCRT in November
of this year. The Company's currently contemplated product line, includes but
is not limited to, video billboards, television monitors, automobile Global
Positioning Satellite (GPS) screens, computer monitors, laptops, medical
monitors and various types of military applications.
As of the date of this registration statement, however, the Company is in a
research and development stage only. The Company has yet to manufacture its
first prototype TCRT, and any subsequent technology, product or service
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introductions by the Company are fully dependent on the Company's successful
manufacture and completion of its first TCRT. Additionally, the Company is
relying completely on Ceravision Limited to develop and produce its first
prototypes. From that point, the Company expects to introduce new product and
service offerings related to the Company's licensed proprietary technology
developed by Ceravision. See "-Status of Any New Announced Product or Service".
The market for the Company's technology, products and services is highly
competitive. The Company believes that the principal competitive factors in its
business include capital resources, technology, research and development
spending, product performance, time to market for new product and technology
introductions, adherence to flat panel industry and related manufacturing
standards, price, and marketing and distribution resources. The Company
believes that it competes favorably in most of these categories.
(2) Distribution Methods of the Products or Services
MANUFACTURING AND DISTRIBUTION
MATERIALS, SUPPLIES AND EQUIPMENT
AuGRID's design prototype and future production models will utilize existing
sources of production materials such as phosphor plates, silicon wafers, and
Spinet microtips. These suppliers include large, well-known suppliers such as
Intel, DuPont, and Coors. They have abundant supplies for our production
requirements.
Equipment to operate a Single Production Line include the following:
$ 9,750,000 A Model PSA Production FED Assembler
$ 1,000,000 Final assembly and packaging equipment
$ 135,000 A Class 1000 Clean Room
$ 815,000 Production Line calibration and testing
$ 300,000 2.5% miscellaneous contingency
FACILITY PLANS
The first facility under consideration for the North American area will be in
Oakwood Village, Ohio, which is in a designated enterprise zone. The initial
Ohio plant will have 3 production lines within a 35,000 square foot facility and
will be capable of producing 288 shippable Monitors per line per 8 hours. The
cost for the entire facility will be $2,000,000 for the land and building and
$30,000,000 for 3 production lines for a grand total of $32,000,000. The second
facility will have 6 production lines and will be located in the southeastern
part of the United States.
Ohio
A typical enterprise zone, such as Oakwood Village, Ohio, offers a manufacturer
the following features:
Tax Abatement # of years
90% on Real Property Improvements 15
100% on Tangible Personal Property 10
(Contingent upon State and County Approval)
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Other incentives:
The Ohio Department of Development could provide, contingent upon meeting all
individual program guidelines and final approval by the Job Creation Tax credit
Authority, Department Finance Advisory Board and the State Controlling Board,
the following incentives:
$9,000,000 Offer a low interest loan on the purchase of machinery and
equipment at 6%, 112% over 20 years, through the Enterprise Bond
Fund. The floating rate is fixed at time of bond sale. One year
of debt service must be placed in escrow to qualify.
$1,000,000 Offer of loan towards construction of the building at 5% over 15
years.
The 3 production lines at the Ohio Facility will be financed as follows:
* The 1st production line will be financed through the additional
$30,000,000 in capital that is being sought.
* The 2nd production line will be financed through commercial banking loans
or leasing arrangements.
* The 3rd production line will be financed through the Ohio Department of
Development incentives.
Mexican, Mexico Site - (Maquiladora)
In 1965, the USA and Mexico created the Maquiladora Program. The program allows
U.S. companies to establish industrial plants / factories in Mexico to take
advantage of the lower labor cost and to take full advantage of the duty free
benefits. Since the initiation of the North American Free Trade Agreement,
Mexico has been Placed in a higher regard by the competitive North American
Manufacturers Association. In order to take full advantage of the growth
demands expected by AuGRID, it will have to negotiate with an Industrial
Developmental Commission in order to expand into Mexico. The City of Mexicali
has established the Mexicali Industrial Development Commission, in combination
with members of local private sector organizations, to help, attract, and
develop the industries and new business. Below is a sample of the steps that
will be required by AuGRID to open a plant in Mexico.
The Industrial Development Commission is comprised of representatives from both,
the private sector and government agencies:
The Mexicali City Mayor
Chamber of Commerce
Employer's Association
Banker's Association
Maquiladora's Association
Chamber of Construction
Chamber of Industry Secretariat Economic Development, State Government
The purpose of the Mexicali Industrial Development Commission is to attract and
facilitate the activities of industrial firms. The Commission can be of
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assistance by serving as a clearinghouse for information and professional
services. The Commission will handle initial contacts and site visitations and
will arrange meetings and tours of industrial areas and plants similar to the
one contemplated. The Commission will assist in generating dam, and will
arrange contacts with consultants who can perform feasibility studies. The
Commission will arrange appointments with key professionals, who can provide
assistance in dealing with customs, legal matters, accounting, environmental,
etc.
The owners and managers of industrial parks and buildings, are members of the
Commission, and are ready to assist any new company, select a site or building
based on its specifications. The Commission will assist in dealing with local,
state and federal government agencies, by speeding up paperwork and by helping
to get questions answered. The Commission and the Employer's Association will
provide assistance in recruiting and evaluating job applications.
The principal goal of the Commission is to remove obstacles which impede any
interested person or firm from obtaining necessary information to make sound
business decisions, which will result in the opening of a plant, subcontracting
or make Joint Venture with existing local businessmen in Mexicali.
Services Provided:
Macro economic information
Localization
Information to start operations in Mexico.
Legal and tax aspects
Investment financial requirements
Directories:
Maquiladoras
Domestic Industry
Subcontractors
Industrial Parks
Import / Export
Professional Services:
Accountants
Legal Consultants
Labor Consultants
Mexican Custom Brokers
U.S. Custom Brokers
Environmental
Mexican Real Estate Brokers
DESIGN, TECHNICAL AND ENGINEERING
AuGRID intends to maintain its design, research and development team with U.K.
Facility. Further enhancements to AuGRID's own team and state-of-the-art
facilities will be implemented by the end of 1999.
Research Partnership
The U.K. Facility is a leader in electronic imaging. In 1993, the U.K. Facility
achieved profitability, a little more than six years after it became a client-
supported R&D organization. This accomplishment is due in great part to the
partnership of the U.K. Facility team. Staff members working together towards a
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common goal of developing electronic imaging technologies that are clearly the
best in the world. The U.K. Facility people not only have the extraordinary
talents and skills, they are dedicated team players. The U.K. Facility's
experience with partnerships and other types of joint ventures with industry and
government is as old as the facility itself. From its initial achievements in
Military research during World War II, the U.K. Facility has continued an active
role in industrial and defense related research. Partnerships in which the U.K.
Facility has participated in the past have covered a broad range of research
areas from plasma physics to electronic highways, etc.
The U.K. Facility is an active member in a number of partnerships. In high
definition television, the U.K. Facility has been a member of the Advanced
Television Research Consortium and continues as an active participant in the
Grand Alliance, which is producing the "best of the best" HDTV system for
approval by the Federal Communication Commission (FCC). In another consortium
form the Associated Institutions for Materials Science. The U.K. Facility's
chief responsibilities in this project were to design and build the illumination
and projection optics of the display and to design and construct the hi-
definition television (HDTV) decoding electronics.
At present, the U.K. Facility is investigating EL phosphors, low voltage FED
phosphors, high current loading CRT phosphors.
PROMOTION STRATEGY
The Company's long range goal - over the next thirty-six (36) months - is to
garner enough visibility to leverage its eventual product line into other
domestic industries, as well as foreign markets. To accomplish this goal, the
Company plans on effectuating the following over the next approximately thirty-
six (36) months: (i) acquire the services of a public relations firm which is
intended to generate awareness of editors and product information insertions and
reviews; (ii) advertise via a concerted advertising effort in various trade
publications and business magazines; the Company plans on experimenting with
various trade-related publications and business magazines, while keeping careful
track of the results in order to maximize the return of its advertising dollars
spent; and (iii) attend many of the most important technological trade shows
throughout the United States, and internationally, in order to promote its to-
be-introduced products and technology.
SALES PROGRAMS
The Company's direct sales efforts during the next approximately twenty-four
(24) months will focus on the following:
* Dealer Sales - The Company plans on selling directly to the following Original
Equipment Manufacturers (OEMs): Hewlett-Packard, IBM, NCR, Intel, and Texas
Instruments. However, it currently has no agreement(s) with such OEMs and does
not expect any orders over the next approximately twelve (12) months.
* Hiring a Vice President of Sales and Marketing - The Company believes that
this member of its team will be a key sales executive; the Company plans on
filling this position in the next approximately twelve (12) months; this key
executive will be in charge of establishing a more detailed marketing plan for
the Company, and as the Company's anticipated product line and related
technology offerings expand, this individual will be in charge of the additional
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marketing and related staff the Company believes it will need to hire.
* Manufacturers' Representatives - The Company's management believes that these
individuals may be able to help the Company expand into major domestic and
international markets.
DISTRIBUTION CHANNELS
There are literally thousands of distribution channels available to market
AuGRID's flat panel screens. With the advent of web sites, direct buying clubs,
electronic retail programs and the myriad of marketing and distribution
channels, AuGRID, will focus its initial growth through the distribution
strength of NATM, MARTA and a select number of the retail outlets. The focus is
on production cost as well as distribution capabilities. The interface will
take form, at first, with the strong recognizable dealers in the consumer
electronics industry. Forming early associations with a number of large
dealerships will assure early entry for our product for the critical first year
of production, distribution and sales. Ongoing private discussions are
currently underway with a number of these dealers.
The other areas that will mature gradually will be to contract large retailers
that buy direct from AuGRID. This can be lucrative under the guidance of an
effective marketing program. Production controls and inventory management has
to be in sync with the retailers' demands. Other markets that will be developed
will come in the form of electronic retailing (the Internet, web), catalog,
small component consumer electronics buyers, etc. AuGRID will provide
distribution opportunities for these markets as well by the second year of
production.
The plant locations will provide for easy access to highway and railheads. It
will deploy shipping companies under contract with the distribution network, at
first, and eventually build out AuGRID's own shipping enterprise.
The Company plans to incorporate a total cycle time concept in managing its
technology from inception through manufacturing to distribution to sales. This
competitive technique will allow for management of the growth of AuGRID all the
while it keeps the client, the salesman, and the engineer in the loop. It
should assure smooth distribution and eliminate inventory delays and inventory
excesses.
QUALITY CONTROL
Quality Control will regulate the growth of the Company. It is AuGRID's goal to
produce a high quality product from day one. The Company realizes it will be
entering into a mass production environment, however, it has taken preliminary
steps in tile production cycles to assure quality, for example, pre-testing each
silicon field emitter chip prior to mounting onto the matrix-addressable bottom
plate, will reduce the risk of non-operational pixel elements. The Company's
robotics manufacturing and assembly lines will integrate with its clean room
functions to assure the highest quality standard. AuGRID intends to operate
under the ISO 9001 standard.
DISTRIBUTION
The forecast for distribution will be to focus on the top fifty-eight sales
impact markets in the U.S. These markets will be determined by using marketing
and sales analysis that is available from Major League Baseball, the National
Football League, and the National Basketball Association. The timetable for
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establishing these markets will be approximately six months. This is similar to
the formula that RCA used when they introduced the DIGITAL SATELLITE SYSTEM
(DSS) some three years ago.
The first markets to be established would be the following:
BOSTON HARTFORD NEW YORK BUFFALO
PHILADELPHIA BALTIMORE WASHINGTON CHARLOTTE
ATLANTA NASHVILLE JACKSONVILLE MIAMI
TAMPA ORLANDO CLEVELAND PITTSBURGH
CINC1NNATI DETROIT CHACAGO INDIANAPOLIS
ST. LOUIS KANSAS CITY DALLAS HOUSTON
SAN ANTONIO NEW ORLEANS MINNEAPOLIS MILWAUKEE
DENVER SALT LAKE CITY PHOENIX SEATTLE
PORTLAND SAN FRANCISCO LOS ANGELES SAN DIEGO
The plan would be to target these markets within the first 90 to 120 days after
the start of production and would come about through the approach of buying
groups such as NATM and MARTA.
The second tier of markets to established would be the following:
ROCHESTER SYRACUSE ALBANY HARRISBURG
SCRANTON/WIILKS BARRE RICHMOND RALEIGH
/DURHAM
COLUMBIA TALLAHASSEE BIRMINGHAM KNOXVILLE
LOUISVILLE COLUMBUS DES MOINES WICHITA
OKLAHOMA CITY EL PASO ALBUQUERQUE TUCSON
LAS VEGAS SACRAMENTO
This plan would be to establish these markets within the second 90 to 120 days
and would come about through the approach of buying groups such as NATM and
MARTA as well as one or two other groups.
In addition to the geographic markets, several other markets would be attacked
simultaneously. The military market is represented by each of the branches of
services independently. AAEFA services the Army and Air Force exchange
retailing while NES services the Navy and Marine Corps. They operate retail
facilities all over the United States as well as overseas. They purchase
products independently as if they were a retailer just like any other retailer.
EXPORT DISTRIBUTION
The approach for these markets will be somewhat different from the approach to
the U.S. dealers and customers. Each country uses a separate importer agent for
each country. The advantage here is in the manner in which business will be
done with these export customers.
All purchases with these agents are done either via irrevocable letter of credit
or via Tele-transfer. Letter of credit is done so that when the products are
shipped and received in a foreign country, we would receive payment through the
agent's bank or financial institution.
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AuGRID prefers the Tele-transfer method.
This method is used when the invoice is generated and ready for shipment.
An invoice is prepared. The agent is notified of the cost of goods, freight
charges and insurance and then the agent transfers the amount of that invoice to
our bank account.
Once we would receive notice from our bank that the funds transfer has taken
place, we would then release the products to be shipped overseas.
AuGRID recommends that our focus for export begin after we have had exposure to
the computer products at the COMDEX and CONSUMER ELECIRONICS show.
The primary export markets to be attacked would be the following:
ENGLAND FRANCE ITALY GERMANY
NORWAY SWEDEN DENMARK HOLLAND
SPAIN PORTUGAL IRELAND AUSTRIA
HUNGARY POLAND SWITZERLAND ISRAEL
EGYPT SAUDI ARABIA
AND SEVERAL OTHER COUNTRIES
The recommendation here is to avoid the FAR EAST and ORIENT until the products
are well established and the brand name has a recognition factor.
MARKET ANALYSIS
MARKETING PHILOSOPHY
The marketing philosophy of AuGRID, is one that is diversified yet targeted.
The momentum comes from the emphasis of the capability of each product along
with the organizational process for which it will be carried out. Each product
and its significant market will have its own team, process and approach. This
allows each product to make a significant impact on its market, allowing for
greater accessibility, focused customer fulfillment and specific technology
monitoring.
This philosophy will be approached in a thoughtful and systematic manner, with
the understanding that all decisions will start from the designated markets.
Distinctively, the following will hold true: those specified (marketing/sales)
for each particular market will be front-line personnel. They will maintain an
active status by focusing only on their designated market receiving requests,
tracking activity and being motivated to inform management systematically. In
terms of any competition, they will cleave the competitor by having a firm
knowledge of their direction, values and management process. In this, a direct
link to product improvement and customer satisfaction, this factor alone, links
the marketing and sales department with a horizontal approach in that
information can and will then be widely distributed with its value reaching
optimal levels for beneficial use throughout the AuGRID environment.
AuGRID's technology and ability to enhance the markets it touches, makes it
mandatory for the marketing strategy and approaches to be externally driven.
The overall objective is to demonstrate a firm commitment to this direction with
processes, beliefs, and managerial support to sustain it. The purpose: Superior
Performance and Customer Satisfaction in every market AuGRID serves.
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CONSUMER ELECTRONIC INDUSTRY
The Company's principal customers are the consumer electronic (CE) dealers,
wholesale and retail outlets. The CE industry, as a whole, is characterized by
intense competition, relatively short product life cycle and significant
fluctuations in product demand. The industry is further complicated with new
emerging technologies such as digital video display (DVD) and high density TV
(HDTV) as it relates to existing inventories. The CE retail industry serves the
display panel market in several areas, including but not limited to lap top
computers, computer CRTs, and television, from pocket models to the home theater
large-screen market.
Thompson Consumer Electronics, whose RCA brand will be among the first in DTV,
along with Philips, Sony, and Zenith, speculates that DTV will command only a
$500 to $700 premium within five years, and cost just $200 or $300 more than
conventional TVs after 10 years of DTV broadcasting. Meanwhile, sometime in
1999, you will be able to buy a converter that will enable your current TV to
receive DTV programs. These converters might cost about $1,000 at the start.
They will not, however, give you full DTV. Neither will some new TVs marketed
as DTV. Here is why. With the converters, you will be receiving the DTV signal
and its programming, but your TV display will be limited to its current
resolution. Increasingly, high-end projection TVs available now can display a
very good picture-equivalent to SVGA level computer images. But no TVs
currently available, including the new flat, plasma displays, can handle, the
highest DTV video format, whose resolution is 1,920 by 1,080 pixels.
TV manufactures are confident they will be able to build front and rear
projection models that achieve DTV's highest resolution. They say it is a
matter of developing projection CRTs (cathode-ray tubes) capable of beaming a
finer spot than do the tubes being used today. But direct view DTV might be
longer in coming. This is because tube TVs need a shadow mask (or aperture
grille) to direct electron beams to the correct phosphor and create a pixel.
Fabricating metal masks with the necessarily finer apertures is a challenge.
Even if it is accomplished, the TV picture might not have the brightness,
comparable to today's TVs. The smaller the aperture, the less light is emitted.
ibis will not be an issue with DTV capable PC monitors, which are viewed from a
distance of about two feet and do not have to compete with ambient light across
the length of a room.
In the short term, DTV will come in two flavors. Projection DTVs that measure
at least 60 inches diagonally and that are viewed from beyond eight feet, will
feature 1,920 by 1,080 resolution, while the largest direct-view tube sets
(perhaps 38 inches diagonally in the wide-screen 16:9 aspect ratio) will max out
at 1,280 by 720 pixels.
How long today's analog signals will remain available is not yet clear. It.
will probably be determined by household penetration of DTV over time. RCA
speculates that DTV sales will reach 1 million annually in 2002, still a far cry
from the 25 Million conventional TVs sold in 1997. This much is clear: those
telecasters who convert to DTV must begin returning their analog channels to the
FCC in 2006. By that time, TV makers expect to offer inexpensive converters for
older sets.
It should be clearly understood that the proliferation of front and rear
projection television in the large screen market would be decimated by the
introduction of AuGRID's flat panel high-resolution large screen. The market
niche for the large screen has been growing along with the entire array of home
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theater products specifically the variety of projectors, screens of different
dimensions and the by products of a growing market in home theater. These
product lines will be severely affected by AuGRID's conventional format and
mass-market appeal for a flat panel large screen promoting its quality, pricing
and efficiencies.
MARKET OVERVIEW AND SIZE
The worldwide display market is currently $20 billion per year and projected to
grow to over $34 billion by 1999. The flat panel display market is estimated to
be approximately $6.5 billion and is estimated to grow to $12.5 billion by 1999.
AuGRID's FPCDs will have the potential of displacing all other display
technologies. There is presently no known emission flat panel display
technology that is cost effective, efficient, or as fast as electrons exiting
highly efficient phosphors, which is the fundamental physics utilized in field
emission displays.
MARKET SEGMENTS
The flat panel market will grow more rapidly with the introduction of AuGRID's
product lines. AuGRID intends to capitalize on its superior product and
efficient pricing policies to the following facets of the market place:
1. An ever-growing opportunity exists for entry into the desktop monitor and
DVD/HDTV component tuner and digital manufacturing markets. These
original equipment Manufacturer (OEM) companies are the leaders in the
reception of high quality signals. These OEM companies have deployed
excessive amounts of capital to develop significant inroads into the
electronic component marketplace. These same companies will benefit
immensely by promoting the "full package" that AuGRID's flat panel screen
will provide for their tuner market.
2. The dealer programs as viewed by AuGRID will be the core distribution and
marketing partner for the mass markets that the flat panel will
penetrate. Dealers exist for the purpose of moving manufactured product
quickly into the market place. Dealer marketing depends on the strength
of the product, pricing and delivery of which AuGRID I will provide, thus
allowing the dealer to market aggressively into a robust CE market.
3. The other consumer electronics retail giants such as Best Buy, Circuit
City, and Wal-Mart will also be bidding on the product and will provide
incredible market opportunities once the Company has established
marketing and distribution capabilities. These outlets will not only
provide an early and sustained challenge to AuGRID's production and
quality assurance capabilities, but will also push it to industry
leadership in the flat panel screen market.
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Market segment growth will be limited to the production capacity starting the
4th quarter of 2000 through the 1st quarter of 2001.
COMPETITION
The competition, thus far, has expanded in excess of $150 billion U.S. dollars
in attempting to develop Liquid Crystal Display (LCD) technology. Thus far,
they have been unable to tackle the problem of scaling up the size of LCD
screens without the process becoming cost prohibitive in the extreme.
The concerns of AuGRID are that there is unquestionable evidence that the
Japanese and foreign manufacturers are capable of spending into the billions of
dollars to seek the technology that the marketplace has been anticipating for
the thin screen technology. AuGRID remains confident that the course of
scientific technology, utilizing thin cathode ray technology/field emitter
display (TCRT/FED) technology will overwhelm the international marketplace and
place undue burden on the foreign competition to either abandon their thin
screen technology or re-deploy their Research and Development towards the
TCRT/FED. AuGRID has positioned itself to anticipate that foreign technology
will be forced to clone itself to AuGRID's soon to be acquired technology.
The major competitive flat-panel computer display technologies are active matrix
liquid-crystal displays (Almonds), plasma displays and electro luminescent (EL)
panels. AuGRID's distinctive technology will overwhelm the Consumer Electronic
Industry.
GEOGRAPHIC MARKET FACTORS
It is anticipated that AuGRID will enter aggressively into the U.S. marketplace,
followed immediately into the European marketplace. The global expansion for
the manufacturing facilities of AuGRID are scheduled in Europe by the end of
2002, in order to deliver products directly to the overseas markets.
BARRIERS TO MARKET ENTRY
At the time of this writing, the global capital markets have been experiencing
financial turmoil. This international situation may serve as a catalyst for a
U.S. domestic company to seek infrastructure funding from the capital markets.
However, the global consumer electronics market and in particular the thin
screen video marketplace will be robust and healthy for a number of years to
come.
AuGRID's capital requirements for plant expansion will be enhanced by the
strength of the dollar in the overseas and domestic construction build outs.
Domestic and international promotions by municipals and foreign governments for
construction outlays favor the deployment of the global manufacturing operations
as quickly as the technology can be developed.
(3) Status of Any Announced New Product or Service
The Company has four (4) product lines that are beyond the research and
development stage and that are ready for commercialization. These product lines
were initially developed by Ceravision Limited, through an Exclusive Research
and Development Agreement the Company had with Ceravision. This Agreement has
been disclosed previously in this Registration Statement. At this time, the
Company is in the process of renegotiating its global exclusive licensing
agreement with Ceravision. The purpose of these negotiations is to enable the
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Company to manufacture the above-mentioned product lines for the military and
consumer electronics industry. While the Company believes that it will be
successful in re-obtaining its exclusive licensing agreement with Ceravision,
there can be no guarantee that this will be the case. Any failure of the
Company to successfully renegotiate its licensing agreement with Ceravision will
likely have a negative adverse financial affect on the Company.
The Company plans to eventually develop and manufacturer ceramic substrates
(Laptop Interconnects), packages, and multi-layer ceramic interconnects for the
commercial computer/electronics market. The Company, however, has yet to begin
development of this product beyond a drawing board stage. Additionally, the
Company hopes to develop and introduce other technologies and products to the
marketplace over the next four (4) years related to flat panel displays and
related product and technology areas. The Company, however, has yet to announce
any specific new products, services or technologies in addition to those
existing products and technologies described in this registration statement.
(4) Industry Background
The Market for Flat Panel Displays and Computer Monitors
Augrid intends to supply flat panel displays in the form of thin cathode ray
tubes (TCRT's) to several Japanese computer manufacturers and two European
automobile manufacturers. However, due to its development stage nature and
current focus on continued research and development, the Company has yet to sign
a definitive agreement with any of these parties and does not expect to do so
over the next twelve (12) months. Additionally, no assurances can be given that
the Company will be able to effectuate any definitive agreements to supply flat
panel displays to the above manufacturers.
Initial market surveys that the Company's management has studied indicate that
the market for portable computer monitors alone, along with support materials
will exceed $900 million USD annually over the next three (3) years.
Additionally, the Company believes that this market will be a $1 to $2 billion
market annually within the next five (5) years. Of this, however, the Company
can give no assurance.
The growth of flat panel display sales is being accelerated by the emerging
portable consumer electronic products market as evidenced by the proliferation
of video view-cams, Sega, Nintendo and Sony portable video games, hand held TV
sets, video displays mounted in the rear seats of automobile vans, personal
digital assistants such as those manufactured by U.S. Robotics, Apple, HP, and
Psion to name a few. There is also a rapid expansion in the sales and use of
hand-help global positioning systems such as those manufactured by Trimble
Navigation, and video telephones such as those manufactured by AT&T.
Industry observers anticipate that additional improvements in the cost, power
efficiency and performance levels of flat panel display technology will spawn a
wide range of rapidly growing, portable electronic applications.
Market Analysis Summary
Management of the Company believes that the Thin Cathode Ray Tube (TCRT) market
is large, well defined, and rapidly developing, despite the fact that the market
is still technologically immature. While flat panel display sales continue to
grow, the Company believes that most customers are dissatisfied with the cost,
performance and availability tradeoffs inherent in the current portable display
technology. This dissatisfaction - in management's opinion - creates an
opportunity for the Company's products and technology.
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Until recently, most non-TV display markets such as video billboards and
computer monitors did not require full color or video rates. As an example, the
largest flat panel display market segment, portable computer monitors, have
almost completely shifted to full color video, based upon new applications that
effectively utilize graphics-based characteristics. Microsoft's Windows and
other multimedia paradigms are causing a major demand shift toward portable
systems with rich color video rate displays.
In the market segment of portable video systems, balancing power consumption
against demand for higher display performance has become a major design issue.
Nearly all other computer components can be included in low power, slim profile
systems, with the display demanding a major portion of the power, cost and size
budgets. New LCD's have been introduced which feature enhanced color and video
rates, but with significant power, thickness and cost penalties. Even with sub-
optimal supply conditions, Stanford Resources Corporation, a subsidiary of
Stanford University, has projected worldwide flat panel display sales to
increase from $5.6 billion USD in 1994 to more than $14 billion USD in the year
2000, a conservative compounded annual growth rate of approximately twenty
percent (20%).
Market Segmentation
Because of the nature of Augrid's technology, management of the Company does not
believe that significant market segmentation for the Company is an issue.
Management believes a more significant issue for the Company, however, is likely
to be the application of Field Emission Cathode Display (FED) technlogy to
eliminate and replace existing markets for active matrix liquid crystal display
(AMLCD) technology.
The high resolution flat panel display market is dominated by the AMLCD.
AMLCD's are widely utilized in today's video billboards, notebook and laptop
computers, portable personal assistants, flat screen miniature televisions and
large viewfinder camcorders. The 10-inch diagonal display for portable computer
applications is both the highest dollar volume flat panel product and the one
that sets the technical benchmarks currently. The AMLCD's dominate the high end
of the portable computer display market. This provides a high quality image but
suffers from five major technical drawbacks:
* The AMLCD displays cannot be fabricated with large screen sizes such as a
television monitor that would be placed on the wall, without the product
becoming cost prohibitive (currently $40,000). Even the Japanese have
essentially abandoned the ambitious "Giant Screen Technology Program" which
touted the one meter AMLCD.
* AMLCD color screens consume an inordinate amount of power, shortening battery
life. Even the most optimistic estimates suggest power consumption falling from
5-7 watts to 2-3 watts over the next 1-2 years.
* The complex manufacturing process causes the AMLCD screens to be extremely
expensive. At $800 to $1,000, the screen is almost one half of the
manufacturing cost of a standard portable computer.
* To date, other competing technologies have been unable to dislodge the AMLCD's
dominance. Collectively, the AMLCD industry has invested billions of dollars in
technology, process and equipment development. There is a large cadre of
skilled technicians working in factories that cost billions of dollars to
construct, operate and run. The competing technology infrastructure is and has
been in place, however, and is mostly in Japan and other far eastern countries.
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* These competing display technologies, such as electroluminescent and plasma,
are driven by a cluster of small, independent-minded companies that cannot
muster the resources to transition from specialty niche markets to true volume
production. Their products are designed to sell in low volume at extremely high
prices. These competing display technologies have limitations that preclude
them from offering products for the main stream market: small and large video
billboard displays, the 10-inch diagonal display for portable applications and
desktop computer monitors. To offer a competitively-priced, high performance
display that is manufactured in the millions of units per year, management of
the Company believes that the competition would need to restructure their
organizations, redesign their products and retool their manufacturing processes.
Industry Analysis
Augrid's management believes that it has proprietary technology that competes
directly with AMLCD technology. At the same time, management of the Company
believes that current AMLCD technology is inferior in the areas of color
vibrancy, brightness, power consumption and manufacturing cost. The Company's
Thin CRT (cathode ray tube) is essentially a flat version of the conventional
cathode ray tube (CRT). In a color CRT, the electron beam is replaced by a
multitude of electron beamlets. In a CRT, the electron beam scans across the
phosphor on the faceplate to create an image. In a Thin CRT, the individual
electron beamlets are X-Y addressed and modulated to determine the brightness of
each pixel. As with the traditional CRT, the Thin CRT operates in a vacuum.
(5) Raw Materials and Suppliers
The Company is currently, primarily engaged in the research and development of
its current products and technology, and as such, does not currently use raw
materials or have any single, principal suppliers. When the Company begins
manufacturing its products, however, the Company believes that it will
manufacture and assemble its own products utilizing several source vendors from
various domestic and international locations. The Company does not currently
have any agreements or relationships with any vendors, however.
(6) Customers
The Company believes that the vast majority of its initial customers will be
original equipment manufacturers (OEM's) and manufacturers and developers of
video billboards, televisions, computer monitors, laptops, and medical monitors.
As of September 30, 1999, no sales revenues have been generated by the Company,
however. In addition, the Company does not anticipate generating any material
revenue over the next approximately twelve (12) months.
(7) Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements,
or Labor Contracts
The Company does not currently have any patents, trademarks, licenses,
franchises, concessions or royalty agreements. However, the Company does have a
global exclusive licensing agreement, which includes manufacturing clauses and
is currently being re-negotiated to include several additional applications, and
believes that its success and ability to compete will be dependent, to a large
extent, on the protection of the current and projected technology and on the
goodwill associated with potential patents, trademarks, trade names, service
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marks and other proprietary rights. The Company relies on international patent
laws to protect the existing proprietary technology and the improvements that it
believes it has made to original patents owned by others. However, the Company
does not currently have any patents, and cannot afford to seek such protection
as of the date of this registration statement. Additionally, the Company does
not know when it might be able to afford to seek such protection, if ever.
Policing unauthorized use of the Company's licensed proprietary technology and
other intellectual property rights could entail significant expense and could be
difficult or impossible, particularly given the global nature of the Company's
competition and the fact that the laws of other countries may afford the Company
little or no effective protection of its proprietary property and technology.
In addition, there can be no assurance that third parties will not bring claims
of patent or technology infringement against the Company or claim that the
Company's use of certain technologies violates a patent. The Company
anticipates an increase in patent infringement claims involving flat panel-
related technologies as the number of products and competitors in this market
grows and as related patents are issued. Any claims of infringement, with or
without merit, could be time consuming to defend, result in costly litigation,
divert management attention, require the Company to enter into costly royalty or
licensing arrangements to prevent the Company from using important technologies
or methods, any of which could have a material adverse effect on the Company's
business, financial condition or operating results.
(8) Regulation
The Company does not need any government approval for its principal products,
technology, or related services.
(9) Effect of Existing or Probable Government Regulations
None - Not Applicable.
(10) Research and Development Activities
The market for the Company's products and technology has historically been
characterized by frequent technological advances, evolving industry standards
and escalating customer expectations. As a result, management believes that the
Company's future growth and success will be largely dependent on its ability to
develop or acquire products and technology to meet the evolving needs of its
prospective clients. The Company anticipates that the long-term success of its
product and technology offerings will require further product and technology
development.
In the past approximately three and one half years, Ceravision UK, Limited, a
pure display research and development company, has engaged the Rutherford
Appleton Laboratory in the science of field emission device technology, in
combination with certain proprietary ceramic technology for the express purposes
of completing research and development work for application specific displays.
It is that reason that Augrid of Nevada, Inc. engaged Ceravision, Ltd., to
license and acquire application specific technologies, i.e., desktop monitors,
automobile GPS screens and military application screens. Presently, the Company
has four product lines are completed and positioned for manufacturing in the
United States of America.
As of September 30, 1999, the Company itself has not incurred any research and
development costs related to the Company's products and technology.
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(11) Impact of Environmental Laws
The Company is not aware of any federal, state or local environmental laws which
would effect its operations.
(12) Employees
The Company presently has approximately four (4) full time employees and two (2)
part time employees. The Company's employees are currently not represented by a
collective bargaining agreement, and the Company believes that its relations
with its employees are good.
Item 2. Management's Discussion and Analysis or Plan of Operation
A. Management's Plan of Operation
(1) In its initial approximately four year operating period ended September 30,
1999, the Company incurred a net loss of $1,235,335 for selling, general and
administrative, research and development and other expenses related to start-up
operations. It has yet to receive any revenues from operations. As previously
stated, the Company was organized by the filing of articles of incorporation
with the Secretary of State of the State of Nevada on August 4, 1995. The
Company was formerly known as Ironwood Ventures, Inc., hereinafter referred to
as "Ironwood," and changed its name in February of 1998 after a change of
control. The original articles of incorporation of the Company authorized the
issuance of seven million five hundred thousand (7,500,000) shares of Common
Stock at a par value of $0.01. The articles of the Company were amended on
March 2, 1998, and the Company's amended articles authorized the issuance of
ninety million (90,000,000) shares of Common Stock at a par value of $0.001 per
share.
On August 4, 1995, the Company's original founder contributed $2,000 to the
capital of the Company and was issued 200,000 shares of $0.01 par value Common
Stock of the Company. On August 5, 1995, eleven (11) other shareholders
contributed $11,000, or par value per share, for 1,100,000 shares of Common
Stock. On September 17, 1995, seven (7) other shareholders contributed $5,250,
or $0.015 per share, for 350,000 shares of Common Stock. These offerings were
made in reliance upon exemptions from the registration provisions of Section
4(2) of the Securities Act of 1993 (the "Act"), as amended. As of December 31,
1996, all of the contributed capital of the Company was expended on various
legal, incorporation, organizational, and administrative costs, and on January
17, 1997, the Company consummated a 4.5 for 1 forward stock split for all issued
and outstanding common shares bringing the total issued and outstanding common
shares of the Company to 7,125,000 held by nineteen (19) shareholders. In
February through September of 1997, approximately 98 individuals and
corporations - none of whom were affiliated with the Company's founder -
purchased approximately 300,000 shares of Common Stock of the Company from
existing shareholders, none of which were the founder of the Company. As of
December 31, 1997, the Company had 7,425,000 issued and outstanding shares of
Common Stock held by approximately 117 shareholders, of which 800,000 shares
were held by an affiliate of the Company. On March 1, 1998, the company's
current controlling shareholders purchased controlling interest in the Company
via the purchase of approximately 4,616,111 shares of Common Stock of the
Company in private transactions; this represented approximately 62.2 percent
(62.2%) of the Company's issued and outstanding Common Stock.
On March 2, 1998, the Company executed a forward stock split of its stock,
6.06571228 to 1. In addition, the Company increased its authorized shares to
90,000,000 common shares, and changed its name to Augrid of Nevada, Inc. On
March 12, 1998, the Company - now called Augrid of Nevada, Inc. - executed an
asset purchase agreement purchasing substantially all of the assets of Augrid
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Corporation, a Delaware corporation hereinafter referred to as "Augrid of
Delaware", a company under common control by the control shareholders of the
Company, for 1,000,000 newly issued shares of the Company. This was not a third
party, arms length transaction, and due to the development stage and specialized
nature of the assets/technology that the Company purchased, the Company's
management is unable to determine how this transaction would compare to a
similar arms length transaction. The 1,000,000 shares of the Company are
currently held by Augrid of Delaware. On March 15, 1998, the Company had
approximately 46,037,914 shares of its $0.001 par value Common Stock held by
approximately 188 shareholders of record - 28,000,000 of which were held by
control persons, officers and directors of the Company, and affiliates, and 18,
037,914 held by non-affiliates.
In May of 1998, the Company began a private offering of its Common Stock
pursuant to Regulation D, Rule 506, whereby it sold approximately 3,351,434
shares of Common Stock to approximately 321 shareholders. The Company closed
this offering on or about September 30, 1999. Additionally, in June and July of
1998, the Company sold 317,500 shares of its Preferred Stock to approximately
six (6) accredited investors also pursuant to Regulation D, Rule 506. The
Company raised approximately $1,834,467 from these two offerings.
Finally, in August of 1998, the Company borrowed $100,000 from an existing
shareholder pursuant to a convertible note, at no interest. This money is
currently past due, and is characterized as a current liability on the Company's
balance sheet. Additionally, this note is convertible into Common Stock of the
Company at the conversion rate of thirty five ($0.50) cents per share by the
holder at any time.
As of the date of this Registration Statement, the Company has approximately 49,
389,348 shares of its $0.001 par value common voting stock issued and
outstanding which are held by approximately 509 shareholders of record and 317,
500 shares of its $0.001 par value preferred non-voting stock issued and
outstanding held by six (6) shareholders. Management fully anticipates that the
proceeds from the sale of the shares in the offerings delineated above will be
sufficient to provide for the Company's capital needs for the next approximately
three (3) to six (6) months. However, if additional financing is needed, no
guarantees can be given that the Company will be able to secure additional
financing, if required, or if available, will be on terms and conditions
satisfactory to management. The Company believes that, if necessary, additional
capital will be derived from future securities offerings, public or private,
and/or the assumption of additional debt by the Company. These future offerings
or transactions could significantly dilute the value of any previous or future
stockholders' investment. The Company currently has no arrangements or
commitments for accounts and accounts receivable financing. There can be no
assurance that any such financing can be obtained or, if obtained, that it will
be on reasonable terms.
There is no assurance that the Company will generate any initial revenues for at
least another twelve (12) months. At the same time, realization of significant
sales of the Company's products and services during the fiscal year ending
December 31, 2000 is vital to its plan of operations. To this end, management
is currently emphasizing the development of the Company's current products and
technology as described herein.
(2) No engineering, management or similar report has been prepared or provided
for external use by the Company in connection with the offer of its securities
to the public.
(3) Management believes that the Company's future growth and success will be
largely dependent on its ability to develop or acquire products and technology
to meet the evolving needs of its prospective clients. The Company anticipates
that the long-term success of its product and technology offerings will require
further product and technology development. However, as of September 30, 1999,
the Company has not incurred any in-house research and development expenses.
The Company is relying entirely on its agreement with an original technology
provider described above.
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(4) The Company currently does not expect to purchase or sell any of its
facilities or equipment.
(5) Management does not anticipate any significant changes in the number of its
employees over the next approximately six (6) months.
B. Segment Data
As of September 30, 1999, no sales revenue has been generated by the Company.
Accordingly, no table showing percentage breakdown of revenue by business
segment or product line is included.
Item 3. Description of Property
A. Description of Property
The Company's corporate headquarters are located at 140 Public Square, The Park
Building, Suite 108, Cleveland, Ohio 44114. These facilities consist of
approximately 825 square feet of standard office space. The Company has use of
this space through a sub-lease arrangement with RAN Associates, Inc., a non-
related party to the Company. The sub-lease is for approximately $1.27 per
square foot per month ($1,050 per month), lasts through October 31, 1999, and is
at commercially favorable rates in the opinion of management. Upon completion
of this sub-lease, the Company plans on leasing the above-described premises
directly for the next approximately twelve (12) months at approximately the same
terms and rate as described herein. The Company does not have any additional
facilities, and believes that this space is adequate given the Company's current
office and administrative requirements.
There are currently no proposed programs for the renovation, improvement or
development of the properties or facilities leased by the Company.
B. Investment Policies
Management of the Company does not currently have policies regarding the
acquisition or sale of assets primarily for possible capital gain or primarily
for income. The Company does not presently hold any investments or interests in
real estate, investments in real estate mortgages or securities of or interests
in persons primarily engaged in real estate activities.
Item 4. Security Ownership of Management and Certain Security Holders
A. Security Ownership of Management and Certain Beneficial Owners
The following table sets forth information as of the date of this Registration
Statement certain information with respect to the beneficial ownership of the
Common Stock of the Company concerning stock ownership by (i) each director,
(ii) each executive officer, (iii) the directors and officers of the Company as
a group, (iv) and each person known by the Company to own beneficially more than
five percent (5%) of the Common Stock. Unless otherwise indicated, the owners
have sole voting and investment power with respect to their respective shares.
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Amount
Title Name and Address of shares Percent
of of Beneficial held by of
Class Owner of Shares Position Owner Class
Common Muhammad J. Shaheed(1) Chairman;
President & CEO 27,060,000 54.79%
Common Mary F. Sloat-Horoszko(1) Sec./Treas.; CFO; Director 750,000 1.52%
Common Essa Mashni Director 72,000 0.15%
Common Augrid Corporation (2) N/A 1,000,000 2.02%
Common Summer International (3) N/A 4,850,000 9.82%
Common All Executive Officers and
Directors as a Group (3 Persons) (4) 27,882,000 57.00%
(1) c/o Augrid of Nevada, Inc., 140 Public Square, The Park Building, Suite
108, Cleveland, Ohio 44114.
(2) Augrid Corporation ("Augrid of Delaware") is majority-owned by the
Company's current officers and directors; they own 54.7% of this company's
issued and outstanding common stock.
(3) This company is currently owned by Joseph Cornwell, a shareholder of the
Company.
(4) Not including each executive officer's ownership of the Company through
ownership of the shares of Augrid of Delaware, Inc. or Summer International.
B. Persons Sharing Ownership of Control of Shares
No person other than Muhammad J. Shaheed owns or shares the power to vote ten
percent (10%) or more of the Company's voting securities.
C. Non-voting Securities and Principal Holders Thereof
The Company currently has 317,500 shares of, non-voting Preferred Stock
outstanding held by six (6) shareholders. These securities carry a liquidation
preference over the Company's Common Stock. The Company is not registering
these securities.
D. Options, Warrants and Rights
The Company has issued an option to Blakemore, Meeker & Bowler Co., L.P.A.
("Blakemore"), for 500,000 shares of Common Stock in lieu of a legal retainer
for services to be rendered by the firm to the Company. The option granted to
Blakemore is already fully vested, and the option may be exercised in whole, or
in part, at any time from the date of issuance of the option through the first
to occur of (a) March 15, 2008; or (b) the 1095th calendar day after an
underwritten Initial Public Offering ("IPO") pursuant to an effective
registration statement under the Securities Act of 1933, as amended covering the
offering and sale of shares of the Company's Common Stock. The purchase price
for each share of the Company pursuant to this option is three and 1/2 cents
($0.035) per share.
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E. Parents of the Issuer
Under the definition of parent, as including any person or business entity who
controls substantially all (more than 80%) of the issuer's common stock, the
Company has no parents.
Item 5. Directors, Executive Officers and Significant Employees
A. Directors, Executive Officers and Significant Employees
The names, ages and positions of the Company's directors and executive officers
are as follows:
Name Age Position
Muhammad J. Shaheed 32 President, CEO and Chairman
Mary F. Sloat-Horoszko 32 Secretary/Treasurer, CFO and Director
Essa Mashni 35 Director
B. Work Experience
Muhammad J. Shaheed, President, CEO and Chairman of the Board - Mr. Shaheed has
been the President, CEO and Chairman of the Company since March of 1998. A
native of Cleveland, Ohio, Mr. Shaheed attended Cleveland State University from
1986 to 1988, majoring in Physics and Computer Science. From 1986 through 1987,
Mr. Shaheed assisted in the general instruction of math and science to children
at the elementary level - specializing in teaching handicapped and children with
severe behavioral problems. From 1987 to 1990, Mr. Shaheed was a manager with
the National Theatre Corporation in Cleveland Heights, Ohio with overall
management responsibility for customer relations, inventory, promotions,
marketing and accounting. From 1990 to 1993, Mr. Shaheed was a systems engineer
for Integrated Business Solutions located in Lyndhurst, Ohio. He was
responsible for the construction of complete computer hardware systems,
specifications, BIOS, cashe and reconfiguring computer operational systems.
Worked on program that assisted the Dean of the Artificial Intelligence
Department at Case Western Reserve. Assisted as a Holistic Programming expert,
analyst and overall troubleshooter relating to maximum and minimum system
capacity. Since the founding of the Company, Mr. Shaheed had headed the
research and development of Flat Panel Technologies in accordance with the
United States Government Flat Panel Display Initiative; provided clients with
systems engineering, CAD electronic circuit design work for high and low
temperature ceramic tape, thermal analysis for 100% superconductive material,
construction of complete complex computer systems and specifications, BIOS,
cashe and providing current clients with systems analysis and overall trouble
shooting. From 1994 to March of 1998, Mr. Shaheed's focus and dedication was
directed solely to acquiring a viable flat screen technology to be implemented
in the United States in the areas of auto, military and consumer electronics.
During this time, a concentrated and inordinate amount of time was spent with
Ceravision, Ltd., in the research and development, as well as the formulation
and identification of market-specific applications in the United States.
Mary F. Sloat-Horoszko, Secretary/Treasurer, CFO and Director - Mrs. Sloat-
Horoszko has been the Secretary/Treasurer and Director of the Company since
February of 1999. Mrs. Sloat-Horoszko, a graduate of Ohio State
University, holds a Bachelor of Arts Journalism Degree with specialization
in Broadcast Communication and Marketing. From 1992 until 1994, Mrs.
Sloat-Horoszko was a Producer and On-Air Coordinator for Cleveland, Ohio
based WWWE-Newsradio. During this time her responsibilities were
Guest/Topic development and coordination; marketing and program/station
promotional development as well as corporate and community events. From
1994 through 1996, she served as Director of Marketing, responsible for
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product development, marketing and advertising, for Illinois Insurance
Brokerage Services, Chicago, Illinois. Late 1996 through 1997, Ms. Sloat-
Horoszko served as Director of Marketing and Sales for RAE Enterprises of
Chagrin Falls, Ohio, where she was responsible for corporate sales,
marketing, assessments, program development and facilitation. Clients
included General Motors, IBM, UAW/Ford and Rubbermaid. Since joining the
Augrid team, Ms. Sloat-Horoszko has dedicated her efforts to the daily
functions of the corporation in addition to the market segmentation,
sizing, planning and execution of the up and coming product lines of the
Company.
Essa Mashni, Director - Mr. Mashni has been a director of the Company since
1999. Mr. Mashni holds a Bachelor in Pharmacy from the Wayne State College
of Pharmacy in Detroit, Michigan. He attended Wayne State University from
1985 to 1986 and the University of Michigan from 1983 to 1985. He is a
member of the American Pharmaceutical Association and the Michigan Pharmacy
Association. He also is a member of the American Ramallah Federation, St.
Mary's Antiochian Orthodox Church and is active in the Ramallah Boys Club.
He is currently a Chief Pharmacist with Arbor Drugs and has acted in such
capacity for the past five (5) years.
C. Family Relationships
None - Not Applicable.
D. Involvement on Certain Material Legal Proceedings During the Last Five Years
(1) The Company is presently considering potential litigation and claims
against former corporate officers for acts which may include misrepresentation,
misappropriation of corporate assets, breach of fiduciary duty and usurpation of
corporate opportunities. Additionally, Orchard's Way Realty, a creditor of the
pre-merger entity, AuGRID Corporation, has been awarded a judgement against the
Company. As of the date of this filing, the balance outstanding is $4,000.
Virtual Design, Inc. has filed a claim against AuGRID Corporation - the pre-
merger entity - seeking $36,000 for alleged breach of contract. AuGRID of
Nevada, Inc., intends on litigating a defense to this claim.
(2) No director, officer, significant employee or consultant has been convicted
in a criminal proceeding, exclusive of traffic violations.
(3) No director, officer, significant employee or consultant has been
permanently or temporarily enjoined, barred, suspended or otherwise limited from
involvement in any type of business, securities or banking activities.
(4) No director, officer or significant employee has been convicted of
violating a federal or state securities or commodities law.
Item 6. Executive Compensation
Remuneration of Directors and Executive Officers
The Company does not currently have employment agreements with its
executive officers but expects to sign employment agreements with each in
the next approximately twelve (12) months. Each executive officer has been
drawing the following annualized compensation, and each executive officer
is expected to draw the following annual compensation over the next twelve
(12) months. The Company does not currently have a stock option plan.
-24-
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<PAGE>
(1) Name of Individual Capacities in Which Annual
or Identity of Group Remuneration was Recorded Compensation
Muhammad J. Shaheed President and CEO $23,400
Mary F. Sloat-Horoszko Secretary/Treasurer/CFO $23,400
Essa Mashni Director $0
(2) Compensation of Directors
There were no arrangements pursuant to which any director of the Company was
compensated for the period from August 4, 1995 - inception of the Company - to
September 30, 1999 for any service provided as a director. In addition, no such
arrangement is contemplated for the foreseeable future as two of the Company's
three current directors are executive officers who are currently drawing a
salary for the management of the Company.
Item 7. Certain Relationships and Related Transactions
On March 12, 1998, the Company executed an asset purchase agreement purchasing
substantially all of the assets of Augrid Corporation, a Delaware corporation
hereinafter referred to as "Augrid of Delaware", a company under common control
by the control shareholders of the Company, for 1,000,000 newly issued shares of
the Company. This was not a third party, arms length transaction, and due to
the development stage and specialized nature of the assets/technology that the
Company purchased, the Company's management is unable to determine how this
transaction would compare to a similar arms length transaction. 1,000,000 shares
of the Company are currently held by Augrid of Delaware. In the asset purchase
transaction, the Company acquired the right to ongoing preliminary negotiations
involving an exclusive research and development agreement with Ceravision
Limited, originally undertaken by Augrid of Delaware in conjunction with the
Sarnoff Research Facility in Princeton, New Jersey. While an Agreement was
signed with Ceravision on September 24, 1998, the Company is presently
renegotiating the terms of that Agreement with Ceravision so as to expand the
scope of its licensing rights.
Due to the development stage nature of the Company, the Company has no other
relationships or transactions.
-25-
<PAGE>
<PAGE>
Part II
Item 1. Legal Proceedings
The Company is presently considering potential litigation and claims against
former corporate officers for acts which may include misrepresentation,
misappropriation of corporate assets, breach of fiduciary duty and usurpation of
corporate opportunities. Additionally, Orchard's Way Realty, a creditor of the
pre-merger entity, Augrid Corporation, has been awarded a judgement against the
Company. As of the date of this filing, the balance outstanding is $4,000.
Virtual Design, Inc. has filed a claim against Augrid Corporation - the pre-
merger entity - seeking $36,000 for alleged breach of contract. Augrid of
Nevada, Inc., intends on litigating a defense to this claim.
Item 2. Market for Common Equity and Related Stockholder Matters
A. Market Information
(1) The Common Stock of the Company is currently not traded on the "Pink
Sheets" or the OTC Bulletin Board or any other formal or national securities
exchange. Being a start-up company, there is no fiscal history to disclose.
(2)(i) The Company currently has an option outstanding - which was issued to
Blakemore, Meeker & Bowler Co., L.P.A., a law firm - to purchase 500,000 shares
of Common Stock of the Company for three and 1/2 cents per share ($0.035). This
option was granted in lieu of a retainer required by such firm for legal
services to be rendered. The Company, however, currently has no other Common
Stock which is subject to outstanding options or warrants to purchase, or
securities convertible into, the Company's common stock.
(ii) There is currently no common stock of the Company that the registrant has
agreed to register for sale by security holders. The Company, however, has
approximately 3,228,300 shares of Common Stock of the Company which could be
sold under Rule 144 of the Securities Act of 1933, as amended.
(iii) There is currently no common equity that is being or is proposed to be
publicly offered by the registrant, the offering of which could have a material
effect on the market price of the issuer's common equity.
B. Holders
As of September 30, 1999, the Company had 509 common stockholders of record.
C. Dividend Policy
The Company has not paid any dividends to date. In addition, it does not
anticipate paying dividends in the immediate foreseeable future. The board of
directors of the Company will review its dividend policy from time to time to
determine the desirability and feasibility of paying dividends after giving
consideration to the Company's earnings, financial condition, capital
requirements and such other factors as the board may deem relevant.
-26-
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<PAGE>
D. Reports to Shareholders
The Company intends to furnish its shareholders with annual reports
containing audited financial statements and such other periodic reports as
the Company may determine to be appropriate or as may be required by law.
Upon the effectiveness of this Registration Statement, the Company will be
required to comply with periodic reporting, proxy solicitation and certain
other requirements by the Securities Exchange Act of 1934.
E. Transfer Agent and Registrar
The Transfer Agent for the shares of common voting stock of the Company is
Shelley Godfrey, Pacific Stock Transfer Company, 5844 S. Pecos, Suite D,
Las Vegas, Nevada 89120, (702)-361-3033.
Item 3. Recent Sale of Unregistered Securities
On March 15, 1998, the Company had approximately 46,037,914 shares of its
$0.001 par value Common Stock held by approximately 188 shareholders of
record - 28,000,000 of which were held by control persons, officers and
directors of the Company, and affiliates, and 18,037,914 held by non-
affiliates.
In May of 1998, the Company began a private offering of its Common Stock
pursuant to Regulation D, Rule 506, whereby it sold approximately 3,351,434
shares of Common Stock to approximately 321 shareholders. The Company
closed this offering on or about September 30, 1999. Additionally, in June
and July of 1998, the Company sold 317,500 shares of its Preferred Stock to
approximately six (6) accredited investors also pursuant to Regulation D,
Rule 506. The Company raised approximately $1,834,467 from these two
offerings.
Finally, in August of 1998, the Company borrowed $100,000 from an existing
shareholder pursuant to a convertible note, at no interest. This money is
currently past due, and is characterized as a current liability on the
Company's balance sheet. Additionally, this note is convertible into
Common Stock of the Company at the conversion rate of thirty five ($0.50)
cents per share by the holder at any time.
As of the date of this Registration Statement, the Company has approximately 49,
389,348 shares of its $0.001 par value common voting stock issued and
outstanding which are held by approximately 509 common shareholders of record
and 317,500 shares of its $0.001 par value preferred non-voting stock issued and
outstanding held by six (6) shareholders.
Item 4. Description of Securities
A. Common Stock
(1) Description of Rights and Liabilities of Common Stockholders
i. Dividend Rights - The holders of outstanding shares of common stock are
entitled to receive dividends out of assets legally available therefore at such
times and in such amounts as the board of directors of the Company may from time
to time determine.
ii. Voting Rights - Each holder of the Company's common stock are entitled
to one vote for each share held of record on all matters submitted to the vote
of stockholders, including the election of directors. All voting is
noncumulative, which means that the holder of fifty percent (50%) of the shares
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<PAGE>
voting for the election of the directors can elect all the directors. The board
of directors may issue shares for consideration of previously authorized but
unissued common stock without future stockholder action.
iii. Liquidation Rights - Upon liquidation, the holders of the common stock
are entitled to receive pro rata all of the assets of the Company available for
distribution to such holders.
iv. Preemptive Rights - Holders of common stock are not entitled to
preemptive rights.
v. Conversion Rights - No shares of common stock are currently subject to
outstanding options, warrants, or other convertible securities.
vi. Redemption rights - no redemption rights exist for shares of common
stock.
vii. Sinking Fund Provisions - No sinking fund provisions exist.
viii. Further Liability For Calls - No shares of common stock are subject to
further call or assessment by the issuer. The Company has not issued stock
options as of the date of this Registration Statement to any party other than
those options already disclosed herein.
B. Preferred Stock
(1) Description of Rights and Liabilities of Preferred Stockholders
i. Dividend Rights - The holders of outstanding shares of preferred stock are
entitled to receive dividends out of assets legally available therefore at such
times and in such amounts as the board of directors of the Company may from time
to time determine.
ii. Voting Rights - The Company's preferred stock has no voting rights.
iii. Liquidation Rights - Upon liquidation, the holders of the preferred
stock have liquidation preference above the Common stockholders of the Company
and are entitled to receive pro rata all of the assets of the Company available
for distribution to such holders.
iv. Preemptive Rights - Holders of preferred stock are not entitled to
preemptive rights.
v. Conversion Rights - No shares of preferred stock are currently subject to
outstanding options, warrants, or other convertible securities.
vi. Redemption rights - no redemption rights exist for shares of preferred
stock.
viii. Sinking Fund Provisions - No sinking fund provisions exist.
viii. Further Liability For Calls - No shares of preferred stock are subject
to further call or assessment by the issuer. The Company has not issued
preferred stock options as of the date of this Registration Statement.
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<PAGE>
(2) Potential Liabilities of Common Stockholders to State and Local Authorities
No material potential liabilities are anticipated to be imposed on stockholders
under state statues. Certain Nevada regulations, however, require regulation of
beneficial owners of more than 5% of the Company's voting securities.
Stockholders that fall into this category, therefore, may be subject to fines in
circumstances where non-compliance with these regulations are established.
B. Debt Securities
The Company is not registering any debt securities.
C. Other Securities To Be Registered
The Company is not registering any security other than its common stock.
Item 5. Indemnification of Directors and Officers
The Bylaws of the Company provide for indemnification of its directors, officers
and employees as follows: Every director, officer, or employee of the
Corporation shall be indemnified by the Corporation against all expenses and
liabilities, including counsel fees, reasonably incurred by or imposed upon
him/her in connection with any proceeding to which he/she may be made a party,
or in which he/she may become involved, by reason of being or having been a
director, officer, employee or agent of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee or agent of the
Corporation, partnership, joint venture, trust or enterprise, or any settlement
thereof, whether or not he/she is a director, officer, employee or agent at the
time such expenses are incurred, except in such cases wherein the director,
officer, employee or agent is adjudged guilty of willful misfeasance or
malfeasance in the performance of his/her duties; provided that in the event of
a settlement the indemnification herein shall apply only when the Board of
Directors approves such settlement and reimbursement as being for the best
interests of the Corporation.
The Bylaws of the Company further states that the Company shall provide to any
person who is or was a director, officer, employee or agent of the Corporation
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of the corporation, partnership, joint venture, trust or
enterprise, the indemnity against expenses of a suit, litigation or other
proceedings which is specifically permissible under applicable Nevada law. The
Board of Directors may, in its discretion, direct the purchase of liability
insurance by way of implementing the provisions of this Article. However, the
Company has yet to purchase any such insurance and has no plans to do so.
The Articles of Incorporation of the Company states that a director or officer
of the corporation shall not be personally liable to this corporation or its
stockholders for damages for breach of fiduciary duty as a director or officer,
but this Article shall not eliminate or limit the liability of a director or
officer for (i) acts or omissions which involve intentional misconduct, fraud or
a knowing violation of the law or (ii) the unlawful payment of dividends. Any
repeal or modification of this Article by stockholders of the corporation shall
be prospective only, and shall not adversely affect any limitation on the
personal liability of a director or officer of the corporation for acts or
omissions prior to such repeal or modification.
The Articles of Incorporation of the Company further states that every
person who was or is a party to, or is threatened to be made a party to, or
is involved in any such action, suit or proceeding, whether civil,
criminal, administrative or investigative, by the reason of the fact that
he or she, or a person with whom he or she is a legal representative, is or
was a director of the corporation, or who is serving at the request of the
corporation as a director or officer of another corporation, or is a
representative in a partnership, joint venture, trust or other enterprise,
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<PAGE>
shall be indemnified and held harmless to the fullest extent legally
permissible under the laws of the State of Nevada from time to time against
all expenses, liability and loss (including attorneys' fees, judgments,
fines, and amounts paid or to be paid in a settlement) reasonably incurred
or suffered by him or her in connection therewith. Such right of
indemnification shall be a contract right which may be enforced in any
manner desired by such person. The expenses of officers and directors
incurred in defending a civil suit or proceeding must be paid by the
corporation as incurred and in advance of the final disposition of the
action, suit, or proceeding, under receipt of an undertaking by or on
behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he or she is not
entitled to be indemnified by the corporation. Such right of
indemnification shall not be exclusive of any other right of such
directors, officers or representatives may have or hereafter acquire, and,
without limiting the generality of such statement, they shall be entitled
to their respective rights of indemnification under any bylaw, agreement,
vote of stockholders, provision of law, or otherwise, as well as their
rights under this article.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
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<PAGE>
Part F/S
Item 1. Financial Statements
The following documents are filed as part of this report:
a) Audited Financial Statements of AuGRID OF NEVADA, INC.
(PREVIOUSLY IRONWOOD VENTURES)
Report of Henry L. Creel Co., Inc., CPA
Balance Sheet As At December 31, 1997 and December 31, 1998
Statement of Operations For Period August 4,1995 (Date of Inception) to
December 31, 1998 And the Period Ended December 31, 1997 And December 31,
1998
Statement of Shareholders' Equity For Period August 4,1995 (Date of
Inception) to December 31, 1998 And the Period Ended December 31, 1997
and December 31,1998
Statement of Cash Flows For Period August 4,1995 (Date of Inception) to
December 31, 1998 And the Period Ended December 31, 1997 And December 31,
1998
Notes to Financial Statements
b) Interim Financial Statements of AuGRID OF NEVADA, INC.
(PREVIOUSLY IRONWOOD VENTURES)
Report of Henry L. Creel Co., Inc., CPA
Balance Sheet As At September 30, 1998 and September 30, 1999
Statement of Operations For Period August 4,1995 (Date of Inception) to
September 30, 1999 And the Period Ended September 30, 1998 And
September 30, 1999
Statement of Shareholders' Equity For Period August 4,1995 (Date of
Inception) to September 30, 1999 And the Period Ended September 30, 1998
and December 31,1998
Statement of Cash Flows For Period August 4,1995 (Date of Inception) to
September 30, 1999 And the Period Ended September 30, 1998 And
September 30, 1999
Notes to Financial Statements
c) Financial Statements of AuGRID CORPORATION (predecessor)
Report of Henry L. Creel Co., Inc., CPA
Balance Sheet As At March 12, 1998 and December 31, 1997
Statement of Operations For Period Ended December 31, 1996 And For
Period Ended December 31, 1997 And the Period Ended March 12, 1998
Statement of Shareholders' Equity For Period Ended December 31, 1996 And
For Period Ended December 31, 1997 And the Period Ended March 12, 1998
Statement of Cash Flows For Period Ended December 31, 1996 And For Period
Ended December 31, 1997 And the Period Ended March 12, 1998
Notes to Financial Statements
Analysis of Changes In Assets. Liabilities & Equity From
December 31, 1997 to March 12, 1999
d) AuGRID OF NEVADA, INC. Consolidated Pro Forma Financial Statements
Report of Henry L. Creel Co., Inc., CPA
Consolidated Pro Forma Balance Sheet For September 30, 1999
Consolidated Pro Forma Statement of Operations For the Nine Months Ended
September 30, 1999
Consolidated Pro Forma Statement of Operations For the Six Months Ended
June 30, 1999
Consolidated Pro Forma Statement of Operations For the Three Months Ended
March 31, 1999
Consolidated Pro Forma Statement of Operations For the Period Ended
December 31, 1998
Notes to Financial Statements
Item 2. Changes In and Disagreements With Accountants on Accounting and
Financial
Disclosure
None -- Not Applicable.
<PAGE>
<PAGE>
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 1997
AND
DECEMBER 31, 1998
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
TABLE OF CONTENTS
PAGE NO.
Independent Auditor's Report
Balance Sheet 2-3
Statement of Operations 4
Statement of Stockholder's Equity 5
Statement of Cash Flows 6
Notes to the Financial Statements 7-8
<PAGE>
<PAGE>
HENRY L. CREEL CO., INC.
Certified Public Accountant
(216) 491-0800
Fax (216) 491-0803
Board of Directors
AuGRID OF NEVADA, INC.
140 Public Square
The Park Building Suite 208
Cleveland, Ohio 44114
Independent Auditor's Report
I have audited the accompanying balance sheet of AuGRID OF NEVADA, INC.
(previously Ironwood Ventures) (A Nevada Development Stage Corporation) as of
December 31, 1997, and December 31, 1998, and the related Statement of
Operations, Shareholder's Equity and Cash Flows for the period August 4, 1995
(date of inception) to December 31, 1997 and the period Ended December 31, 1998.
These financial statements are the responsibility of management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating, the overall presentation
of the financial statements. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AuGRID OF NEVADA, INC
(previously Ironwood Ventures) (A Nevada Development Stage Corporation) as of
December 31, 1997, and December 31, 1998, and the results of its operations
and its cash flows for the period August 4, 1995 (date of inception) to
December 31, 1997, and the period Ended December 31, 1998, in conformity with
generally accepted accounting principles.
The Accompanying Financial Statement have been prepared assuming the company
will continue as a going concern. As discussed in note 1 to the Financial
Statements, the company has had limited operations. Management's plan in
regards to these matters are also described in note 1.
/s/ Henry L. Creel Co., Inc.
May 25, 1999
<PAGE>
<PAGE>
3587 LEE ROAD * SHAKER HEIGHTS, OHIO 44120
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE COMPANY)
Balance Sheet
As At
December 31, 1997 and December 31, 1998
ASSETS
December 31 December 31
CURRENT ASSETS 1998 1997
Cash $ 7,860 -0-
Total Current Assets 7,860 -0-
PROPERTY AND EQUIPMENT (Note 1)
Machinery and Equipment 28,135 -0-
Furniture & Fixtures 2,731 -0-
Office Equipment 13,074 -0-
Total Property @ Cost 43,940 -0-
Less: Accumulated Depreciation
and Amortization (9,418) -0-
Net Property and Equipment 34,522 -0-
OTHER ASSETS
Investment in Company (Note 3) 139,945 288
Deferred Charges 588,825 -0-
Total Other Assets 728,770 288
TOTAL ASSETS $ 771.152 $ 288
The accompanying notes are an integral part of this statement.
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<PAGE>
<PAGE>
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE COMTANY)
Balance Sheet
As At
December 31, 1997 and December 31, 1998
LIABILITIES AND SHAREHOLDER'S EQUITY
December 31 December 31
CURRENT LIABILITIES 1998 1997
Account Payable - Trade $ 4,607 $ 250
Total Current Liabilities 4,607 250
LONG-TERM LIABILITIES
Loan from shareholder -0- -0-
Total Long-Term Liabilities -0- -0-
Total Liabilities 4,607 250
SHAREHOLDERS EQUITY
Common stock, with 0.01 par value
90,000,000 shares authorized; 46,594,414
shares issued and outstanding, and stated at: 1,520,098 16,494
Preferred stock with $.50 par value
317,500 authorized, 317,500 issued
and outstanding and stated at: 158,750 -0-
Additional Paid In Capital 1,750 1,750
Retained Earnings (Deficit)
Accumulated During the Development Stage (914,053) (18,212)
Total Shareholders Equity 766,545 38
TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY $ 771,152 $ 288
The accompanying notes are an integral part of this statement.
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<PAGE>
<PAGE>
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE COMPANY)
Statement of Operations
For Period
August 4,1995 (Date of Inception) to December 31, 1998
And the Period Ended December 31, 1997
And December 31, 1998
August 4, 1995
December 31 December 31 to December 31
REVENUE 1998 1997 1998
Net Sales (Note 1) $ -0- $ -0- $ -0-
Direct Cost -0- -0- -0-
Gross Profit -0- -0- -0-
GENERAL AND ADMINISTRATION
Consultants $184,440 $ 250 $ 381,630
Fringe Benefits 9,529 -0- 18,902
Advertising & Promotions 22,406 -0- 34,360
Travel and Lodging 59,107 -0- 89,386
Legal & Accounting 78,127 -0- 119,932
Office Supplies 6,251 -0- 10,964
Office Expense 7,895 -0- 21,845
Printing 6,492 -0- 11,314
Postage & Delivery 8,523 -0- 11,648
Rent & Utilities 24,637 -0- 77,062
Telephone 19,326 -0- 421,758
Investment Banker 20,137 -0- 20,137
Computer Service and Software 2,693 -0- 11,990
Furniture & Equipment Lease 4,217 -0- 8,623
Insurance 800 -0- 3,496
Auto Expense 9,040 -0- 11,285
Auto Lease 9.159 -0- 12,896
Conference & Seminars 1,267 -0- 7,972
Repairs & Maintenance 1,994 -0- 2,961
Depreciation 4,394 99 9,418
Miscellaneous Expenses 3,767 -0- 4,612
Total General and
Administrative 484,701 349 914,053
Income Before Income Taxes (484,701) (349) (914,053)
Provision for Income
Taxes (Note 2) -0- -0- -0-
Net Income (Loss) $ (494,701) $ (349) $ (914,053)
The accompanying notes are an Integral part of this statement.
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<PAGE>
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE COMPANY)
Statement of Shareholders' Equity
For Period
August 4,1995 (Date of Inception) to December 31, 1998
And the Period Ended December 31, 1997
and December 31,1998
Earnings (Deficit)
Accumulated
Stock Additional During
Common/Preferred Paid In Development
Shares Amount Capital Stage
August 4, 1995 200,000 $2,000
August 5, 1995 1,100,000 11,000
September 17, 1995 350,000 3,500 1,750
Net Loss, August 4, 1995
(inception)to
December 31,1995 (4,905)
Balance
December 31. 1995 1,650,000 16,500 1,750 (4,905)
Net loss year ended
December 31, 1996 (12,958)
Balance
December 31, 1996 1,650,000 16,500 1,750 (17,863)
January 17, 1997
forward
stock split 4.5:1 5,775,000 (6)
Net Loss
year ended
December 30, 1997 (349)
Balance
December 31, 1997 7,425,000 16,494 1,750 (18,212)
March 2, 1998
Forward stock
split 6.0657:1 341,679,114 (15,494)
March 12,1998 1,000,000 (1,000)
March 31,1998
Consolidated Losses (411,140)
May to December
Issued for cash 3,490,300 1,520,098
June to July
issue of
preferred stock 317,500 158,750
Net loss
December 31, 1998 (484,701)
Balance
December 31, 1998 46,911,914 $ 1,678,848 $ 1,750 $ (914,053)
The accompanying notes are an integral part of this statement.
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<PAGE>
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE COMPANY)
Statement of Cash Flows
For Period
August 4,1995 (Date of Inception) to December 31, 1998
And the Period Ended December 31, 1997
And December 31, 1998
August 4, 1995
December 31 December 31 to December 31
OPERATING ACTIVITIES 1998 1997 1998
Net Income (Loss) $ (484,701) $ (349) $ (914,053)
Adjustments to reconcile Net Income to
Net Cash provided by Operating Activities:
Depreciation and
Amortization 4,394 99 9,418
Changes in Operating Assets and Liabilities Net:
(Increase) Decrease in
Other Assets -0- -0- (540)
Increase (Decrease) in
A/P and Accrued Expenses 4,357 250 4,607
Net Cash Used by
Operating Activities (475,950) -0- (900,568)
INVESTING ACTIVITIES
Increase in Deferred
Charges (428,325) -0- (428,325)
Investment in Company (1,036,637) -0- (139,945)
Purchase of Property
and Equipment (43,940) -0- (43,940)
Net Cash Used in
Investing Activities (1,508,902) -0- (612,210)
FINANCING ACTIVITIES
Proceeds Issuance of
Capital Stock 1,096,020 -0- 1,520,638
Net Cash Provided by
Financing Activities 1,096,020 -0- 1,520,638
Increase in Cash and
Cash Equivalents 7,860 -0- 7,860
Cash and Cash Equivalents
at Beginning of Year -0- -0- -0-
Cash and Cash Equivalents
at End of Year $ 7,860 $ -0- $ 7.860
The accompanying notes are an integral part of this statement.
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<PAGE>
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE COMPANY)
Notes to Financial Statements
Note 1 Summary of Significant Accounting Policies
AuGRID OF NEVADA, INC., (Previously Ironwood Ventures)(a Nevada Development
Stage Corporation) formed under the laws of the State of Nevada, is a
technology development firm specializing in Thin Cathode Ray Tube (TCRT)
technology. The company currently has no operations and , in accordance with
SFAS 97 is considered a development corporation.
AuGRID of NEVADA, INC., in March, 1998, acquired substantially all the assets or
property of AuGRID Corporation a Delaware Corporation, solely in exchange for
all of its own voting stock. The transaction was treated as a C Reorganization
under Internal Revenue Code Section 368(a)(1)(c).
A. Method of Accounting
The financial records of the company are maintained on the accrual basis of
accounting.
B. Property and Equipment
All property and equipment is stated at cost. The Company provides for
depreciation, using the straight line method, over the estimated useful lives of
the respective assets, as follows:
Years
Machinery and Equipment $ 28,135 7
Furniture and Fixtures 2,731 7
Office Equipment 13,074 5
Total Property & Equipment $ 43,940
Major renewals and improvements of property and equipment are capitalized, while
replacements, maintenance and repairs which do not improve or extend the lives
of the assets are charged against current operations.
When property and equipment is disposed of, any gain or loss is included in
current operations.
-7-
<PAGE>
<PAGE>
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPNIENT STAGE COMPANY)
Notes to Financial Statements
C. Going Concern
The company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern. It is management's plan to begin producing sales in
late 1999 or early 2000.
Note 2 Income Taxes
The Company is a C Corporation for Federal Income Tax purposes. There is no
provision for Federal Income tax because of an unexpired net operating loss
carry forward.
Note 3 Investments Unconsolidated Company
The Company in 1997 and 1998 purchased the capital stock of Kiosk International
, a travel agency, and Ironwood Ventures for a purchase price of $139,945.
<PAGE>
<PAGE>
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE CONIPANY)
FINANCIAL STATEMENTS
SEPTEMBER 30,1998
AND
SEPTEMBER 30, 1999
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL Statements
TABLE OF CONTENTS
PAGE NO.
Compilation Report
Balance Sheet 2-3
Statement of Operations 4
Statement of Stockholder's Equity 5
Statement of Cash Flows 6
Notes to the Financial Statements 7-8
<PAGE>
<PAGE>
HENRY L. CREEL CO., INC.
Certified Public Accountant
(216) 491-0800
Fax (216) 491-0803
Board of Directors
AuGRID OF NEVADA, INC.
140 Public Square
The Park Building Suite 208
Cleveland, Ohio 44114
Compilation Report
I have compiled the accompanying balance sheet of AuGRID OF NEVADA, INC.
(previously Ironwood Ventures) (A Nevada Development Stage Corporation) as of
September 30, 1998 and September 30,1999, and the related Statement of
Operations, Shareholder's Equity and Cash Flows 'for the period August 4, 1995
(date of inception) to September 30, 1998 and the period Ended September 30,
1999 in accordance with standards established by the American Institute of
Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any form of assurance on them.
The Accompanying Financial Statement have been prepared assuming the company
will continue as a going concern. As discussed in note 1 to the Financial
Statements, the company has had limited operations. Management 's plan in
regards to these matters are also described in note 1.
/s/ Henry L. Creel Co., Inc.
October 29,1999
<PAGE>
<PAGE>
3587 LEE ROAD * SHAKER HEIGHTS, OHIO 44120
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE COMPANY)
Balance Sheet
As At
September 30, 1998 and September 30, 1999
ASSETS
September 30 September 30
CURRENT ASSETS 1999 1998
Cash $ 69,061 $ 9,071
Total Current Assets 69,061 9,071
PROPERTY AND EQUIPMENT (Note 1)
Machinery and Equipment 28,135 28,135
Furniture & Fixtures 2,731 2,731
Office Equipment 14,176 13,074
Total Property @ Cost 45,042 43,940
Less: Accumulated Depreciation
and Amortization (12,714) (8,320)
Net Property and Equipment 32,328 35,620
OTHER ASSETS
Investment in Company (Note 3) 139,945 139,945
Deferred Charges 578,532 431,145
Total Other Assets 718,477 571,090
TOTAL ASSETS $ 819,866 $ 615,781
The accompany notes are an integral part of this statement
-2-
<PAGE>
<PAGE>
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE COMPANY)
Balance Sheet
As At
September 30, 1998 and September 30, 1999
LIABILITIES AND SHAREHOLDER'S EQUITY
September 30 September 30
CURRENT LIABILITIES 1999 1998
Account Payable - Trade $ 7,910 $ 16,837
Total Current Liabilities 7,910 16,837
LONG-TERM LIABILITIES
Loan from shareholder -0- -0-
Total Long-Term Liabilities -0- -0-
Total Liabilities 7,910 16,837
SHAREHOLDERS EQUITY
Common stock, with 001 par value
90,000,000 shares authorized;
49,389,348 shares issued and
outstanding, and stated at: 1,886,791 1,231,053
Preferred stock with $.50 par value
317,500 authorized, 317,500 issued
and outstanding and stated at: 158,750 158,750
Additional Paid In Capital 1,750 1,750
Retained Earnings (Deficit)
Accumulated During the
Development Stage (1,235,335) (792,609)
Total Shareholders Equity 811,956 598,944
TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY $ 819,866 $ 615,781
The accompany notes are an intelgral part of this statement
-3-
<PAGE>
<PAGE>
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE COMPANY)
Statement of Operations
For Period
August 4,1995 (Date of Inception) to September 30, 1999
And the Period Ended September 30, 1998
And September 30, 1999
August 4, 1995
September 30 September 30 to September 30
REVENUE 1999 1998 1999
Net Sales (Note 1) -0- -0- -0-
Direct Cost -0- -0- -0-
Gross Profit -0- -0- -0-
GENERAL AND ADMMSTRATION
Consultants $ 193,219 $ 138,330 $574,849
Fringe Benefits 6,009 7,147 24,911
Advertising & Promotions 3,951 16,805 38,311
Travel and Lodging 24,074 44,330 113,460
Legal & Accounting 6,675 58,595 126,607
Office Supplies 5,998 4,688 16,962
Office Expense 6,151 5,921 27,996
Printing -0- 4,869 11,314
Postage & Delivery 6,187 6,392 17,835
Rent & Utilities 17,259 18,478 94,321
Telephone 1,870 14,870 44,628
Investment Banker -0- 15,103 20,137
Computer Service and Software 12,697 2,020 24,687
Furniture & Equipment Lease -0- 3,163 8,623
Insurance 1,087 600 4,583
Auto Expense 15,191 6,780 26,476
Auto Lease 6,220 6,868 19,116
Conference & Seminars 2,500 950 10,472
Repairs & Maintenance 1,308 1,496 4,269
Depreciation 3,296 3,296 12,714
Miscellaneous Expenses 7,590 2,826 12,202
Total General and Administrative 321,282 363,527 1,235,335
Income Before Income Taxes (321,282) (363,527) (1,235,335)
Provision for Income Taxes
(Note 2) -0- -0- -0-
Net Income (Loss) $ (321,282) $ (363,257) $(1,235,335)
The accompany notes are an integral part of this statement
-4-
<PAGE>
<PAGE>
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE COMPANY)
Statement of Shareholders' Equity
For Period
August 4,1995 (Date of Inception) to September 30, 1999
And the Period Ended September 30, 1998
and December 31,1998
Earnings (Deficit)
Accumulated
Stock Additional During
Common/Preferred Paid In Development
Shares Amount Capital Stage
August 4, 1995 to
December 31, 1995 1,650,000 $16,500 1,750
Net Loss
August 4, 1995
(inception)to
December 31,1995 (4,905)
Balance
December 31, 1995 1,650,000 16,500 1,750 (4,905)
Net loss year ended
December 31, 1996 (12,958)
Balance
December 31, 1996 1,650,000 16,500 1,750 (17,863)
January 17. 1997
forward stock
split 4.5: 1 5,775,000 (6)
Net Loss
year ended
December 30, 1997 (349)
Balance
December 31, 1997 7,425.000 16,494 1,750 (18,212)
March 2, 1998
Forward stock
split 6.0657:1 34,679,114 (15,494)
March 12,1998 1,000,000 (1,000)
March 31, 1998
Consolidated Losses (411,140)
Mav to December
Issued for cash 3,490,300 1,745,150
June to JuIv
issue of preferred
stock 317,500 158,750
Net loss
December 31, 1998 (484,701)
Balance
December 31, 1998 46,911,914 $1,903,900 $1.750 $ (914,053)
January 1 to September 30
issued for Cash 141,641
Net Loss
September 30. 1999 (321,282)
Balance
September 30, 1999 49,389,348 $2,045,541 $1,750 (1,235,335)
The accompany notes are an integral part of this statement
-5-
<PAGE>
<PAGE>
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE COMPANY)
Statement of Cash Flows
For Period
August 4,1995 (Date of Inception) to September 30, 1999
And the Period Ended September 30, 1998
And September 30, 1999
August 4, 1995
December 31 December 31 to December 31
OPERATING ACTIVITIES 1998 1997 1998
Net Income (Loss) $ (381,282) $ (363,257) $(1,235,335)
Adjustments to reconcile Net
Income to Net Cash provided by
Operating Activities:
Depreciation and Amortization 3,296 3,296 12,714
Changes in Operating
Assets and Liabilities Net:
(Increase) Decrease in Other Assets -0- -0- (540)
Increase (Decrease) in
A/P and Accrued Expenses (8,927) 16,837 (7,910)
Net Cash Used by
Operating Activities (386,913) (343,124) (1,215,251)
INVESTING ACTIVITIES
Increase in Deferred Charges (139,945) (431,145) (578,532)
Investment in Company -0- (139,945) (139,945)
Purchase of Property and Equipment (1,102) (43,940) (45,042)
Net Cash Used in
Investing Activities (141,047) (615,030) (763,519)
FINANCING ACTIVITIES
Proceeds Issuance of
Capital Stock 587,950 967,225 2,047,831
Net Cash Provided by
Financing Activities 587,950 967,225 2,047,831
Increase in Cash and
Cash Equivalents 59,990 9,071 69,061
Cash and Cash Equivalents
at Beginning of Year 9,071 -0- -0-
Cash and Cash Equivalents
at End of Year $ 69,061 $ 9,071 $ 69,061
The accompany notes are an integral part of this statement
-6-
<PAGE>
<PAGE>
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPNIENT STAGE COMPANY)
Notes to Financial Statements
Note I Summary of Significant Accounting Policies
AuGRID OF NEVADA, INC., (Previously Ironwood Ventures)(a Nevada Development
Stage Corporation) formed under the laws of the State of Nevada, is a technology
development firm specializing in Thin Cathode Ray Tube (TCRT) technology. The
company currently has no operations and, in accordance with SFAS #7 is
considered a development corporation.
AuGRID of NEVADA, INC., in March, 1998 acquired substantially all the assets or
property of AuGRID Corporation a Delaware Corporation, solely in exchange for
all of its own voting stock. The transaction was treated as a C Reorganization
under Internal Revenue Code Section 368(a)(l)(c).
A. Method of Accounting
The financial records of the company are maintained on the accrual basis of
accounting.
B. Property and Equipment
All property and equipment is stated at cost. The Company provides for
depreciation, using the straight line method, over the estimated useful lives of
the respective assets, as follows:
Years
Machinery and Equipment $ 28,135 7
Furniture and Fixtures 2,731 7
Office Equipment 14,176 5
Total Property & Equipment $ 45,042
Major renewals and improvements of property and equipment are capitalized, while
replacements, maintenance and repairs which do not improve or extend the lives
of the assets are charged against current operations.
When property and equipment is disposed of, any gain or loss is included in
current operations.
-7-
<PAGE>
<PAGE>
AuGRID OF NEVADA, INC. (PREVIOUSLY IRONWOOD VENTURES)
(A DEVELOPMENT STAGE COMPANY)
Notes to Financial Statements
C. Going Concern
The company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern. it is management's plan to begin producing sales in
late 1999 or early 2000.
Note 2 Income Taxes
The Company is a C Corporation for Federal Income Tax purposes. There is no
provision for Federal Income tax because of an unexpired net operating loss
carry forward.
Note 3 Investments Unconsolidated Company
The Company in 1997 and 1998 purchased the capital stock of Kiosk International
, a travel agency, and Ironwood Ventures for a purchase price of $139,945.
-8-
<PAGE>
<PAGE>
AuGRID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANICIAL STATEMENTS
DECEMBER 31, 1997
AND
MARCH 12,1998
AuGRID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
TABLE OF CONTENTS
PAGE NO.
Accountants Review Report
Balance Sheet 2-3
Statement of Operations 4
Statement of Stockholder's Equity 5
Statement of Cash Flows 6
Notes to the Financial Statements 7-8
Analysis of Changes in Assets,
Liabilities & Equity 9-10
<PAGE>
<PAGE>
HENRY L. CREEL CO., INC.
Certified Public Accountant
(216) 491-0800
Fax (216) 491-0803
Board of Directors
AuGRID OF NEVADA, INC.
140 Public Square
The Park Building Suite 208
Cleveland, Ohio 44114
Accountant's Review Report
We have reviewed the accompanying balance sheet of AuGRID CORPORATION (A
Delaware Development Stage Corporation) as of March 12, 1998 and December 31,
1997 and the related Statement of Operations, Shareholder's Equity and Cash
Flows for the period ended March 12, 1998, December 31, 1997, and December 31,
1996, in accordance with standards established by the American Institute of
Certified Public Accountants. All information included in these financial
statements is the representation of the management of this Company.
A review consists principally of inquiries of company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
examination in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding, the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any modifications that should be made
to the accompanying financial statements in order for them to be in conformity
with generally accepted accounting principles.
The Accompanying Financial Statement have been prepared assuming the company
will continue as a going concern. As discussed in note 1 to the Financial
Statements, the company has had limited operations. Management's plan in
regards to these matters are also described in note 1.
/s/ Henry L. Creel Co., Inc.
October 25, 1999
<PAGE>
<PAGE>
3587 LEE ROAD * SHAKER HEIGHTS, OHIO 44120
AuGRID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Balance Sheet
As At
March 12, 1998 and December 31, 1997
ASSETS
March 12 December 31
CURRENT ASSETS 1998 1997
Cash $ 30,001 $ 32,373
Total Current Assets 30,001 32,373
PROPERTY AND EQUIPMENT (Note 1)
Machinery and Equipment 28,135 28,135
Furniture & Fixtures 2,73l 2,731
Office Equipment 13,074 5,363
Total Property @ Cost 43,940 36,229
Less: Accumulated Depreciation
and Amortization (5,730) (5,024)
Net Property and Equipment 38,210 31,205
OTHER ASSETS
Investment in Company (Note 3) 139,945 84,945
Deferred Charges 179,420 179,420
Total Other Assets 319,365 264,365
TOTAL ASSETS $387,576 $327,942
The accompanying notes are an integral part of this statement.
-2-
<PAGE>
<PAGE>
AuGRID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Balance Sheet
As At
March 12, 1998 and December 31, 1997
LIABILITIES AND SHAREHOLDER'S EQUITY
March 12 December 31
CURRENT LIABILITIES 1998 1997
Account Payable - Trade $ 42,515 $ 9,146
Total Current Liabilities 42,515 9,146
LONG-TERM LIABILITIES
Total Long-Term Liabilities -0- -0-
Total Liabilities 42,515 9,146
SHAREHOLDERS EQUITY
Common stock, with 0.01 par value
100,000,000 shares authorized; 42,060,900
shares issued and outstanding, and stated at: 908,777 748,149
Additional Paid In Capital -0- -0-
Retained Earnings (Deficit)
Accumulated During the Development Stage (563,716) (429,352)
Total Shareholders Equity 345,061 318,797
TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY $ 387,576 $ 327,943
The accompanying notes are an integral part of this statement.
-3-
<PAGE>
<PAGE>
AuGRID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Statement of Operations
For Period Ended December 31, 1996
And For Period Ended December 31, 1997
And the Period Ended March 12, 1998
March 12 December 31 December 31
REVENUE 1998 1997 1996
Net Sales (Note 1) $ -0- $ -0- $ -0-
Direct Cost -0- -0- -0-
Gross Profit -0- -0- -0-
GENERAL AND ADMINISTRATION
Consultants $ 66,469 $ 196,950 $ -0-
Fringe Benefits 1,836 9,373 -0-
Advertising & Promotions 858 11,954 1,273
Travel and Lodging 22,143 30,279 -0-
Legal & Accounting 2,500 36,805 7,250
Office Supplies 1,496 2,288 544
Office Expense 1,581 7,382 1,725
Printing -0- 4,822 -0-
Postage & Delivery 1,679 3,125 437
Rent & Utilities 3,972 23,858 12,765
Telephone 4,018 15,463 7,831
Investment Banker 19,873 -0- -0-
Computer Service and Software 63 9,297 3,846
Furniture & Equipment Lease 1,085 4,406 3,479
Insurance -0- 2,696 2,283
Auto Expense 1,391 2,245 1,864
Auto Lease -0- 3,737 3,737
Conference & Seminars 2,281 6,705 -0-
Repairs & Maintenance 1,739 967 1,268
Depreciation 706 3,529 1,495
Miscellaneous Expenses 673 845 967
Total General and Administrative 134,364 378,588 50,764
Income Before Income Taxes (134,364) (378,588) (50,764)
Provision for Income Taxes (Note 2) -0- -0- -0-
Net Income (Loss) $(134,364) $(378,588) $(50,764)
The accompanying notes are an integral part of this statement.
-4-
<PAGE>
<PAGE>
AuGRID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Statement of Shareholders' Equity
For Period Ended December 31, 1996
And For Period Ended December 31, 1997
And the Period Ended March 12, 1998
Earnings (Deficit)
Accumulated
Stock Additional During
Common/Preferred Paid In Development
Shares Amount Capital Stage
January 1, 1996
Issued for cash 10,000,000 $ 100,000 $ -0-
Net Loss
December 31, 1996 (50,764)
Balance
December 31, 1996 10,000,000 100,000 -0- (50,764)
January 1, 1997 to
December 31, 1997
Issued for cash 28,776,900 648,149 -0-
Net Loss
December 31, 1997 (378,588)
Balance
December 31, 1997 38,776,900 748,149 -0- (429,352)
January 1, 1998 to
March 12, 1998
Issued for cash 3,248,000 160,628 -0-
Net Loss
March 12, 1998 (134,364)
Balance
March 12, 1998 42,060,900 908,777 -0- (563,716)
The accompanying notes are an integral part of this statement.
-5-
<PAGE>
<PAGE>
AuGRID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Statement of Cash Flows
For Period Ended December 31, 1996
And For Period Ended December 31, 1997
And the Period Ended March 12, 1998
March 12 December 31 December 31
OPERATING ACTIVITIES 1998 1997 1996
Net Income (Loss) $ (133,658) $ (378,588) $(50,764)
Adjustments to reconcile Net Income to
Net Cash provided by Operating Activities:
Depreciation and Amortization 706 3,529 1,495
Changes in Operating Assets
and Liabilities Net:
(Increase) Decrease in Deposits 1,194 (1,194)
(Increase) Decrease in Amounts
due from Shareholders 34,887 (34,887)
Increase (Decrease) in A/P
and Accrued Expenses 33,369 9,146 -0-
Net Cash Used by
Operating Activities (99,583) (329,832) (85,350)
INVESTING ACTIVITIES
Increase in Deferred Charges -0- -0- -0-
Investment in Company -0- -0- -0-
Purchase of Property and Equipment (7,711) (21,579) (14,650)
Net Cash Used in
Investing Activities (7,711) (21,579) (14,650)
FINANCING ACTIVITIES
Proceeds Issuance of Capital Stock 104,922 383,784 100,000
Net Cash Provided by
Financing Activities 104,922 383,784 100,000
Decrease in Cash and Cash Equivalents (2,372) (32,373) -0-
Cash and Cash Equivalents at
Beginning of Year 32,373 -0 - -0-
Cash and Cash Equivalents at
End of Year $ 30,001 $ 32,373 $ -0-
The accompanying notes are an integral part of this statement.
-6-
<PAGE>
<PAGE>
AuGRID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Notes to Financial Statements
Note 1 Summary of Significant Accounting Policies
AuGRID CORPORATION., (a Delaware Development Stage Corporation) formed under the
laws of the State of Delaware, is a technology development firm specializing in
Thin Cathode Ray Tube (TCRT) technology. The company currently has no
operations and , in accordance with SFAS #7 is considered a development
corporation.
AuGRID of NEVADA, INC., in March, 1998 acquired substantially all the assets or
property of AuGRID Corporation a Delaware Corporation, solely 'in exchange for
all of its own voting stock. The transaction was treated as a C Reorganization
under Internal Revenue Code Section 368(a)(1)(c).
A. Method of Accounting
The financial records of the company are maintained on the accrual basis of
accounting.
B. Property and Equipment
All property and equipment is stated at cost. The Company provides for
depreciation, using the straight-line method, over the estimated useful lives of
the respective assets, as follows:
Years
Machinery and Equipment $ 28,135 7
Furniture and Fixtures 2,731 7
Office Equipment 14,176 5
Total Property & Equipment $ 45,042
Major renewals and improvements of property and equipment are capitalized, while
replacements, maintenance and repairs which do not improve or extend the lives
of the assets are charged against current operations.
When property and equipment is disposed of, any gain or loss is included in
current operations.
-7-
<PAGE>
<PAGE>
AuGRID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Notes to Financial Statements
C. Going Concern
The company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern. it is management's plan to begin producing sales in
late 1999 or early 2000.
Note 2 Income Taxes
The Company is a C Corporation for Federal Income Tax purposes. There is no
provision for Federal Income tax because of an unexpired net operating loss
carry forward.
Note 3 Investments Unconsolidated Company
The Company in 1997 and 1998 purchased the capital stock of Kiosk International
, a travel agency, and Ironwood Ventures for a purchase price of $139,945.
-8-
<PAGE>
<PAGE>
AuGRID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Analysis of Changes
In Assets. Liabilities & Equity
From December 31, 1997 to March 12, 1999
ASSETS December 31 March 12
CURRENT ASSETS 1997 1998 Debit Credit
Cash $ 32,373 $ 30,001 2,372 1
Total Current Assets 32,373 30,001
PROPERTY AND EQUIPMENT
Machinery and Equipment 28,135 28,135 -0-
Furniture & Fixtures 2,731 2,731 -0-
Office Equipment 5,363 13,074 7,711 2
Total Property @ Cost 36,229 43,940
Less: Accumulated Depreciation
and Amortization (5,024) (5,730) 706 3
Net Property and Equipment 31,205 38,210
OTHER ASSETS
Investment in Company 84,945 139,945 55,000 4
Deferred Charges 179,420 179,420 -0-
Total Other Assets 264,365 319,365
TOTAL ASSETS 327,943 387,576
CURRENT LIABILITIES
Account Payable - Trade 9,146 42,515 33,369 5
Total Current Liabilities 9,146 42,515
LONG-TERM LIABILITIES
Total Long-Terrn Liabiliti -0- -0-
Total Liabilities 9,146 42,515
SHAREHOLDERS EQUIT
Common stock 748,149 908,777 160,628 6
Additional Paid In Capital -0- -0 - -0-
Rtnd Ernngs (Dfct)
Accmltd During the
Development Stage (429,352) (563,716) 134,364 7
Total Shareholders
Equity 318,797 345,061
TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY $ 327,943 $ 387.576 $ 197,075 $ 197,075
-9-
<PAGE>
<PAGE>
AuGRID CORPORATION
(A DEVELOPMENT STAGE COMPANY)
Analysis of Changes
In Assets, Liabilities & Equity
From December 31, 1997 to March 12, 1998
(1) Operations-Payment of Accounts Payable.
(2) Operations-Purchase of New Office Equipment.
(3) Operations-Monthly Depreciation Deduction.
(4) Operations-Investment into Kiosk International.
(5) Operations-Increase Due to recoding, Invoices for Development Cost.
(6) Operations-Increase Due to sale of Common Stock
(7) Operations-Change in Retained Earnings Due to Net Loss from
Operations.
-10-
<PAGE>
<PAGE>
AuGRID OF NEVADA, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED PRO FORMA
FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
DECEMBER 31,1998
AND
SEPTEMBER 30, 1999
AuGRID OF NEVADA, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
TABLE OF CONTENTS
PAGE NO.
Pro Forma Compilation Report
Balance Sheet 2
Statement of Operations 3-6
Notes to the Financial Statements 7-8
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HENRY L. CREEL CO, INC.
Certified Public Accountant
(216) 491-0800
Fax (216) 491-0803
Board of Directors
AuGRID OF NEVADA, INC.
140 Public Square
The Park Building Suite 208
Cleveland, Ohio 44114
Pro Forma Compilation Report
I have compiled the Pro Forma balance sheet of AuGRID OF NEVADA, INC. (A Nevada
Development Stage Corporation) as of September 30, 1999 and the related
Statement of Operations, Shareholder's Equity for the period ended December 31,
1998, the three month period ended March 31, 1999, the six month period ended
June 30, 1999 and the nine month period ended September 30, 1999 in accordance
with standards established by the American Institute of Certified Public
Accountants.
A compilation is limited to presenting, in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any form of assurance on them.
The Accompanying Financial Statement have been prepared assuming the company
will continue as a going concern. As discussed in Note 1 to the Financial
Statements, the company has had limited operations. Management 's plan in
regards to these matters are also described in note 1.
/s/ Henry L. Creel Co., Inc.
November 12,1999
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3587 LEE ROAD * SHAKER HEIGHTS, OHIO 44120
AuGRID OF NEVADA, INC.
(A DEVELOPMENT STAGE COMPANY)
Consolidated Pro Forma
Balance Sheet
For the-Nine Months Ended
September 30, 1999
Pro Forma Pro Forma Pro Forma Combined
AuGrid(Nev) AuGrid(Del) Adjustments Company
ASSETS
CURRENT ASSETS
Cash $ 69,061 $ -0- $ -0- $ 69,061
Total Current Assets
PROPERTY & EQUIP.
(Note 1)
Machinery and Equipment 28,135 -0- -0- 28,135
Furniture & Fixtures 2,731 -0- -0- 2,731
Office Equipment 14,176 -0- -0- 14,176
Total Property @ Cost 45,042 -0- -0- 45,042
Less: Accumulated
Depreciation
and Amortization (12,714) -0- -0- (12,714)
Net Property and
Equipment 32,328 -0- -0- 32,328
OTHER ASSETS
Investment in Company
(Note 3) 139,945 -0- -0- 139,945
Deferred Charges 578,532 -0- -0- 578,532
Total Other Assets 718,477 -0- -0- 718,477
TOTAL ASSETS $ 819,866 -0- -0- 819,866
LIABLTS & SHRHLDR'S EQUITY
CURRENT LIABILITIES
Account Payable - Trade 7,910 -0- -0- 7,910
Total Current Liabilities 7,910 -0- -0- 7,910
LONG-TERM LIABILITIES
Loan from shareholder -0- -0- -0- -0-
Total Long-Term Liabilities-0- -0- -0- -0-
Total Liabilities -0- -0- -0- 7,910
SHAREHOLDERS FOUITY
Common stock 1,886,791 -0- -0- 1,886,791
Preferred stock 158,750 -0- -0- 158,750
Additional Paid In Capital 1,750 -0- -0- 1,750
Retained Earnings (Deficit)
Accumulated During
the Development Stage (1,235,335) -0- -0- (1,235,335)
Total Shareholders
Equity 811,956 -0- 811,956
TOTAL LIABILITTES AND
SHAREHOLDERS EQUITY $ 819,866 -0- -0- 819,866
The accompanying notes are an integral part of this statement.
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AuGRID OF NEVADA, INC.
(A DEVELOPMENT STAGE COMPANY)
Consolidated Pro Forma
Statement of Operations
For the Nine Months Ended
September 30, 1999
Pro Forma Pro Forma Pro Forma Combined
AuGRID(Nev) AuGRID(Del) Adjustments Company
REVENUE
Net Sales (Note 1) $ -0- $ -0- $ -0- $ -0-
Direct Cost -0- -0- -0- -0-
Gross Profit -0- -0- -0- -0-
GENERAL AND ADMINISTRATION
Consultants 193,219 -0- -0- 193,219
Fringe Benefits 6,009 -0- -0- 6,009
Advertising & Promotions 3,951 -0- -0- 3,951
Travel and Lodging 24,074 -0- -0- 24,074
Legal & Accounting 6,675 -0- -0- 6,675
Office Supplies 5,998 -0- -0- 5,998
Office Expense 6,151 -0- -0- 6,151
Postage & Delivery 6,187 -0- -0- 6,187
Rent & Utilities 17,259 -0- -0- 17,239
Telephone 1,870 -0- -0- 1,870
Computer Service and
Software 12,697 -0- -0- 12,697
Insurance 1,087 -0- -0- 1,087
Auto Expense 15,191 -0- -0- 15,191
Auto Lease 6,220 -0- -0- 6,220
Conference & Seminars 2,500 -0- -0- 2,500
Repairs & Maintenance 1,308 -0- -0- 1,308
Depreciation 3,296 -0- -0- 3,296
Miscellaneous Expenses 7,590 -0- -0- 7,590
Total General
and Administrative 321,282 -0- -0- 321,282
Income Before Income
Taxes (321.282) -0- -0- (321,282)
Provision for Income
Taxes (Note 2) -0- -0- -0- -0-
Net Income (Loss) $ (321,282) $ -0- S -0- $ (321,282)
The accompanying notes are an integral part of this statement.
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AuGRID OF NEVADA, INC.
(A DEVELOPMENT STAGE COMPANY)
Consolidated Pro Forma
Statement of Operations
For the Six Months Ended
June 30, 1999
Pro Forma Pro Forma Pro Forma Combined
AuGrid(Nev) AuGrid(Del) Adjustments Company
REVENUE
Net Sales (Note 1) $ -0- $ -0- $ -0- $ -0-
Direct Cost -0- -0- -0- -0-
Gross Profit -0- -0- -0- -0-
GENERAL A-ND ADNrINISTRATION
Consultants 125,544 -0- -0- 125,544
Fringe Benefits 2,140 -0- -0- 2,140
Advertising & Promotions 2,282 -0- -0- 2,282
Travel and Lodging 16,750 -0- -0- 16,750
Legal & Accounting 5,500 -0- -0- 5,500
Office Supplies 4,836 -0- -0- 4,836
Office Expense 4,277 -0- -0- 4,277
Postage & Delivery 4,132 -0- -0- 4,132
Rent & Utilities 12,109 -0- -0- 12,109
Telephone 1,393 -0- -0- 1,393
Computer Service and
Software 4,274 -0- -0- 4,274
Insurance 299 -0- -0- 299
Auto Expense 9,988 -0- -0- 9,988
Auto Lease 4,501 -0- -0- 4,501
Repairs & Maintenance 1,307 -0- -0- 1,307
Miscellaneous Expenses 2,220 -0- -0- 2,220
Total General and
Administrative 201,552 -0- -0- 201,552
Income Before Income
Taxes (201,552) -0- -0- (201,552)
Provision for Income
Taxes (Note 2) -0- -0- -0- -0-
Net Income (Loss) $ (201,552) $ -0- S -0- $ (201,552)
The accompanying notes are an integral part of this statement.
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AuGRID OF NEVADA, INC.
(A DEVELOPMENT STAGE COMPANY)
Consolidated Pro Forma
Statement of Operations
For the Three Months Ended
March 31, 1999
Pro Forma Pro Forma Pro Forma Combined
AuGrid(Nev) AuGrid(Del) Adiustments Companv
REVENUE
Net Sales (Note 1) $ -0- $ -0- $ -0- $ -0-
Direct Cost -0- -0- -0- -0-
Gross Profit -0- -0- -0- -0-
GENERAL AND ADMINISTRATION
Consultants 61,801 -0- -0- 61,801
Fringe Benefits 1,659 -0- -0- 11,659
Advertising & Promotions 282 -0- -0- 282
Travel and Lodging 7,354 -0- -0- 7,354
Office Supplies 1,959 -0- -0- 1,959
Office Expense 600 -0- -0- 600
Postage & Delivery 1,948 -0- -0- 1,948
Rent & Utilities 1,700 -0- -0- 1,700
Telephone 636 -0- -0- 636
Computer Service and
Software 2,494 -0- -0- 2,494
Auto Expense 1,386 -0- -0- 1,386
Auto Lease 1,578 -0- -0- 11,578
Repairs & Maintenance 808 -0- -0- 808
Miscellaneous Expenses 100 -0- -0- 100
Total General and
Administrative 84,303 -0- -0- 84,303
Income Before Income
Taxes (84,303) -0- -0- (84,303)
Provision for
Income Taxes (Note 2) -0- -0- -0- -0-
Net Income (Loss) $ (84,3O3) $ -0- $ -0- $ (84,303)
The accompanying, notes are an integral part of this statement.
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AuGRID OF NEVADA, INC.
(A DEVELOPMENT STAGE COMPANY)
Consolidated Pro Forma
Statement of Operations
For the Period Ended
December 31, 1998
Pro Forma Pro Forma Pro Forma Combined
AuGrid(Nev) AuGrid(Del) Adjustments Company
REVENUE
Net Sales (Note 1) $ -0- $ -0- $ -0- $ -0-
Direct Cost -0- -0- -0- -0-
Gross Profit -0- -0- -0- -0-
GENERAL AND ADMMSTRATION
Consultants 117,971 66,469 -0- 184,440
Fringe Benefits 7,693 1,836 -0- 9,529
Advertising & Promotions 21,548 858 -0- 22,406
Travel and Lodging 36,964 22,143 -0- 59,107
Legal & Accounting 75,627 2,500 -0- 78,127
Office Supplies 4,755 1,496 -0- 6,251
Office Expense 6,314 1,581 -0- 7,895
Printing 6,492 -0- -0- 61,492
Postage & Delivery 6,844 1,679 -0- 8,523
Rent & Utilities 20,665 3,972 -0- 24,637
Telephone 151,808 4,018 -0- 19,826
Investment Banker 264 19,873 -0- 20,137
Computer Service and
Software 2,630 63 -0- 2,693
Furniture & Equipment Lease 3,132 1,085 -0- 4,217
Insurance 800 -0- -0- 800
Auto Expense 7,649 1,391 -0- 9,040
Auto Lease 9,159 -0- -0- 9,159
Conference & Seminars -0- 1,267 -0- 1,267
Repairs & Maintenance 255 1,739 -0- 1,994
Depreciation 3,688 706 -0- 4,394
Miscellaneous Expenses 1,079 1,688 -0- 3,767
Total General and
Administrative 350,337 134,364 -0- 484,701
Income Before
Income Taxes (350,337) (134,364) -0- (484,701)
Provision for
Income Taxes (Note 2) -0- -0- -0- -0-
Net Income (Loss) $ (350,337) $ (134,364) S -0- $ (484,701)
The accompanying notes are an integral part of this statement.
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AuGRID OF NEVADA, INC.
(A DEVELOPMENT STAGE COMPANY)
Notes to Financial Statements
Note 1 Summary of Significant Accounting Policies
AuGRID OF NEVADA, INC., (a Nevada Development Stage Corporation) formed under
the laws of the State of Nevada, is a technology development firm specializing
in Thin Cathode Ray Tube (TCRT) technology. The company currently has no
operations and , in accordance with SFAS #7 is considered a development
corporation.
AuGRID of NEVADA, INC., in March, 1998 acquired substantially all the assets or
property of AuGRID Corporation a Delaware Corporation, solely in exchange for
all of its own voting stock. The transaction was treated as a C Reorganization
under Internal Revenue Code Section 368(a)(1)(c).
A. Method of Accounting
The financial records of the company are maintained on the accrual basis of
accounting.
B. Property and Equipment
All property and equipment is stated at cost. The Company provides for
depreciation, using the straight line method, over the estimated useful lives of
the respective assets, as follows:
Years
Machinery and Equipment $ 28,135 7
Furniture and Fixtures 2,731 7
Office Equipment 14,176 5
Total Property & Equipment $ 45,042
Major renewals and improvements of property and equipment are capitalized, while
replacements, maintenance and repairs which do not improve or extend the lives
of the assets are charged against current operations.
When property and equipment is disposed of, any gain or loss is included in
current operations.
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AuGRID OF NEVADA, 1NC.
(A DEVELOPMENT STAGE COMIPANY)
Notes to Financial Statements
C. Going Concern
The company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern. It is management's plan to begin producing sales
in late 1999 or early 2000.
Note 2 Income Taxes
The Company is a C Corporation for Federal Income Tax purposes. There is no
provision for Federal Income tax because of an unexpired net operating loss
carry forward.
Note 3 Investments Unconsolidated Company
The Company in 1997 and 1998 purchased the capital stock of Kiosk International
, a travel agency, and Ironwood Ventures for a purchase price of $139,945.
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Part III
Item 1. Index to Exhibits (Pursuant to Item 601 of Regulation SB)
Exhibit
Number Name and/or Identification of Exhibit
1. Underwriting Agreement
Not applicable
2. Plan of Acquisition, Reorganization, Arrangement, Liquidation, or
Succession
(a) Asset Purchase Agreement with Augrid Corporation
3. Articles of Incorporation & By-Laws
(a) By-Laws of the Company adopted August 4, 1995
4. Instruments Defining the Rights of Security Holders
No instruments other than those included in Exhibit 3
5. Opinion on Legality
Not applicable
6. No Exhibit Required
Not applicable
7. Opinion on Liquidation Preference
Not applicable
8. Opinion on Tax Matters
Not applicable
9. Voting Trust Agreement and Amendments
Not applicable
10. Material Contracts
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Exhibit
Number Name and/or Identification of Exhibit
(d) Exclusive Research and Development Agreement - Ceravision Limited
11. Statement Re Computation of Per Share Earnings
Not applicable - Computation of per share earnings can be clearly
determined
from the Statement of Operations in the Company's financial
statements
12. No Exhibit Required
Not applicable
13. Annual or Quarterly Reports - Form 10-Q
Not applicable
14. Material Foreign Patents
Not applicable
15. Letter on Unaudited Interim Financial Information
Not applicable
16. Letter on Change in Certifying Accountant
Not applicable
17. Letter on Director Resignation
Not applicable
18. Letter on Change in Accounting Principles
Not applicable
19. Reports Furnished to Security Holders
Not applicable
20. Other Documents or Statements to Security Holders
None - Not applicable
21. Subsidiaries of Small Business Issuer
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Exhibit
Number Name and/or Identification of Exhibit
None - Not applicable
22. Published Report Regarding Matters Submitted to Vote of Security
Holders
Not applicable
23. Consent of Experts and Counsel
None
24. Power of Attorney
Not applicable
25. Statement of Eligibility of Trustee
Not applicable
26. Invitations for Competitive Bids
Not applicable
27. Financial Data Schedule
Financial Data Schedule of Augrid of Nevada, Inc. ending
September 30, 1999
28. Information from Reports Furnished to State Insurance Regulatory
Authorities
Not applicable
29. Additional Exhibits
Not applicable
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Item 2. Description of Exhibits
Exhibit
Number Name and/or Identification of Exhibit
1. Underwriting Agreement
Not applicable
2. Plan of Acquisition, Reorganization, Arrangement, Liquidation, or
Succession
(a) Asset Purchase Agreement with Augrid Corporation
3. Articles of Incorporation & By-Laws
(c) By-Laws of the Company adopted August 4, 1995
4. Instruments Defining the Rights of Security Holders
No instruments other than those included in Exhibit 3
5. Opinion on Legality
Not applicable
6. No Exhibit Required
Not applicable
7. Opinion on Liquidation Preference
Not applicable
8. Opinion on Tax Matters
Not applicable
9. Voting Trust Agreement and Amendments
Not applicable
10. Material Contracts
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<PAGE>
Exhibit
Number Name and/or Identification of Exhibit
(a) Exclusive Research and Development Agreement - Ceravision
Limited
11. Statement Re Computation of Per Share Earnings
Not applicable - Computation of per share earnings can be clearly
determined
from the Statement of Operations in the Company's financial
statements
12. No Exhibit Required
Not applicable
13. Annual or Quarterly Reports - Form 10-Q
Not applicable
14. Material Foreign Patents
Not applicable
15. Letter on Unaudited Interim Financial Information
Not applicable
16. Letter on Change in Certifying Accountant
Not applicable
17. Letter on Director Resignation
Not applicable
18. Letter on Change in Accounting Principles
Not applicable
20. Reports Furnished to Security Holders
Not applicable
20. Other Documents or Statements to Security Holders
None - Not applicable
21. Subsidiaries of Small Business Issuer
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Exhibit
Number Name and/or Identification of Exhibit
None - Not applicable
22. Published Report Regarding Matters Submitted to Vote of Security
Holders
Not applicable
23. Consent of Experts and Counsel
None
24. Power of Attorney
Not applicable
25. Statement of Eligibility of Trustee
Not applicable
26. Invitations for Competitive Bids
Not applicable
27. Financial Data Schedule
Financial Data Schedule of Augrid of Nevada, Inc. ending
September 30, 1999
28. Information from Reports Furnished to State Insurance Regulatory
Authorities
Not applicable
29. Additional Exhibits
Not applicable
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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.
_____________________________Augrid of Nevada,Inc.______________________________
(Registrant)
Date: December 16, 1999____________________
By: /s/ Muhammad J. Shaheed________________
Muhammad J. Shaheed, Chairman of the Board, President and Chief Executive
Officer
By: /s/ Mary F. Sloat-Horoszko_______________
Mary F. Sloat-Horoszko, Director, CFO, Secretary/Treasurer
Asset Purchase Agreement
This Asset Purchase Agreement (the "Agreement") is made and entered into this
12th day of March, 1998, by and between Augrid of Nevada, Inc., a Nevada
corporation ("Buyer") and Augrid Corporation, a Delaware corporation ("Seller").
RECITALS
A. Seller is the owner of certain assets, a list of which is attached hereto at
Exhibit A and incorporated herein by reference (the "Assets").
B. Buyer desires to purchase and acquire from Seller such Assets, and Seller
desires to transfer and convey the same to Buyer, in accordance with the terms
and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual representations, warranties and
covenants contained herein, and on the terms and subject to the conditions
herein set forth, the parties hereby agree as follows:
ARTICLE I
Definitions
As used in this Agreement, the following terms shall have the meanings set forth
below:
1.1 Closing. "Closing" shall mean the closing of the transaction contemplated
by this Agreement, which shall occur at 10:00 a.m., Pacific Standard Time, on
the Closing Date in the offices of Buyer, or at such other time and place as
shall be mutually agreed in writing by the parties hereto.
1.2 Closing Date. "Closing Date" shall mean March 12, 1998, unless otherwise
mutually agreed in writing by the parties hereto.
1.3 Assets. "Assets" shall mean all rights and interests in the assets listed
at Exhibit A hereto.
ARTICLE II
Purchase and Sale
2.1 Sale and Purchase of Assets. Subject to and upon the terms and conditions
contained herein, at the Closing, Seller shall sell, transfer, assign, convey,
and deliver to Buyer, free and clear of all liens, claims and encumbrances, and
Buyer shall purchase, accept and acquire from Seller the Assets.
2.2 Purchase Price. The total purchase price for the Assets shall be ONE
MILLION (1,000,000) shares of common stock of Buyer.
2.3 Instruments of Transfer; Further Assurances.
(a) At the Closing, Seller shall deliver to Buyer:
(i) An assignment of each Asset, in form and substance satisfactory to Buyer;
(ii) Such other instrument or instruments of transfer as shall be necessary or
appropriate, as Buyer shall reasonably request, to vest in Buyer good and
marketable title to the Assets.
(b) At the Closing, Buyer shall deliver to Seller such instrument or
instruments as shall be necessary or appropriate, as Seller shall
reasonably request.
ARTICLE III
Representations and Warranties of Buyer
Buyer represents and warrants that the following are true and correct as of this
date and will be true and correct through the Closing Date as if made on that
date:
3.1 Organization and Good Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada,
with all the requisite power and authority to carry on the business in which it
is engaged, to own the properties it owns and to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.
3.2 Authorization and Validity. The execution, delivery and performance by
Buyer of this Agreement and the other agreements contemplated hereby, and the
consummation of the transactions contemplated hereby, have been duly authorized
by Buyer. This Agreement and each other agreement contemplated hereby have been
or will be prior to Closing duly executed and delivered by Buyer and constitute
or will constitute legal, valid and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms.
3.3 No Violation. Neither the execution and performance of this Agreement or
the other agreements contemplated hereby, nor the consummation of the
transactions contemplated hereby or thereby, will (a) conflict with, or result
in a breach of the terms, conditions and provisions of, or constitute a default
under, the Articles of Incorporation or Bylaws of Buyer or any agreement,
indenture or other instrument under which Buyer is bound, or (b) violate or
conflict with any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body having
jurisdiction over Buyer or the properties or Assets of Buyer.
3.4 Consents. No authorization, consent, approval, permit or license of, or
filing with, any governmental or public body or authority, any lender or lessor
or any other person or entity is required to authorize, or is required in
connection with, the execution, delivery and performance of this Agreement or
the agreements contemplated hereby on the part of Buyer.
ARTICLE IV
Representations and Warranties of Seller
Seller represents and warrants that the following are true and correct as of
this date and will be true and correct through the Closing Date as if made on
that date:
4.1 Organization and Good Standing. Seller is a corporation duly organized,
validly existing and in good standing under the laws of Delaware, with all the
requisite power and authority to carry on the business in which it is engaged,
to own the properties it owns and to execute and deliver this Agreement and to
consummate the transactions contemplated hereby.
4.2 Authorization and Validity. The execution, delivery and performance by
Seller of this Agreement and the other agreements contemplated hereby, and the
consummation of the transactions contemplated hereby, have been duly authorized
by Seller. This Agreement and each other agreement contemplated hereby have
been or will be prior to Closing duly executed and delivered by Seller and
constitute or will constitute legal, valid and binding obligations of Seller,
enforceable against Seller in accordance with their respective terms.
4.3 Title. Seller has good and marketable title to the Assets which are the
subject of this Agreement. Upon consummation of the transactions contemplated
hereby, Buyer shall receive good, valid and marketable title to all the Assets
free and clear of all liens, claims, and encumbrances.
4.4 Commitments. Seller has not entered into, nor are the Assets or the
business of Seller bound by, whether or not in writing, any (i) partnership or
joint venture agreement; (ii) deed of trust or other security agreement; (iii)
guaranty or suretyship, indemnification or contribution agreement or performance
bond; (iv) employment, consulting or compensation agreement or arrangement,
including the election or retention in office of any director or officer; (v)
labor or collective bargaining agreement; (vi) debt instrument, loan agreement
or other obligation relating to indebtedness for borrowed money or money lent to
another; (vii) deed or other document evidencing an interest in or contract to
purchase or sell real property; (viii) agreement with dealers or sales or
commission agents, public relations or advertising agencies, accountants or
attorneys; (ix) lease of real or personal property, whether as lessor, lessee,
sublessor, or sublessee; (x) agreement relating to any material matter or
transition in which an interest is held by a person or entity which is an
affiliate of Seller; (xi) powers of attorney; or (xii) contracts containing
noncompetition covenants.
4.5 Adverse Agreements. Seller is not a party to any agreement or instrument
or subject to any charter or other corporate restriction or any judgment, order,
writ, injunction, decree, rule or regulation which materially and adversely
affects or, so far as Seller can now foresee, may in the future materially and
adversely affect the business operations, prospects, properties, Assets or
condition, financial or otherwise, of Seller.
4.6 No Violation. Neither the execution and performance of this Agreement or
the other agreements contemplated hereby, nor the consummation of the
transactions contemplated hereby or thereby, will (a) conflict with, or result
in a breach of the terms, conditions and provisions of, or constitute a default
under, the Articles of Incorporation or Bylaws of Seller or any agreement,
indenture or other instrument under which Buyer is bound, or (b) violate or
conflict with any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body having
jurisdiction over Seller or the properties or Assets of Seller.
4.7 Consents. No authorization, consent, approval, permit or license of, or
filing with, any governmental or public body or authority, any lender or lessor
or any other person or entity is required to authorize, or is required in
connection with, the execution, delivery and performance of this Agreement or
the agreements contemplated hereby on the part of Seller.
4.8 Compliance with Laws. There are no existing violations by Seller of any
applicable federal, state or local law or regulation, except to the extent that
any such violations would not have a material adverse effect on the property or
business of Seller.
4.9 Accuracy of Information Furnished. All information furnished to Buyer by
Seller is true, correct and complete in all material respects. Such information
states all material facts required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such statements
are made, true, correct and complete.
4.10 Proceedings. No action, proceeding or order by any court or governmental
body or agency shall have been threatened in writing, asserted, instituted or
entered to restrain or prohibit the carrying out of the transactions
contemplated by this Agreement.
ARTICLE V
Indemnification
5.1 Seller's Indemnity. Subject to the terms of this Section, Seller hereby
agrees to indemnify, defend and hold harmless Buyer and its officers, directors,
agents, attorneys, accountants and affiliates from and against any and all
losses, claims, obligations, demands, assessments, penalties, liabilities,
costs, damages, reasonable attorneys' fees and expenses ("Damages") asserted
against or incurred by Buyer by reason of or resulting from a breach by Seller
of any representation, warranty or covenant contained herein, or in any
agreement executed pursuant thereto.
5.2 Buyer's Indemnity. Subject to the terms of this Section, Buyer hereby
agrees to indemnify, defend and hold harmless Seller and its officers,
directors, agents, attorneys, accountants and affiliates from and against any
and all losses, claims, obligations, demands, assessments, penalties,
liabilities, costs, damages, reasonable attorneys' fees and expenses ("Damages")
asserted against or incurred by Seller by reason of or resulting from a breach
by Buyer of any representation, warranty or covenant contained herein, or in
any agreement executed pursuant thereto.
5.3 Remedies Not Exclusive. The remedies provided for in this Section shall
not be exclusive of any other rights or remedies available by one party against
the other, either at law or in equity.
ARTICLE VI
Termination
6.1 Termination for Cause. This Agreement may be terminated prior to Closing
upon notice to the other party at any time by a party if any representation or
warranty of the other party contained in this Agreement or in any certificate or
other document executed and delivered by one party to the other is or becomes
untrue or breached in any material respect or if one party fails to comply in
any material respect with any covenant or agreement contained herein, and any
such misrepresentation, breach or noncompliance is not cured, waived, or
eliminated before Closing.
6.2 Termination Without Cause. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and abandoned at any time
without further obligation or liability on the part of any party in favor of any
other by mutual consent of Purchaser and Seller.
ARTICLE VII
Miscellaneous Provisions
7.1 Amendment and Modification. Subject to applicable law, this Agreement may
be amended, modified or supplemented only by a written agreement signed by Buyer
and Seller.
7.2 Waiver of Compliance; Consents.
7.2.1 Any failure of any party to comply with any obligation, covenant,
agreement or condition herein may be waived by the party entitled to the
performance of such obligation, covenant or agreement or who has the
benefit of such condition, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, or agreement or condition will
not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
7.2.2 Whenever this Agreement requires or permits consent by or on behalf
of any party hereto, such consent will be given in a manner consistent with
the requirements for a waiver of compliance as set forth above.
7.3 Notices. All Notices, requests, demands and other communications required
or permitted hereunder will be in writing and will be deemed to have been duly
given when delivered by (i) hand; (ii) reliable overnight delivery service; or
(iii) facsimile transmission.
If to Buyer, to: ________________________________________________
If to Seller, to: ________________________________________________
7.4 Titles and Captions. All section titles or captions contained in this
Agreement are for convenience only and shall not be deemed part of the context
nor effect the interpretation of this Agreement.
7.5 Entire Agreement. This Agreement contains the entire understanding between
and among the parties and supersedes any prior understandings and agreements
among them respecting the subject matter of this Agreement.
7.6 Agreement Binding. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
7.7 Attorneys' Fees. In the event an arbitration, suit or action is brought by
any party under this Agreement to enforce any of its terms, or in any appeal
therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
7.8 Computation of Time. In computing any period of time pursuant to this
Agreement, the day of the act, event or default from which the designated period
of time begins to run shall be included, unless it is a Saturday, Sunday or a
legal holiday, in which event the period shall begin to run on the next day that
is not a Saturday, Sunday or legal holiday.
7.9 Pronouns and Plurals. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the person or persons may require.
7.10 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEVADA. THE PARTIES AGREE THAT ANY LITIGATION RELATING
DIRECTLY OR INDIRECTLY TO THIS AGREEMENT MUST BE BROUGHT BEFORE AND DETERMINED
BY A COURT OF COMPETENT JURISDICTION WITHIN THE STATE OF NEVADA.
7.11 Arbitration. If at any time during the term of this Agreement any
dispute, difference, or disagreement shall arise upon or in respect of this
Agreement, and the meaning and construction hereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed upon
by the parties, or if no single arbiter can be agreed upon, an arbiter or
arbiters shall be selected in accordance with the rules of the American
Arbitration Association and such dispute, difference or disagreement shall be
settled by arbitration in accordance with the then prevailing commercial rules
of the American Arbitration Association, and judgment upon the award rendered by
the arbiter may be entered in any court having jurisdiction thereof.
7.12 Presumption. This Agreement or any Section thereof shall not be construed
against any party due to the fact that said Agreement or any section thereof was
drafted by said party.
7.13 Further Action. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.
7.14 Parties in Interest. Nothing herein shall be construed to be to the
benefit of any third party, nor is it intended that any provision shall be for
the benefit of any third party.
7.15 Savings Clause. If any provision of this Agreement, or the application of
such provision to any person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those as to which it is held invalid, shall not be
affected hereby.
7.16 Confidentiality. The parties shall keep this Agreement and its terms
confidential, but any party may make such disclosures as it reasonably considers
are required by law or necessary to obtain financing. In the event that the
transactions contemplated by this Agreement are not consummated for any reason
whatsoever, the parties hereto agree not to disclose or use any confidential
information they may have concerning the affairs of other parties, except for
information which is required by law to be disclosed. Confidential information
includes, but is not limited to, financial records, surveys, reports, plans,
proposals, financial information, information relating to personnel contracts,
stock ownership, liabilities and litigation.
7.17 Costs, Expenses and Legal Fees. Whether or not the transactions
contemplated hereby are consummated, each party hereto shall bear its own costs
and expenses (including attorneys' fees), except as set forth in the Escrow
Agreement.
7.18 Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws effecting during the term
hereof, such provision shall be fully severable and this Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision
never comprised a part hereof; and the remaining provisions hereof shall remain
in full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom. Furthermore, in lieu of
such illegal, invalid and unenforceable provision, there shall be added
automatically as part of this Agreement a provision as similar in nature in its
terms to such illegal, invalid or unenforceable provision as may be possible and
be legal, valid and enforceable.
7.19 Counterparts and Facsimile Signatures. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. For purposes of
this Agreement, facsimile signatures shall be treated as originals until such
time that applicable pages bearing non-facsimile signatures are obtained from
the relevant party or parties.
7.20 Continuing Nature. All representations and warranties contained in this
Agreement shall survive the Closing for a period of two (2) years and, if
applicable, all covenants, which, according to their terms are to be performed
after the execution of this Agreement, shall survive the Closing for a period of
two (2) years.
IN WITNESS WHEREOF, the parties hereto have set their hands this 12th day of
March, 1998.
Augrid of Nevada, Inc. Augrid Corporation
A Nevada Corporation (Buyer) A Delaware
Corporation (Seller)
by: ___________________________ by:___________________________
EXHIBIT 3 (c)
BYLAWS
OF
Augrid of Nevada, Inc.
ARTICLE I
OFFICES
The principal office of the Corporation in the State of Nevada shall be
located in Las Vegas, County of Clark. The Corporation may have such
other offices, either within or without the State of Nevada, as the Board
of Directors may designate or as the business of the Corporation may
require from time to time.
ARTICLE II
SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of the shareholders shall
be held on the first day in the month of August in each year, beginning
with the year 1999, at the hour of one o'clock p.m., for the purpose of
electing Directors and for the transaction of such other business as may
come before the meeting. If the day fixed for the annual meeting shall be
a legal holiday, such meeting shall be held on the next business day. If
the election of Directors shall not be held on the day designated herein
for any annual meeting of the shareholders, or at any adjournment thereof,
the Board of Directors shall cause the election to be held at a special
meeting of the shareholders as soon thereafter as soon as conveniently may
be.
SECTION 2. Special Meetings. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by statute, may be
called by the President or by the Board of Directors, and shall be called
by the President at the request of the holders of not less than fifty
percent (50%) of all the outstanding shares of the Corporation entitled to
vote at the meeting.
SECTION 3. Place of Meeting. The Board of Directors may designate any
place, either within or without the State of Nevada, unless otherwise
prescribed by statute, as the place of meeting for any annual meeting or
for any special meeting. A waiver of notice signed by all shareholders
entitled to vote at a meeting may designate any place, either within or
without the State of Nevada, unless otherwise prescribed by statute, as the
place for the holding of such meeting. If no designation is made, the
place of the meeting will be the principal office of the Corporation.
SECTION 4. Notice of Meeting. Written notice stating the place, day and
hour of the meeting and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall unless otherwise prescribed
by statute, be delivered not less than ten (10) days nor more than sixty
(60) days before the date of the meeting, to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed
to be delivered when deposited in the United States mail, addressed to the
shareholder at his/her address as it appears on the stock transfer books of
the Corporation, with postage thereon prepaid.
SECTION 5. Closing of Transfer Books or Fixing of Record. For the purpose
of determining shareholders entitled to notice of or to vote at any meeting
of shareholders or any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be closed for a
stated period, but not to exceed in any case fifty (50) days. If the stock
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, such books
shall be closed for at least ten (10) days immediately preceding such
meeting. In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than
fifty (50) days and, in case of a meeting of shareholders, not less than
ten (10) days prior to the date on which the particular action requiring
such determination of shareholders is to be taken. If the stock transfer
books are not closed and no record date is fixed for determination of
shareholders entitled to notice of or to vote at a meeting of shareholders,
or shareholders entitled to receive payment of a dividend, the date on
which notice of the meeting is mailed or the date on which the resolution
of the Board of Directors declaring such dividend is adopted, as the case
may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination
shall apply to any adjournment thereof.
SECTION 6. Voting Lists. The officer or agent having charge of the stock
transfer books for shares of the Corporation shall make a complete list of
the shareholders entitled to vote at each meeting of shareholders or at any
adjournment thereof, arranged in alphabetical order, with the address of
and the number of shares held by each. Such list shall be produced and
kept open at the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the meeting for the
purposes thereof.
SECTION 7. Quorum. A majority of the outstanding shares of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less than a majority
of the outstanding shares are represented at a meeting, a majority of the
shares so represented may adjourn the meeting from time to time without
further notice. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have
been transacted at the meeting as originally noticed. The shareholders
present at a duly organized meeting may continue to transact business until
adjournment, notwithstanding the withdrawal of enough shareholders to leave
less than a quorum.
SECTION 8. Proxies. At all meetings of shareholders, a shareholder
may vote in person or by proxy executed in writing by the shareholder
by his/her duly authorized attorney-in-fact. Such proxy shall be
filed with the secretary of the Corporation before or at the time of
the meeting.
SECTION 9. Voting of Shares. Each outstanding share entitled to vote
shall be entitled to one vote upon each matter submitted to a vote at a
meeting of shareholders.
SECTION 10. Voting of Shares by Certain Holders. Shares standing in the
name of another corporation may be voted by such officer, agent or proxy as
the Bylaws of such corporation may prescribe or, in the absence of such
provision, as the Board of Directors of such corporation may determine.
Shares held by an administrator, executor, guardian or conservator may be
voted by him, either in person or by proxy, without a transfer of such
shares into his name. Shares standing in the name of a trustee may be
voted by him, either in person or by proxy, but no trustee shall be
entitled to vote shares held by him without a transfer of such shares into
his name.
Shares standing in the name of a receiver may be voted by such receiver,
and the shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name, if authority to
do so be contained in an appropriate order of the court by which such
receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote the shares so
transferred.
Shares of its own stock belonging to the Corporation shall not be voted,
directly or indirectly, at any meeting, and shall not be counted in
determining the total number of outstanding shares at any given time.
SECTION 11. Informal Action by Shareholders. Unless otherwise provided by
law, any action required to be taken at a meeting of the shareholders, or
any other action which may be taken at a meeting of the shareholders, may
be taken without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by all of the shareholders entitled to
vote with respect to the subject matter thereof.
ARTCLE III
BOARD OF DIRECTORS
SECTION 1. General Powers. The Board of Directors shall be responsible
for the control and management of the affairs, property and interests of
the Corporation and may exercise all powers of the Corporation, except as
are in the Articles of Incorporation or by statute expressly conferred upon
or reserved to the shareholders.
SECTION 2. Number, Tenure and Qualifications. The number of directors of
the Corporation shall be fixed by the Board of Directors, but in no event
shall be less than one (1). Each director shall hold office until the next
annual meeting of shareholders and until his/her successor shall have been
elected and qualified.
SECTION 3. Regular Meetings. A regular meeting of the Board of Directors
shall be held without other notice than this Bylaw immediately after, and
at the same place as, the annual meeting of shareholders. The Board of
Directors may provide, by resolution, the time and place for the holding of
additional regular meetings without notice other than such resolution.
SECTION 4. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the President or any two directors.
The person or persons authorized to call special meetings of the Board of
Directors may fix the place for holding any special meeting of the Board of
Directors called by them.
SECTION 5. Notice. Notice of any special meeting shall be given at least
one (1) day previous thereto by written notice delivered personally or
mailed to each director at his business address, or by telegram. If
mailed, such notice shall be deemed to be delivered when deposited in the
United States mail so addressed, with postage thereon prepaid. If notice
be given by telegram, such notice shall be deemed to be delivered when the
notice be given to the telegraph company. Any directors may waive notice
of any meeting. The attendance of a director at a meeting shall constitute
a waiver of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened.
SECTION 6. Quorum. A majority of the number of directors fixed by Section
2 of this Article shall constitute a quorum for the transaction of business
at any meeting of the Board of Directors, but if less than such majority is
present at a meeting, a majority of the directors present may adjourn the
meeting from time to time without further notice.
SECTION 7. Telephonic Meeting. A meeting of the Board of Directors may be
had by means of a telephone conference or similar communications equipment
by which all persons participating in the meeting can hear each other, and
the participation in a meeting under such circumstances shall constitute
presence at the meeting.
SECTION 8. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the
Board of Directors.
SECTION 9. Action Without a Meeting. Any action that may be taken by the
Board of Directors at a meeting may be taken without a meeting if a consent
in writing, setting forth the action so to be taken, shall be signed before
such action by all of the directors.
SECTION 10. Vacancies. Any vacancy occurring in the Board of Directors
may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors, unless
otherwise provided by law. A director elected to fill a vacancy shall be
elected for the unexpired term of his/her predecessor in office. Any
directorship to be filled by reason of an increase in the number of
directors may be filled by election by the Board of Directors for a term of
office continuing only until the next election of directors by the
shareholders.
SECTION 11. Resignation. Any director may resign at any time by giving
written notice to the Board of Directors, the President or the Secretary of
the Corporation. Unless otherwise specified in such written notice such
resignation shall take effect upon receipt thereof by the Board of
Directors or such officer, and the acceptance of such resignation shall not
be necessary to make it effective.
SECTION 12. Removal. Any director may be removed with or without cause at
any time by the affirmative vote of shareholders holding of record in the
aggregate at least a majority of the outstanding shares of stock of the
Corporation at a special meeting of the shareholders called for that
purpose, and may be removed for cause by action of the Board.
SECTION 13. Compensation. By resolution of the Board of Directors, each
director may be paid for his/her expenses, if any, of attendance at each
meeting of the Board of Directors, and may be paid a stated salary as
director or a fixed sum for attendance at each meeting of the Board of
Directors or both. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor.
SECTION 14. Contracts. No contract or other transaction between this
Corporation and any other corporation shall be impaired, affected or
invalidated, nor shall any director be liable in any way by reason of the
fact that one or more of the directors of this Corporation is or are
interested in, or is a director or officer, or are directors or officers of
such other corporations, provided that such facts are disclosed or made
known to the Board of Directors, prior to their authorizing such
transaction. Any director, personally and individually, may be a party to
or may be interested in any contract or transaction of this Corporation,
and no directors shall be liable in any way by reason of such interest,
provided that the fact of such interest be disclosed or made known to the
Board of Directors prior to their authorization of such contract or
transaction, and provided that the Board of Directors shall authorize,
approve or ratify such contract or transaction by the vote (not counting
the vote of any such Director) of a majority of a quorum, notwithstanding
the presence of any such director at the meeting at which such action is
taken. Such director or directors may be counted in determining the
presence of a quorum at such meeting. This Section shall not be construed
to impair, invalidate or in any way affect any contract or other
transaction which would otherwise be valid under the law (common, statutory
or otherwise) applicable thereto.
SECTION 15. Committees. The Board of Directors, by resolution adopted by
a majority of the entire Board, may from time to time designate from among
its members an executive committee and such other committees, and alternate
members thereof, as they may deem desirable, with such powers and authority
(to the extent permitted by law) as may be provided in such resolution.
Each such committee shall serve at the pleasure of the Board.
SECTION 16. Presumption of Assent. A director of the Corporation who is
present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless his/her dissent shall be entered into the minutes of the
meeting or unless he/she shall file written dissent to such action with the
person acting as the Secretary of the meeting before the adjournment
thereof, or shall forward such dissent by registered mail to the Secretary
of the Corporation immediately after the adjournment of the meeting. Such
right to dissent shall not apply to a director who voted in favor of such
action.
ARTICLE IV
OFFICERS
SECTION 1. Number. The officers of the Corporation shall be a President,
one or more Vice Presidents, a Secretary, and a Treasurer, each of whom
shall be elected by the Board of Directors. Such other officers and
assistant officers as may be deemed necessary may be elected or appointed
by the Board of Directors, including a Chairman of the Board. In its
discretion, the Board of Directors may leave unfilled for any such period
as it may determine any office except those of President and Secretary.
Any two or more offices may be held by the same person. Officers may be
directors or shareholders of the Corporation.
SECTION 2. Election and Term of Office. The officers of the Corporation
to be elected by the Board of Directors shall be elected annually by the
Board of Directors at the first meeting of the Board of Directors held
after each annual meeting of the shareholders. If the election of officers
shall not be held at such meeting, such election shall be held as soon
thereafter as conveniently may be. Each officer shall hold office until
his/her successor shall have been duly elected and shall have qualified, or
until his/her death, or until he/she shall resign or shall have been
removed in the manner hereinafter provided.
SECTION 3. Resignation. Any officer may resign at any time by giving
written notice of such resignation to the Board of Directors, or to the
President or the Secretary of the Corporation. Unless otherwise specified
in such written notice, such resignation shall take effect upon receipt
thereof by the Board of Directors or by such officer, and the acceptance of
such resignation shall not be necessary to make it effective.
SECTION 4. Removal. Any officer or agent may be removed by the Board of
Directors whenever, in its judgment, the best interests of the Corporation
will be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or appointment
of an officer or agent shall not of itself create contract rights, and such
appointment shall be terminable at will.
SECTION 5. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the
Board of Directors for the unexpired portion of the term.
SECTION 6. President. The President shall be the principal executive
officer of the Corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the Corporation. He/she shall, when present, preside at all
meetings of the shareholders and of the Board of Directors, unless there is
a Chairman of the Board, in which case the Chairman will preside. The
President may sign, with the Secretary or any other proper officer of the
Corporation thereunto authorized by the Board of Directors, certificates
for shares of the Corporation, any deeds, mortgages, bonds, contracts, or
other instruments which the Board of Directors has authorized to be
executed, except in cases where the signing and execution thereof shall be
expressly delegated by the Board of Directors or by these Bylaws to some
other officer or agent of the Corporation, or shall be required by law to
be otherwise signed or executed; and in general shall perform all duties
incident to the office of President and such other duties as may be
prescribed by the Board of Directors from time to time.
SECTION 7. Vice President. In the absence of the President or in event of
his/her death, inability or refusal to act, the Vice President shall
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. The
Vice President shall perform such other duties as from time to time may be
assigned by the President or by the Board of Directors. If there is more
than one Vice President, each Vice President shall succeed to the duties of
the President in order of rank as determined by the Board of Directors. If
no such rank has been determined, then each Vice President shall succeed to
the duties of the President in order of date of election, the earliest date
having first rank.
SECTION 8. Secretary. The Secretary shall: (a) keep the minutes of the
proceedings of the shareholders and of the Board of Directors in one or
more minute book provided for that purpose; (b) see that all notices are
duly given in accordance with the provisions of these Bylaws or as required
by law; (c) be custodian of the corporate records and of the seal of the
Corporation and see that the seal of the Corporation is affixed to all
documents, the execution of which on behalf of the Corporation under its
seal is duly authorized; (d) keep a register of the post office address of
each shareholder which shall be furnished to the Secretary by such
shareholder; (e) sign with the president certificates for shares of the
Corporation, the issuance of which shall have been authorized by resolution
of the Board of Directors; (f) have general charge of the stock transfer
books of the Corporation; and (g) in general perform all duties incident to
the office of the Secretary and such other duties as from time to time may
be assigned by the President or by the Board of Directors.
SECTION 9. Treasurer. The Treasurer shall: (a) have charge and custody of
and be responsible for all funds and securities of the Corporation; (b)
receive and give receipts for moneys due and payable to the Corporation
from any source whatsoever, and deposit all such moneys in the name of the
Corporation in such banks, trust companies or other depositories as shall
be selected in accordance with the provisions of Article VI of these
Bylaws; and (c) in general perform all of the duties incident to the office
of Treasurer and such other duties as from time to time may be assigned to
him by the President or by the Board of Directors.
SECTION 10. Salaries. The salaries of the officers shall be fixed from
time to time by the Board of Directors, and no officer shall be prevented
from receiving such salary by reason of the fact that he/she is also a
director of the corporation.
SECTION 11. Sureties and Bonds. In case the Board of Directors shall so
require any officer, employee or agent of the Corporation shall execute to
the Corporation a bond in such sum, and with such surety or sureties as the
Board of Directors may direct, conditioned upon the faithful performance of
his/her duties to the Corporation, including responsibility for negligence
for the accounting for all property, funds or securities of the Corporation
which may come into his/her hands.
SECTION 12. Shares of Stock of Other Corporations. Whenever the
Corporation is the holder of shares of stock of any other corporation, any
right of power of the Corporation as such shareholder (including the
attendance, acting and voting at shareholders' meetings and execution of
waivers, consents, proxies or other instruments) may be exercised on behalf
of the Corporation by the President, any Vice President or such other
person as the Board of directors may authorize.
ARTICLE V
INDEMNITY
The Corporation shall indemnify its directors, officers and employees as
follows:
Every director, officer, or employee of the Corporation shall be indemnified by
the Corporation against all expenses and liabilities, including counsel fees,
reasonably incurred by or imposed upon him/her in connection with any proceeding
to which he/she may be made a party, or in which he/she may become involved, by
reason of being or having been a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of the Corporation, partnership, joint
venture, trust or enterprise, or any settlement thereof, whether or not he/she
is a director, officer, employee or agent at the time such expenses are
incurred, except in such cases wherein the director, officer, employee or agent
is adjudged guilty of willful misfeasance or malfeasance in the performance of
his/her duties; provided that in the event of a settlement the indemnification
herein shall apply only when the Board of Directors approves such settlement and
reimbursement as being for the best interests of the Corporation.
The Corporation shall provide to any person who is or was a director, officer,
employee or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of the corporation,
partnership, joint venture, trust or enterprise, the indemnity against expenses
of a suit, litigation or other proceedings which is specifically permissible
under applicable law.
The Board of Directors may, in its discretion, direct the purchase of liability
insurance by way of implementing the provisions of this Article.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the Corporation, and
such authority may be general or confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the Board of Directors. Such
authority may be general or confined to specific instances.
SECTION 3. Checks, Drafts, etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in
the name of the Corporation, shall be signed by such officer or officers,
agent or agents of the Corporation and in such manner as shall from time to
time be determined by resolution of the Board of Directors.
SECTION 4. Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in
such banks, trust companies or other depositories as the Board of Directors
may select.
ARTICLE VII
SHARES OF STOCK
SECTION 1. Certificates for Shares. Certificates representing shares of
the Corporation shall be in such a form as shall be determined by the
Board of Directors. Such certificates shall be signed by the President
and by the Secretary or by such other officers authorized by law and by
the Board of Directors to do so, and sealed with the corporate seal. All
certificates for shares shall be consecutively numbered or otherwise
identified. The name and address of the person to whom the shares
represented thereby are issued, with the number of shares and date of
issue, shall be entered on the stock transfer books of the Corporation.
All certificates surrendered to the Corporation for transfer shall be
canceled and no new certificate shall be issued until the former
certificate for a like number of shares shall have been surrendered and
canceled, except that in the case of a lost, destroyed or mutilated
certificate, a new one may be issued therefor upon such terms and
indemnity to the Corporation as the Board of Directors may prescribe.
SECTION 2. Transfer of Shares. Transfer of shares of the Corporation
shall be made only on the stock transfer books of the Corporation by the
holder of record thereof or by his/her legal representative, who shall
furnish proper evidence of authority to transfer, or by his/her attorney
thereunto authorized by power of attorney duly executed and filed with the
Secretary of the Corporation, and on surrender for cancellation of the
certificate for such shares. The person in whose name shares stand on the
books of the Corporation shall be deemed by the Corporation to be the owner
thereof for all purposes. Provided, however, that upon any action
undertaken by the shareholders to elect S Corporation status pursuant to
Section 1362 of the Internal Revenue Code and upon any shareholders'
agreement thereto restricting the transfer of said shares so as to
disqualify said S Corporation status, said restriction on transfer shall be
made a part of the Bylaws so long as said agreement is in force and effect.
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Corporation shall begin on the first day of January
and end on the thirty first day of December of each year.
ARTICLE IX
DIVIDENDS
The Board of Directors may from time to time declare, and the corporation
may pay, dividends on its outstanding shares in the manner and upon the
terms and conditions provided by law and its Articles of Incorporation.
ARTICLE X
CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the
Corporation and the state of incorporation and the words "Corporate Seal".
ARTICLE XI
WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be
given to any shareholder or director of the Corporation under the
provisions of these Bylaws or under the provisions of the Articles of
Incorporation or under the provisions of the applicable Business
Corporation Act, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.
ARTICLE XII
AMENDMENTS
These Bylaws may be altered, amended or repealed and new Bylaws may be
adopted by the Board of Directors at any regular or special meeting of the
Board of Directors.
The above Bylaws are certified to have been adopted by the Board of
Directors of the Corporation on the ___ day of _______________, 1999.
______________________________
Secretary
EXHIBIT 10 (d)
DATE 24 September 1998
CERAVISION LIMITED and AuGRID CORPORATION OF NEVADA, INC
EXCLUSIVE RESEARCH & DEVELOPMENT AGREEMENT
relating to FLAT SCREEN MONITORS
Fennemores 200 Silbury Boulevard Central Milton Keynes
MK9 1LL
Ref. CIR/JYPWF
EXCLUSIVE RESEARCH & DEVELOPMENT AGREEMENT
made on 24 September 1998
PARTIES:
1. CERAVISION LIMITED a company incorporated in England and Wales under number
3191734 with registered office at Sovereign Court, 230 Upper Fifth Street,
Central Milton Keynes MK9 2HR ("Ceravision").
2. AUGRID CORPORATION OF NEVADA, INC a corporation organised and validly
existing under the laws of the State of Nevada whose principal office is at 140
Public Square, The Par Building, Suite 208, Cleveland, Ohio 44114 ("Augrid")
BACKGROUND:
A. Ceravision has developed and is developing certain technology relating to
flat-screen displays.
B. Augrid wishes to have such technology developed by Ceravision for Augrid to
the extent that it relates to desk-top monitors and in due course to have rights
to manufacture such monitors using Ceravision technology.
C. Augrid has previously paid to Ceravision the sum of US$200,000 for exclusive
negotiating rights leading to this Agreement.
IT IS AGREED:
1 INTERPRETATION
1.1 In this Agreement unless the context otherwise requires the following words
and expressions have the following meanings:
Associate- in relation to any person means a person connected with him within
the meaning of section 839 Income and Corporation Taxes Act 1988
Business Day- a day (other than a Saturday) on which clearing banks in the City
of London are open for normal sterling banking business
Ceravision's
Intellectual Property Rights- Property Rights of Ceravision or its Associates
Confidential Information-the Technology together with any other information
relating to the technology or business affairs of Ceravision or its Associates
disclosed by Ceravision or its Associates to AUgrid or otherwise obtained by or
coming to the knowledge of Migrid (whether in writing, orally, pictorially, in
machine-readable form, by observation during visits, by examination of
Prototypes or otherwise howsoever) which is indicated to be confidential or
which by virtue of its nature or content is clearly of a confidential nature,
and any information derived from any such information
Intellectual Property Rights- patents, design rights, copyright, registered
designs,trade marks, trade names, know how and other similar such rights
existing or arising anywhere in the world (including applications for and rights
under licences of any of the foregoing) which relate to the Prototypes or the
Technology
Products- flat-screen field emission display mains driven non-portable self-
contained desktop monitors for use only in displaying the output of computers.
Computers will for this purpose exclude equipment primarily designed to display
broadcast or recorded video material or primarily designed for home
entertainment
Project- the research and development project to develop and supply Prototypes
to Augrid
Prototype- a prototype of the Products complying with the Specification
Specification- the specification for the Prototypes set out in the Schedule
Technology- all technology embodied or to be embodied in the Prototypes or in
the machinery required to be used in the manufacture of Products conforming to
the Prototypes (whether dxisting at the date of this Agreement or developed by
Ceravision during the term of the Project) including all inventions, designs,
drawings, technical specifications, computer programs and other technology of
whatever nature
UK- Great Britain and Northern Ireland
VAT- value added tax or any other tax or levy of substantially similar effect
1.2 In this Agreement, unless the context otherwise requires:
1.2.1 the singular includes the plural and vice versa and reference to any
gender includes the other genders;
1.2.2 references to persons include companies, unincorporated associations and
partnerships;
1.2.3 references to "the term of the Project" are to the period from the date of
this Agreement until the Project terminates under Clause 11. 1;
1.2.4 words and phrases defined in the Companies Act 1985 have the same
meanings, but the word "company" includes any body corporate;
1.2.5 references to "Clauses" are to clauses or sub-clauses of this Agreement,
references to "Schedules" are to schedules to this Agreement and references
within a Schedule to "paragraphs" are to paragraphs of that Schedule;
1.2.6 references to any rate of interest mean that rate as from time to time in
force, calculated from day to day on the basis of a 365 day year, and compounded
on the last day of March, June, September and December in each year, both before
and after judgment; and references to a base lending rate, if there is no such
published or determinable rate at the appropriate time, mean such reasonably
equivalent rate as Ceravision shall select; and
1.2.7 examples preceded by the word "including" are to be construed as not
limiting the generality of the words preceding it.
1. 3 In this Agreement:
1.3.1 any reference to a statute or statutory instrument or any section or part
of it includes any enactment replacing or amending it (with or without
modification) or any instrument, order or regulation made under it and also
includes any past statutory provision (as from time to time modified or re-
enacted) which it has directly or indirectly replaced-,
1.3.2 headings are for convenience only and are not to affect the construction
of anything in this Agreement;
1.3.3 references to any English legal term for any action, remedy, judicial
process, legal document, legal status, court, official or legal concept shall in
respect of any jurisdiction other than England be deemed to include that which
most nearly approximates in that jurisdiction to the English legal term; and
1.4 The Schedule is an integral part of this Agreement and is to be construed as
one with it, and references to this Agreement include the Schedule. 2
2. THE PROJECT
2.1 During the term of the Project Ceravision will use its best endeavours to
develop and produce, within two years of the date of this Agreement,
Prototypes complying with the Specification and to develop any Technology
necessary to produce the Prototypes; provided that:
2. 1.1 Ceravision shall not be required to expend more effort or money on the
Project than is contemplated by its present plans and budgets, which plans and
budgets are reasonably based upon the full expenditure of the payments to be
made by Augrid as set out in clause 6.2;
2.1.2 Ceravision shall not be required to devote its entire resources or entire
key personnel to the Project and shall not be prevented by this Clause 2.1 or
Clause 4.1 from giving undertakings to use its best endeavours in other
projects.
2.2 Ceravision will devote such time, resources and personnel to the Project as
it considers necessary to comply with its obligations under this Agreement.
Ceravision does not guarantee its ability to develop the Technology necessary to
produce the Prototypes.
2. 3 Ceravision will only be required to incorporate into the Prototypes such of
its existing or developed technology as is required to comply with the
Specification. Ceravision will not be required to and does not guarantee to
incorporate all of its existing or developed technology if that is not a
requirement under the Specification.
2.4 The Specification may not be altered (save as contemplated therein) other
than with the written consent of Ceravision and Augrid.
3. EXCLUSIVITY
3.1 During the term of the Project (and thereafter as provided in Clause 11.2.2)
Ceravision will not negotiate with or enter into any agreement with any person
anywhere in the world to supply, develop, manufacture or otherwise deal in the
Products or license any person to use any of Ceravision's Intellectual Property
Rights for the purpose of supplying, developing, manufacturing or otherwise
dealing in the Products.
3.2 Subject to Clause 3.1 Ceravision will be entitled to enter into any
arrangement with any person or take any other action it considers appropriate to
supply, develop, manufacture or otherwise deal in any product embodying the
Technology or any of its other technology.
4 PROTOTYPES
4.1 Ceravision will use its best endeavours (subject to Clauses 2.1.1 and 2.1.2)
to supply up to 10 Prototypes to Aiigrid at a time or times to be determined by
Ceravision within two years of the date of this Agreement. If Ailgrid so
agrees early Prototypes need not comply fully with the Specification if they
demonstrate the current development at that time of the Technology and work
towards production of Prototypes which do so comply. The Prototypes shall at all
times remain the property of Ceravision and shall be marked as such.
4.2 Ceravision will only be required to supply Prototypes to Augrid. Ceravision
will not supply details of any of the Technology to Augrid unless otherwise
agreed.
4. 3 Augrid will not dismantle or reverse engineer the Prototypes or otherwise
attempt to analyse the Technology embodied in the Prototypes.
4.4 Augrid will, at its own expense, keep the Prototypes in its possession and
under strict security details of which will be supplied by Ceravision and will
comply with any security measures specified by Ceravision, which may include
constant supervision by or on behalf of Ceravision. Augrid shall at all times
keep the Prototypes insured against all risks including accidental damage in
their full replacement cost. Augrid will not be entitled to use or deal with
the Prototypes other than for demonstration and evaluation purposes or otherwise
as specifically permitted by Ceravision.
5 INTELLECTUAL PROPERTY RIGHTS
5.1 All Intellectual Property Rights in the design of the Prototypes and the
Technology embodied therein (whether existing at the date of this Agreement or
developed or registered by Ceravision or its Associates during the term of the
Project) will belong to Ceravision and Atigrid will not acquire any rights other
than those specifically provided in this Agreement.
5.2 Ceravision will not be required to supply any Prototypes to Augrid or to
disclose any Technology to Augrid until such time as Ceravision has applied for
patent protection in respect of the relevant Technology (if applicable).
5.3 Ceravision will maintain such patent protection as it considers appropriate
in relation to the Technology and take such other action as it considers
appropriate to protect its Technology or Ceravision's Intellectual Property
Rights.
5.4 Augrid will forthwith inform Ceravision in writing if it becomes aware that
any person is or may be intending to infringe any of Ceravision's Intellectual
Property Rights.
6 PAYMENT
6.1 In consideration for the undertaking by Ceravision contained in Clause 3.1
to refrain from certain business activities and from exercising certain
Intellectual Property Rights, Augrid will pay Ceravision 2,000,000 (two million
pounds Sterling) per annum for the term of the Project. Payment will be made as
follows:- 6.1.1 175,000 (one hundred and seventy-five thousand pounds Sterling)
will be paid within 30 days from the date of this Agreement
6.1.2 825,000 (eight hundred and twenty-five thousand pounds Sterling) will be
paid within 60 days from the date of this Agreement
6.1.3 1,000,000 (one million pounds Sterling) will be paid on or before 15 May
1999
6.1.4 thereafter each annual payment of 2,000,000 (two million pounds Sterling)
will be paid in two equal instalments the first to be paid in advance on each
anniversary of the date of this Agreement and the second six months later
6.2 In addition to the sum of US$200,000 previously paid to Ceravision by
Augrid, in consideration for the consultancy and engineering services referred
to in clause 2 and the provision of information Augrid will pay Ceravision 500,
000 (five hundred thousand pounds Sterling) per annum for the duration of this
Agreement payable in advance by equal quarterly instalments except that the
first instalment will be
175,000 (one hundred and seventy-five thousand pounds Sterling) payable within
30 days following the date of this Agreement and the second instalment will be
75,000 (seventy-five thousand pounds Sterling) payable within 90 days following
the date of this Agreement. Thereafter on and as from the commencement of the
third quarter (ie the date 270 days following the date of this Agreement) each
quarterly installment of 125,000 (one hundred and twenty-five thousand pounds
Sterling) will be payable on the commencement of each quarter.
6.3 All sums stated in this Agreement are exclusive of VAT, which where
applicable will be paid in addition at the same time as the payment to which it
relates or, if later, upon demand by Ceravision.
6.4 Any sum payable by AUgrid to Ceravision in connection with this Agreement
which is not received by Ceravision in cleared funds on the due date shall bear
interest at 4% above the base lending rate of Lloyds bank plc from the due date
until receipt by Ceravision in cleared funds. All payments to be made by Migrid
to Ceravision shall be made free of any deduction, set-off, counterclaim, equity
or any other matter whatsoever.
6.5 No part of the consideration paid by Augrid to Ceravision shall be
refundable to Augrid in any circumstances whatsoever save as expressly provided
in Clause 11.2.5, provided that this Clause shall not be construed as excluding
(subject to Clause 7) any right of Augrid to claim damages for breach of
contract.
7. WARRANTIES & LIABILITY
7.1 Augrid warrants to Ceravision that:
7.1.1 Augrid is a corporation organised and validly existing and in good
standing under the laws of the State of Nevada
7.1.2 Augrid has the necessary power and authority to enter into and perform
this Agreement and has taken all corporate action necessary to authorise this
Agreement and this Agreement constitutes a valid and binding obligation of
Augrid in accordance with its terms
7.1.3 The execution by Augrid of, and the performance by Augrid of its
obligations under, this Agreement does not and will not:
7.1.3.1 require the consent of or any filing with any court, authority or
person;
7.1.3.2 result in a breach of, or constitute a default under, any instrument to
which Augrid or any of its Associates is a party or by which Augrid or any of
its Associates is bound; or
7.1.3.3 result in a breach of any order, judgment or decree of or undertaking to
any court, authority or person to which Augrid or any of its Associates is a
party or by which Augrid or any of its Associates is bound.
7.2 Ceravision warrants to Augrid that:
7.2.1 Ceravision is a company duly incorporated under the laws of England and
Wales
7.2.2 Ceravision has the necessary power and authority to enter into and perform
this Agreement and has taken all corporate action necessary to authorise this
Agreement and this Agreement constitutes a valid and binding obligation of
Cerdvision in accordance with its terms
7.2.3 The execution by Ceravision of, and the performance by Ceravision of its
obligations under, this Agreement does not and will not:
7.2.3.1 require the consent of or any filing with any court, authority or
person;
7.2.3.2 result in a breach of, or constitute a default under, any instrument to
which Ceravision or any of its Associates is a party or by which Ceravision or
any of its Associates is bound; or
7.2.3.3 result in a breach of any order, judgment or decree of or undertaking to
any court, authority or person to which Ceravision or any of its Associates is a
party or by which Ceravision or any of its Associates is bound; provided that
nothing in this Clause 7.2 or elsewhere in this Agreement shall be construed as
a warranty that Ceravision's Intellectual Property Rights are or will be valid,
subsisting and enforceable nor that the Technology does not and will not
infringe the Intellectual Property Rights of any other person, and any warranty
or representation to such effect is expressly excluded; provided further
however, that Ceravision hereby represents and warrants that neither it nor any
of itsAssociates has any knowledge or expectation that its Intellectual Property
Rights are not or will not be valid, subsisting and enforceable or has any
knowledge or expectation that the Technology does or will infringe the
Intellectual Property Right., of any person.
7. 3 Ceravision will comply with its specific obligations under this Agreement
but otherwise gives no warranty whatsoever in relation to any aspect of the
Project.
7.4 If Ceravision fails to comply with any of its obligations under this
Agreement other than the exclusivity obligation in Clause 3. 1, its liability
(if any) to Augrid for damages for breach of contract in respect of such failure
shall be limited to the total amount referred to in Clause 6.2, irrespective of
whether or not Augrid elects to terminate the Project under Clause 11. 1.
7.5 If Ceravision fails to comply with its exclusivity obligation in Clause 3 ).
1, its liability (if any) to Augrid for damages for breach of contract in
respect of such failure shall be limited to the total amount referred to in
Clause 6. 1, irrespective of whether or not Augrid elects to terminate the
Project under Clause 11. 1.
8. REPORTING AND ACCESS
8.1 Ceravision will issue verbal reports at least monthly and written reports at
least quarterly on the progress of the Project.
8.2 Both Ceravision and Mgrid will be entitled to visit each other's premises at
regular intervals on giving reasonable advance notice of the visit. Other than
in exceptional circumstances visits by Augrid to Ceravision should not normally
be more often than quarterly. Augrid will be entitled to be accompanied by
potential investors funders or employees on its visits (subject to the prior
approval of Ceravision such approval not to be unreasonably withheld, and
subject to such persons signing confidentiality undertakings in such form as
Ceravision shall require) and Ceravision agrees that it will not initiate or
receive from such persons any communication without the prior consent or request
of Migrid. Mgrid shall not communicate with any director (other than Anthony
Cooper or Timothy Reynolds), employee, contractor or supplier of Ceravision
without the express written consent of Ceravision.
9 CONFIDENTIALITY
9.1 Augrid will maintain the Confidential Information as strictly confidential
and:
9.1.1 will not use it for any purpose other than for the purposes of the
Project;
9.1.2 will not part with possession of it;
9.1.3 will safeguard it as appropriate for sensitive commercial and technical
information, including through taking reasonable security measures at its own
expense;
9.1.4 will not without the prior written consent of Ceravision disclose any
Confidential Information to any person other than its employees who are required
in the course of their duties to receive and consider it for evaluating the
Project and who shall be informed by the A0grid of the confidential nature of
the information; Migrid shall procure that AUgrid's employees observe the terms
of this Agreement and Migrid shall be responsible for any breach by such
employees or any other person to whom it may have disclosed Confidential
Information with or without the consent of Ceravision;
9.1.5 will not without the prior written consent of Ceravision allow any
Confidential Information or any Prototype to be transmitted, transported or held
outside of the United States or the UK; and
9.1.6 following the termination of the Project under Clause 11.1, will return to
Ceravision on request all of the Confidential Information which is in a physical
form (including all copies) and will destroy any other records (including,
without limitation, those in machine-readable form) containing Confidential
Information.
9.2 The terms of paragraph 9.1 will apply both during and after the term of the
Project and will survive termination of this Agreement for any reason
9. 3 The undertakings of Adgrid in Clause 9.1 will not apply in respect of any
Confidential Information: which is or comes into the public domain through no
act or default on the part of Mgrid or its Associates or their directors,
employees or advisers; provided that information shall not be deemed to be in
the public domain by reason only that it is known to only a few of those people
to whom it may be of commercial interest; and a combination of two or more
portions of the Confidential Information shall not be deemed to be in the public
domain by reason only of each separate portion being in the public domain; or
9.3.2 which Augrid can show was in its possession or known to it by being in its
use or being recorded in its files prior to the date of this Agreement and which
was not previously acquired by Augrid directly or indirectly from Ceravision
under an obligation of confidence; or
9.3.3 which is hereafter disclosed or made available to Migrid from a source
other than Ceravision without breach by Migrid or such source of any obligation
of confidentiality or non-use owed towards Ceravision. The undertakings of
AUgrid in Clause 9.1 shall not apply to any disclosure of Confidential
Information required by an order of a court of competent jurisdiction, provided
that Augrid shall have taken all reasonable steps to avoid such disclosure
becoming necessary.
9.5 In case of any dispute as to whether any of the exceptions in this Clause 9
applies it shall be for Migrid to prove that it does apply.
9.6 If the exceptions in this Clause 9 apply to some but not all Confidential
Information, those exceptions shall not thereby apply to a combination of
Confidential Information to which they do and do not apply.
9.7 Each party will be entitled to disclose the fact that it is working on this
Project with the other.
10 ADVERTISING
10.1 Augrid will be entitled to issue publicity and advertising material in
relation to the Prototypes provided that no Confidential Information is
disclosed and provided that Ceravision has approved the material in writing
before it is published.
10.2 All Prototypes will be branded under the Ceravision trade mark and Augrid
must ensure that the name of Ceravision is credited in all publicity and
advertising material in a manner as required by Ceravision. Aiigrid will also if
required by Ceravision indicate on such material that the technology embodied in
the Prototype is patented.
10.3 Augrid will not exhibit the Prototypes without Ceravision's consent and
then only if a representative of Ceravision is present at the exhibition unless
the requirement of such presence is waived in writing by Ceravision.
11 TERMINATION
11.1 The Project shall terminate:
11.1.1 upon delivery of the Prototypes complying with the Specification to
Augrid;
11.1.2 if either party shall give to the other no less than three months' notice
of termination, to expire no earlier than the second anniversary of this
Agreement;
11.1.3 if the parties shall both agree that the Project is technically
impossible or impractical and do not both agree on modifications to this
Agreement to make the Project (as amended) possible or practical;
11.1.4 if Afigrid fails to make any payment to Ceravision when due, has not
made payment within 14 days of the date of a notice given to Aagrid by
Ceravision requiring Aiigrid to remedy such default and Ceravision gives notice
to Abgrid terminating the Project;
11. 1.5 if either party:
11.1.5.1 is in material breach of its obligations under this Agreement and (if
such breach is capable of remedy) fails to remedy such breach within a
reasonable time specified in a notice given to it by the other party requiring
it to do so; or
11.1.5.2 has a petition presented a~ainst it for its winding-up or
administration or passes a resolution or convenes a meeting to consider a
resolution for winding-up or has a receiver or administrative receiver appointed
in respect of any of its assets or proposes any voluntary arrangement with its
creditors or takes or has any action taken in respect of it under the law of any
jurisdiction relating to bankruptcy, insolvency, moratorium or protection from
creditors;
and the other party gives notice terminating the Project;
whichever shall first occur.
11.2 When the Project terminates under Clause 11.1:
11.2.1 the obligations of the parties under Clauses 2, 4.1 and 8 shall
terminate;
11.2.2 the exclusivity undertaking by Ceravision under Clause 3.1 shall
terminate, save that if the Project has terminated under Clause 11. 1. 1 the
exclusivity undertaking shall continue in force for up to three months after
delivery of the Prototypes to Augrid so long as good faith negotiations under
Clause 12.2 are in progress;
11. 2.3 if the Project terminates within two years of the date of this Agreement
(including upon early delivery of the Prototypes) Ceravision will be entitled to
immediate payment by Atigrid of all sums which would have been payable under
Clause 6 had the Project continued for two years from the date of this
Agreement, provided that this Clause 11.2.3 shall not apply if termination of
the Project is under Clause 11. 1.5 due to the default of Ceravision;
11.2.4 subject to Clause 11.2.3, AUgrid's payment obligations under Clause 6
shall cease with effect from the date of termination of the Project, save that:
11.2.4.1 the payments under Clause 6.1 shall continue for such time as the
exclusivity undertaking by Ceravision under Clause 3.1 continues under Clause
11.2.2; and
11.2.4.2 subject to Clause 11.2.5, all sums due for payment before the
termination of the Project (and any interest thereon to the date of payment)
shall remain due;
11.2.5 if the Project terminates after the second anniversary of the date of
this Agreement, Ceravision shall refund to Augrid the proportionate part of any
periodic payment made by Augrid in advance in respect of any unexpired portion
of the period for which it is made;.
11.2.6 if the Project terminates under Clause 11.1.4 or 11.1.5 due to the
default of Augrid, Ceravision may by notice to Augrid terminate the rights of
Augrid under this Agreement which would otherwise survive termination of the
Project; .
11.2.7 Augrid shall immediately return any Prototypes and any Confidential
Information to Ceravision, provided that this Clause 11.2.7 shall not apply for
so long as good faith negotiations under Clause 12.2 are in progress.
11.3 Termination of the obligations of either party under this Clause 11 is
without prejudice to its liability for any breach of this Agreement prior to
such termination or to its obligation to do anything which it ought to have done
before such termination.
11.4 Following termination of the Project Atigrid will continue to be bound by
the confidentiality obligations in Clause 9 and will not be entitled to disclose
or make use of any of the Confidential Information.
11.5 Ceravision's obligations under Clauses 2, 4.1 and 8 shall be suspended for
so long as any payment to Ceravision from Augrid has fallen due and has not been
paid.
12 MANUFACTURE
12.1 The parties acknowledge that this Agreement is intended as a preliminary
step towards an agreement for the manufacture by Augrid of Products using the
Technology.
12.2 No later than 21 months after the date of this Agreement the parties shall
enter into negotiations for the grant by Ceravision of licences of Ceravision's
Intellectual Property Rights and the transfer by Ceravision of know-how and the
provision by Ceravision of manufacturing equipment to Augrid to enable Augrid to
manufacture Products. Subject to the outcome of such negotiations, the terms are
expected to include:
12.2.1 an exclusive worldwide licence (to remain exclusive for a term to be
agreed) to enable manufacture, distribution and sale of the Products by Aiigrid,
such exclusivity not to prevent exploitation of the Technology by Ceravision or
others in applications other than the Products, and excluding any rights for
Ailgrid to use the Technology or the manufacturing equipment in applications
other than the Products;
12.2.2 a price, to include either or both of a capital payment or royalties,
reflecting the market value of the rights granted at the time.
12.3 The parties acknowledge that the provisions of this Clause 12 are
insufficiently certain to be legally enforceable. Neither the invalidity or
unenforceability of this Clause 12 nor any failure to reach agreement under this
Clause 12 shall affect the validity or enforceability of any other provision of
this Agreement nor entitle Ailgrid to any refund of sums paid under this
Agreement.
12.4 The obligations under this clause 12 shall end if no agreement has been
concluded within three months after delivery of the Protypes.
GENERAL
13. This Agreement sets out the entire agreement between the parties in
connection with the transaction contemplated by this Agreement. Each party
acknowledges that it has not relied on any warranty or representation by the
other save as set out in this Agreement.
13.2 This Agreement is not capable of being varied except in writing signed by
or on behalf of each of the parties.
13.3 This Agreement is personal to Augrid and neither it nor any benefit arising
under it may be assigned by Augrid without the prior written consent of
Ceravision. Ceravision may assign the benefit of this Agreement to any company
to which the whole of its business and technical expertise relevant to the
Project is transferred so long as Ceravision has deten-nined that such assignee
has the capability to comply with this Agreement in the same manner as prior to
any such transfer. Ceravision shall be free to dispose of Ceravision's
Intellectual Property Rights provided that it retains such rights as to enable
it to comply with this Agreement.
13.4 Ceravision shall not be liable to Augrid or be deemed to be in breach of
this Agreement by reason of any delay in performing or any failure to perform
any of Ceravision's obligations if the delay or failure was due to any cause
beyond Ceravision's reasonable control; provided however, that Ceravision will
immediately take appropriate action to mitigate the effect of the causes of any
such delay, and upon the cessation of any such delay Ceravision will immediately
recommence the performance of its obligations under this Agreement. Without
prejudice to the generality of the foregoing, the following shall be regarded as
causes beyond Ceravision's reasonable control:
13.4.1 Act of God, explosion, flood, tempest, fire or accident;
134.2 war or threat of war, sabotage, insurrection, civil disturbance or
requisition;
13.4.3 acts, restrictions, regulations, bye-laws, prohibitions or measures of
any kind on the part of any governmental, parliamentary or local authority;
13.4.4 import or export regulations or embargoes;
13.4.5 Intellectual Property Rights of third parties;
13.4.6 strike, lock outs or other industrial actions or trade disputes (whether
involving employees of Ceravsion or of a third party);
13.4.7 the death or incapacity of any person;
13.4.8 difficulties in obtaining raw materials, labour, fuel, parts or
machinery;
13.4.9 power failure or breakdown in machinery.
13.5 The parties will each bear their own legal and accountancy costs and other
expenses incurred in connection with this Agreement.
13.6 Any notice to be given in connection with this Agreement must be, in
writing. Without prejudice to proof that it has been effectively given in any
other manner, it shall be deemed duly served if delivered at or posted by first
class recorded delivery post (or air mail if outside the European Union) to the
address of the party concerned which is set out in this Agreement or notified to
the other party in accordance with this Clause. If delivered personally, the
notice shall be deemed served on the day on which it is delivered. If posted,
evidence that the notice was properly addressed, stamped and put into the post
shall be conclusive evidence of service and the notice shall be deemed served on
the second business day after posting or, if posted to an address outside the
British Isles, on the fifth business day after posting; but if a copy of a
notice is also sent by fax on or after the day of posting, it shall be deemed
served three hours after the end of fax transmission. A copy notice to be sent
by fax shall be sent:
13.6.1 if addressed to Ceravision, on (01235) 446423 T J Reynolds, with copy to
(01908) 665985 marked for the attention of C I Robinson;
13.6.2 if addressed to Augid, on 001 216 344 9008 marked for the attention of M
J Shaheed with copy marked for the attention of R Carter or to any current fax
number and contact details of the intended recipient notified to the sender in
accordance with this Clause. A notice served or deemed served after 5pm
(recipient's local time) on any business day or on a day which is not a business
day shall be deemed served on the next following Business Day.
13.7 The proper law of this Agreement is English law and the parties hereby
submit to the exclusive jurisdiction of the English courts in relation to any
claim or matter arising out of this Agreement.
THIS AGREEMENT has been executed on the date first stated above.
THE SCHEDULE (Clause 1.1) The Specifications
13.8 diagonal screen or larger as dictated by the high vacuum sealing chamber
(target dimension would be at least 14.2")
Plug and play ready
Digital input
Fully encased in computer grey
1.75" (or less) in depth
Normal mains power consumption (I 10 and/or 240 volts only)
90 lines per inch resolution
0.8 micron field emission gate holes
Standard high end VGA monitor ("standard" and "high end" by reference to general
technical standards at the date of this Agreement)
A maximum of 10lbs in weight which is mainly comprised of the base for
anchor/swivel retention
Minimal display surround - ideally 0.2" or less around three sides 12,
Adjustment for swivel and view height
Items 1, 5, 10 and 11 of the specification may be enhanced as appropriate at
Ceravision's discretion.
SIGNED by M.J SHAHEED duly authorised for and on behalf of AUGRID CORPORATION OF
NEVADA, INC in the presence of
/s M.J SHAHEED
Witness signature: /s Witness
Witness name:
Witness address:
Witness signature: /s Witness
SIGNED by ANTHONY COOPER ) duly authorised for and on behalf of ) CERAVISION
LIMITED in the presence of.
/s ANTHONY COOPER
Witness signature: Witness narne: Witness address:
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