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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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FORM 10-SB
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GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(g) of
The Securities Exchange Act of 1934
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EAGLETECH COMMUNICATIONS, INC.
(Name of Small Business Issuer in its charter)
Nevada 13-4020694
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
305 South Andrews Avenue, Fort Lauderdale, Florida 33301
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(Address of principal executive offices) (Zip code)
Issuer's telephone number: (954) 462-1494
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Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock ($.0001 Par Value)
(Title of Class)
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TABLE OF CONTENTS
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Page
PART I
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Item 1. Description of Business. 3
Item 2. Plan of Operation. 7
Item 3. Description of Property. 12
Item 4. Security Ownership of Certain Beneficial Owners and Management 12
Item 5. Directors, Executive Officers, Promoters and Control Persons 14
Item 6. Executive Compensation 16
Item 7. Certain Relationships and Related Transactions 17
Item 8. Description of Securities 17
PART II
Item 1. Market for Common Equities and Related Stockholder Matters 17
Item 2. Legal Proceedings 19
Item 3. Changes in and Disagreements with Accountants 19
Item 4. Recent Sales of Unregistered Securities. 20
Item 5. Indemnification of Directors and Officers. 22
PART F/S
Financial Statements 23
Table of Contents 24
PART III
Item 1. Index to Exhibits. 36
Signatures 36
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PART I
Item 1. Description of Business
Eagletech Communications, Inc. (the "Company") has developed
proprietary unified communications products and services to complement existing
telecommunications technologies for voice-mail, messaging and connectivity
solutions. As a communications service provider ("CSP"), Eagletech makes it
possible for mobile professionals to maintain real-time contact with one
telephone number while also providing telephone access to messages and Web
control over the unified system.
Eagletech's proprietary solution to this telecommunications challenge
is the "EagleOne" (TM) flat rate service that includes:
- "One Number-Follow Me"- Provides for call transfers of up to
four telephone numbers.
- "EagleAttendant" (TM)- Autoattendant greeting with a custom
recorded business greeting.
- "EagleAnnounce" (TM) - Screens calls, when the caller
announces his or her name, you can take the important calls
and send others to voice mail.
- "EagleMail" (TM) - Voice mail, callers have the option to
leave a detailed message of up to five minutes in length.
Calls are automatically deleted after 30 days.
- "EagleMessage" (TM) - EagleMail (TM) messages are delivered
within minutes. Messages are re-delivered until you are
found. You specify how often and how many times deliveries
are attempted.
- "EagleWeb" (TM) - Set up and make changes to your transfer
numbers, message delivery parameters, etc. using your web
browser, or when on the road, from a cellphone. Messages can
be delivered to your email address and heard on a multimedia
computer.
- "EagleFax" (TM) - Store and forward your faxes to any fax
machine. EagleFax (TM) will notify you when you have
received a fax.
There are two distinct markets for Eagletech's products. The first is
integration of these services into a company's existing private branch exchange
("PBX") system. Here the solution is customized to the needs of the company
which has multiple employees covered by the system. The first implementation of
these customized solutions will be in the real estate market where it is
critical for a broker to be reached by a client. The customized solution will
provide for not only "One Number-Follow Me" service but also other features
appropriate for this class of customers such as fax on demand sending a party
information about a listed property. The first two real estate systems in South
Florida are operational. The Company markets its services directly to potential
customers in this market. Charges for these services will vary on the options
purchased and the hardware setup.
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The second market is a service bureau designed for mobile professionals
who are not part of a larger organization which provides these critical
communications services. Using local points of access, Eagletech will provide
individuals with the full range of its services in given geographic areas. In
the fourth quarter of 1999, Eagletech began the national rollout of its service
bureaus in Dade and Broward Counties of Florida.
Eagletech intends to use strategic relationships with independent
cellular telephone service distributors to market and sell its products to the
second market. The Company charges $24.95 per month per telephone line. It will
manufacture the basic products necessary to provide these services and provide
the technical support associated with any customized system or question raised
by a service bureau customer. For the service bureau market, Eagletech intends
to build a national network for access to unified communications services with
local points of access, similar to the way national Internet Service Providers
offer Web access with local access numbers and Points of Presence (POPs).
The Company is not dependent on a few major customers, since its
service bureau product is being marketed to all types of small to medium
sized-business in its service area.
Eagletech has four (4) full time employees and one (1) part-time
employee.
Eagletech does not require government approval or licensing for its
services. However, as noted below, the telecommunications industry is regulated
and Eagletech's equipment must meet certain standards. If the government were
to impose strict regulation on the telecommunications industry, that would have
a material effect on Eagletech's business.
Since inception, the Company has spent about $65,000 on research and
development, which does not include the many hours spent by Rodney Young in
developing the Company's technology.
The Company's costs and effects of compliance with environmental laws
are not material.
The Board of Directors of the Company has begun to implement this
principal business purpose described below under "Item 2 - Plan of Operation."
Eagletech was incorporated as Goldplate Holdings Enterprises, Inc. in
Nevada in August, 1997. In June 1999, the Company changed its name to Eagletech
Communications, Inc. The Company's corporate offices are located at 305 South
Andrews Avenue, Fort Lauderdale, Florida 33301. The Company's telephone number
at that location is (954) 462-1494.
The Company is filing this registration statement to enhance investor
protection and to provide information to the trading market. On December 11,
1997, the National Association of Securities Dealers, Inc. (the "NASD")
announced that its Board of Governors had approved a series of proposed changes
for the Over the Counter ("OTC") Bulletin Board and the OTC market. The
principal change, which was approved by the Securities and Exchange Commission
on January 4, 1999, allows only those companies that report their current
financial information to the Securities and Exchange Commission, banking, or
insurance regulators to be quoted on the OTC Bulletin Board. The rule provides
for a phase-in period for those securities already quoted on the OTC Bulletin
Board. The Company is filing this Registration Statement to comply with that
rule. Quotations for the Company's common stock (par value $0.001 per share)
(the "Common Stock") are posted on the OTC Bulletin Board under the symbol
"EATC."
The Company's business is subject to numerous risk factors, including,
but not limited to, the following:
RISKS RELATED TO THE COMPANY'S BUSINESS
Development Stage Company; Limited Operating History. Eagletech is an
early-stage company and Eagletech expects to encounter risks and difficulties
frequently faced by early-stage companies in new and rapidly evolving markets.
Eagletech's predecessor was incorporated in 1996. Eagletech installed its first
system in September, 1999. The
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Company's limited operating history makes an evaluation of the Company's future
prospects very difficult. Eagletech cannot be certain that the Company's
business strategy will be successful or that Eagletech will successfully address
these risks.
Eagletech Anticipates Future Losses and Negative Cash Flow. Eagletech expects
operating losses and negative cash flow to continue for the foreseeable future.
Eagletech anticipates the Company's losses will increase significantly from
current levels because Eagletech expects to incur additional costs and expenses
related to:
- - brand development, marketing and other promotional activities;
- - expansion of the Company's operations;
- - continued development of the Company's technology, its website, the systems
that Eagletech uses to process customers' orders and payments, and the
Company's computer network;
- - geographic expansion of the Company's service area; and
- - development of relationships with strategic business partners.
As of June 30, 1999, Eagletech had an accumulated deficit during the
development stage of $8,355,588. Eagletech incurred net losses of $8,063,805 and
had no sales in the three months ended June 30, 1999. The Company's ability to
become profitable depends on the Company's ability to generate and sustain sales
while maintaining reasonable expense levels. If Eagletech does achieve
profitability, Eagletech cannot be certain that the Company would be able to
sustain or increase profitability on a quarterly or annual basis in the future.
See Item 2-"Plan of Operations."
The Company's Limited Operating History Makes Future Forecasting Difficult.
Because of the Company's limited operating history, Eagletech finds it difficult
to forecast the Company's net sales accurately. Eagletech has limited meaningful
historical financial data upon which to base planned operating expenses, since
it has been in the development stage without sales since 1996. Eagletech bases
the Company's current and future expense levels on the Company's operating plans
and estimates of future net sales, and the Company's expenses are to a large
extent fixed. Sales and operating results are difficult to forecast because they
generally depend on the volume and timing of the orders Eagletech receives.
Consequently, Eagletech may be unable to adjust the Company's spending in a
timely manner to compensate for any unexpected revenue shortfall. This inability
could cause the Company's net losses in a given quarter to be greater than
expected.
The Company's Operating Results are Volatile and Difficult to Predict. If
Eagletech Fails to Meet the Expectations of Public Market Analysts and
Investors, the Market Price of the Company's Common Stock May Decrease
Significantly. The Company's annual and quarterly operating results may
fluctuate significantly in the future due to a variety of factors, many of which
are outside of the Company's control, including, among other
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things, the demand for the Company's products, unpredictability of consumer
trends and technology changes. Because the Company's operating results are
volatile and difficult to predict, Eagletech believes that quarter-to-quarter
comparisons of the Company's operating results are not a good indication of the
Company's future performance. It is likely that in some future quarter the
Company's operating results may fall below the expectations of securities
analysts and investors. In this event, the trading price of the Company's Common
Stock may fall significantly. Factors that may harm the Company's business or
cause the Company's operating results to fluctuate include the following:
- - the Company's inability to obtain new customers at reasonable cost and
retain existing customers;
- - decreases in the funds available for marketing and promoting the Company's
services;
- - the Company's inability to manage rapid expansion of its services;
- - the Company's inability to adequately maintain, upgrade and develop the
Company's technical systems;
- - the ability of the Company's competitors to offer new or enhanced services
or products;
- - price competition;
- - an unanticipated high level of service cancellations;
- - the termination of existing, or failure to develop new, strategic marketing
and manufacturing relationships;
- - increases in the cost of advertising;
- - the amount and timing of operating costs and capital expenditures relating
to expansion of the Company's operations;
- - technical difficulties, system downtime or telephone service interruptions.
A number of factors will cause the Company's gross margins to fluctuate in
future periods, including timing of service area expansion, the mix of services
provided by the Company, and the level of discount or introductory pricing. Any
change in one or more of these factors could harm the Company's gross margins
and operating results in future periods.
The Company's Net Sales are Dependent Upon the Company's Ability To Offer the
Company's Customers Dependable Quality Services at Competitive Prices. If
Eagletech is not able to offer the Company's customers dependable services at
competitive prices, the Company's net sales and results of operations will be
harmed. The Company's success depends on the Company's ability to provide
dependable service to its customers at competitive prices.
If Eagletech Is Unable To Obtain Sufficient Quantities of Products From the
Company's Key Vendors, the Company's Net Sales Would Be Adversely Affected. If
Eagletech was unable to obtain sufficient quantities of electronic components
from the Company's key vendors, the Company's net sales and results of
operations would be harmed. The Company buys its electronic components from one
vendor at this time, but the Company
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believes that multiple other sources of such components exist and finding
replacement vendors would not have a material adverse effect upon the Company.
To Manage the Company's Growth and Expansion, Eagletech Needs To Improve and
Implement the Company's Systems, Procedures and Controls. If Eagletech Is Unable
To Do So Successfully, the Company's Business Would Be Seriously Harmed. The
Company's rapid growth in operations will place a significant strain on the
Company's management, information systems and resources. In order to manage this
growth effectively, Eagletech needs to continue to improve the Company's
financial and managerial controls and reporting systems and procedures. The
Company's failure to successfully implement, improve and integrate these systems
and procedures would harm the Company's results of operations.
Eagletech May Not Be Able To Compete Successfully Against Current and Future
Competitors. The Company faces competition from some of the largest
telecommunications companies in the United States. The telecommunications market
is rapidly evolving and intensely competitive. Increased competition is likely
to result in price reductions, reduced gross margins and loss of market share,
any of which could seriously harm the Company's net sales and results of
operations. Eagletech expects competition to intensify in the future as
telecommunications deregulation continues, regional Bell companies expand
nationwide and cellular services become more common.
Many of the Company's competitors have longer operating histories, larger
customer or user bases, greater brand recognition and significantly greater
financial, marketing and other resources than does Eagletech. Many of these
competitors can devote substantially more resources to marketing and promotion
than can Eagletech. In addition, larger, well-established and well-financed
telecommunications companies, cable suppliers and cellular telephone companies
may try to offer competing services. The Company's competitors may be able to
secure products from vendors on terms that are more favorable and adopt more
aggressive pricing policies than can Eagletech.
If Eagletech Does Not Successfully Expand the Company's Service Area, the
Company's Business Could be Seriously Harmed. If Eagletech does not successfully
expand the Company's service area and number of lines its service bureau can
accommodate, Eagletech will not be able to increase the Company's net sales in
accordance with the expectations of securities analysts and investors. In such
an event, the Company's business will be harmed. The Company's success depends
on the Company's ability to expand the Company's service area and switching
capacity rapidly in order to accommodate a significant increase in customer
orders. The Company's planned expansion may cause disruptions that could harm
the Company's business, results of operations and financial condition.
The Company's Facilities and Systems are Vulnerable to Natural Disasters and
Other Unexpected Problems. The occurrence of a hurricane, tornado, large scale
electrical storm or other natural disaster or unanticipated problems at the
Company's leased facility
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in Ft. Lauderdale, Florida that houses substantially all of the Company's
computer and communications hardware systems, could cause interruptions or
delays in the Company's business, loss of data or render the Company unable to
provide its services. Any such interruptions or delays at its facility would
harm the Company's net sales and results of operations. In addition, the
Company's systems and operations are vulnerable to damage or interruption from
fire, flood, power loss, telecommunications failure, break-ins, and similar
events. Eagletech has no formal disaster recovery plan and the Company's
business interruption insurance may not adequately compensate Eagletech for
losses that may occur. The occurrence of any or all of the events could harm the
Company's reputation, brand and business.
If Eagletech Does Not Respond To Rapid Technological Changes, the Company's
Services Could Become Obsolete and the Company's Business Would Be Seriously
Harmed. If Eagletech faces material delays in introducing new services, products
and enhancements, the Company's customers may forego the use of the Company's
services and use those of the Company's competitors. To remain competitive,
Eagletech must continue to enhance and improve the functionality and features of
the Company's telecommunications services. The telecommunications industry is
rapidly changing as a result of deregulation, technology improvements and new
customer demands. If competitors introduce new products and services embodying
new technologies, or if new industry standards and practices emerge, the
Company's existing proprietary technology and systems may become obsolete.
Developing, enhancing and upgrading the Company's proprietary technology entails
significant technical and business risks. Eagletech may use new technologies
ineffectively or Eagletech may fail to adapt the Company's proprietary
technology and the Company's computer network to customer requirements or
emerging industry standards.
Intellectual Property Claims Against the Company Could Be Costly and Could
Result In the Loss Of Significant Rights. Other parties may assert infringement
or unfair competition claims against Eagletech. The Company cannot predict
whether third parties will assert claims of infringement against Eagletech, or
whether any future assertions or prosecutions will harm the Company's business.
If Eagletech is forced to defend against any such claims, whether they are with
or without merit or are determined in the Company's favor, then Eagletech may
face costly litigation, diversion of technical and management personnel, or
product shipment delays. Because of such a dispute, Eagletech may have to
develop non-infringing technology or enter into royalty or licensing agreements.
Such royalty or licensing agreements, if required, may be unavailable on terms
acceptable to the Company, or at all. If there is a successful claim of product
infringement against the Company and Eagletech is unable to develop
non-infringing technology or license the infringed or similar technology on a
timely basis, it could harm the Company's business.
If the Protection of the Company's Technology, Trademarks and Proprietary Rights
Is Inadequate, the Company's Business Will Be Seriously Harmed. The steps
Eagletech takes to protect the Company's proprietary rights may be inadequate.
Eagletech regards
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the Company's copyrights, service marks, trademarks, trade dress, trade secrets
and similar intellectual property as critical to the Company's success. In
addition, Eagletech has filed for patent protection for its proprietary
technology and expects the patent to issue by the end of the second quarter of
2000. Eagletech relies on trademark and copyright law, trade secret protection
and confidentiality or license agreements with the Company's employees,
customers, partners and others to protect the Company's proprietary rights. The
Company is in the process of filing for trademark protection for "Eagletech" for
telecommunications services. Effective patent, trademark, service mark,
copyright and trade secret protection may not be available in every country in
which Eagletech will sell the Company's products and services.
The Loss of the Services of One Or More of the Company's Key Personnel, or the
Company's Failure To Attract, Assimilate and Retain Other Highly Qualified
Personnel in the Future Would Seriously Harm the Company's Business. The loss of
the services of one or more of the Company's key personnel could seriously harm
the Company's business. Eagletech depends on the continued services and
performance of the Company's senior management and other key personnel,
particularly Robert Dobbs, the Company's President and Chief Executive Officer,
and Rodney Young, the Company's Vice-President for Technology and the inventor
of the Company's proprietary technology. The Company's future success also
depends upon the continued service of Robert Bergman, the Company's Vice
President for Marketing and Sales, and the services of other essential technical
and support personnel. All of the Company's officers and key employees are bound
by employment agreements. Eagletech does not have "key person" life insurance
policies covering any of the Company's employees.
Eagletech May Be Adversely Impacted if the Software, Computer Technology and
Other Systems Eagletech Uses are not Year 2000 Compliant. Any failure of the
Company's material systems, the Company's vendors' material systems or the
Internet to be Year 2000 compliant would have material adverse consequences for
the Company. Such consequences would include difficulties in providing switching
or conducting other fundamental parts of the Company's business. Eagletech has
determined that all of its material systems are Year 2000 compliant and has
received assurances that its vendors' systems are Year 2000 compliant also.
Eagletech also depends on the Year 2000 compliance of the computer systems and
financial services used by consumers and by telecommunications companies with
which its systems operate. A significant disruption in the ability of consumers
to reliably access their telecommunications system or portions of it would have
an adverse effect on demand for the Company's services and would have a material
adverse effect on the Company. See Item 2-"Plan of Operations."
Risks Associated With Potential Acquisitions. If Eagletech is presented with
appropriate opportunities, Eagletech intends to make investments in
complementary companies, products or technologies. Eagletech may not realize the
anticipated benefits of any acquisition or investment. If Eagletech buys a
company, Eagletech could have difficulty in assimilating that company's
personnel and operations. In addition, the essential personnel of the acquired
company may decide not to work for the Company. If
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Eagletech makes other types of acquisitions, Eagletech could have difficulty in
assimilating the acquired technology or products into the Company's operations.
These difficulties could disrupt the Company's ongoing business, distract the
Company's management and employees and increase the Company's expenses.
Furthermore, Eagletech may have to incur debt or issue equity securities to pay
for any future acquisitions or investments, the issuance of which could be
dilutive to the Company or the Company's existing stockholders.
Existing Stockholders Will Be Able to Exercise Significant Control Over
Eagletech. Executive officers, directors and entities affiliated with them, if
acting together, would be able to significantly influence all matters requiring
approval by the Company's stockholders, including the election of directors and
the approval of mergers or other business combination transactions. These
stockholders, taken together, beneficially own approximately 59% of the
Company's outstanding common stock and can elect all directors and pass any
action requiring stockholder approval. See Item 4. "Security Ownership of
Certain Beneficial Owners and Management" and Item 5 "Directors, Executive
Officers, Promoters and Control Persons."
It May Be Difficult For A Third Party To Acquire The Company. Provisions of the
Company's Certificate of Incorporation, the Company's Bylaws and Nevada law
could make it more difficult for a third party to acquire the Company, even if
doing so would be beneficial to the Company's stockholders. See Item 8.
"Description of Securities."
RISKS RELATED TO THE COMPANY'S INDUSTRY
Eagletech May Need To Change the Manner In Which Eagletech Conducts the
Company's Business If Government Regulation Increases. The adoption or
modification of laws or regulations relating to the telecommunications industry
could adversely affect the manner in which Eagletech currently conducts the
Company's business. In addition, the growth and development of the market for
enhanced telecommunications systems may lead to more stringent consumer
protection laws, both in the United States and abroad, that may impose
additional burdens on the Company. Laws and regulations directly applicable to
telecommunications are in a constant state of flux.
RISKS RELATED TO SECURITIES MARKETS
Eagletech May Be Unable to Meet the Company's Future Capital Requirements.
Eagletech cannot be certain that additional financing will be available to the
Company on favorable terms when required, or at all. If Eagletech raises
additional funds through the issuance of equity, equity-related or debt
securities, such securities may have rights, preferences or privileges senior to
those of the rights of the Company's Common Stock and the Company's stockholders
may experience additional dilution. Eagletech requires substantial working
capital to fund the Company's business. Since the Company's inception, Eagletech
has experienced negative cash flow from operations and expects to experience
significant negative cash flow from operations for the foreseeable future.
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Eagletech currently anticipates that the Company's available funds will be
sufficient to meet the Company's anticipated needs for working capital and
capital expenditures through at least the next 6 months. Eagletech may need to
raise additional funds before the expiration of such period.
The Company's Common Stock Price May Be Volatile, Which Could Result in
Substantial Losses For Individual Stockholders. The market price for the
Company's common stock is likely to be highly volatile and subject to wide
fluctuations in response to factors including the following, some of which are
beyond the Company's control:
- - actual or anticipated variations in the Company's quarterly operating
results;
- - announcements of technological innovations or new products or services by
the Company or the Company's competitors;
- - changes in financial estimates by securities analysts;
- - conditions or trends in the telecommunications industry;
- - changes in the economic performance and/or market valuations of other
independent telecommunications companies;
- - announcements by the Company or the Company's competitors of significant
acquisitions, strategic partnerships, joint ventures or capital
commitments;
- - additions or departures of key personnel;
- - release of lock-up or other transfer restrictions on the Company's
outstanding shares of common stock or sales of additional shares of common
stock; and
- - potential litigation.
If the Company's Stock Price Is Volatile, Eagletech Could Face a Securities
Class Action Lawsuit. In the past, following periods of volatility in the market
price of their stock, many companies have been the subjects of securities class
action litigation. If disgruntled stockholders sued Eagletech in a securities
class action, it could result in substantial costs and a diversion of
management's attention and resources and would harm the Company's stock price.
Substantial Sales of the Company's Common Stock Could Cause the Company's Stock
Price To Fall. If the Company's stockholders sell substantial amounts of the
Company's Common Stock in the public market, the market price of the Company's
Common Stock could fall. Such sales also might make it more difficult for the
Company to sell equity or equity-related securities in the future at a time and
price that Eagletech deems appropriate.
Conflicts of Interest. Officers and directors of the Company may in the future
participate in business ventures that could be deemed to compete directly with
the Company. Additional conflicts of interest and non-arms length transactions
may also arise in the future in the event the Company's officers or directors
are involved in the management of any firm with which the Company transacts
business. The Company has adopted a policy that the Company will not seek a
merger with, or acquisition of, any entity in which
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members of the Company's management serve as officers, directors or partners, or
in which they or their family members own or hold any material ownership
interest.
Reporting Requirements May Delay or Preclude Acquisition. Sections 13 and 5(d)
of the Securities Exchange Act of 1934 (the "1934 Act"), require companies
subject thereto to provide certain information about significant acquisitions,
including certified financial statements for the company acquired, covering one,
two, or three years, depending on the relative size of the acquisition. The time
and additional costs that may be incurred by some target entities to prepare
such statements may significantly delay or essentially preclude consummation of
an otherwise desirable acquisition by the Company. Acquisition prospects that do
not have or are unable to obtain the required audited statements may not be
appropriate for acquisition so long as the reporting requirements of the 1934
Act are applicable.
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Item 2. Plan of Operation
Eagletech was founded to manufacture, market and distribute unique
communications products and services. We recognized a major marketing
opportunity to develop a unified messaging service and a low cost unified
communications call management solution. Currently, most mobile and remote
professionals have cellphones, pagers, laptops, email and corporate voice mail
in order to stay in contact with co-workers and customers. Still, with all these
available business tools, three out of four calls fail to reach their intended
party. Eagletech provides solutions that increase productivity and efficiency.
Eagletech delivers a full suite of communications services that
integrate seamlessly with a company's existing communications infrastructure or
work as a stand alone solution. Because of the proprietary manner in which
Eagletech delivers these services, Eagletech believes it is the low cost
communications service provider compared with its competitors.
Eagletech's proprietary solution to this telecommunications challenge
is the "EagleOne" (TM) flat rate service, which includes:
- "One Number-Follow Me"- Provides for call transfers of up to four
telephone numbers.
- "EagleAttendant"(TM) - Autoattendant greeting with a custom
recorded business greeting.
- "EagleAnnounce" (TM) - Screens incoming calls, when the caller
announces his or her name, the customer can take important calls
and send others to Voice Mail.
- "EagleMail" (TM) - Voice mail, callers have the option to leave a
detailed message of up to five minutes in length. Calls are
automatically deleted after 30 days.
- "EagleMessage" (TM) - EagleMail messages are delivered within
minutes. Messages are re-delivered until the customer is found. The
customer specifies how often and how many times deliveries are
attempted.
- "EagleWeb" (TM) - The customer can set up and make changes to
transfer numbers, message delivery parameters, and the like using
the Internet, or from a cellphone. Audio messages can be delivered
to the customer's email address and heard on a multimedia computer.
- "EagleFax" (TM) - Stores and forwards faxes to any fax machine.
EagleFax notifies the customer when a fax is received.
This suite of products and services provide a universal local number
that connects the business professional, wherever he or she is working, to
important calls and messages through telephone interfaces for a per line flat
fee of $24.95 per month. The customer receives:
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- Local access using one telephone number
- Call forwarding of up to four numbers
- Integrated voice mail system o Call announcement
- Efficient call management
- Internet management and message delivery
In addition, customer accounts may include customized solutions such as
fax on demand or the "EagleDirectory" (TM). After the autoattendant answers with
the customized company greeting, EagleDirectory gives a directory of extensions
formatted in the method that works best for the customer.
Eagletech has developed a proprietary switching capability that
provides an ongoing cost advantage to the provision of its services. The
Company's enhanced switching device increases significantly the capacity of that
switching device. This proprietary technology is the basis for the Company's
patent application.
All other communications service providers utilize switches which have
at minimum two lines bound together, the incoming and the outgoing, for the
duration of a typical seven minute business call. For a standard T-1 switch, 24
simultaneous conversations are possible. During peak use, this limits all other
communications providers to 300 subscribers per T-1 switch. The Eagletech
proprietary solution increases the density for the same T-1 switch from 300 to
1500 to 2000 subscribers during peak use. Eagletech has filed a patent
application with the United States Patent and Trademark Office for this
proprietary solution and will pursue foreign patent protection for critical
markets.
MARKET STRATEGY
There are two distinct markets for Eagletech's products. The first is
integration of the Company's services into a customer's existing PBX system.
Here the solution is customized to the needs of the customer with multiple
employees. The Company has targeted the real estate brokerage market for the
first implementation of these customized solutions, where it is absolutely
critical for a broker to be reached by a client. The customized solution will
provide for not only "One Number-Follow Me" service but also other features
appropriate for this class of customers such as "Talking Signs", "Talking Ads",
fax-back information and the ability to capture Caller ID information from home
buyers who respond to a Talking Sign or Talking Ad. The first two real estate
systems are operational.
These two demonstration sites will allow the Company to roll out this
product to other real estate brokerage firms as well as other corporate markets
such as healthcare, financial services and the building industry, which
typically deploy personnel off-premises. Further, these two demonstration sites
will be helpful in marketing and selling the EagleOne (TM) Enhanced Service
Bureau (TM) product.
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<PAGE> 15
The second market is a service bureau designed for business
professionals who are not part of a larger organization which provides these
critical communications services. Using local points of access, Eagletech will
provide individuals with the full range of its services in given geographic
areas. In the fourth quarter of 1999, Eagletech began the national roll-out of
its service bureaus in Dade and Broward Counties of Florida.
The EagleOne (TM) service bureau products provide a universal local
number which connects the business professional, wherever he or she is working,
to important calls and messages through telephone interfaces. There no longer is
a need for a pager since the business professional will have the call forwarded
to wherever that professional is, have the call announced and then the
professional will decide whether to take it or have it forwarded to voice mail.
Eagletech has built one local switch to provide this service in Dade
and Broward Counties in Florida. The service bureau will be offered through
independent cellular telephone dealers in each of these two counties. For each
customer who decides to use the service, the dealer will receive a commission
together with a residual income from the monthly revenue stream generated by the
customer.
The experience in Dade and Broward Counties together with the
experience at corporate accounts will be instrumental in obtaining a strategic
partner for the EagleOne(TM) Enhanced Service Bureau (TM) product. This
strategic partner could be a retail chain that sells a significant amount of
telecommunications equipment or a partner capable of bundling this product with
their own telecommunications products. Alternatively, Eagletech can contract
with independent sales representatives on a commission only basis to market and
sell the EagleOne (TM) Enhanced Service Bureau (TM) product to independent
cellular telephone dealers. In either event, Eagletech together with its
strategic partner or independent sales force will roll-out EagleOne (TM) to the
major metropolitan regions of the country, starting from its south Florida base.
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<PAGE> 16
COMPETITION
Eagletech competes with a variety of companies that provide some type
of unifying message services. There are a number of turnkey voice mail systems
available on the market, the majority featuring expensive, high density
equipment focused on larger businesses. There are also several excellent
software products on the market but require programming experience and are aimed
at developers and not end user solutions.
The Company's competitors include voice mail service bureaus, which are
typically paging companies that offers basic voice mail/pager notification
mailboxes at bargain prices but without advanced features. AT&T, MCI and
MCI-WorldCom offer "One Number- Follow Me" service bureaus, but they require the
caller to enter a PIN number and are sold as measured rate service -- $0.27
peak, to $0.15 off peak per minute. Inexpensive local flat rate service is not
available.
Two communication provider companies offer competing products in this
unifying message category. The first is Wildfire Communications, which develops
and markets the Wildfire Electronic Assistant, which uses speech recognition to
manage telephone, fax and email communications. Wildfire mimics a personal
assistant, taking messages and telephone numbers if users are unable to
personally answer. Wildfire can follow spoken instructions and also make and
take calls. As the service is used increasingly, Wildfire develops and adapts to
a user's personal requirements, building up a personal list of names and
numbers. Wildfire can store up to 150 personal contacts. Wildfire will
automatically call one of the stored numbers when instructed by the user.
Wildfire requires a great deal of computing power and therefore is very
expensive. Monthly charges normally exceed $300. Further, a headset is necessary
for clarity in speech recognition. This product has been marketed for over two
years but has received minimal market acceptance.
Linx Communications is a national communications service provider
offering businesses and consumers local and toll-free access to a suite of
communications products and services through the telephone or Internet. Linx
offers customizable unified communication services that allow individuals to
connect to important callers and gives them access to messages with one local or
toll free phone number or Internet connection. Linx provides a single point of
access, through the telephone or the Internet, for all voice messages, faxes and
email. When a caller dials a user's LinxConnect number the system rings up to
three user-specified numbers simultaneously and announces the caller. The user
can choose to take the call, send it to voice mail, or transfer the call to a
colleague. For faxes, users can send an incoming fax to specified machines or
hold it in queue for printing later.
Linx, through a partnership with Focal Communications of Chicago, is
co-locating its switching equipment in Focal facilities across the United
States. LinxConnect is currently available in Boston, New York, San Francisco,
Los Angeles and Washington, D.C. Linx expects to expand service to 14 additional
cities in 1999 including Atlanta, Chicago and Dallas. The basic charge for
LinxConnect, the equivalent "One Number
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<PAGE> 17
Follow-Me" service of EagleOne, is $24.95 a month plus a set-up fee of $24.95.
In addition there is a measured meter rate charge of $.15 per minute for long
distance calls. Through the first year of marketing, the average bill was $50 to
$75 per month. In 1998, Linx had 2500 subscribers, $1 million in revenues and
lost $1 million. In 1999, Linx grew its subscriber base to 5,000 subscribers.
There are important differences between the EagleOne (TM) and
LinxConnect. LinxConnect rings three numbers simultaneously while EagleOne rings
them in sequence. The LinxConnect configuration requires the use of multiple
lines at once, thereby limiting the number of subscribers possible per switch to
less than the 300 possible if only two lines are being used. EagleOne's (TM)
proprietary switching configuration permits at least 1500 subscribers per
switch, thereby insuring a substantial cost advantage to Eagletech in providing
these unifying message services. Further, the LinxConnect service includes a
measured meter rate component for long distance calls, which may result in the
user paying more per minute than under his or her current long distance
provider. The Company anticipates that EagleOne (TM) will be profitable without
the need for additional margin from the measured meter rate service.
The Company has 4 full time and 1 part time employees and operates one
facility at 305 South Andrews Avenue, Fort Lauderdale, Florida used as the
principal corporate office and the site of its initial service bureau.
CORPORATE INFORMATION
The Company has significant capital needs, which to date the Company
has met through private sales of its equity and loans. The Company will continue
to need substantial infusions of capital, which it expects to continue to fund
primarily from private sales of its equity and loans, or by a public offering of
its equity or debt securities. The Company has no definitive plans for any
transaction at this time.
Item 3. Description of Property
The Company leases one facility located at 305 South Andrews Avenue,
Fort Lauderdale, Florida as an office and service bureau facility. The facility
contains approximately 1,000 square feet total, of which 900 square feet are
used for office space and 100 square feet are used to house equipment. The lease
on this facility expires June 30, 2004 and the annual lease payments are $30,000
for the entire facility.
Item 4. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners.
The following table sets forth the beneficial ownership for the Company's
sole class of Common Stock of the Company beneficially owned by all directors,
officers and 5% or more holders.
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<PAGE> 18
<TABLE>
<CAPTION>
Name and
Address of Nature of
Beneficial Beneficial Number of
Owner Ownership Shares Percent
- ----- --------- ------ -------
<S> <C> <C> <C>
Robert J. Dobbs (1) Record 100,000 1.0%
Rodney E. Young (1) (2) Record and Beneficial 2,775,001 29.0%
Robert A. Bergman (1) Record 25,000 0.3%
James Payne (1) (3) Record and Beneficial 2,575,001 26.5%
Thomas Kessler (1) (4) Record and Beneficial 666,668 6.9%
Kenneth L. Payne (1) (4) Record and Beneficial 200,000 2.1%
Christopher P. Flannery (1) Record and Beneficial 0 0.0%
</TABLE>
(1) Address c/o the Company at 305 South Andrews Avenue, Fort Lauderdale,
Florida.
(2) Mr. Young's total includes 853,330 shares owned by members of his
immediate family as to which he disclaims beneficial ownership.
(3) Mr. James Payne's total includes 536,300 shares owned by members of his
immediate family as to which he disclaims beneficial ownership.
(4) Mr. Kessler is Managing Director of Lloyds Bahamas Securities, Inc., which
holds 666,668 shares as to which he disclaims beneficial ownership.
(5) Mr. Kenneth Payne's holdings include 100,000 shares owned by members of
his immediate family as to which he disclaims beneficial ownership.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The directors and officers of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Robert J. Dobbs 40 President, Chairman of the Board and Director
Rodney E. Young 48 Vice President of Technology and Director
Robert A. Bergman 49 Vice President- Sales and Marketing
Thomas Kessler 57 Director
Kenneth L. Payne 40 Director
Christopher P. Flannery 42 Director
</TABLE>
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<PAGE> 19
ROBERT J. DOBBS. Mr Dobbs became President and Chairman of the Board of
Eagletech in April, 1999. Mr. Dobbs has been owner and President of ATNEX
Business Solutions, Inc., Fort Lauderdale, Florida since 1997. In this capacity,
Mr. Dobbs has been responsible for all operations of a regional management
consulting firm specializing in providing corporate re-engineering and business
solutions to small and middle market size companies (Sales-$5MM-$50MM)
headquartered in the Gold Coast Region of Florida. In this role, Mr. Dobbs
served as interim chief operating officer for several small and medium size
companies providing day to day management of all corporate operations and
financial/reporting accountability to the company's shareholders. Mr. Dobbs was
responsible for increased corporate profits, reduction of overhead and
improvement in company's Dun & Bradstreet credit rating.
From 1995 to 1997, he served as Vice President, First Union National
Bank, Fort Lauderdale, Florida where he was responsible for corporate revenue
generation through the distribution of commercial credit, capital markets
solutions and comprehensive cash management platforms to senior-level executives
and managers of small and middle market size companies located in the South
Florida Region.
From 1986 to 1995, Mr. Dobbs served as Senior Vice President, SunTrust
Bank, Washington, DC. He is a graduate of The American University Kogod School
of Business. During his military career, while in the United States Army, Mr.
Dobbs served on the Presidential Honor Guard.
RODNEY E. YOUNG. Mr. Young is a founder of the Company and has been engaged in
developing the Company's technology since 1996. Mr. Young has had a successful
career in computers, systems integration, local area networking, computer
telephony, construction and real estate development and management. His varied
experience includes a full range of general business disciplines: marketing,
promotion, sales, planning, product design, production, personnel, finance, and
accounting. He has special expertise in developing product concepts, marketing
research, Pro-forma analysis, written and oral communications.
From 1989-1996, Mr. Young was owner and president of Eagle/Century
Development Corp., Fort Lauderdale, Florida. There he developed the EagleOne(TM)
Enhanced Service Bureau(TM) turnkey Interactive Voice Response System(TM)
featuring: One Number-Follow Me, Voice Mail, Fax Mail, Fax-on-Demand, Audiotext
system for small business. From 1991-1996, Mr. Young was a real estate
development consultant and certified expert witness. From 1988-1991, he served
as Executive Vice President of Adult Management Corporation, Deerfield Beach,
Florida, where he developed a 250 unit adult congregate living facility.
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<PAGE> 20
THOMAS R. KESSLER. Thomas Kessler has served since 1994 as a Director of the
Montaque Securities International Limited, Nassau, The Bahamas. Previously he
was General Manager of the Euro Canadian Bank, Nassau, The Bahamas. From 1975 to
1982, he served as Vice President/Manager: European Division of the Continental
Bank International in New York.
Mr. Kessler is a graduate of Kent State University (B.S. and M.A.) and
the Cleveland Marshall College of Law ( J.D.).
KENNETH L. PAYNE. Kenneth L. Payne is a member of the board of directors of
Different Strokes Golf Centers, Inc. which owns and manages a number of
brand-name, public, family oriented golf centers in the Southeast. In addition
Mr. Payne also serves as Vice President and General Manager for Main Street
Realty Inc., a real estate development company. He has been with the firm since
1989 and been responsible for various residential and commercial real estate
developments. Prior to that, Mr. Payne was Director of Tax for Humana, Inc., a
fortune 500 health care company, where he was responsible for tax research and
planning. From 1981 to 1988, Mr. Payne was a tax manager with the international
accounting firm of Coopers & Lybrand. Before joining Coopers & Lybrand, Mr.
Payne served as controller for a local real estate development company.
Mr. Payne is a licensed Certified Public Accountant (CPA) and is a
member of the American Institute of Certified Public Accountants, the Kentucky
Society of CPAs, where he has also served as a member of the Federal Taxation
Committee, and the Tax division of the AICPA. Mr. Payne is a graduate of the
University of Louisville and is a native of Louisville.
CHRISTOPHER P. FLANNERY Christopher P. Flannery has practiced corporate and
business law, with an emphasis on securities, since 1984, first in New York and
now in Philadelphia. Mr. Flannery is an attorney with Astor, Weiss, Kaplan &
Rosenblum, LLP in Center City Philadelphia. He deals mainly with start-up and
development stage companies, assisting clients in corporate formation,
financings, mergers and acquisitions, private and public offerings, reverse
mergers, exchange listings and continuing compliance with securities laws and
regulations. Mr. Flannery's clients include companies in the financial,
insurance, manufacturing, computer software and hardware, electronics, building
materials, pharmaceutical, internet retailing, entertainment and sports
equipment industries, among others.
Mr. Flannery graduated from the Cornell Law School in 1981. In 1978,
Mr. Flannery received his B.A., magna cum laude, from LeMoyne College in
Syracuse, New York majoring in History and French, with minors in Political
Science and Philosophy.
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<PAGE> 21
Mr. Flannery has written for Philadelphia Enterpriser Magazine and
Mergers & Acquisitions. Mr. Flannery has been a principal speaker in numerous
programs for the profession and for entrepreneurs on corporate finance and
securities issues.
ROBERT A. BERGMAN. Mr. Bergman became the Company's Vice President of Sales and
Marketing in June, 1999. Mr. Bergman has been actively involved with sales and
marketing for major investment banking firms, as well as marketing benefit
enhancement products in the managed care and insurance marketplace. His
background includes experience in employee benefits, estate planning and
insurance sales. Since 1994, he has been a self-employed sales and marketing
consultant in the insurance, energy and technology fields.
Mr. Bergman has a B.A. in Business Administration from Temple
University and pursued graduate studies at the Wharton School of Business. He is
actively involved within his community and serves as a Board Member of
Associated Day Care Services.
The above listed directors will serve until the next annual meeting of
the stockholders or until their death, resignation, retirement, removal, or
disqualification, and until their successors have been duly elected and
qualified. Our executive officers serve at the discretion of the Board of
Directors. Vacancies in the existing Board of Directors are filled by majority
vote of the remaining Directors. Officers of the Company serve at the will of
the Board of Directors. There are no agreements or understandings for any
officer or director to resign at the request of another person and no officer or
director is acting on behalf of or will act at the direction of any other
person. There is no family relationship between any executive officer or
director of the Company.
Board Committees. The Board of Directors has not yet established any committees.
The Board intends to establish a Compensation Committee and an Audit Committee
at the next meeting of the Board of Directors.
Compensation Committee Interlocks And Insider Participation. The Board has not
yet established a Compensation Committee. The Board of Directors as a whole
performs this function.
Director Compensation. Eagletech's directors do not receive any cash
compensation for their service as members of the Board of Directors, although
they are reimbursed for travel and lodging expenses in connection with
attendance at Board meetings.
Item 6. Executive Compensation.
Executive Compensation. The following table sets forth the compensation received
for services rendered to the Company during the fiscal year ended June 30, 1999
by our Chief Executive Officer. The Company had no officers who earned more than
$100,000 during the fiscal year ended March 31, 1999.
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<PAGE> 22
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Name And Principal Annual Compensation Other Annual Long-Term All Other
Position Salary($) Bonus($) Compensation Compensation Awards
- -------- --------- -------- ------------ ------------ ------
Compensation
------------
<S> <C> <C> <C> <C> <C>
Robert J, Dobbs, Jr. (1) $45,000 $ 0 None None None
</TABLE>
(1) Robert J. Dobbs, Jr. became Chairman of the Board, President and Chief
Executive Officer of the Company in April 1999. Mr. Dobbs was issued 100,000
shares of common stock as part of his employment agreement. On an annual basis,
Mr. Dobbs' salary would have been $75,000. On September 25, 1999, the Board
approved an employment agreement with Mr. Dobbs whereby Mr. Dobbs will receive
an annual salary of $110,000, with a bonus only if granted by the Board of
Directors.
The Company did not pay to our Chief Executive Officer or any executive
officer any compensation intended to serve as incentive for performance to occur
over a period longer than one year pursuant to a long-term incentive plan in the
fiscal year ended March 31, 1999. The Company does not have any defined benefit
or actuarial plan with respect to our Chief Executive Officer or any executive
officer under which benefits are determined primarily by final compensation and
years of service.
Option Grants
The Company did not issue any stock options to its Chief Executive
Officer or any executive officer in the fiscal year ended March 31, 1999.
Members of the Company's management are associated with other firms
involved in a range of business activities. Consequently, there are potential
inherent conflicts of interest in their acting as officers and directors of the
Company. Insofar as the officers and directors are engaged in other business
activities, management anticipates it will devote only a minor amount of time to
the Company's affairs.
The officers and directors of the Company are now, and may in the
future become, stockholders, officers or directors of other companies that may
be engaged in business activities similar to those conducted by the Company.
Accordingly, additional direct conflicts of interest may arise in the future
with respect to such individuals acting on behalf of the Company or other
entities. Moreover, additional conflicts of interest may arise with respect to
opportunities which come to the attention of such individuals in the performance
of their duties or otherwise. The Company does not currently have a right of
first refusal pertaining to opportunities that come to management's attention
insofar as such opportunities may relate to the Company's proposed business
operations.
None of the Company's directors receives any compensation for their
respective services rendered to the Company as directors, nor have they received
such compensation
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<PAGE> 23
in the past. They all have agreed to act without compensation until authorized
by the Board of Directors. Further, none of the directors is accruing any
compensation under any agreement with the Company.
Item 7. Certain Relationships and Related Transactions.
There have been no related party transactions or any other transactions
or relationships required to be disclosed pursuant to Item 404 of Regulation
S-B.
Item 8. Description of Securities.
The Company's authorized capital stock consists of 100,000,000 shares,
par value $.0001 per share. There are 9,729,077 shares of Common Stock issued
and outstanding as of the date of this filing. All shares of Common Stock have
equal voting rights and, when validly issued and outstanding, are entitled to
one vote per share in all matters to be voted upon by stockholders. The shares
of Common Stock have no preemptive, subscription, conversion or redemption
rights and may be issued only as fully-paid and non-assessable shares.
Cumulative voting in the election of directors is not permitted, which means
that the holders of a majority of the issued and outstanding shares of Common
Stock represented at any meeting at which a quorum is present will be able to
elect the entire Board of Directors if they so choose and, in such event, the
holders of the remaining shares of Common Stock will not be able to elect any
directors. In the event of liquidation of the Company, each stockholder is
entitled to receive a proportionate share of the Company's assets available for
distribution to stockholders after the payment of liabilities and after
distribution in full of preferential amounts, if any. All shares of the
Company's Common Stock issued and outstanding are fully paid and nonassessable.
Holders of the Common Stock are entitled to share pro rata in dividends and
distributions with respect to the Common Stock, as may be declared by the Board
of Directors out of funds legally available therefor.
PART II
Item 1. Market Price for Common Equity and Related Stockholder Matters.
Price quotations for the Company's Common Stock are posted presently on
the OTC Bulletin Board and have been since May, 1998. As soon as the Company
becomes eligible, the Company intends to request a listing for the Common Stock
on the NASDAQ SmallCap Market (TM). This listing requires certain asset,
earnings and per share price standards that the Company does not now meet. The
Company can give no assurance that it will meet these standards in the
foreseeable future, it at all.
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<PAGE> 24
(a) Market Price.
Since February 23, 1999, market makers have be able to post price
quotations for the Company's Common Stock on the Over the Counter Bulletin
Board. The historical prices for the Company's Common Stock on the OTC Bulletin
Board are as follows:
<TABLE>
<CAPTION>
High Low
---- ---
<S> <C> <C>
First Quarter 1999 (Beginning 2/23/99) $ 4.50 $2.25
Second Quarter 1999 $12.75 $1.50
Third Quarter 1999 $ 8.81 $5.50
Fourth Quarter 1999 (Until 12/3/99) $ 8.00 $5.13
</TABLE>
The Securities and Exchange Commission adopted Rule 15g-9, which
established the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stock in both public offering and in
secondary trading, and about commissions payable to both the broker-dealer and
the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
For the initial listing in the NASDAQ SmallCap Market(TM), a company
must have net tangible assets of $4 million or market capitalization of $50
million or a net income (in the latest fiscal year or two of the last fiscal
years) of $750,000, a public float of 1,000,000 shares with a market value of $5
million. The minimum bid price must be $4.00 and there must be three market
makers. In addition, there must be 300 stockholders holding 100 shares or more,
and the company must have an operating history of at least one year or a market
capitalization of $50 million. For continued listing in the NASDAQ SmallCap
Market(TM), a company must have net tangible assets of $2 million or market
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<PAGE> 25
capitalization of $35 million or a net income (in the latest fiscal year or two
of the last fiscal years) of $500,000, a public float of 500,000 shares with a
market value of $1 million. The minimum bid price must be $1.00 and there must
be two market makers. In addition, there must be 300 stockholders holding 100
shares or more. The Company can give no assurances that it will qualify its
securities for listing on NASDAQ or some other national exchange, or be able to
maintain the maintenance criteria necessary to insure continued listing. The
failure of the Company to qualify its securities or to meet the relevant
maintenance criteria after such qualification in the future may result in the
discontinuance of the inclusion of the Company's securities on a national
exchange. In such events, trading, if any, in the Company's securities may then
continue in the non-NASDAQ over-the-counter market. As a result, a stockholder
may find it more difficult to dispose of, or to obtain accurate quotations as to
the market value of, the Company's securities.
(b) Holders. There are approximately 200 holders of the Company's Common Stock.
All share numbers are adjusted for a 1 for 10 reverse stock split effective
April 1, 1999 and a 1 for 3 reverse stock split effective June 9, 1999. During
1998, the Company did not issue any Common Stock. In 1999, the Company issued
9,209,059 shares to investors for cash, in exchange for services or assets or to
retire debt. All of the issued and outstanding shares of the Company's Common
Stock were issued in accordance with exemptions from registration afforded by
Sections 3(b) or 4(2) of the Securities Act of 1933, as amended (the "Securities
Act"). As of the date of this registration statement, 3,853,342 shares of the
Company's Common Stock held by non-affiliates are eligible for sale, including
520,018 shares eligible under Rule 144 promulgated under the Securities Act of
1933, as amended, subject to certain limitations included in such Rule. In
general, under Rule 144, a person (or persons whose shares are aggregated), who
has satisfied a one year holding period, under certain circumstances, may sell
within any three-month period a number of shares which does not exceed the
greater of one percent of the then outstanding Common Stock or the average
weekly trading volume during the four calendar weeks prior to such sale. Rule
144 also permits, under certain circumstances, the sale of shares without any
quantity limitation by a person who has satisfied a two-year holding period and
who is not, and has not been for the preceding three months, an affiliate of the
Company.
TM Dividends. The Company has not paid any dividends to date, and has no plans
to do so in the immediate future.
Item 2. Legal Proceedings.
There is no litigation pending or threatened by or against the Company.
Item 3. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure. The Company has changed accountants since its formation;
but there were no disagreements with the findings of the Company's former
accountants.
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<PAGE> 26
Item 4. Recent Sales of Unregistered Securities.
(a) Securities sold. The Company sold and issued its securities during the three
year period preceding the date of this registration statement in a series of
private transactions or exempt offerings of securities; as follows:
All share numbers are adjusted for a 1 for 10 reverse stock split
effective April 1, 1999 and a 1 for 3 reverse stock split effective June 9,
1999. In March, 1999, prior to the acquisition by the Company of Eagletech
Communications, Inc., a Florida corporation ("Eagletech-Florida"), the Company
issued 520,018 shares to the stockholders of 21ST Century Frontier Group, Inc.
("21st Century") in exchange for their shares of 21st Century in a transaction
designed to change the Company's state of incorporation to Nevada from Florida.
On April 1, 1999, the Company acquired Eagletech-Florida in exchange for
5,000,000 shares of common stock in a private transaction, of which 4,882,401
were issued to the principals of Eagletech-Florida and 117,599 were issued to
debtholders of Eagletech-Florida. On April 5, 1999, in order to raise additional
capital, the Company issued 3,333,333 shares to investors in an offering exempt
under Rule 504 of Regulation D. On May 5, 1999, the Company issued 675,002 to
officers of the Company as compensation in a private transaction, and an
additional 150,000 shares were issued as compensation to consultants. On May 26,
1999, Eagletech approved a 1-for-3 reverse stock split, effective June 9, 1999.
On June 1, the Company issued 667 shares to certain vendors in settlement of
certain debts in private transactions.
Certain of the shares of Common Stock of the Company were sold and issued
on various dates, described above, for investment purposes in "private
transactions" and are "restricted" shares as defined in Rule 144 under the
Securities Act of 1933, as amended. These shares may not be offered for public
sale except under Rule 144, or otherwise, pursuant to said Act. In summary, Rule
144 applies to affiliates (that is, control persons) and nonaffiliates when they
resell restricted securities (those purchased from the issuer or an affiliate of
the issuer in nonpublic transactions). Nonaffiliates reselling restricted
securities, as well as affiliates selling restricted or nonrestricted
securities, are not considered to be engaged in a distribution and, therefore,
are not deemed to be underwriters as defined in Section 2(11) of the Securities
Act of 1933, as amended, if six conditions are met:
(1) Current public information must be available about the issuer unless sales
are limited to those made by non-affiliates after two years.
(2) When restricted securities are sold, generally there must be a one-year
holding period.
(3) When either restricted or nonrestricted securities are sold by an
affiliate after one year, there are limitations on the amount of
securities that may be sold; when restricted securities are sold by
non-affiliates between the first and second years, there are identical
limitations; after two years, there are no volume limitations for resales
by non-affiliates.
(4) Except for sales of restricted securities made by non-affiliates after two
years, all sales must be made in brokers' transactions as defined in
Section 4(4) of the Securities Act
24
<PAGE> 27
of 1933, as amended, or a transaction directly with a "market maker" as
that term is defined in Section 3(a)(38) of the 1934 Act.
(5) Except for sales of restricted securities made by non-affiliates after two
years, a notice of proposed sale must be filed for all sales in excess of
500 shares or with an aggregate sales price in excess of $10,000.
(6) There must be a bona fide intention to sell within a reasonable time after
the filing of the notice referred to in (5) above.
(b) Underwriters and other purchasers. There were no underwriters in the sale
and issuance of any of the Company's securities. All of the purchasers of Common
Stock from the Company have had a pre-existing personal or business relationship
with the Company or its officers and directors.
Consideration.
The Company sold certain shares of stock for cash and others were issued either
for services rendered to the Company, for the assets of Eagletech-Florida or to
settle outstanding debts of the Company or its predecessor. The Company sold
shares in 1999 at various prices, ranging from $0.10 to $4.00.
(d) Exemptions from Registration Relied Upon.
The sale and issuance of the shares of stock were exempt from registration under
the Securities Act of 1933, as amended, by virtue of either section 3(b) or 4(2)
and, in certain cases, Regulation D promulgated thereunder. Purchasers in
transactions exempt under Section 4(2) and Rule 506 purchased shares from the
Company for investment and not with a view to distribution to the public. The
Company sold 3,333,333 shares under Rule 504 of Regulation D that are not
subject to restrictions on resale.
Item 5. Indemnification of Directors and Officers.
Except for acts or omissions which involve intentional misconduct, fraud or
known violation of law or for the payment of dividends in violation of the
Nevada Revised Statutes, there shall be no personal liability of a director or
officer to the Company, or its stockholders for damages for breach of fiduciary
duty as a director or officer. The Company may indemnify any person for expenses
incurred, including attorneys fees, in connection with their good faith acts if
they reasonably believe such acts are in and not opposed to the best interests
of the Company and for acts for which the person had no reason to believe his or
her conduct was unlawful. The Company may indemnify the officers and directors
for expenses incurred in defending a civil or criminal action, suit or
proceeding as they are incurred in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount of such expenses if it is ultimately
determined by a court of competent jurisdiction in which the action or suit is
brought determined that such person is fairly and reasonably entitled to
indemnification for such expenses which the court deems proper.
25
<PAGE> 28
Insofar as indemnification for liabilities arising under the 1933 Act may be
permitted to officers, directors or persons controlling the Company pursuant to
the foregoing, the Company has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933, as amended, and is therefore
unenforceable.
PART F/S
Financial Statements. The following financial statements are attached to this
report and filed as a part thereof.
26
<PAGE> 29
EAGLETECH COMMUNICATIONS, INC.,
FORMERLY GOLDPLATE HOLDINGS ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
AND REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
<PAGE> 30
EAGLETECH COMMUNICATIONS, INC.,
FORMERLY GOLDPLATE HOLDINGS ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
TABLE OF CONTENTS
Page
Report of Independent Certified Public Accountants 1
Balance Sheets 2
Statements of Operations 3
Statements of Stockholders' Equity (Deficit) 4
Statements of Cash Flows 5
Notes to the Financial Statements 7
<PAGE> 31
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
Eagletech Communications, Inc.,
formerly Goldplate Holdings Enterprises, Inc.
We have audited the accompanying balance sheet of Eagletech Communications,
Inc., formerly Goldplate Holdings Enterprises, Inc., (a development stage
company), as of March 31, 1999, and the related statements of operations and
stockholders' equity (deficit) and cash flows for the years ended March 31, 1999
and 1998, and for the period December 20, 1996 (inception) to March 31, 1999.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Eagletech Communications, Inc.,
formerly Goldplate Holdings Enterprises, Inc., (a development stage company) as
of March 31, 1999, and the results of its operations and its cash flows for the
years ended March 31, 1999 and 1998, and for the period December 20, 1996
(inception) to March 31, 1999, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in Note 3 to the
financial statements, the company has suffered losses from operations and has a
net capital deficiency that raise substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
SWEENEY GATES & CO.
September 28, 1999
Fort Lauderdale, Florida
<PAGE> 32
EAGLETECH COMMUNICATIONS, INC.
FORMERLY GOLDPLATE HOLDINGS ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, 1999 March 31, 1999
------------- --------------
<S> <C> <C>
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 881,648 $ --
----------- -----------
Total current assets 881,648 --
----------- -----------
Property and equipment, net 5,352 --
Other assets 1,500 --
----------- -----------
$ 888,500 $ --
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $ 236,724 $ 47,258
Related party notes 33,902 88,127
Judgments payable 68,196 68,196
Convertible debt -- 88,200
----------- -----------
Total current liabilities 338,822 291,781
----------- -----------
Stockholders' equity (deficit)
Common stock, $.0001 par value, 100,000,000 shares
authorized; 9,678,353 and 4,882,401 shares issued and
outstanding 968 488
Additional paid-in capital 8,904,298 (486)
Deficit accumulated during the development stage (8,355,588) (291,783)
----------- -----------
Stockholders' equity (deficit) 549,678 (291,781)
----------- -----------
$ 888,500 $ --
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 2
<PAGE> 33
EAGLETECH COMMUNICATIONS, INC.
FORMERLY GOLDPLATE HOLDINGS ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
December 20, 1996
Three months ended June 30, (inception)
1999 1998 to June 30, 1999
----------- ----------- -----------------
(unaudited) (unaudited)
<S> <C> <C> <C>
Sales $ -- $ -- $ --
Operating expenses:
Public relations 575,000 -- 575,000
Investment banking fees 1,150,000 -- 1,150,000
Compensation 5,818,768 -- 5,818,768
Start up 204,000 -- 204,000
Consulting fees 211,000 -- 211,000
Research and development -- 1,791 65,868
Selling, general, and administrative 98,932 2,717 274,385
----------- ----------- -----------
Total operating expenses 8,057,700 4,508 8,299,021
----------- ----------- -----------
Loss from operations (8,057,700) (4,508) (8,299,021)
----------- ----------- -----------
Other income (expense):
Interest expense (6,105) (4,284) (33,605)
Loss on disposal of property and equipment -- (22,962) (22,962)
----------- ----------- -----------
Total other income(expense) (6,105) (27,246) (56,567)
----------- ----------- -----------
Net loss $(8,063,805) $ (31,754) $(8,355,588)
=========== =========== ===========
Loss per share, basic and diluted $ (1.41) $ (0.01)
=========== ===========
Weighted averages shares outstanding 5,726,279 4,882,401
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
December 20, 1996
Year ended Year ended (inception)
March 31, 1999 March 31, 1998 to March 31, 1999
--------------- --------------- -----------------
<S> <C> <C> <C>
Sales $ -- $ -- $ --
Operating expenses:
Public relations -- -- --
Investment banking fees -- -- --
Compensation -- -- --
Start up -- -- --
Consulting fees -- -- --
Research and development 7,165 58,703 65,868
Selling, general, and administrative 10,218 67,225 175,453
----------- ----------- -----------
Total operating expenses 17,383 125,928 241,321
----------- ----------- -----------
Loss from operations (17,383) (125,928) (241,321)
----------- ----------- -----------
Other income (expense):
Interest expense (17,136) (10,364) (27,500)
Loss on disposal of property and equipment (22,962) -- (22,962)
----------- ----------- -----------
Total other income(expense) (40,098) (10,364) (50,462)
----------- ----------- -----------
Net loss $ (57,481) $ (136,292) $ (291,783)
=========== =========== ===========
Loss per share, basic and diluted $ (0.01) $ (0.03)
=========== ===========
Weighted averages shares outstanding 4,882,401 4,882,401
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 3
<PAGE> 34
EAGLETECH COMMUNICATIONS, INC.
FORMERLY GOLDPLATE HOLDINGS ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES TO STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Deficit
accumulated
Additional during the
Common stock paid-in development
Shares Amount capital stage Total
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Issuance of stock,
December 20, 1996 4,882,401 $ 488 $ (486) $ -- $ 2
----------- ----------- ----------- ----------- -----------
Balance, December 31, 1996 4,882,401 488 (486) -- 2
Net loss for the year ended
March 31, 1997 -- -- -- (98,010) (98,010)
----------- ----------- ----------- ----------- -----------
Balance, March 31, 1997 4,882,401 488 (486) (98,010) (98,008)
Net loss for the year ended
March 31, 1998 (136,292) (136,292)
----------- ----------- ----------- ----------- -----------
Balance, March 31, 1998 4,882,401 488 (486) (234,302) (234,300)
Net loss for the year ended
March 31, 1999 (57,481) (57,481)
----------- ----------- ----------- ----------- -----------
Balance, March 31, 1999 4,882,401 488 (486) (291,783) (291,781)
Recapitalization 520,018 52 106 158
Sale of stock 3,333,333 333 1,260,667 1,261,000
Issuance of stock for compensation 675,002 68 5,818,700 5,818,768
Issuance of stock to consultants 150,000 15 1,724,985 1,725,000
Bonds converted to common stock 117,599 12 100,326 100,338
Net loss for the three months ended
June 30, 1999 (unaudited) (8,063,805) (8,063,805)
----------- ----------- ----------- ----------- -----------
Balance, June 30, 1999 (unaudited) 9,678,353 $ 968 $ 8,904,298 $(8,355,588) $ 549,678
=========== =========== =========== ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 4
<PAGE> 35
EAGLETECH COMMUNICATIONS, INC.,
FORMERLY GOLDPLATE HOLDINGS ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
December 20, 1996
Three months ended June 30, (inception)
1999 1998 to June 30, 1999
----------- ---------- -----------------
<S> <C> <C> <C>
unaudited) (unaudited)
Cash flows from operating activities:
Net loss $(8,063,805) $ (31,754) $(8,355,588)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation -- -- 6,651
Issuance of stock for services 7,543,768 -- 7,543,768
Start up expense 204,000 -- 204,000
Loss on disposal of property and
equipment -- 22,962 22,962
Changes in assets and liabilities:
(Increase) decrease in deposits -- -- --
Increase (decrease) in accounts payable and
accrued expenses (2,238) 4,284 45,017
Increase in other assets (1,500) -- (1,500)
Increase in judgments payable -- -- 68,196
----------- ---------- -----------
Net cash used in operating activities (319,775) (4,508) (466,494)
----------- ---------- -----------
Cash flows from investing activities:
Purchases of property and equipment (5,352) -- (34,965)
----------- ---------- -----------
Net cash used in investing activities (5,352) -- (34,965)
----------- ---------- -----------
</TABLE>
<TABLE>
<CAPTION>
December 20, 1996
Year ended Year ended (inception)
March 31, 1999 March 31, 1998 to March 31, 1999
-------------- -------------- -----------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (57,481) $ (136,292) $ (291,783)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation -- 4,434 6,651
Issuance of stock for services -- -- --
Start up expense -- -- --
Loss on disposal of property and
equipment 22,962 -- 22,962
Changes in assets and liabilities:
(Increase) decrease in deposits 2,030 (2,030) --
Increase (decrease) in accounts payable and
accrued expenses 27,136 18,873 47,255
Increase in other assets -- --
Increase in judgments payable -- 68,196 68,196
----------- ----------- -----------
Net cash used in operating activities (5,353) (46,819) (146,719)
----------- ----------- -----------
Cash flows from investing activities:
Purchases of property and equipment -- -- (29,613)
----------- ----------- -----------
Net cash used in investing activities -- -- (29,613)
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 5
<PAGE> 36
EAGLETECH COMMUNICATIONS, INC.,
FORMERLY GOLDPLATE HOLDINGS ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
December 20, 1996
Three months ended June 30, (inception) to
1999 1998 June 30, 1999
---------- ----------- -----------------
<S> <C> <C> <C>
(unaudited)
Proceeds from debt -- 4,491 176,330
Proceeds from sale of stock 1,261,000 -- 1,261,002
Payments on related party notes (54,225) -- (54,225)
---------- ----------- -----------
Net cash provided by financing activities 1,206,775 4,491 1,383,107
---------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents: 881,648 (17) 881,648
---------- ----------- -----------
Cash and cash equivalents, beginning or period -- 17 --
---------- ----------- -----------
Cash and cash equivalents, end of period $ 881,648 $ -- $ 881,648
========== =========== ===========
Supplemental information:
Cash paid for interest during the period $ -- $ -- $ --
========== =========== ===========
Cash paid for income taxes during the period $ -- $ -- $ --
========== =========== ===========
Schedule of noncash investing and financing activities:
Increase in additional paid-in capital
due to convertible bonds $ 12,138 $ 12,138
========== ===========
</TABLE>
<TABLE>
<CAPTION>
December 20, 1996
Year ended (inception) to
March 31, 1999 March 31, 1998 March 31, 1999
-------------- -------------- -----------------
<S> <C> <C> <C>
Proceeds from debt 5,336 45,866 176,332
Proceeds from sale of stock -- -- --
Payments on related party notes -- -- --
----------- ----------- -----------
Net cash provided by financing activities 5,336 45,866 176,332
----------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents: (17) (953) --
----------- ----------- -----------
Cash and cash equivalents, beginning or period 17 970 --
----------- ----------- -----------
Cash and cash equivalents, end of period $ -- $ 17 $ --
=========== =========== ===========
Supplemental information:
Cash paid for interest during the period $ -- $ -- $ --
=========== =========== ===========
Cash paid for income taxes during the period $ -- $ -- $ --
=========== =========== ===========
Schedule of noncash investing and financing activities:
Increase in additional paid-in capital
due to convertible bonds
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 6
<PAGE> 37
EAGLETECH COMMUNICATIONS, INC.,
FORMERLY GOLDPLATE HOLDINGS ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
1. BUSINESS AND BASIS OF PRESENTATION
BUSINESS - Goldplate Holdings Enterprises, Inc. ("GHE"), subsequently Eagletech
Communications, Inc. ("the Company"), was incorporated in the state of Nevada on
August 8, 1997. GHE was a development stage company and inactive.
On April 1, 1999, GHE's stockholders approved a merger with Eagletech
Communications, Inc. ("Eagletech Florida"), a Florida corporation, incorporated
on December 20, 1996, and located in Fort Lauderdale, Florida. Eagletech Florida
was engaged in the development of a proprietary unified communications products
and services to complement existing telecommunications technologies for
voice-mail, messaging and connectivity solutions. The merger agreement provided
that the Eagletech Florida stockholders and convertible bondholders were to
receive 5,000,000 shares of GHE common stock. At the date of the transaction,
GHE had no assets or operations and had liabilities of approximately $204,000,
which were recorded as accounts payable and expensed as startup costs. For
accounting purposes, the transaction was treated as a "reverse merger". As such,
the financial statements of the Company reflect the assets, liabilities and
operations of Eagletech Florida as if it had been the reporting entity since
inception. On June 8, 1999, subsequent to the merger, GHE changed its name to
Eagletech Communications, Inc.
The Company was in the development stage and its efforts through June 30, 1999
were principally devoted to organizational activities, raising capital and
development of its products. Management anticipates incurring substantial
additional losses as it pursues its development efforts.
UNAUDITED INTERIM FINANCIAL STATEMENTS - The accompanying financial statements
of the Company for the three months ended June 30, 1999 and 1998, and for the
period from December 20, 1996 (inception) to June 30, 1999, are unaudited, but,
in the opinion of management, reflect the adjustments, all of which are of a
normal recurring nature, necessary for a fair presentation of such financial
statements in accordance with generally accepted accounting principles. The
results of operations for an interim period are not necessarily indicative of
the results for a full year.
PROPERTY AND EQUIPMENT - Property, and equipment are stated at cost. Major
renewals and improvements are capitalized, while maintenance and repairs are
expensed when incurred. The cost and accumulated depreciation for property, and
equipment sold, retired, or otherwise disposed of are relieved from the
accounts, and resulting gains or losses are reflected in income. Depreciation is
computed over the estimated useful lives of depreciable assets using the
straight-line method.
Page 7
<PAGE> 38
EAGLETECH COMMUNICATIONS, INC.,
FORMERLY GOLDPLATE HOLDINGS ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INCOME TAX - Income tax assets and liabilities are computed annually for
temporary differences between the financial statement and tax bases of assets
and liabilities that will result in taxable or deductible amounts in the future,
based upon enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary, to reduce deferred tax assets to the amount expected
to be realized. Income tax expense is the tax payable or refundable for the
period, plus or minus the change during the period in deferred tax assets and
liabilities.
USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS - The fair value of the Company's financial
instruments such as accounts payable and notes payable approximate their
carrying value.
ADVERTISING COSTS - Advertising costs were none in 1999 and $4,701 in 1998 and
are charged to operations as incurred.
DEVELOPMENT COSTS - All costs relating to start up and development of its
telecommunications systems are expensed as incurred.
IMPAIRMENT OF LONG-LIVED ASSETS - The Company evaluates the recoverability of
its property and equipment, and other assets in accordance with Statement of
Financial Accounting Standards Board ("FASB") No.121, "Accounting for the
Impairment of Long-Lived Assets to be Disposed of" ("SFAS 121"). SFAS 121
requires recognition of impairment of long-lived assets in the event the net
book value of such assets exceeds the estimated future undiscounted cash flows
attributable to such assets or the business to which such intangible assets
relate. No impairments were recognized during the year ended March 31, 1999.
INCOME (LOSS) PER SHARE - The Company accounts for earnings per share according
to Financial Accounting Standards No. 128, "Earnings per Share" ("FAS 128"). FAS
128 requires presentation of basic and diluted earnings or loss per share.
Shares related to convertible bonds were excluded from the computation of net
loss per share because the effect of inclusion would be anti-dilutive due to the
Company's net loss. Earnings or loss per share is computed by dividing net
income or loss by the weighted average number of shares outstanding during the
period.
Page 8
<PAGE> 39
EAGLETECH COMMUNICATIONS, INC.,
FORMERLY GOLDPLATE HOLDINGS ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. GOING CONCERN
As shown in the accompanying financial statements, the Company incurred net
losses of $57,481 and $136,292 during the years ended March 31, 1999 and 1998,
respectively, and as of March 31, 1999, the Company's current liabilities
exceeded its current assets by $291,781. The Company's continued existence is
dependent upon its ability to resolve its liquidity problems, principally by
obtaining capital, commencing sales of its products and generating sufficient
revenues to become profitable. The ability of the Company to continue as a going
concern is dependent upon obtaining additional capital subsequent to the merger
with GHE (see Note 8). The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
4. PROPERTY AND EQUIPMENT
The Company purchased equipment in June 1999 for $5,352 and depreciation will
commence on July 1, 1999. Prior year's depreciation relating to assets abandoned
in fiscal 1999 is charged to general and administrative expenses.
5. RELATED PARTY NOTES
Related party notes are unsecured demand notes due to stockholders, including
imputed and accrued interest at 7%.
6. CONVERTIBLE DEBT
In 1998, the Company issued unsecured convertible notes in the amount of
$88,200, due on demand, with interest accruing at seven percent. Subsequent to
March 31, 1999, the notes were converted at $.75 per share to 117,599 shares of
common stock. The accrued interest of $12,138 was contributed to capital at that
time.
7. JUDGMENTS PAYABLE
As of March 31, 1999, the Company had judgments relating to three outstanding
irrevocable financing agreements from various banks in the amount of $68,196,
issued in connection with the lease of certain equipment. During the year ended
March 31, 1999, the equipment was abandoned. However, the judgments continue to
accrue interest at the rate of 10%.
Page 9
<PAGE> 40
EAGLETECH COMMUNICATIONS, INC.,
FORMERLY GOLDPLATE HOLDINGS ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. MERGER AND STARTUP COSTS
Prior to merging with Eagletech Florida, on March 17, 1999 the Company completed
an exchange of stock whereby 21st Century Frontier Group, Inc.("21st Century"),
a publicly trading Company, became a wholly owned subsidiary. The Company became
the surviving entity. This share agreement resulted in the Company assuming
approximately $204,000 in liabilities. Since there were no assets or operations
in 21st Century, the $204,000 was written off as startup costs on April 1, 1999,
the date of the GHE and Eagletech Florida merger. The Company may have
additional contingent liabilities in connection with this transaction. No
accruals have been made for any contingencies.
The financial statements are not consolidated as 21st Century has no operations
and was dissolved subsequent to March 31, 1999.
9. SALE OF SECURITIES AND MERGER
In May 1999, the Company approved a one for three reverse stock split effective
June 9, 1999. All share and per share information has been restated to
retroactively reflect this split. In March 1999, GHE issued 520,018 shares to
individuals pursuant to a private placement. No cash was raised in the offering.
On April 1, 1999, the Company, pursuant to a private placement offering, sold
3,333,333 shares of common stock for $1,261,000.
In June 1999, the Company issued a total of 675,002 shares of stock to officers
and a founding stockholder and recorded a $5,818,768 charge for compensation.
Additionally, 150,000 shares of stock were issued to the Company's investment
banking and public relations firms for services performed, totaling $1,725,000.
These stock transactions were expensed at fair market value on the date the
transactions were approved by the board of directors. In June 1999, the
convertible bondholders converted their bonds to 117,599 shares of stock (see
Note 6).
10. INCOME TAXES
The Company does not have any net operating loss carry forwards as of March 31,
1999, due to the change of business and ownership provisions of the Internal
Revenue Code.
Page 10
<PAGE> 41
EAGLETECH COMMUNICATIONS, INC.,
FORMERLY GOLDPLATE HOLDINGS ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
11. COMMITMENTS
EMPLOYMENT AGREEMENTS - On June 2, 1999, the Company entered into an employment
agreement with the Chief Operating Officer for one year commencing June 15,
1999. The agreement included a signing bonus of $3,000 and an annual
compensation of $75,000. Additionally, the employee was provided, at no cost,
100,000 shares of restricted common stock.
On June 24, 1999, the Company entered into an employment agreement with the
Director of Marketing to commence on July 1, 1999 and to expire on December 31,
1999, unless extended in writing by both parties. The agreement included an
annualized compensation of $60,000 and 25,000 shares of restricted common stock
subsequent to a ninety-day probation period.
CONSULTING AGREEMENT - On June 15, 1999, the Company entered into an agreement
with a firm to provide consulting advice. The agreement included a commitment to
pay the balance of the retainer of three payments of $15,000 each, on July 15,
1999, August 15, 1999 and September 15, 1999 and 100,000 shares of restricted
common stock.
12. YEAR 2000 COMPUTER CONSIDERATIONS (UNAUDITED)
The Company has completed an inventory of computer systems and other electronic
equipment that may be affected by the year 2000 issue and that are necessary to
conduct Company operations. All computer and electronic systems identified
during the inventory are year 2000 compliant.
Because of the unprecedented nature of the year 2000 issue, its effects and the
success of related remediation efforts will not be fully determinable until the
year 2000 and thereafter. Management cannot assure that the Company is or will
be year 2000 ready, that the Company's remediation efforts will be successful in
whole or in part, or that parties with whom the Company does business will be
year 2000 compliant.
Page 11
<PAGE> 42
Item 1. Exhibit Index
Exhibit
No
(3) Articles of Incorporation and Bylaws
3.1 Articles of Incorporation
3.2 Bylaws
(10) Material Contracts
10.1 Consulting Agreement with LBC Capital, Inc.
10.2 Services Agreement with BellSouth Telecommunications, Inc.
10.3 Employment Agreement with Robert J. Dobbs
10.4 Employment Agreement with Rodney Young
10.5 Employment Agreement with Robert Bergman
(21) Subsidiaries of the Registrant
21.1 Subsidiaries of the Registrant
(23) Consents - Experts
23.1 Consent of Sweeney, Gates & Co.
(27) Financial Data Schedule
27.1 Financial Data Schedule
1
<PAGE> 43
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
Date: December 1, 1999 EAGLETECH COMMUNICATIONS, INC.
By: /s/ ROBERT J. DOBBS, JR.
Robert J. Dobbs, Jr., President
2
<PAGE> 1
EXHIBIT 3.1
ARTICLES OF INCORPORATION
(PURSUANT TO NRS 78)
STATE OF NEVADA
Secretary of State
FILED RECEIPT NO. FY970000547
IN THE OFFICE OF THE DGB
SECRETARY OF STATE OF THE 06/06/1997
STATE OF NEVADA REC'D BY Shirley Nodzak
AUG 08 1997
No. C17014-97
/s/ DEAN HELLER
DEAN HELLER SECRETARY OF STATE
IMPORTANT: Read instructions on reverse side before completing this form.
TYPE OR PRINT (BLACK INK ONLY)
1. NAME OF CORPORATION: GOLDPLATE HOLDINGS ENTERPRISES CORP.
2. RESIDENT AGENT: (designated resident agent and his STREET ADDRESS in
Nevada where process may be served)
Name of Resident Agent: STEWART SYTNER
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Street Address: 210 E. Flamingo Las Vegas 89109
-----------------------------------------------------------
Street No. Street Name City
3. SHARES: (number of shares the corporation is authorized to issue)
Number of shares with par value: 1,000,000 Par value: .001 Number of shares
without par value: 0
4. GOVERNING BOARD: shall be styled as (check one): X Directors Trustees
----
The FIRST BOARD OF DIRECTORS shall consist of 1 members and the names and
addresses are as follows:
MILTON MILLER P.O. Box 287, Metuchen, NJ 08840
------------------------ -------------------------------------------
Name Address
5. PURPOSE (optional -- see reverse side): The purpose of the corporation
shall be:
---------------------------------------------------------------------
6. OTHER MATTERS: This form includes the minimum statutory requirements to
incorporate under NRS 78. You may attach additional information pursuant to
NRS 78.037 or any other information you deem appropriate. If any of the
additional information is contradictory to this form it cannot be filed and
will be returned to you for correction. Number of pages attached
------
7. SIGNATURES OF INCORPORATORS: The names and addresses of each of the
incorporators signing the articles (Signatures must be notarized) (Attach
additional pages if there are more than two incorporators)
MILTON MILLER
---------------------------------- -----------------------------------
Name (print) Name (print)
P.O. Box 287, Metuchen, NJ 08840
---------------------------------- -----------------------------------
Address Address
/s/ Milton Miller
---------------------------------- -----------------------------------
Signature Signature
State of Nevada County of Clark State of County of
-------- -------
This instrument was acknowledged This instrument was acknowledged
before me on before me on
March 13, 1997 by , 19 , by
------------- ----
Milton Miller
---------------------------------- -----------------------------------
Name of Person Name of Person
As incorporator As incorporator
Of Milton Miller
----------------------------- -----------------------------------
(name of party on behalf of whom (name of party on behalf of whom
instrument was executed) instrument was executed)
/s/ Betty Ann Jones
----------------------------- -----------------------------------
Notary Public Signature Notary Public Signature
(affix notary stamp or seal) (affix notary stamp or seal)
8. CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT
I, Stewart Sytner hereby accept appointment as Resident Agent for the above
named corporation.
/s/ Stewart Sytner 7/14/97
- ---------------------------------- -----------------------------------
Signature of Resident Agent
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<PAGE> 1
EXHIBIT 3.2
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(After Issuance of Stock)
FILED # C17014-97
JUN 08 1999
IN THE OFFICE OF
/s/ DEAN HELLER
DEAN HELLER SECRETARY OF STATE
GOLDPLATE HOLDINGS ENTERPRISES
------------------------------
Name of Corporation
We the undersigned President and
--------------------------------
President or Vice President
Secretary of Goldplate Holdings Enterprises
- ----------------------------------- ---------------------------------------
Secretary of Assistant Secretary Name of Corporation
Do hereby certify:
That the Board of Directors of said corporation at a meeting duly
convened, held on the 1st Day of April, 1999, adopted a resolution to amend the
original articles as follows:
Article 1 is hereby amended to read as follows:
The name of the Corporation shall be Eagletech Communications,
Inc.
The number of shares of the corporation outstanding and entitled to
vote on an amendment to the Articles of incorporation is 100,000,000, that the
said changes and amendment have been consented to and approved by a majority
vote of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
/s/ Robert E. Young
-----------------------------------
Robert E. Young, President
/s/ James R. Payne
-----------------------------------
James R. Payne, Secretary
State of Florida
--------
County of Broward
-------
On May 12th, 1999, personally appeared before me, a Notary Public,
Robert E Young and James R. Payne, who acknowledged
Names of Persons Appearing and Signing Document
that they executed the above instrument.
(Notary Seal) EDWARD CHANDLER, JR. /s/ Edward Chandler, Jr.
Commission # CC 691522 -----------------------------------
Expires NOV 29, 2001
Bonded thru
Atlantic Bonding Co., Inc.
4
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EXHIBIT 3.3
BYLAWS
OF
EAGLETECH COMMUNICATIONS, INC.
History of Actions Taken
Related to Bylaws Date
Bylaws Adopted 4/1/99
5
<PAGE> 2
ARTICLE I CORPORATE OFFICES
<TABLE>
<CAPTION>
<S> <C>
1.1 PRINCIPAL OFFICE 1
1.2 OTHER OFFICES 1
ARTICLE II MEETINGS OF SHAREHOLDERS
2.1 PLACE OF MEETINGS 1
2.2 ANNUAL MEETING 1
2.3 SPECIAL MEETINGS 1
2.4 NOTICE OF SHAREHOLDERS' MEETINGS 2
2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE 2
2.6 QUORUM 3
2.7 ADJOURNED MEETING; NOTICE 3
2.8 VOTING 3
2.9 VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT 4
2.10 SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING 4
2.11 RECORD DATE FOR SHAREHOLDER NOTICE; VOTING; GIVING CONSENTS 5
2.12 PROXIES 5
2.13 INSPECTORS OF ELECTION 6
ARTICLE III DIRECTORS
3.1 POWERS 6
3.2 NUMBER OF DIRECTORS 6
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS 6
3.4 REMOVAL 7
3.5 RESIGNATION AND VACANCIES 7
3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE 7
3.7 REGULAR MEETINGS 8
3.8 SPECIAL MEETINGS; NOTICE 8
3.9 QUORUM 8
3.10 WAIVER OF NOTICE 8
3.11 ADJOURNMENT 9
3.12 NOTICE OF ADJOURNMENT 9
3.13 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING 9
3.14 FEES AND COMPENSATION OF DIRECTORS 9
3.15 APPROVAL OF LOANS TO OFFICERS 9
ARTICLE IV COMMITTEES
4.1 COMMITTEES OF DIRECTORS 9
4.2 MEETINGS AND ACTION OF COMMITTEES 10
ARTICLE V OFFICERS
5.1 OFFICERS 10
5.2 APPOINTMENT OF OFFICERS 11
5.3 SUBORDINATE OFFICERS 11
5.4 REMOVAL AND RESIGNATION OF OFFICERS 11
</TABLE>
6
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
5.5 VACANCIES IN OFFICES 11
5.6 CHAIRMAN OF THE BOARD 11
5.7 PRESIDENT 11
5.8 VICE PRESIDENTS 12
5.9 SECRETARY 12
5.10 CHIEF FINANCIAL OFFICER 12
ARTICLE VI INDEMNIFICATION OF DIRECTORS,
OFFICERS, EMPLOYEES, AND OTHER AGENTS
6.1 INDEMNIFICATION OF DIRECTORS 13
6.2 INDEMNIFICATION OF OTHERS 13
6.3 PAYMENT OF EXPENSES IN ADVANCE 13
6.4 INDEMNITY NOT EXCLUSIVE 13
6.5 INSURANCE INDEMNIFICATION 13
6.6 CONFLICTS 14
6.7 RIGHT TO BRING SUIT 14
6.8 INDEMNITY AGREEMENTS 14
6.9 AMENDMENT, REPEAL OR MODIFICATION 14
ARTICLE VII RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF SHARE REGISTER 15
7.2 MAINTENANCE AND INSPECTION OF BYLAWS 15
7.3 MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS 15
7.4 INSPECTION BY DIRECTORS 16
7.5 ANNUAL REPORT TO SHAREHOLDERS; WAIVER 16
7.6 FINANCIAL STATEMENTS 16
7.7 REPRESENTATION OF SHARES OF OTHER CORPORATIONS 17
ARTICLE VIII GENERAL MATTERS
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING 17
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS 17
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED 17
8.4 CERTIFICATES FOR SHARES 17
8.5 LOST CERTIFICATES 18
8.6 CONSTRUCTION; DEFINITIONS 18
ARTICLE IX AMENDMENTS
9.1 AMENDMENT BY SHAREHOLDERS 18
9.2 AMENDMENT BY DIRECTORS 19
9.3 RECORD OF AMENDMENTS 19
ARTICLE X INTERPRETATION 19
</TABLE>
7
<PAGE> 4
BYLAWS
OF
EAGLETECH COMMUNICATIONS, INC.
ARTICLE I
CORPORATE OFFICES
1.1 PRINCIPAL OFFICE
The Board of Directors shall fix the location of the principal
executive office of the corporation at any place within or outside the State of
Nevada. If the principal executive office is located outside Nevada and the
corporation has one or more business offices in Nevada, then the Board of
Directors shall fix and designate a principal business office in Nevada.
1.2 OTHER OFFICES
The Board of Directors may at any time establish branch or subordinate
offices at any place or places.
ARTICLE II
MEETINGS OF SHAREHOLDERS
2.1 PLACE OF MEETINGS
Meetings of shareholders shall be held at any place within or outside
the State of Nevada designated by the Board of Directors. In the absence of any
such designation, shareholders' meetings shall be held at the principal
executive office of the corporation or at any place consented to in writing by
all persons entitled to vote at such meeting, given before or after the meeting
and filed with the Secretary of the corporation.
2.2 ANNUAL MEETING
An annual meeting of shareholders shall be held each year on a date and
at a time designated by the Board of Directors. At that meeting, directors shall
be elected. Any other proper business may be transacted at the annual meeting of
shareholders.
2.3 SPECIAL MEETINGS
Special meetings of the shareholders may be called at any time, subject
to the provisions of Sections 2.4 and 2.5 of these Bylaws, by the Board of
Directors, the Chairman of the Board, the President or the holders of shares
entitled to cast not less than ten percent (10%) of the votes at that meeting.
Page 8 of 70
<PAGE> 5
If a special meeting is called by anyone other than the Board of
Directors or the President or the Chairman of the Board, then the request shall
be in writing, specifying the time of such meeting and the general nature of the
business proposed to be transacted, and shall be delivered personally or sent by
registered mail or by other written communication to the Chairman of the Board,
the President, any Vice President or the Secretary of the corporation. The
officer receiving the request forthwith shall cause notice to be given to the
shareholders entitled to vote, in accordance with the provisions of Sections 2.4
and 2.5 of these Bylaws, that a meeting will be held at the time requested by
the person or persons calling the meeting, so long as that time is not less than
thirty-five (35) nor more than sixty (60) days after the receipt of the request.
If the notice is not given within twenty (20) days after receipt of the request,
then the person or persons requesting the meeting may give the notice. Nothing
contained in this paragraph of this Section 2.3 shall be construed as limiting,
fixing or affecting the time when a meeting of shareholders called by action of
the Board of Directors may be held.
2.4 NOTICE OF SHAREHOLDERS' MEETINGS
All notices of meetings of shareholders shall be sent or otherwise
given in accordance with Section 2.5 of these Bylaws not less than ten (10) (or,
if sent by third-class mail pursuant to Section 2.5 of these Bylaws, not less
than thirty (30)) nor more than sixty (60) days before the date of the meeting
to each shareholder entitled to vote thereat. Such notice shall state the place,
date, and hour of the meeting and (i) in the case of a special meeting, the
general nature of the business to be transacted, and no business other than that
specified in the notice may be transacted, or (ii) in the case of the annual
meeting, those matters which the Board of Directors, at the time of the mailing
of the notice, intends to present for action by the shareholders, but, subject
to the provisions of the next paragraph of this Section 2.4, any proper matter
may be presented at the meeting for such action. The notice of any meeting at
which Directors are to be elected shall include the names of nominees intended
at the time of the notice to be presented by the Board for election.
If action is proposed to be taken at any meeting for approval of (i) an
amendment of the Articles of Incorporation, pursuant to the Nevada Corporations
Code (the "Code"), (ii) a reorganization of the corporation, (iii) a voluntary
dissolution of the corporation, or (iv) a distribution in dissolution other than
in accordance with the rights of any outstanding preferred shares, then the
notice shall also state the general nature of that proposal.
2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Notice of a shareholders' meeting shall be given either personally or
by first-class mail, or, if the corporation has outstanding shares held of
record by five hundred (500) or more persons (determined as provided in Section
605 of the Code) on the record date for the shareholders' meeting, notice may be
sent by third-class mail, or other means of written communication, addressed to
the shareholder at the address of the shareholder appearing on the books of the
corporation or given by the shareholder to the corporation for the purpose of
notice;
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or if no such address appears or is given, at the place where the principal
executive office of the corporation is located or by publication at least once
in a newspaper of general circulation in the county in which the principal
executive office is located. The notice shall be deemed to have been given at
the time when delivered personally or deposited in the mail or sent by other
means of written communication.
If any notice (or any report referenced in Article VII of these Bylaws)
addressed to a shareholder at the address of such shareholder appearing on the
books of the corporation is returned to the corporation by the United States
Postal Service marked to indicate that the United States Postal Service is
unable to deliver the notice to the shareholder at that address, all future
notices or reports shall be deemed to have been duly given without further
mailing if the same shall be available to the shareholder upon written demand of
the shareholder at the principal executive office of the corporation for a
period of one (1) year from the date of the giving of the notice.
An affidavit of mailing of any notice or report in accordance with the
provisions of this Section 2.5, executed by the Secretary, Assistant Secretary
or any transfer agent, shall be prima facie evidence of the giving of the notice
or report.
2.6 QUORUM
Unless otherwise provided in the Articles of Incorporation of the
corporation, a majority of the shares entitled to vote, represented in person or
by proxy, shall constitute a quorum at a meeting of the shareholders. The
shareholders present at a duly called or held meeting at which a quorum is
present may continue to transact business until adjournment notwithstanding the
withdrawal of enough shareholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the shares
required to constitute a quorum.
In the absence of a quorum, any meeting of shareholders may be
adjourned from time to time by the vote of a majority of the shares represented
either in person or by proxy, but no other business may be transacted, except as
provided in the last sentence of the preceding paragraph.
2.7 ADJOURNED MEETING; NOTICE
Any shareholders' meeting, annual or special, whether or not a quorum
is present, may be adjourned from time to time by the vote of the majority of
the shares represented at that meeting, either in person or by proxy.
When any meeting of shareholders, either annual or special, is
adjourned to another time or place, notice need not be given of the adjourned
meeting if its time and place are announced at the meeting at which the
adjournment is taken. However, if the adjournment is for more than forty-five
(45) days from the date set for the original meeting or if a new record date for
the adjourned meeting is fixed, a notice of the adjourned meeting shall be given
to each shareholder of record entitled to vote at the adjourned meeting in
accordance with the provisions of Sections
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2.4 and 2.5 of these Bylaws. At any adjourned meeting the corporation may
transact any business which might have been transacted at the original meeting.
2.8 VOTING
The shareholders entitled to vote at any meeting of shareholders shall
be determined in accordance with the provisions of Section 2.11 of these Bylaws,
subject to the provisions of the Code.
Elections for directors and voting on any other matter at a
shareholders' meeting need not be by ballot unless a shareholder demands
election by ballot at the meeting and before the voting begins.
Except as provided in the last paragraph of this Section 2.8, or as may
be otherwise provided in the Articles of Incorporation, each outstanding share,
regardless of class, shall be entitled to one vote on each matter submitted to a
vote of the shareholders. Any holder of shares entitled to vote on any matter
may vote part of the shares in favor of the proposal and refrain from voting the
remaining shares or may vote them against the proposal other than elections to
office, but, if the shareholder fails to specify the number of shares such
shareholder is voting affirmatively, it will be conclusively presumed that the
shareholder's approving vote is with respect to all shares which the shareholder
is entitled to vote.
The affirmative vote of the majority of the shares represented and
voting at a duly held meeting at which a quorum is present (which shares voting
affirmatively also constitute at least a majority of the required quorum) shall
be the act of the shareholders, unless the vote of a greater number or voting by
classes is required by the Code or by the Articles of Incorporation.
At a shareholders' meeting at which directors are to be elected, a
shareholder shall be entitled to cumulate votes either (i) by giving one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which that shareholder's shares are
normally entitled or (ii) by distributing the shareholder's votes on the same
principle among as many candidates as the shareholder thinks fit, if the
candidate or candidates' names have been placed in nomination prior to the
voting and the shareholder has given notice prior to the voting of the
shareholder's intention to cumulate the shareholder's votes. If any one
shareholder has given such a notice, then every shareholder entitled to vote may
cumulate votes for candidates in nomination. The candidates receiving the
highest number of affirmative votes, up to the number of directors to be
elected, shall be elected; votes against any candidate and votes withheld shall
have no legal effect.
2.9 VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT
The transactions of any meeting of shareholders, either annual or
special, however called and noticed, and wherever held, are as valid as though
they had been taken at a meeting duly held after regular call and notice, if a
quorum be present either in person or by proxy, and if,
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either before or after the meeting, each of the persons entitled to vote, not
present in person or by proxy, signs a written waiver of notice or a consent to
the holding of the meeting or an approval of the minutes thereof. Neither the
business to be transacted at nor the purpose of any annual or special meeting of
shareholders need be specified in any written waiver of notice or consent to the
holding of the meeting or approval of the minutes thereof, except that if action
is taken or proposed to be taken for approval of any of those matters specified
in the second paragraph of Section 2.4 of these Bylaws, the waiver of notice or
consent or approval shall state the general nature of the proposal. All such
waivers, consents, and approvals shall be filed with the corporate records or
made a part of the minutes of the meeting.
Attendance of a person at a meeting shall constitute a waiver of notice
of and presence at that meeting, except when the person objects, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened and except that attendance at a meeting is
not a waiver of any right to object to the consideration of matters required by
the Code to be included in the notice of such meeting but not so included, if
such objection is expressly made at the meeting.
2.10 SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Any action which may be taken at any annual or special meeting of
shareholders may be taken without a meeting and without prior notice, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding shares having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted.
Directors may not be elected by written consent except by unanimous
written consent of all shares entitled to vote for the election of directors.
However, a director may be elected at any time to fill any vacancy on the Board
of Directors, provided that it was not created by removal of a director and that
it has not been filled by the directors, by the written consent of the holders
of a majority of the outstanding shares entitled to vote for the election of
directors.
All such consents shall be maintained in the corporate records. Any
shareholder giving a written consent, or the shareholder's proxy holders, or a
transferee of the shares, or a personal representative of the shareholder, or
their respective proxy holders, may revoke the consent by a writing received by
the Secretary of the corporation before written consents of the number of shares
required to authorize the proposed action have been filed with the Secretary.
If the consents of all shareholders entitled to vote have not been
solicited in writing, the Secretary shall give prompt notice of any corporate
action approved by the shareholders without a meeting by less than unanimous
written consent to those shareholders entitled to vote who have not consented in
writing. Such notice shall be given in the manner specified in Section 2.5 of
these Bylaws. In the case of approval of (i) a contract or transaction in which
a director has a direct or indirect financial interest, pursuant to Section 310
of the Code, (ii) indemnification of a
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corporate agent, pursuant to Section 317 of the Code, (iii) a reorganization of
the corporation, pursuant to Section 1201 of the Code, and (iv) a distribution
in dissolution other than in accordance with the rights of outstanding preferred
shares, pursuant to Section 2007 of the Code, the notice shall be given at least
ten (10) days before the consummation of any action authorized by that approval,
unless the consents of all shareholders entitled to vote have been solicited in
writing.
2.11 RECORD DATE FOR SHAREHOLDER NOTICE; VOTING; GIVING CONSENTS
In order that the corporation may determine the shareholders entitled
to notice of any meeting or to vote, the Board of Directors may fix, in advance,
a record date, which shall not be more than sixty (60) days nor less than ten
(10) days prior to the date of such meeting nor more than sixty (60) days before
any other action. Shareholders at the close of business on the record date are
entitled to notice and to vote, as the case may be, notwithstanding any transfer
of any shares on the books of the corporation after the record date, except as
otherwise provided in the Articles of Incorporation or the Code.
A determination of shareholders of record entitled to notice of or to
vote at a meeting of shareholders shall apply to any adjournment of the meeting
unless the Board of Directors fixes a new record date for the adjourned meeting,
but the Board of Directors shall fix a new record date if the meeting is
adjourned for more than forty-five (45) days from the date set for the original
meeting.
If the Board of Directors does not so fix a record date:
(a) The record date for determining shareholders entitled to notice of
or to vote at a meeting of shareholders shall be at the close of business on the
business day next preceding the day on which notice is given or, if notice is
waived, at the close of business on the business day next preceding the day on
which the meeting is held.
(b) The record date for determining shareholders entitled to give
consent to corporate action in writing without a meeting, (i) when no prior
action by the Board has been taken, shall be the day on which the first written
consent is given, or (ii) when prior action by the Board has been taken, shall
be at the close of business on the day on which the Board adopts the resolution
relating thereto, or the sixtieth (60th) day prior to the date of such other
action, whichever is later.
The record date for any other purpose shall be as provided in Section
8.1 of these Bylaws.
2.12 PROXIES
Every person entitled to vote for directors, or on any other matter,
shall have the right to do so either in person or by one or more agents
authorized by a written proxy signed by the person and filed with the Secretary
of the corporation. A proxy shall be deemed signed if the
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<PAGE> 10
shareholder's name or other authorization is placed on the proxy (whether by
manual signature, typewriting, telegraphic or electronic transmission or
otherwise) by the shareholder or the shareholder's attorney-in-fact. A validly
executed proxy which does not state that it is irrevocable shall continue in
full force and effect unless (i) the person who executed the proxy revokes it
prior to the time of voting by delivering a writing to the corporation stating
that the proxy is revoked or by executing a subsequent proxy and presenting it
to the meeting or by attendance at such meeting and voting in person, or (ii)
written notice of the death or incapacity of the maker of that proxy is received
by the corporation before the vote pursuant to that proxy is counted; provided,
however, that no proxy shall be valid after the expiration of eleven (11) months
from the date thereof, unless otherwise provided in the proxy. The dates
contained on the forms of proxy presumptively determine the order of execution,
regardless of the postmark dates on the envelopes in which they are mailed. The
revocability of a proxy that states on its face that it is irrevocable shall be
governed by the provisions of Sections 705(e) and 705(f) of the Code.
2.13 INSPECTORS OF ELECTION
In advance of any meeting of shareholders, the Board of Directors may
appoint inspectors of election to act at the meeting and any adjournment
thereof. If inspectors of election are not so appointed or designated or if any
persons so appointed fail to appear or refuse to act, then the Chairman of the
meeting may, and on the request of any shareholder or a shareholder's proxy
shall, appoint inspectors of election (or persons to replace those who so fail
to appear) at the meeting. The number of inspectors shall be either one (1) or
three (3). If appointed at a meeting on the request of one (1) or more
shareholders or proxies, the majority of shares represented in person or by
proxy shall determine whether one (1) or three (3) inspectors are to be
appointed.
The inspectors of election shall determine the number of shares
outstanding and the voting power of each, the shares represented at the meeting,
the existence of a quorum, and the authenticity, validity, and effect of
proxies, receive votes, ballots or consents, hear and determine all challenges
and questions in any way arising in connection with the right to vote, count and
tabulate all votes or consents, determine when the polls shall close, determine
the result and do any other acts that may be proper to conduct the election or
vote with fairness to all shareholders.
ARTICLE III
DIRECTORS
3.1 POWERS
Subject to the provisions of the Code and any limitations in the
Articles of Incorporation and these Bylaws relating to action required to be
approved by the shareholders or by the outstanding shares, the business and
affairs of the corporation shall be managed and all corporate powers shall be
exercised by or under the direction of the Board of Directors. The Board may
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delegate the management of the day-to-day operation of the business of the
corporation to a management company or other person provided that the business
and affairs of the corporation shall be managed and all corporate powers shall
be exercised under the ultimate direction of the Board.
3.2 NUMBER OF DIRECTORS
The authorized number of directors of the corporation shall be
determined by the Board of Directors and shall be greater than one (1) but less
than ten (10).
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS
At each annual meeting of shareholders, directors shall be elected to
hold office until the next annual meeting. Each director, including a director
elected to fill a vacancy, shall hold office until the expiration of the term
for which elected and until a successor has been elected and qualified, except
in the case of the death, resignation, or removal of such a director.
3.4 REMOVAL
The entire Board of Directors or any individual director may be removed
from office without cause by the affirmative vote of two-thirds of the
outstanding shares entitled to vote on such removal; provided, however, that
unless the entire Board is removed, no individual director may be removed when
the votes cast against such director's removal, or not consenting in writing to
such removal, would be sufficient to elect that director if voted cumulatively
at an election at which the same total number of votes cast were cast (or, if
such action is taken by written consent, all shares entitled to vote were voted)
and the entire number of directors authorized at the time of such director's
most recent election were then being elected.
3.5 RESIGNATION AND VACANCIES
Any director may resign effective upon giving oral or written notice to
the Chairman of the Board, the President, the Secretary or the Board of
Directors, unless the notice specifies a later time for the effectiveness of
such resignation. If the resignation of a director is effective at a future
time, the Board of Directors may elect a successor to take office when the
resignation becomes effective.
Vacancies on the Board of Directors may be filled by a majority of the
remaining directors, or if the number of directors then in office is less than a
quorum by (i) unanimous written consent of the directors then in office, (ii)
the affirmative vote of a majority of the directors then in office at a meeting
held pursuant to notice or waivers of notice, or (iii) a sole remaining
director; however, a vacancy created by the removal of a director by the vote or
written consent of the shareholders or by court order may be filled only by the
affirmative vote of a majority of the shares represented and voting at a duly
held meeting at which a quorum is present (which shares voting affirmatively
also constitute at least a majority of the required
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quorum), or by the unanimous written consent of all shares entitled to vote
thereon. Each director so elected shall hold office until the next annual
meeting of the shareholders and until a successor has been elected and
qualified, or until his or her death, resignation or removal.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist (i) in the event of the death, resignation or removal of any director,
(ii) if the Board of Directors by resolution declares vacant the office of a
director who has been declared of unsound mind by an order of court or convicted
of a felony, (iii) if the authorized number of directors is increased, or (iv)
if the shareholders fail, at any meeting of shareholders at which any director
or directors are elected, to elect the full authorized number of directors to be
elected at that meeting.
The shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors, but any such election by
written consent, other than to fill a vacancy created by removal, shall require
the consent of the holders of a majority of the outstanding shares entitled to
vote thereon. A director may not be elected by written consent to fill a vacancy
created by removal except by unanimous consent of all shares entitled to vote
for the election of directors.
3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
Regular meetings of the Board of Directors may be held at any place
within or outside the State of Nevada that has been designated from time to time
by resolution of the Board. In the absence of such a designation, regular
meetings shall be held at the principal executive office of the corporation.
Special meetings of the Board may be held at any place within or outside the
State of Nevada that has been designated in the notice of the meeting or, if not
stated in the notice or if there is no notice, at the principal executive office
of the corporation.
Members of the Board may participate in a meeting through the use of
conference telephone or similar communications equipment, so long as all
directors participating in such meeting can hear one another. Participation in a
meeting pursuant to this paragraph constitutes presence in person at such
meeting.
3.7 REGULAR MEETINGS
Regular meetings of the Board of Directors may be held without notice
if the time and place of such meetings are fixed by the Board of Directors.
3.8 SPECIAL MEETINGS; NOTICE
Subject to the provisions of the following paragraph, special meetings
of the Board of Directors for any purpose or purposes may be called at any time
by the Chairman of the Board, the President, any Vice President, the Secretary
or any two (2) directors.
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Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail,
telegram, charges prepaid, or by telecopier, addressed to each director at that
director's address as it is shown on the records of the corporation. If the
notice is mailed, it shall be deposited in the United States mail at least four
(4) days before the time of the holding of the meeting. If the notice is
delivered personally or by telephone or by telecopier or telegram, it shall be
delivered personally or by telephone or by telecopier or to the telegraph
company at least forty-eight (48) hours before the time of the holding of the
meeting. Any oral notice given personally or by telephone may be communicated
either to the director or to a person at the office of the director who the
person giving the notice has reason to believe will promptly communicate it to
the director. The notice need not specify the purpose of the meeting.
3.9 QUORUM
A majority of the authorized number of directors shall constitute a
quorum for the transaction of business, except to adjourn as provided in Section
3.11 of these Bylaws. Every act or decision done or made by a majority of the
directors present at a meeting duly held at which a quorum is present is the act
of the Board of Directors, subject to the provisions of Section 310 of the Code
(as to approval of contracts or transactions in which a director has a direct or
indirect material financial interest), Section 311 of the Code (as to
appointment of committees), Section 317(e) of the Code (as to indemnification of
directors), the Articles of Incorporation, and other applicable law.
A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the required quorum for such
meeting.
3.10 WAIVER OF NOTICE
Notice of a meeting need not be given to any director who signs a
waiver of notice or a consent to holding the meeting or an approval of the
minutes thereof, whether before or after the meeting, or who attends the meeting
without protesting, prior thereto or at its commencement, the lack of notice to
such director. All such waivers, consents, and approvals shall be filed with the
corporate records or made a part of the minutes of the meeting. A waiver of
notice need not specify the purpose of any regular or special meeting of the
Board of Directors.
3.11 ADJOURNMENT
A majority of the directors present, whether or not a quorum is
present, may adjourn any meeting to another time and place.
3.12 NOTICE OF ADJOURNMENT
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If the meeting is adjourned for more than twenty-four (24) hours,
notice of any adjournment to another time and place shall be given prior to the
time of the adjourned meeting to the directors who were not present at the time
of the adjournment.
3.13 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Any action required or permitted to be taken by the Board of Directors
may be taken without a meeting, if all members of the Board individually or
collectively consent in writing to such action. Such written consent or consents
shall be filed with the minutes of the proceedings of the Board. Such action by
written consent shall have the same force and effect as a unanimous vote of the
Board of Directors.
3.14 FEES AND COMPENSATION OF DIRECTORS
Directors and members of committees may receive such compensation, if
any, for their services and such reimbursement of expenses as may be fixed or
determined by resolution of the Board of Directors. This Section 3.14 shall not
be construed to preclude any director from serving the corporation in any other
capacity as an officer, agent, employee or otherwise and receiving compensation
for those services.
3.15 APPROVAL OF LOANS TO OFFICERS
If these Bylaws have been approved by the corporation's shareholders in
accordance with the Code, the corporation may, upon the approval of the Board of
Directors alone, make loans of money or property to, or guarantee the
obligations of, any officer of the corporation or of its parent, if any, whether
or not a director, or adopt an employee benefit plan or plans authorizing such
loans or guaranties provided that (i) the Board of Directors determines that
such a loan or guaranty or plan may reasonably be expected to benefit the
corporation, (ii) the corporation has outstanding shares held of record by 100
or more persons (determined as provided in the Code) on the date of approval by
the Board of Directors, and (iii) the approval of the Board of Directors is by a
vote sufficient without counting the vote of any interested director or
directors. Notwithstanding the foregoing, the corporation shall have the power
to make loans permitted by the Code.
ARTICLE IV
COMMITTEES
4.1 COMMITTEES OF DIRECTORS
The Board of Directors may, by resolution adopted by a majority of the
authorized number of directors, designate one or more committees, each
consisting of two (2) or more directors, to serve at the pleasure of the Board.
The Board may designate one or more directors as alternate members of any
committee, who may replace any absent member at any meeting of
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the committee. The appointment of members or alternate members of a committee
requires the vote of a majority of the authorized number of directors. Any such
committee shall have authority to act in the manner and to the extent provided
in the resolution of the Board and may have all the authority of the Board,
except with respect to:
(a) The approval of any action which, under the Code, also requires
shareholders' approval or approval of the outstanding shares.
(b) The filling of vacancies on the Board of Directors or in any
committee.
(c) The fixing of compensation of the directors for serving on the
Board or on any committee.
(d) The amendment or repeal of these Bylaws or the adoption of new
Bylaws.
(e) The amendment or repeal of any resolution of the Board of Directors
which by its express terms is not so amendable or repealable.
(f) A distribution to the shareholders of the corporation, except at a
rate, in a periodic amount or within a price range set forth in the Articles of
Incorporation or determined by the Board of Directors.
(g) The appointment of any other committees of the Board of Directors
or the members thereof.
4.2 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and held and
taken in accordance with, the provisions of Article III of these Bylaws, Section
3.6 (place of meetings), Section 3.7 (regular meetings), Section 3.8 (special
meetings and notice), Section 3.9 (quorum), Section 3.10 (waiver of notice),
Section 3.11 (adjournment), Section 3.12 (notice of adjournment), and Section
3.13 (action without meeting), with such changes in the context of those Bylaws
as are necessary to substitute the committee and its members for the Board of
Directors and its members; provided, however, that the time of regular meetings
of committees may be determined either by resolution of the Board of Directors
or by resolution of the committee, that special meetings of committees may also
be called by resolution of the Board of Directors, and that notice of special
meetings of committees shall also be given to all alternate members, who shall
have the right to attend all meetings of the committee. The Board of Directors
may adopt rules for the government of any committee not inconsistent with the
provisions of these Bylaws.
ARTICLE V
OFFICERS
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5.1 OFFICERS
The officers of the corporation shall be a President, a Chief Executive
Officer, a Secretary, and a Treasurer. The corporation may also have, at the
discretion of the Board of Directors, a Chairman of the Board, one or more Vice
Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers,
and such other officers as may be appointed in accordance with the provisions of
Section 5.3 of these Bylaws. Any number of offices may be held by the same
person.
5.2 APPOINTMENT OF OFFICERS
The officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Section 5.3 or Section 5.5 of
these Bylaws, shall be chosen by the Board and serve at the pleasure of the
Board, subject to the rights, if any, of an officer under any contract of
employment.
5.3 SUBORDINATE OFFICERS
The Board of Directors may appoint, or may empower the Chairman of the
Board or the President to appoint, such other officers as the business of the
corporation may require, each of whom shall hold office for such period, have
such authority, and perform such duties as are provided in these Bylaws or as
the Board of Directors may from time to time determine.
5.4 REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of an officer under any contract of
employment, all officers serve at the pleasure of the Board of Directors and any
officer may be removed, either with or without cause, by the Board of Directors
at any regular or special meeting of the Board or, except in case of an officer
chosen by the Board of Directors, by any officer upon whom such power of removal
may be conferred by the Board of Directors.
Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the officer is a
party.
5.5 VACANCIES IN OFFICES
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these Bylaws for regular appointments to that office.
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5.6 CHAIRMAN OF THE BOARD
The Chairman of the Board, if such an officer be elected, shall, if
present, preside at meetings of the Board of Directors and exercise and perform
such other powers and duties as may from time to time be assigned by the Board
of Directors or as may be prescribed by these Bylaws. If there is no President,
then the Chairman of the Board shall also be the chief executive officer of the
corporation and shall have the powers and duties prescribed in Section 5.7 of
these Bylaws.
5.7 PRESIDENT
Subject to such supervisory powers, if any, as may be given by the
Board of Directors to the Chairman of the Board, if there be such an officer,
the President shall be the chief executive officer of the corporation and shall,
subject to the control of the Board of Directors, have general supervision,
direction, and control of the business and the officers of the corporation. The
President shall preside at all meetings of the shareholders and, in the absence
or nonexistence of a Chairman of the Board, at all meetings of the Board of
Directors. The President shall have the general powers and duties of management
usually vested in the office of President of a corporation, and shall have such
other powers and duties as may be prescribed by the Board of Directors or these
Bylaws.
5.8 VICE PRESIDENTS
In the absence or disability of the President, the Vice Presidents, if
any, in order of their rank as fixed by the Board of Directors or, if not
ranked, a Vice President designated by the Board of Directors, shall perform all
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 Presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the Board of Directors, these Bylaws,
the President or the Chairman of the Board.
5.9 SECRETARY
The Secretary shall keep or cause to be kept, at the principal
executive office of the corporation or such other place as the Board of
Directors may direct, a book of minutes of all meetings and actions of
Directors, committees of directors and shareholders. The minutes shall show the
time and place of each meeting, whether regular or special (and, if special, how
authorized and the notice given), the names of those present at directors'
meetings or committee meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal
executive office of the corporation or at the office of the corporation's
transfer agent or registrar, as determined by resolution of the Board of
Directors, a share register, or a duplicate share register, showing the
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names of all shareholders and their addresses, the number and classes of shares
held by each, the number and date of certificates evidencing such shares, and
the number and date of cancellation of every certificate surrendered for
cancellation.
The Secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the Board of Directors required to be given by law or
by these Bylaws. The Secretary shall keep the seal of the corporation, if one be
adopted, in safe custody and shall have such other powers and perform such other
duties as may be prescribed by the Board of Directors or by these Bylaws.
5.10 TREASURER
The Treasurer shall keep and maintain, or cause to be kept and
maintained, adequate and correct books and records of accounts of the properties
and business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, retained earnings,
and shares. The books of account shall at all reasonable times be open to
inspection by any director.
The Treasurer shall deposit all money and other valuables in the name
and to the credit of the corporation with such depositaries as may be designated
by the Board of Directors. The Treasurer shall disburse the funds of the
corporation as may be ordered by the Board of Directors, shall render to the
President and directors, whenever they request it, an account of all of his or
her transactions as Treasurer and of the financial condition of the corporation,
and shall have such other powers and perform such other duties as may be
prescribed by the Board of Directors or these Bylaws.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND OTHER AGENTS
6.1 INDEMNIFICATION OF DIRECTORS
The corporation shall, to the maximum extent and in the manner
permitted by the Code, indemnify each of its directors against expenses (as
defined in the Code), judgments, fines, settlements, and other amounts actually
and reasonably incurred in connection with any proceeding (as defined in the
Code), arising by reason of the fact that such person is or was a
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director of the corporation. For purposes of this Article VI, a director of the
corporation includes any person (i) who is or was a director of the corporation,
(ii) who is or was serving at the request of the corporation as a director of
another foreign or domestic corporation, partnership, joint venture, trust or
other enterprise, or (iii) who was a director of a corporation which was a
predecessor corporation of the corporation or of another enterprise at the
request of such predecessor corporation.
6.2 INDEMNIFICATION OF OTHERS
The corporation shall have the power, to the extent and in the manner
permitted by the Code, to indemnify each of its employees, officers, and agents
(other than directors) against expenses (as defined in the Code), judgments,
fines, settlements, and other amounts actually and reasonably incurred in
connection with any proceeding (as defined in of the Code), arising by reason of
the fact that such person is or was an employee, officer, or agent of the
corporation. For purposes of this Article VI, an employee or officer or agent of
the corporation (other than a director) includes any person (i) who is or was an
employee, officer, or agent of the corporation, (ii) who is or was serving at
the request of the corporation as an employee, officer, or agent of another
foreign or domestic corporation, partnership, joint venture, trust or other
enterprise, or (iii) who was an employee, officer, or agent of a corporation
which was a predecessor corporation of the corporation or of another enterprise
at the request of such predecessor corporation.
6.3 PAYMENT OF EXPENSES IN ADVANCE
Expenses and attorneys' fees incurred in defending any civil or
criminal action or proceeding for which indemnification is required pursuant to
Section 6.1, or if otherwise authorized by the Board of Directors, shall be paid
by the corporation in advance of the final disposition of such action or
proceeding upon receipt of an undertaking by or on behalf of the indemnified
party to repay such amount if it shall ultimately be determined that the
indemnified party is not entitled to be indemnified as authorized in this
Article VI.
6.4 INDEMNITY NOT EXCLUSIVE
The indemnification provided by this Article VI shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any Bylaw, agreement, vote of shareholders or directors or
otherwise, both as to action in an official capacity and as to action in another
capacity while holding such office. The rights to indemnity hereunder shall
continue as to a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors, and administrators
of the person.
6.5 INSURANCE INDEMNIFICATION
The corporation shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the corporation against any
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liability asserted against or incurred by such person in such capacity or
arising out of that person's status as such, whether or not the corporation
would have the power to indemnify that person against such liability under the
provisions of this Article VI.
6.6 CONFLICTS
No indemnification or advance shall be made under this Article VI,
except where such indemnification or advance is mandated by law or the order,
judgment or decree of any court of competent jurisdiction, in any circumstance
where it appears:
(1) That it would be inconsistent with a provision of the Articles
of Incorporation, these Bylaws, a resolution of the shareholders or an agreement
in effect at the time of the accrual of the alleged cause of the action asserted
in the proceeding in which the expenses were incurred or other amounts were
paid, which prohibits or otherwise limits indemnification; or
(2) That it would be inconsistent with any condition expressly
imposed by a court in approving a settlement.
6.7 RIGHT TO BRING SUIT
If a claim under this Article is not paid in full by the corporation
within 90 days after a written claim has been received by the corporation
(either because the claim is denied or because no determination is made), the
claimant may at any time thereafter bring suit against the corporation to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant shall also be entitled to be paid the expenses of prosecuting such
claim. The corporation shall be entitled to raise as a defense to any such
action that the claimant has not met the standards of conduct that make it
permissible under the Code for the corporation to indemnify the claimant for the
claim. Neither the failure of the corporation (including its Board of Directors,
independent legal counsel, or its shareholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
permissible in the circumstances because he or she has met the applicable
standard of conduct, if any, nor an actual determination by the corporation
(including its Board of Directors, independent legal counsel, or its
shareholders) that the claimant has not met the applicable standard of conduct,
shall be a defense to such action or create a presumption for the purposes of
such action that the claimant has not met the applicable standard of conduct.
6.8 INDEMNITY AGREEMENTS
The Board of Directors is authorized to enter into a contract with any
director, officer, employee or agent of the corporation, or any person who is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, including employee benefit plans, or any person who was a director,
officer, employee or agent of a corporation which was a predecessor corporation
of the corporation or of another enterprise at the request of such predecessor
corporation, providing for
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indemnification rights equivalent to or, if the Board of Directors so determines
and to the extent permitted by applicable law, greater than, those provided for
in this Article VI.
6.9 AMENDMENT, REPEAL OR MODIFICATION
Any amendment, repeal or modification of any provision of this Article
VI shall not adversely affect any right or protection of a director or agent of
the corporation existing at the time of such amendment, repeal or modification.
ARTICLE VII
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF SHARE REGISTER
The corporation shall keep either at its principal executive office or
at the office of its transfer agent or registrar (if either be appointed), as
determined by resolution of the Board of Directors, a record of its shareholders
listing the names and addresses of all shareholders and the number and class of
shares held by each shareholder.
A shareholder or shareholders of the corporation holding at least five
percent (5%) in the aggregate of the outstanding voting shares of the
corporation or who hold at least one percent (1%) of such voting shares and have
filed a Schedule 14B with the United States Securities and Exchange Commission
relating to the election of directors, shall have an absolute right to do either
or both of the following (i) inspect and copy the record of shareholders' names,
addresses, and shareholdings during usual business hours upon five (5) days'
prior written demand upon the corporation, or (ii) obtain from the transfer
agent for the corporation, upon written demand and upon the tender of such
transfer agent's usual charges for such list (the amount of which charges shall
be stated to the shareholder by the transfer agent upon request), a list of the
shareholders' names and addresses who are entitled to vote for the election of
directors, and their shareholdings, as of the most recent record date for which
it has been compiled or as of a date specified by the shareholder subsequent to
the date of demand. The list shall be made available on or before the later of
five (5) business days after the demand is received or the date specified
therein as the date as of which the list is to be compiled.
The record of shareholders shall also be open to inspection and copying
by any shareholder or holder of a voting trust certificate at any time during
usual business hours upon written demand on the corporation, for a purpose
reasonably related to the holder's interests as a shareholder or holder of a
voting trust certificate.
Any inspection and copying under this Section 7.1 may be made in person
or by an agent or attorney of the shareholder or holder of a voting trust
certificate making the demand.
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7.2 MAINTENANCE AND INSPECTION OF BYLAWS
The corporation shall keep at its principal executive office or, if its
principal executive office is not in the State of Nevada, at its principal
business office in Nevada, the original or a copy of these Bylaws as amended to
date, which shall be open to inspection by the shareholders at all reasonable
times during office hours. If the principal executive office of the corporation
is outside the State of Nevada and the corporation has no principal business
office in such state, then it shall, upon the written request of any
shareholder, furnish to such shareholder a copy of these Bylaws as amended to
date.
7.3 MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS
The accounting books and records and the minutes of proceedings of the
shareholders and the Board of Directors, and committees of the Board of
Directors shall be kept at such place or places as are designated by the Board
of Directors or, in absence of such designation, at the principal executive
office of the corporation. The minutes shall be kept in written form, and the
accounting books and records shall be kept either in written form or in any
other form capable of being converted into written form.
The minutes and accounting books and records shall be open to
inspection upon the written demand on the corporation of any shareholder or
holder of a voting trust certificate at any reasonable time during usual
business hours, for a purpose reasonably related to such holder's interests as a
shareholder or as the holder of a voting trust certificate. Such inspection by a
shareholder or holder of a voting trust certificate may be made in person or by
an agent or attorney and the right of inspection includes the right to copy and
make extracts. Such rights of inspection shall extend to the records of each
subsidiary corporation of the corporation.
7.4 INSPECTION BY DIRECTORS
Every director shall have the absolute right at any reasonable time to
inspect and copy all books, records, and documents of every kind and to inspect
the physical properties of the corporation and each of its subsidiary
corporations, domestic or foreign. Such inspection by a director may be made in
person or by an agent or attorney and the right of inspection includes the right
to copy and make extracts.
7.5 ANNUAL REPORT TO SHAREHOLDERS; WAIVER
The Board of Directors shall cause an annual report to be sent to the
shareholders not later than one hundred twenty (120) days after the close of the
fiscal year adopted by the corporation. Such report shall be sent to the
shareholders at least fifteen (15) (or, if sent by third-class mail, thirty-five
(35)) days prior to the annual meeting of shareholders to be held during the
next fiscal year and in the manner specified in Section 2.5 of these Bylaws for
giving notice to shareholders of the corporation.
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The annual report shall contain a balance sheet as of the end of the
fiscal year and an income statement and statement of changes in financial
position for the fiscal year, accompanied by any report thereon of independent
accountants or, if there is no such report, the certificate of an authorized
officer of the corporation that the statements were prepared without audit from
the books and records of the corporation.
The foregoing requirement of an annual report shall be waived so long
as the shares of the corporation are held by fewer than one hundred (100)
holders of record.
7.6 FINANCIAL STATEMENTS
If no annual report for the fiscal year has been sent to shareholders,
then the corporation shall, upon the written request of any shareholder made
more than one hundred twenty (120) days after the close of such fiscal year,
deliver or mail to the person making the request, within thirty (30) days
thereafter, a copy of a balance sheet as of the end of such fiscal year and an
income statement and statement of changes in financial position for such fiscal
year.
A shareholder or shareholders holding at least five percent (5%) of the
outstanding shares of any class of the corporation may make a written request to
the corporation for an income statement of the corporation for the three-month,
six-month or nine-month period of the current fiscal year ended more than thirty
(30) days prior to the date of the request and a balance sheet of the
corporation as of the end of that period. The statements shall be delivered or
mailed to the person making the request within thirty (30) days thereafter. A
copy of the statements shall be kept on file in the principal office of the
corporation for twelve (12) months and it shall be exhibited at all reasonable
times to any shareholder demanding an examination of the statements or a copy
shall be mailed to the shareholder. If the corporation has not sent to the
shareholders its annual report for the last fiscal year, the statements referred
to in the first paragraph of this Section 7.6 shall likewise be delivered or
mailed to the shareholder or shareholders within thirty (30) days after the
request.
The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report thereon, if any, of any independent
accountants engaged by the corporation or the certificate of an authorized
officer of the corporation that the financial statements were prepared without
audit from the books and records of the corporation.
7.7 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The Chairman of the Board, the President, any Vice President, the Chief
Financial Officer, the Secretary or Assistant Secretary of this corporation, or
any other person authorized by the Board of Directors or the President or a Vice
President, is authorized to vote, represent, and exercise on behalf of this
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of this corporation. The authority herein
granted may be exercised either by such person directly or by any other person
authorized to do so by proxy or power of attorney duly executed by such person
having the authority.
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ARTICLE VIII
GENERAL MATTERS
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING
For purposes of determining the shareholders entitled to receive
payment of any dividend or other distribution or allotment of any rights or
entitled to exercise any rights in respect of any other lawful action (other
than with respect to notice or voting at a shareholders meeting or action by
shareholders by written consent without a meeting), the Board of Directors may
fix, in advance, a record date, which shall not be more than sixty (60) days
prior to any such action. Only shareholders of record at the close of business
on the record date are entitled to receive the dividend, distribution or
allotment of rights, or to exercise the rights, as the case may be,
notwithstanding any transfer of any shares on the books of the corporation after
the record date, except as otherwise provided in the Articles of Incorporation
or the Code.
If the Board of Directors does not so fix a record date, then the
record date for determining shareholders for any such purpose shall be at the
close of business on the day on which the Board adopts the resolution relating
thereto or the sixtieth (60th) day prior to the date of that action, whichever
is later.
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS
From time to time, the Board of Directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the corporation, and only the persons so authorized
shall sign or endorse those instruments.
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED
The Board of Directors, except as otherwise provided in these Bylaws,
may authorize any officer or officers, or agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
corporation; such authority may be general or confined to specific instances.
Unless so authorized or ratified by the Board of Directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.
8.4 CERTIFICATES FOR SHARES
A certificate or certificates for shares of the corporation shall be
issued to each shareholder when any of such shares are fully paid. The Board of
Directors may authorize the issuance of certificates for shares partly paid
provided that these certificates shall state the total amount of the
consideration to be paid for them and the amount actually paid. All certificates
Page 28 of 70
<PAGE> 25
shall be signed in the name of the corporation by the Chairman of the Board or
the Vice Chairman of the Board or the President or a Vice President and by the
Chief Financial Officer or an Assistant Treasurer or the Secretary or an
Assistant Secretary, certifying the number of shares and the class or series of
shares owned by the shareholder. Any or all of the signatures on the certificate
may be by facsimile.
In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed on a certificate has ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the corporation with the same effect as if that person were an
officer, transfer agent or registrar at the date of issue.
8.5 LOST CERTIFICATES
Except as provided in this Section 8.5, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation or its transfer agent or registrar and cancelled
at the same time. The Board of Directors may, in case any share certificate or
certificate for any other security is lost, stolen or destroyed (as evidenced by
a written affidavit or affirmation of such fact), authorize the issuance of
replacement certificates on such terms and conditions as the Board may require;
the Board may require indemnification of the corporation secured by a bond or
other adequate security sufficient to protect the corporation against any claim
that may be made against it, including any expense or liability, on account of
the alleged loss, theft or destruction of the certificate or the issuance of the
replacement certificate.
8.6 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the Code shall govern the construction of these
Bylaws. Without limiting the generality of this provision, the singular number
includes the plural, the plural number includes the singular, and the term
person includes both a corporation and a natural person.
ARTICLE IX
AMENDMENTS
9.1 AMENDMENT BY SHAREHOLDERS
New Bylaws may be adopted or these Bylaws may be amended or repealed by
the vote or written consent of holders of a majority of the outstanding shares
entitled to vote; provided, however, that if the Articles of Incorporation of
the corporation set forth the number of authorized Directors of the corporation,
then the authorized number of Directors may be changed only by an amendment of
the Articles of Incorporation.
9.2 AMENDMENT BY DIRECTORS
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Subject to the rights of the shareholders as provided in Section 9.1 of
these Bylaws, Bylaws, other than a Bylaw or an amendment of a Bylaw changing the
authorized number of directors (except to fix the authorized number of directors
pursuant to a Bylaw providing for a variable number of directors), may be
adopted, amended or repealed by the Board of Directors.
9.3 RECORD OF AMENDMENTS
Whenever an amendment or new Bylaw is adopted, it shall be copied in
the book of minutes with the original Bylaws. If any Bylaw is repealed, the fact
of repeal, with the date of the meeting at which the repeal was enacted or
written consent was filed, shall be stated in said book.
ARTICLE X
INTERPRETATION
Reference in these Bylaws to any provision of the Nevada Corporations
Code shall be deemed to include all amendments thereof.
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<PAGE> 1
EXHIBIT 10.1
Consulting Agreement
LBC Capital Corporation
1608 Walnut Street
Suite 501
Philadelphia, PA 19103
TEL: 215-985-4000
FAX: 215-985-4926
June 15, 1999
EagleTech Communications, Inc.
305 S. Andrews Avenue
Suite 300
Fort Lauderdale, FL 33301
Attention: Robert Dobbs
Chief Executive Officer
This letter confirms the agreement ("Agreement") by EagleTech
Communications, Inc., and its affiliates (collectively the "Company") to retain
LBC Capital Corporation ("LBC") to provide the services described below on a
non-exclusive basis.
1. Services. The following summarizes the services to be provided by LBC.
1.1 LBC will advice the Company about "Transactions" (as defined
below) and screen corporations, individuals, mutual funds,
hedge funds, investors, investment partnerships, securities
firms, lending and other institutions identified by LBC
(collectively "Entities") which may engage in or provide a
Transaction to the Company. As used herein, the term
"Entities" also means and includes any party, which is
directly or indirectly connected with or related to one of the
Entities described above including, without limitation, all
affiliates as well as any referral from any of the Entities,
any client or customer of any of the Entities, and any
investor in any of the Entities.
1.2 Except as set forth below, all services provided by LBC under
this Agreement shall be at LBC's cost and risk. LBC's
compensation for consulting services consists of 1) a retainer
of $15,000 per month for six (6) months (first three (3)
months payable upon the signing of this Agreement), and 2)
100,000 restricted
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<PAGE> 2
common shares upon the signing of this Agreement. LBC shall
receive a "Transaction Fee" upon consummation of a Transaction
in any form which any Entities as provided in Section 4 below.
The consummation of a Transaction may or may not require the
services of LBC. At the sole discretion of the Company, LBC
shall also assist the Company with regard to the completion of
a new Business Plan. LBC will devote a minimum of 100 hours to
this activity and will be paid $20,000 payable $10,000 at the
time of the request by the Company and $10,000 upon the
satisfactory completion of the plan.
1.3 The Company affirms that LBC's activities are entirely on a
best efforts basis and that the Company perceives value, in
exchange for the consideration paid, by virtue of the
association with LBC and the possibility of resulting advice.
2. Term.
2.1 This Agreement shall take effect immediately and shall
continue in effect for a minimum term of one (1) year.
Thereafter the Agreement will remain in effect until
terminated by either party upon thirty (30) days prior written
notice to the other.
3.1 To assist LBC in performing its services, the Company will
provide LBC with such information regarding the Company and
its operations as the Company shall determine is proper and
appropriate and LBC shall be entitled to rely thereon. The
Company shall also promptly advise LBC of all communications
to or from Entities respecting potential Transactions.
4. Transaction Fee to LBC.
4.1 LBC shall receive a transaction fee ("LBC's Fee") comprised of
cash and warrants.
4.2 The cash portion of LBC's Fee shall equal eight (8%) percent
of the Transaction Amount (as defined below), and shall be
paid at the closing of each Transaction. Any portion of LBC's
Fee (cash or warrants) that is attributable to proceeds to be
received by the Company upon the occurrence of a future event,
or the satisfaction of a contingency, shall be paid when the
event occurs or the contingency is satisfied.
4.3 In addition to the cash portion of LBC's Fee as set forth
above, upon completion of one or more Transactions, for each
$1,000,000 of Transaction Amount, on a pro-rata basis, LBC or
its designee agrees to purchase, and the Company agrees to
sell for $2,500, a five (5) year warrant ("Warrant") equal to
one (1%) percent of the outstanding shares of the Company on a
fully diluted basis exercisable at one
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<PAGE> 3
hundred twenty-five (125%) percent of the lower of the average
closing price of the Company's common stock for the five (5)
trading days prior to the signing of this Agreement or the
five (5) trading days prior to the completion of a
Transaction. The Warrant will contain standard provisions as
to anti-dilution, cashless exercise, registration rights,
transferability, etc. Upon the completion of any Transaction,
LBC's Warrants will not exceed two and one-half (2.5%) percent
of the Company's outstanding shares on a fully diluted basis.
4.4 LBC will not be paid for any marketing or sales arrangements
entered into by the Company unless such arrangement includes
consideration paid or lent to the Company, joint venture
arrangements, etc.
4.5 In the event of the sale of the Company, a merger or
acquisition, LBC's Transaction Fees (cash and warrants) shall
be fifty (50%) percent of those stated in this Agreement, and
such compensation will be limited to LBC Entities as defined
in Section 1.1
4.6 In the event LBC identifies a bonafide investment firm which
completes a public offering or private placement and such
investment firm receives compensation from the Company for
such placement, LBC's Transaction fees (cash and shares of
common stock) shall be reduced to fifty (50%) percent of those
stated in this Agreement, and shall be further reduced by any
and all finders' fees paid to LBC by such investment firm.
4.7 LBC's Fee shall have been earned and shall be payable to LBC
upon consummation of any Transaction which occurs as a result
of this Agreement with any Entities in which a Transaction was
made in whole or in part (1) during the term of this Agreement
(hereafter "Phase I"), or (2) within twenty-four (24) months
following the effective termination date of this Agreement
(hereafter "Phase II") with regard to Entities with which LBC
or the Company has had any communications during Phase I, or
(3) within thirty-six (36) months following the effective date
of this Agreement with any Entity with which there has been a
Transaction during Phases I or II above.
5. Indemnification.
5.1 LBC shall assume that (a) all information furnished by the
Company or its representatives, as well as all information
contained in public documents issued by or for the Company or
made available to LBC by the Company, is complete and accurate
in all material respects, and does not omit any material fact
or information necessary to make the statements contained
therein not misleading, and (b) the Company has complied with
or, prior to closing, will comply with all applicable laws
relating to the issuance of securities. The Company will
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<PAGE> 4
indemnify and hold harmless LBC, its affiliates, successors,
assigns, directors, officers, agents, employees and their
heirs, executors, administrators and all persons, firms and
entities who might be claimed to be jointly or severally
liable with LBC ("Indemnified Parties") against any loss or
liability arising directly or indirectly from the Company's
activities.
5.2 The Company will indemnify and hold harmless the Indemnified
Parties from and against any and all losses, claims, damages,
liabilities, cost and expenses (including any legal fees and
costs incurred in connection with such claim) to which such
indemnified parties may become subject under any applicable
federal or state law or otherwise, except to the extent that
any such loss, claim, damage or liability, cost and expense is
finally judicially determined to have resulted from LBC's
negligence or misconduct in the performance of its services
hereunder.
5.3 If the Company fails to fulfill its obligations under this
Agreement, the Company will be responsible for resulting
damages, losses, and expenses, including legal expenses, if
any.
6. Transaction and Transaction Amount.
6.1 As used herein, the term "Transaction" means any business
agreement, arrangement, or transaction or series or
combinations thereof which may include sales or exchanges of
stock, warrants, or assets, or the making of loans, leases and
other arrangements of every type and description by which,
directly or indirectly, an interest in the Company, its
affiliates, or any business with common management with the
Company, or any of their respective assets, capital stock or
other securities, may be transferred including, without
limitation, a merger, acquisition, sale or exchange or stock
or assets, lease of assets, with or without purchase option,
joint venture, royalty or licensing arrangements, minority
investment or partnership.
6.2 As used herein, the term "Transaction Amount" shall mean the
gross amount of consideration exchanged or provided to or by
the Company or its shareholders, affiliates, or subsidiaries
in a Transaction, or any entities formed in or which results
from a Transaction. The Transaction Amount shall be cumulative
(e.g., if the Company receives initial consideration and then
subsequently received royalty and/or licensing fees, option or
warrant exercise funds, (however, whenever exercised or
converted into another Company's warrants or shares) etc.)
such that the Transaction Amount shall include all such
consideration.
7. General Provisions.
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<PAGE> 5
7.1 For the purposes of this Agreement, the term "Company"
includes any entity which acquired (by merger or otherwise)
any or substantially all of the assets and/or rights of the
Company, and the successors, newly formed entities or assigns
of the Company.
7.2 The headings on the various paragraphs of this Agreement are
solely intended to simplify the reading of this Agreement and
are not meant to impart any meaning to the Agreement.
7.3 LBC will not be responsible for any fees, commissions or
expenses payable to any other person, firm, or Entity.
7.4 This Agreement may not be amended or modified except in
writing and shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
8. Expenses.
8.1 Concurrent with the execution of this Agreement, the Company
will issue to LBC a non-accountable expense allowance equal to
$10,000. In addition, the Company will reimburse all
reasonable LBC expenses incurred on behalf of the Company not
to exceed $25,000 without prior written authorization of the
Company.
9. Acceptance and Effectiveness.
9.1 Nothing herein shall obligate the Company to enter into any
Transaction proposed by LBC.
9.2 Execution of this letter by the Company, and return of a
signed copy, by fax or otherwise to LBC completes this
Agreement between LBC and the Company.
If the foregoing is acceptable to you, please sign and return the
enclosed copy of this letter to my attention.
Very truly yours,
LBC Capital Corporation
By: /s/Harry Leopold
Harry Leopold
President
ACCEPTED:
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<PAGE> 6
Eagletech Communications, Inc.
By: /s/ Robert Dobbs Date: 6/15/99
Robert Dobbs
Eagletech Communications, Inc.
Page 36 of 70
<PAGE> 1
EXHIBIT 10.2
Service Agreement with BellSouth Telecommunications, Inc.
SERVICE AGREEMENT
The undersigned Subscriber requests BellSouth Telecommunications, Inc.
("Company") provide MegaLink service ("ML") at the central office and
Subscriber's location at: 305 S. Andrews Avenue, Suite 217, Fort Lauderdale,
Florida 33301 (954-462-1494).
Important tariff provisions relating to ML are set forth herein:
1. The Company will furnish, install, maintain and provide maintenance of
channel services for ML in accordance with the Company's lawfully filed
tariffs. The tariffs provide the basis for this Agreement with the
Subscriber. The Agreement period shall begin the day ML is installed.
2. The Subscriber agrees to pay the Company for the provisions of ML
("Service"). The Service shall be offered for variable rate periods
with rates based on lengths of 36 months (payment periods may be
selected from 24 months to 48 months at 36 month rates), 60 months
(payment periods may be selected from 49 months to 72 months at 60
month rates), or 84 months (payment periods may be selected from 73
months to 96 months at the 84 month rates). This monthly rate will
continue for the elected service period and will not be subject to
Company initiated change during such period.
The monthly rates for facility mileages, basic system capacity and
feature activation in effect at the time the Service is installed and/
or as of the service order application date will be in effect until the
expiration of the service period chosen by the Subscriber. Other rates
applicable to other services provided by the Company, including but not
limited to, individual exchange network access and private line channel
services, that are connected to ML, may be increased during this
period.
3. Recognition of previous service will be given to the Subscriber who
renews an existing contract arrangement, for the same or larger
system(s) and all associated rate elements at the same location(s),
provided that the length of the new contract arrangement is a minimum
twenty-four (24) month service period or equals/exceeds the remaining
service period of the original contract arrangement, whichever is
greater.
4. Recognition of previous service will be given to the month-to-month
Subscriber with a service date of January 1, 1994 or later who converts
to a contract arrangement, provided the minimum service period has been
met. For the Subscriber whose service date is
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<PAGE> 2
January 1, 1994 or earlier, recognition will be given for the previous
service back to January 1, 1994. For the Subscriber whose service date
is later than January 1, 1994, recognition for the previous service
will be given back to the actual service date.
5. The service period for this Agreement shall be twenty-four (24) months.
This agreement period includes _____ months for recognition of previous
service. The recurring and nonrecurring charges for items under this
Agreement are:
<TABLE>
<CAPTION>
Nonrecurring Recurring
------------ ---------
<S> <C> <C>
Local Channel (See Attached) _________
Interoffice Channel ____________ _________
</TABLE>
6. In the event that any item of the Service is terminated prior to the
expiration of the service period, the Subscriber shall pay a
termination liability charge as specified in the tariff. In Florida,
Georgia and South Carolina, moves of service that meet all criteria as
stated in B2.4 of the Private Line Services Tariff shall not be subject
to Termination Liability.
7. At the expiration of the service period, the Subscriber may continue
the Service according to renewal options provided under the tariff. If
the Subscriber does not elect an additional service period, or does not
request discontinuance of service, then the above Service will be
continued at the monthly rate currently in effect for month-to-month
rates. Service periods may also be renewed prior to expiration in
accordance with regulations and rates then in effect.
8. Suspension of service is not permitted for ML Service.
9. The Subscriber agrees to pay any added costs incurred by the Company
due to a Subscriber initiated change in the location of the ML prior to
the time it is placed in service.
10. In the event the Service requested by the Subscriber is canceled prior
to the establishment of Service, but after the date of ordering
reflected herein, the Subscriber is required to reimburse the Company
for all expenses incurred in handling the request before the notice of
cancellation is received. Such charge however, is not to exceed the sum
of all charges which would apply if the work involved in complying with
the request had been completed.
11. Equipment may be transferred to another Subscriber at the same location
upon written concurrence of the Company. The new Subscriber to whom the
Service is transferred
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<PAGE> 3
will be subject to all tariff provisions and equipment configurations
currently in effect for the present Subscriber.
12. This Agreement is effect when executed by the Subscriber and accepted
by the Company, and is subject to and controlled by the provisions of
the Company's lawfully filed tariffs, including any changes therein, as
may be made from time to time.
ADDRESS:
-------------------------------
SUBSCRIBER:
----------------------------
BY: TITLE:
------------------------------------- -----------------------------
BY: TITLE:
------------------------------------- -----------------------------
Page 39 of 70
<PAGE> 1
EXHIBIT 10.3
Employment Agreement with Robert J. Dobbs
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into this 30th day of September, 1999,
between EAGLETECH COMMUNICATIONS, INC., a Nevada Corporation, hereinafter called
the "Employer", and Robert J. Dobbs, hereinafter called the "Employee",
WITNESSETH:
WHEREAS, Employer is actively engaged in the business of
telecommunications.
WHEREAS, Employer wishes to employ Employee and Employee wishes to be
employed pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties, intending
to be legally bound, agree as follows:
(1) Position: Chief Executive Officer / President / Chief
Operating Officer
(2) Duties of Employee: Employee shall have the responsibilities
and perform the duties and to work in such other capacity as
the Corporation may direct from time to time and as is
consistent with the Employee's position as recited in Exhibit
"A" hereto and such Exhibit is made a part hereof as if fully
iterated herein. The Employee shall at all times use the
Employee's best efforts and shall promote the interests of the
Corporation. Employer reserves the right to change the nature
of Employee's duties, however Employee's duties and job title
shall always be of an executive nature and have those
opportunities for earnings and bonuses as recited in this
Agreement.
(3) Place of Employment:
- Employee shall be based at Employer's principal
office at 305 South Andrews Avenue, Ft. Lauderdale,
Florida 33301 and shall not be required to travel
away from that office on business more than sixty
(60) days during a calendar year. Employer agrees
that during the term of this Agreement, Employer
shall not assign Employee to work at any location
that is more than 100 miles from said principal
office without Employee's
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<PAGE> 2
consent.
- Moving Expenses. If Employer relocates its principal
office more than 50 miles from its current principal
offices, or requests that Employee relocate to one of
its offices which is more than 50 miles from its
current principal offices, and if the Employee
consents to relocate to that new location, Employer
shall promptly pay or reimburse Employee for all
reasonable moving expenses incurred by Employee in
connection with the relocation plus an amount to
reimburse Employee for any federal and state income
taxes that it has to pay on amounts reimbursed.
Employer shall indemnify Employee against any loss
incurred in connection with the sale of Employee's
principal residence. The amount of any loss shall be
determined by taking the difference between the
average of two appraisal prices set by two
independent appraisers agreed to by Employer and
Employee and the actual sales price of Employee's
principal residence so long as the sale transaction
is at "arms length" and the listing and marketing of
the sale of the residence was conducted in a manner
consistent with local real estate practices.
(4) Compensation of Employee:
- Base Salary. For all services rendered by Employee
under this Agreement, Employer agrees to pay Employee
an annual base salary of $110,000, which shall be
payable to Employee is such installments, but not
less frequently than monthly, as are to be consistent
with Employee's practice for its other employees.
Commencing on the below referenced dates the
following salary changes automatically go into
effect:
<TABLE>
<CAPTION>
<S> <C> <C>
- October 1, 2000 $125,000.00
- October 1, 2001 $135,000.00
</TABLE>
- Signing Bonus. Employer agrees to pay employee
$10,000.00 upon execution of this Agreement.
- Bonus / Incentive Compensation. In addition to the
base salary, Employee shall be entitled to receive
incentive compensation to be equal to three percent
(3.0%) of Employee's pre-tax earnings.
Notwithstanding the foregoing, Employee agrees the
Employer will not pay and the Employee will not
receive any bonuses until such time as Employer's
pre-tax earnings exceed $750,000.00 in any fiscal
year. Bonus payment is to be based on audited
financial statements and is to be considered fully
earned and due upon the completion of the Company's
FYE financial statements.
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<PAGE> 3
- Stock Options. Employee shall receive 100,000 of
restricted common stock options at a price and
vesting schedule to be determined by negotiation
between Employer and Employee no later than December
31, 1999.
- Reimbursement for Business Expenses. Employee shall
promptly pay or reimburse Employee for all reasonable
business expenses incurred by Employee in performing
Employee's duties and obligations under this
Agreement, but only if Employee properly accounts for
expenses in accordance with Employer's policies and
related tax statutes.
(5) Employee Benefits:
- Vacation Days. Employee shall be entitled to three
(3) weeks paid vacation each calendar year during the
term of this Agreement.
- Holidays. Employee shall be entitled to the same paid
holidays as authorized by Employer for its other
employees.
- Sick Days and Personal Absence Days. Employee shall
be entitled to the same number of paid sick days and
personal absence days (currently 15 and 5,
respectively) authorized by Employer for its other
employees.
- Employer / Employee Benefits Plans. Employee shall be
entitled to participate in and receive benefits from
all of Employer's employee benefit plans that are
currently maintained by Employer for its employees.
Employee shall be entitled to participate in and
receive benefits under any retirement plan,
profit-sharing plan, medical / health and accident
coverage, life insurance, automotive allowance
(currently $500.00 monthly) or other Employee benefit
plan that Employer establishes for the benefit of its
employees and after the date of this Agreement. No
amounts paid to Employee from an Employee benefit
plan shall count as compensation due Employee as base
salary or incentive compensation.
(6) Terms of Employment:
- Term of Employment. Employee's employment shall
commence on the date of execution by Employer and
shall continue for three (3) years
("end-of-employment date"), unless extended or
terminated sooner, as provided within this Agreement.
- Extension of Employment. On the end-of-employment
date and every two (2) years thereafter, Employee's
employment with Employer automatically
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<PAGE> 4
shall be extended for an additional two (2) years
unless, at least ninety (90) days prior to the
end-of-employment date, or successive two (2) year
anniversary thereof, Employer or Employee delivers to
the other a written notice that Employee's employment
with Employer is not to be extended.
- Termination of Employee. Employee may, but is not
obliged to, terminate this Agreement at any time
under the following circumstances:
- Employee's health becomes so impaired that
continued performance of Employee's duties
under this Agreement would be hazardous to
Employee's physical of mental health.
- Employer requires Employee to travel more
frequently than contemplated by this
Agreement.
- Employer becomes insolvent or files a
bankruptcy petition.
- Employee provides Employer with a minimum of
ninety (90) day's notice of intent to
terminate employment.
- Notice of Termination. Any termination of
Employee's employment by Employer or
Employee must be communicated to the other
party by a written notice of termination.
The notice must specify the provision of
this Agreement authorizing the termination
and must set forth in reasonable detail the
facts and circumstances establishing the
basis for termination of Employee's
employment.
- Date of Termination is Effective. If Employee's
employment terminates because this Agreement expires,
then Employee's employment will be considered two
have terminated on that expiration date. If
Employee's employment terminates because of
Employee's death, the Employee's employment will be
considered to have terminated on the date of
Employee's death. If Employee's employment is
terminated by Employee, then Employee's employment
will be considered to have terminated on the date
that notice of termination is given.
- Compensation Following Termination. If Employer
terminates Employee's employment, Employer shall pay
Employee immediately an amount equal to the remaining
balance of Employee's total compensation due under
this Agreement.
(7) Notices: Any notice given under this Agreement to either party
shall be in writing. Notices shall be deemed given when
delivered by hand or when mailed
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<PAGE> 5
by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the party at the address set
forth below:
<TABLE>
<CAPTION>
<S> <C>
Employee's Address: 1201 Camellia Lane
Weston, Florida 33326
Employer's Address: 305 South Andrews Avenue, Suite 305
Ft. Lauderdale, Florida 33301
</TABLE>
(8) Binding Agreement:
- Employer's Successors. The rights and obligations of
Employer under this Agreement shall inure to the
benefit of and shall be binding in all respects upon
the successors and assigns of Employer.
- Employee's Successors. This Agreement shall inure to
the benefit and be enforceable by and upon Employee's
personal representatives, legatees and heirs. If
Employee dies while amounts are still owed, such
amounts shall be paid to Employee's legatees or, if
no such person or persons have been designated, to
Employee's estate.
(9) Governing Law and Venue: This Agreement has been made in the
State of Florida and shall be construed and governed and
enforced in all respects in accordance with the laws of the
State of Florida and venue shall be Broward County Florida,
including Federal or State courts.
(10) Confidentiality and Trade Secrets:
- Employee's work for the Company will involve
confidential information and/or trade secrets of the
Company, including matters of a technical nature,
such as scientific, trade and engineering secrets,
formulas, processes, machines, inventions, and
research projects; matters of business nature, such
as information about costs, profits, markets, sales,
lists of customers and vendors, databases, computer
programs, and models; and other information of a
similar nature, including plans for future projects
and services. Employee agrees to keep secret all
confidential information and trade secrets of the
Company and agrees not to disclose, either directly
or indirectly, such information to anyone outside the
Company, during or after Employee's employment with
the Company except upon written consent of the Board
of Directors. Employee shall keep such matters
confidential after leaving the employment of the
Company, regardless of the reason for the separation
of employment. All records, files, software,
memoranda, reports price lists, customer lists,
drawings, plans, sketches,
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<PAGE> 6
documents, technical information, information on the
use, development and integration of Employer products
or materials, and the like (together with all copies
of such documents and things) relating to the
business of Employer, including any and all Trade
Secrets and Confidential Information, which Employee
shall use or prepare or come in contact with in the
course of, or as a result of, his employment shall,
as between the parties to this Agreement, remain the
sole property of Employer and Employee hereby conveys
such property to Employer. Employee agrees that he
shall return to Employer all such information and
materials, including all copies thereof, immediately
upon the termination of his employment with Employer
and, at the request of Employer, he shall cooperate
with Employer to assign such information and
materials to Employer and/or to register to obtain
patent, trademark, service mark or copyright
protection in favor of Employer with respect to all
such information and materials.
- For purposes of this Agreement, "Confidential
Information" means information, other than Trade
Secrets, which relates to Employer, Employer's
business, or Employer's suppliers or customers that
is not generally known by persons not employed by
Employer and which Employee has learned as a
consequence of Employee's relationship to Employer.
Such information includes, without limitation,
financial information, strategic plans and forecasts,
marketing plans and forecasts, customer lists,
customer pricing and order data, supplier lists, or
technical information relating to Employer's products
or services. Confidential information shall not
include information which has become generally
available to the public by the act of one who has the
right to disclose such information without violating
a legal right to Employer.
(11) Agreement Not to Compete:
- Employee covenants and agrees that during his
employment with the Company and six (6) month
following the payment of salary / benefits if
terminated by the Company, or for such foregoing
period as applicable following the Company obtaining
injunctive relief to prevent Employee's violation of
this Agreement, Employee shall not, either directly
or indirectly, engage in the following activities, or
assist others in such activities in any location
where the Company conducts its business at the time
of the termination of Employee's employment with the
Company:
- Employee acknowledges that the restrictions set forth
in this section are necessary to prevent the use and
disclosure of the Company's confidential information
as described and to be otherwise protect the
legitimate
Page 45 of 70
<PAGE> 7
business interests of the Company. Employee further
acknowledges that if Employee's employment with the
Company terminates for any reason, he will be able to
learn a livelihood without violating the foregoing
restrictions and that Employee's ability to earn a
livelihood without violating such restrictions is a
material condition to Employee's employment or
continued employment with the Company. Employee
agrees that this covenant is reasonable and shall
apply both during the term of Employee's employment
under this Agreement and thereafter as described
above, regardless of how said employment is
terminated.
- That pursuant to this Agreement, Employee will be
placed in a position of trust and responsibility and
he will have access to a substantial amount of
Confidential Information and Trade Secrets and that
Employer is placing Employee in such position and
giving Employee access to such information in
reliance upon Employee's not competing against
Employer or its subsidiaries, and not soliciting
Employer's or its subsidiaries' customers during the
time periods set forth in this Agreement.
- For purposes of this Agreement, "Trade Secrets" shall
mean all secret, propriety or confidential
information regarding Employer or its business,
whether developed by Employee or otherwise, including
any and all information not generally known to, or
ascertainable by, persons not employed by Employer,
this disclosure or knowledge of which would permit
those persons to derive actual or potential economic
value therefrom or to cause economic or financial
harm to Employer. "Trade Secrets" shall not include
information that has become generally available to
the public by the act of one who has the right to
disclose such information without violating a legal
right of Employer.
- Remedies. The Company and Employee agree that
irreparable injury would result from any breach by
Employee of the provisions in this Agreement,
specifically including the Agreement Not to Compete,
and that monetary damages would not provide adequate
relief for any such breach. Accordingly, in addition
to other remedies which may be available to the
Company, if Employee breaches this Agreement,
Employee agrees that injunctive relief in favor of
the Company is proper and that an injunction
restraining Employee from violating the terms of the
Agreement Not to Compete Section will not contrary to
the public health, safety or welfare.
(12) Severability: In the event that any provision of this
Agreement shall be determined to be invalid or unenforceable
for any reason, the remaining provisions shall be unaffected
thereby and shall remain in full force and effect.
Page 46 of 70
<PAGE> 8
Each party understands this Agreement constitutes the entire
agreement between the parties. It supersedes any prior
understandings or agreements between them upon the subjects
covered by this Agreement. There are no other warranties or
representations or agreements other than those set forth
herein.
Acknowledged and Accepted by:
Witness EMPLOYEE:
/s/ Summer Palmer BY: /s/ Robert J. Dobbs, Jr.
- ---------------------------------- --------------------------------
Summer Palmer Robert J. Dobbs, Jr.
EMPLOYER:
EAGLETECH COMMUNICATIONS, INC.
/s/ Christopher P. Flannery BY: /s/ Rodney Young
- ---------------------------------- --------------------------------
Christopher P. Flannery Title: Treasurer
BY: /s/ Robert Bergman
--------------------------------
Title: Assistant Secretary
Page 47 of 70
<PAGE> 9
EXHIBIT "A"
Chief Executive Officer / President / Chief Operating Officer
CORPORATE RESPONSIBILITIES: Direct management of all corporate operations as
delegated by the Company's Board of Directors to include but not limited to
sales, marketing, client support, human resources, accounting / finance,
software development, hardware support, corporate logistics and any other
function deemed critical to the Company meeting its corporate objective. In
addition to the above-referenced responsibilities, the following duties will be
performed as part of this Agreement:
- Implementation of a corporate marketing plan to allow for
distribution of the Company's service / products.
- Develop and maintain a relationship with Dun & Bradstreet to
allow for the timely assessment of the Company's credit rating
- Establish and monitor the Company's overall banking
relationship to include but not limited to commercial credit /
cash management / capital markets.
- Develop follow-up on all legal matters either pending or
future situations.
- Establish and maintain a relationship with a provider of
commercial insurance coverage for the Company and officers /
directors.
- Develop and maintain a relationship with the Company's
suppliers / vendors / strategic partners.
- Support all merger and acquisition activity in accordance with
maximizing corporate profitability and shareholder value.
- Complete a search for suitable commercial office space in
accordance with Company's requirements.
- Communicate with Company's Board on all pertinent matters and
provide required reporting.
Page 48 of 70
<PAGE> 1
EXHIBIT 10.4
Employment Agreement with Rodney Young
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into this 30th day of September, 1999,
between EAGLETECH COMMUNICATIONS, INC., a Nevada Corporation, hereinafter called
the "Employer", and Rodney E. Young, hereinafter called the "Employee",
WITNESSETH:
WHEREAS, Employer is actively engaged in the business of
telecommunications.
WHEREAS, Employer wishes to employ Employee and Employee wishes to be
employed pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties, intending
to be legally bound, agree as follows:
(1) Position: Executive Vice President/Director of Technology
(2) Duties of Employee: Employee shall have the responsibilities
and perform the duties and to work in such other capacity as
the Corporation may direct from time to time and as is
consistent with the Employee's position as Director of
Technology. The Employee shall at all times use the Employee's
best efforts and shall promote the interests of the
Corporation. Employer reserves the right to change the nature
of Employee's duties, however Employee's duties and job title
shall always be of an executive nature and have those
opportunities for earnings and bonuses as recited in this
Agreement.
(3) Place of Employment:
- Employee shall be based at Employer's principal
office at 305 South Andrews Avenue, Ft. Lauderdale,
Florida 33301 and shall not be required to travel
away from that office on business more than sixty
(60) days during a calendar year. Employer agrees
that during the term of this Agreement, Employer
shall not assign Employee to work at any location
that is more than 100 miles from said principal
office without Employee's consent.
Page 49 of 70
<PAGE> 2
- Moving Expenses. If Employer relocates its principal
office more than 50 miles from its current principal
offices, or requests that Employee relocate to one of
its offices which is more than 50 miles from its
current principal offices, and if the Employee
consents to relocate to that new location, Employer
shall promptly pay or reimburse Employee for all
reasonable moving expenses incurred by Employee in
connection with the relocation plus an amount to
reimburse Employee for any federal and state income
taxes that it has to pay on amounts reimbursed.
Employer shall indemnify Employee against any loss
incurred in connection with the sale of Employee's
principal residence. The amount of any loss shall be
determined by taking the difference between the
average of two appraisal prices set by two
independent appraisers agreed to by Employer and
Employee and the actual sales price of Employee's
principal residence so long as the sale transaction
is at "arms length" and the listing and marketing of
the sale of the residence was conducted in a manner
consistent with local real estate practices.
(4) Compensation of Employee:
- Base Salary. For all services rendered by Employee
under this Agreement, Employer agrees to pay Employee
an annual base salary of $90,000, which shall be
payable to Employee is such installments, but not
less frequently than monthly, as are to be consistent
with Employee's practice for its other employees.
Commencing on the below referenced dates the
following salary changes automatically go into
effect:
<TABLE>
<CAPTION>
<S> <C> <C>
- October 1, 2000 $100,000.00
- October 1, 2001 $110,000.00
</TABLE>
- Signing Bonus. Employer agrees to pay employee
$5,000.00 upon execution of this Agreement.
- Bonus/Incentive Compensation. In addition to the
base salary, Employee shall be entitled to receive
incentive compensation to be equal to one percent
(1.0%) of Employee's pre-tax earnings.
Notwithstanding the foregoing, Employee agrees the
Employer will not pay and the Employee will both
receive any bonuses until such time as Employer's
pre-tax earnings exceed $750,000.00 in any fiscal
year. Bonus payment is to be based on audited
financial statements and is to be considered fully
earned and due upon the completion of the Company's
FYE financial statements.
- Reimbursement for Business Expenses. Employee shall
promptly pay or
Page 50 of 70
<PAGE> 3
reimburse Employee for all reasonable business
expenses incurred by Employee in performing
Employee's duties and obligations under this
Agreement, but only if Employee properly accounts for
expenses in accordance with Employer's policies and
related tax statutes.
(5) Employee Benefits:
- Vacation Days. Employee shall be entitled to three
(3) weeks paid vacation each calendar year during the
term of this Agreement.
- Holidays. Employee shall be entitled to the same paid
holidays as authorized by Employer for its other
employees.
- Sick Days and Personal Absence Days. Employee shall
be entitled to the same number of paid sick days and
personal absence days (currently 15 and 5,
respectively) authorized by Employer for its other
employees.
- Employer/Employee Benefits Plans. Employee shall be
entitled to participate in and receive benefits from
all of Employer's employee benefit plans that are
currently maintained by Employer for its employees.
Employee shall be entitled to participate in and
receive benefits under any retirement plan,
profit-sharing plan, medical/health and accident
coverage, life insurance, automotive allowance
(currently $500.00 monthly) or other Employee benefit
plan that Employer establishes for the benefit of its
employees and after the date of this Agreement. No
amounts paid to Employee from an Employee benefit
plan shall count as compensation due Employee as base
salary or incentive compensation.
(6) Terms of Employment:
- Term of Employment. Employee's employment shall
commence on the date of execution by Employer and
shall continue for three (3) years
("end-of-employment date"), unless extended or
terminated sooner, as provided within this Agreement.
- Extension of Employment. On the end-of-employment
date and every two (2) years thereafter, Employee's
employment with Employer automatically shall be
extended for an additional two (2) years unless, at
least ninety (90) days prior to the end-of-employment
date, or successive two (2) year anniversary thereof,
Employer or Employee delivers to the other a written
notice that Employee's employment with Employer is
not to be extended.
- Termination of Employee. Employee may, but is not
obliged to, terminate
Page 51 of 70
<PAGE> 4
this Agreement at any time under the following
circumstances:
- Employee's health becomes so impaired that continued
performance of Employee's duties under this Agreement
would be hazardous to Employee's physical or mental
health.
- Employer requires Employee to travel more frequently
than contemplated by this Agreement.
- Employer becomes insolvent or files a bankruptcy
petition.
- Employee provides Employer with a minimum of ninety
(90) day's notice of intent to terminate employment.
- Notice of Termination. Any termination of Employee's
employment by Employer or Employee must be
communicated to the other party by a written notice
of termination. The notice must specify the provision
of this Agreement authorizing the termination and
must set forth in reasonable detail the facts and
circumstances establishing the basis for termination
of Employee's employment.
- Date of Termination is Effective. If Employee's employment
terminates because this Agreement expires, then Employee's
employment will be considered to have terminated on that
expiration date. If Employee's employment terminates because
of Employee's death, the Employee's employment will be
considered to have terminated on the date of Employee's death.
If Employee's employment is terminated by Employee, then
Employee's employment will be considered to have terminated on
the date that notice of termination is given.
- Compensation Following Termination. If Employer terminates
Employee's employment, Employer shall pay Employee immediately
an amount equal to the remaining balance of Employee's total
compensation due under this Agreement.
(7) Notices: Any notice given under this Agreement to either party
shall be in writing. Notices shall be deemed given when
delivered by hand or when mailed by registered or certified
mail, return receipt requested, postage prepaid, and addressed
to the party at the address set forth below:
<TABLE>
<S> <C> <C>
Employee's Address: 7241 NW 6th Street
Plantation, Florida 33317
</TABLE>
Page 52 of 70
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C> <C>
Employer's Address: 305 South Andrews Avenue, Suite 305
Ft. Lauderdale, Florida 33301
</TABLE>
(8) Binding Agreement:
- Employer's Successors. The rights and obligations of
Employer under this Agreement shall inure to the
benefit of and shall be binding in all respects upon
the successors and assigns of Employer.
- Employee's Successors. This Agreement shall inure to
the benefit and be enforceable by and upon Employee's
personal representatives, legatees and heirs. If
Employee dies while amounts are still owed, such
amounts shall be paid to Employee's legatees or, if
no such person or persons have been designated, to
Employee's estate.
(9) Governing Law and Venue: This Agreement has been made in the
State of Florida and shall be construed and governed and
enforced in all respects in accordance with the laws of the
State of Florida and venue shall be Broward County Florida,
including Federal or State courts.
(10) Confidentiality and Trade Secrets:
- Employee's work for the Company will involve
confidential information and/or trade secrets of the
Company, including matters of a technical nature,
such as scientific, trade and engineering secrets,
formulas, processes, machines, inventions, and
research projects; matters of business nature, such
as information about costs, profits, markets, sales,
lists of customers and vendors, databases, computer
programs, and models; and other information of a
similar nature, including plans for future projects
and services. Employee agrees to keep secret all
confidential information and trade secrets of the
Company and agrees not to disclose, either directly
or indirectly, such information to anyone outside the
Company, during or after Employee's employment with
the Company except upon written consent of the Board
of Directors. Employee shall keep such matters
confidential after leaving the employment of the
Company, regardless of the reason for the separation
of employment. All records, files, software,
memoranda, reports price lists, customer lists,
drawings, plans, sketches, documents, technical
information, information on the use, development and
integration of Employer products or materials, and
the like (together with all copies of such documents
and things) relating to the business of Employer,
including any and all Trade Secrets and Confidential
Information, which Employee shall use or prepare or
come in contact with in the course of, or as a result
of, his employment shall, as between the
Page 53 of 70
<PAGE> 6
parties to this Agreement, remain the sole property
of Employer and Employee hereby conveys such property
to Employer. Employee agrees that he shall return to
Employer all such information and materials,
including all copies thereof, immediately upon the
termination of his employment with Employer and, at
the request of Employer, he shall cooperate with
Employer to assign such information and materials to
Employer and/or to register to obtain patent,
trademark, service mark or copyright protection in
favor of Employer with respect to all such
information and materials.
- For purposes of this Agreement, "Confidential
Information" means information, other than Trade
Secrets, which relates to Employer, Employer's
business, or Employer's suppliers or customers that
is not generally known by persons not employed by
Employer and which Employee has learned as a
consequence of Employee's relationship to Employer.
Such information includes, without limitation,
financial information, strategic plans and forecasts,
marketing plans and forecasts, customer lists,
customer pricing and order data, supplier lists, or
technical information relating to Employer's products
or services. Confidential information shall not
include information which has become generally
available to the public by the act of one who has the
right to disclose such information without violating
a legal right to Employer.
(11) Agreement Not to Compete:
- Employee covenants and agrees that during his
employment with the Company and six (6) month
following the payment of salary/benefits if
terminated by the Company, or for such foregoing
period as applicable following the Company obtaining
injunctive relief to prevent Employee's violation of
this Agreement, Employee shall not, either directly
or indirectly, engage in the following activities, or
assist others in such activities in any location
where the Company conducts its business at the time
of the termination of Employee's employment with the
Company:
- Employee acknowledges that the restrictions set forth
in this section are necessary to prevent the use and
disclosure of the Company's confidential information
as described and to be otherwise protect the
legitimate business interests of the Company.
Employee further acknowledges that if Employee's
employment with the Company terminates for any
reason, he will be able to learn a livelihood without
violating the foregoing restrictions and that
Employee's ability to earn a livelihood without
violating such restrictions is a material condition
to Employee's employment or continued employment with
the Company. Employee
Page 54 of 70
<PAGE> 7
agrees that this covenant is reasonable and shall
apply both during the term of Employee's employment
under this Agreement and thereafter as described
above, regardless of how said employment is
terminated.
- That pursuant to this Agreement, Employee will be
placed in a position of trust and responsibility and
he will have access to a substantial amount of
Confidential Information and Trade Secrets and that
Employer is placing Employee in such position and
giving Employee access to such information in
reliance upon Employee's not competing against
Employer or its subsidiaries, and not soliciting
Employer's or its subsidiaries' customers during the
time periods set forth in this Agreement.
- For purposes of this Agreement, "Trade Secrets" shall
mean all secret, propriety or confidential
information regarding Employer or its business,
whether developed by Employee or otherwise, including
any and all information not generally known to, or
ascertainable by, persons not employed by Employer,
this disclosure or knowledge of which would permit
those persons to derive actual or potential economic
value therefrom or to cause economic or financial
harm to Employer. "Trade Secrets" shall not include
information that has become generally available to
the public by the act of one who has the right to
disclose such information without violating a legal
right of Employer.
- Remedies. The Company and Employee agree that
irreparable injury would result from any breach by
Employee of the provisions in this Agreement,
specifically including the Agreement Not to Compete,
and that monetary damages would not provide adequate
relief for any such breach. Accordingly, in addition
to other remedies which may be available to the
Company, if Employee breaches this Agreement,
Employee agrees that injunctive relief in favor of
the Company is proper and that an injunction
restraining Employee from violating the terms of the
Agreement Not to Compete Section will not contrary to
the public health, safety or welfare.
(12) Severability: In the event that any provision of this
Agreement shall be determined to be invalid or unenforceable
for any reason, the remaining provisions shall be unaffected
thereby and shall remain in full force and effect. Each party
understands this Agreement constitutes the entire agreement
between the parties. It supersedes any prior understandings or
agreements between them upon the subjects covered by this
Agreement. There are no other warranties or representations or
agreements other than those set forth herein.
Acknowledged and Accepted by:
Page 55 of 70
<PAGE> 8
Witness EMPLOYEE:
/s/ Summer Palmer /s/ Rodney E. Young
- ---------------------------------- -----------------------------------
Summer Palmer Rodney E. Young
EMPLOYER:
EAGLETECH COMMUNICATIONS, INC.
/s/ Christopher P. Flannery BY:/s/ Robert Dobbs
- ---------------------------------- --------------------------------
Christopher P. Flannery Title: President
BY: /s/ Robert Bergman
--------------------------------
Title: Assistant Secretary
Page 56 of 70
<PAGE> 1
EXHIBIT 10.5
Employment Agreement with Robert Bergman
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into this 30th day of September, 1999,
between EAGLETECH COMMUNICATIONS, INC., a Nevada Corporation, hereinafter called
the "Employer", and Robert A. Bergman, hereinafter called the "Employee",
WITNESSETH:
WHEREAS, Employer is actively engaged in the business of
telecommunications.
WHEREAS, Employer wishes to employ Employee and Employee wishes to be
employed pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties, intending
to be legally bound, agree as follows:
(1) Position: Executive Vice President/Director of Sales
(2) Duties of Employee: Employee shall have the responsibilities
and perform the duties and to work in such other capacity as
the Corporation may direct from time to time and as is
consistent with the Employee's position as recited in Exhibit
"A" hereto and such Exhibit is made a part hereof as if fully
iterated herein. The Employee shall at all times use the
Employee's best efforts and shall promote the interests of the
Corporation. Employer reserves the right to change the nature
of Employee's duties, however Employee's duties and job title
shall always be of an executive nature and have those
opportunities for earnings and bonuses as recited in this
Agreement.
(3) Place of Employment:
- Employee shall be based at Employer's principal
office at 305 South Andrews Avenue, Ft. Lauderdale,
Florida 33301 and at home office located at 123
Kilburn Drive, Cherry Hill, New Jersey 08003, shall
not be required to travel away from these offices on
business more than one hundred (100) days during a
calendar year. Employer agrees that during the term
of this Agreement, Employer shall not assign Employee
to work at any location that is more than 100 miles
from said principal offices
Page 57 of 70
<PAGE> 2
without Employee's consent.
- Moving Expenses. If Employer relocates its principal
office more than 50 miles from its current principal
offices, or requests that Employee relocate to one of
its offices which is more than 50 miles from its
current principal offices, and if the Employee
consents to relocate to that new location, Employer
shall promptly pay or reimburse Employee for all
reasonable moving expenses incurred by Employee in
connection with the relocation plus an amount to
reimburse Employee for any federal and state income
taxes that it has to pay on amounts reimbursed.
Employer shall indemnify Employee against any loss
incurred in connection with the sale of Employee's
principal residence. The amount of any loss shall be
determined by taking the difference between the
average of two appraisal prices set by two
independent appraisers agreed to by Employer and
Employee and the actual sales price of Employee's
principal residence so long as the sale transaction
is at "arms length" and the listing and marketing of
the sale of the residence was conducted in a manner
consistent with local real estate practices.
(4) Compensation of Employee:
- Base Salary. For all services rendered by Employee
under this Agreement, Employer agrees to pay Employee
an annual base salary of $100,000, which shall be
payable to Employee is such installments, but not
less frequently than monthly, as are to be consistent
with Employee's practice for its other employees.
Commencing on the below referenced dates the
following salary changes automatically go into
effect:
<TABLE>
<S> <C> <C>
- October 1, 2000 $115,000.00
- October 1, 2001 $125,000.00
</TABLE>
- Signing Bonus. Employer agrees to pay employee
$7,500.00 upon execution of this Agreement.
- Bonus/Incentive Compensation. In addition to the
base salary, Employee shall be entitled to receive
incentive compensation to be equal to two percent
(2.0%) of Employee's pre-tax earnings.
Notwithstanding the foregoing, Employee agrees the
Employer will not pay and the Employee will both
receive any bonuses until such time as Employer's
pre-tax earnings exceed $750,000.00 in any fiscal
year. Bonus payment is to be based on audited
financial statements and is to be considered fully
earned and due upon the completion of the Company's
FYE financial statements.
Page 58 of 70
<PAGE> 3
- Stock Options. Employee shall receive 100,000 of
restricted common stock options at a price and
vesting schedule to be determined by negotiation
between Employer and Employee no later than December
31, 1999.
- Reimbursement for Business Expenses. Employee shall
promptly pay or reimburse Employee for all reasonable
business expenses incurred by Employee in performing
Employee's duties and obligations under this
Agreement, but only if Employee properly accounts for
expenses in accordance with Employer's policies and
related tax statutes.
(5) Employee Benefits:
- Vacation Days. Employee shall be entitled to three
(3) weeks paid vacation each calendar year during the
term of this Agreement.
- Holidays. Employee shall be entitled to the same paid
holidays as authorized by Employer for its other
employees.
- Sick Days and Personal Absence Days. Employee shall
be entitled to the same number of paid sick days and
personal absence days (currently 15 and 5,
respectively) authorized by Employer for its other
employees.
- Employer/Employee Benefits Plans. Employee shall be
entitled to participate in and receive benefits from
all of Employer's employee benefit plans that are
currently maintained by Employer for its employees.
Employee shall be entitled to participate in and
receive benefits under any retirement plan,
profit-sharing plan, medical/health and accident
coverage, life insurance, automotive allowance
(currently $500.00 monthly) or other Employee benefit
plan that Employer establishes for the benefit of its
employees and after the date of this Agreement. No
amounts paid to Employee from an Employee benefit
plan shall count as compensation due Employee as base
salary or incentive compensation.
(6) Terms of Employment:
- Term of Employment. Employee's employment shall
commence on the date of execution by Employer and
shall continue for three (3) years
("end-of-employment date"), unless extended or
terminated sooner, as provided within this Agreement.
- Extension of Employment. On the end-of-employment
date and every two (2) years thereafter, Employee's
employment with Employer automatically
Page 59 of 70
<PAGE> 4
shall be extended for an additional two (2) years
unless, at least ninety (90) days prior to the
end-of-employment date, or successive two (2) year
anniversary thereof, Employer or Employee delivers to
the other a written notice that Employee's employment
with Employer is not to be extended.
- Termination of Employee. Employee may, but is not
obliged to, terminate this Agreement at any time
under the following circumstances:
- Employee's health becomes so impaired that
continued performance of Employee's duties
under this Agreement would be hazardous to
Employee's physical of mental health.
- Employer requires Employee to travel more
frequently than contemplated by this
Agreement.
- Employer becomes insolvent or files a
bankruptcy petition.
- Employee provides Employer with a minimum of
ninety (90) day's notice of intent to
terminate employment.
- Notice of Termination. Any termination of
Employee's employment by Employer or
Employee must be communicated to the other
party by a written notice of termination.
The notice must specify the provision of
this Agreement authorizing the termination
and must set forth in reasonable detail the
facts and circumstances establishing the
basis for termination of Employee's
employment.
- Date of Termination is Effective. If Employee's
employment terminates because this Agreement expires,
then Employee's employment will be considered two
have terminated on that expiration date. If
Employee's employment terminates because of
Employee's death, the Employee's employment will be
considered to have terminated on the date of
Employee's death. If Employee's employment is
terminated by Employee, then Employee's employment
will be considered to have terminated on the date
that notice of termination is given.
- Compensation Following Termination. If Employer
terminates Employee's employment, Employer shall pay
Employee immediately an amount equal to the remaining
balance of Employee's total compensation due under
this Agreement.
(7) Notices: Any notice given under this Agreement to either party
shall be in writing. Notices shall be deemed given when
delivered by hand or when mailed
Page 60 o 70
<PAGE> 5
by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the party at the address set
forth below:
<TABLE>
<CAPTION>
<S> <C>
Employee's Address: 123 Kilburn Drive
Cherry Hill, New Jersey 08003
Employer's Address: 305 South Andrews Avenue, Suite 305
Ft. Lauderdale, Florida 33301
</TABLE>
(8) Binding Agreement:
- Employer's Successors. The rights and obligations of
Employer under this Agreement shall inure to the
benefit of and shall be binding in all respects upon
the successors and assigns of Employer.
- Employee's Successors. This Agreement shall inure to
the benefit and be enforceable by and upon Employee's
personal representatives, legatees and heirs. If
Employee dies while amounts are still owed, such
amounts shall be paid to Employee's legatees or, if
no such person or persons have been designated, to
Employee's estate.
(9) Governing Law and Venue: This Agreement has been made in the
State of Florida and shall be construed and governed and
enforced in all respects in accordance with the laws of the
State of Florida and venue shall be Broward County Florida,
including Federal or State courts.
(10) Confidentiality and Trade Secrets:
- Employee's work for the Company will involve
confidential information and/or trade secrets of the
Company, including matters of a technical nature,
such as scientific, trade and engineering secrets,
formulas, processes, machines, inventions, and
research projects; matters of business nature, such
as information about costs, profits, markets, sales,
lists of customers and vendors, databases, computer
programs, and models; and other information of a
similar nature, including plans for future projects
and services. Employee agrees to keep secret all
confidential information and trade secrets of the
Company and agrees not to disclose, either directly
or indirectly, such information to anyone outside the
Company, during or after Employee's employment with
the Company except upon written consent of the Board
of Directors. Employee shall keep such matters
confidential after leaving the employment of the
Company, regardless of the reason for the separation
of employment. All records, files, software,
memoranda, reports price lists, customer lists,
drawings, plans, sketches,
Page 61 of 70
<PAGE> 6
documents, technical information, information on the
use, development and integration of Employer products
or materials, and the like (together with all copies
of such documents and things) relating to the
business of Employer, including any and all Trade
Secrets and Confidential Information, which Employee
shall use or prepare or come in contact with in the
course of, or as a result of, his employment shall,
as between the parties to this Agreement, remain the
sole property of Employer and Employee hereby conveys
such property to Employer. Employee agrees that he
shall return to Employer all such information and
materials, including all copies thereof, immediately
upon the termination of his employment with Employer
and, at the request of Employer, he shall cooperate
with Employer to assign such information and
materials to Employer and/or to register to obtain
patent, trademark, service mark or copyright
protection in favor of Employer with respect to all
such information and materials.
- For purposes of this Agreement, "Confidential
Information" means information, other than Trade
Secrets, which relates to Employer, Employer's
business, or Employer's suppliers or customers that
is not generally known by persons not employed by
Employer and which Employee has learned as a
consequence of Employee's relationship to Employer.
Such information includes, without limitation,
financial information, strategic plans and forecasts,
marketing plans and forecasts, customer lists,
customer pricing and order data, supplier lists, or
technical information relating to Employer's products
or services. Confidential information shall not
include information which has become generally
available to the public by the act of one who has the
right to disclose such information without violating
a legal right to Employer.
(11) Agreement Not to Compete:
- Employee covenants and agrees that during his
employment with the Company and six (6) month
following the payment of salary/benefits if
terminated by the Company, or for such foregoing
period as applicable following the Company obtaining
injunctive relief to prevent Employee's violation of
this Agreement, Employee shall not, either directly
or indirectly, engage in the following activities, or
assist others in such activities in any location
where the Company conducts its business at the time
of the termination of Employee's employment with the
Company:
- Employee acknowledges that the restrictions set forth
in this section are necessary to prevent the use and
disclosure of the Company's confidential information
as described and to be otherwise protect the
legitimate
Page 62 of 70
<PAGE> 7
business interests of the Company. Employee further
acknowledges that if Employee's employment with the
Company terminates for any reason, he will be able to
learn a livelihood without violating the foregoing
restrictions and that Employee's ability to earn a
livelihood without violating such restrictions is a
material condition to Employee's employment or
continued employment with the Company. Employee
agrees that this covenant is reasonable and shall
apply both during the term of Employee's employment
under this Agreement and thereafter as described
above, regardless of how said employment is
terminated.
- That pursuant to this Agreement, Employee will be
placed in a position of trust and responsibility and
he will have access to a substantial amount of
Confidential Information and Trade Secrets and that
Employer is placing Employee in such position and
giving Employee access to such information in
reliance upon Employee's not competing against
Employer or its subsidiaries, and not soliciting
Employer's or its subsidiaries' customers during the
time periods set forth in this Agreement.
- For purposes of this Agreement, "Trade Secrets" shall
mean all secret, propriety or confidential
information regarding Employer or its business,
whether developed by Employee or otherwise, including
any and all information not generally known to, or
ascertainable by, persons not employed by Employer,
this disclosure or knowledge of which would permit
those persons to derive actual or potential economic
value therefrom or to cause economic or financial
harm to Employer. "Trade Secrets" shall not include
information that has become generally available to
the public by the act of one who has the right to
disclose such information without violating a legal
right of Employer.
- Remedies. The Company and Employee agree that
irreparable injury would result from any breach by
Employee of the provisions in this Agreement,
specifically including the Agreement Not to Compete,
and that monetary damages would not provide adequate
relief for any such breach. Accordingly, in addition
to other remedies which may be available to the
Company, if Employee breaches this Agreement,
Employee agrees that injunctive relief in favor of
the Company is proper and that an injunction
restraining Employee from violating the terms of the
Agreement Not to Compete Section will not contrary to
the public health, safety or welfare.
(12) Severability: In the event that any provision of this
Agreement shall be determined to be invalid or unenforceable
for any reason, the remaining provisions shall be unaffected
thereby and shall remain in full force and effect.
Page 63 of 70
<PAGE> 8
Each party understands this Agreement constitutes the entire
agreement between the parties. It supersedes any prior
understandings or agreements between them upon the subjects
covered by this Agreement. There are no other warranties or
representations or agreements other than those set forth
herein.
Page 64 of 70
<PAGE> 9
Acknowledged and Accepted by:
Witness EMPLOYEE:
/s/Summer Palmer BY:/s/ Robert Bergman
- ---------------------------------- --------------------------------
Summer Palmer Robert A. Bergman
EMPLOYER:
EAGLETECH COMMUNICATIONS, INC.
/s/ Christopher P. Flannery BY: /s/ Robert Dobbs
- ---------------------------------- --------------------------------
Christopher P. Flannery Title: President
BY: /s/ Rodney Young
--------------------------------
Title: Secretary
Page 65 of 70
<PAGE> 10
EXHIBIT "A"
Executive Vice President/Director of Marketing and Sales
CORPORATE RESPONSIBILITIES: Direct management of all corporate marketing and
sales operations as delegated by the Company's CEO to include but not limited to
sales, marketing, and client support. In addition to the above-referenced
responsibilities, the following duties will be performed as part of this
Agreement:
- Implementation of a corporate marketing plan to allow for
distribution of the Company's service/products.
- Establishment and coordination related to the development and
ongoing support of the Company's corporate website.
- Assist with the search and future development of a corporate
strategic partner(s).
- Develop and expand client relationships.
- Develop and initiate a national marketing program to allow for
the distribution of above-referenced products and services to
targeted regions within the United States and select foreign
countries.
- Assist with the development of a sales incentive plan based on
corporate revenue and profitability.
- Provide timely sales and marketing reports to corporate
management.
- Communicate with Company's Board on all pertinent matters and
provide required reporting as delegated by the Company's CEO.
Page 66 of 70
<PAGE> 1
EXHIBIT 21.1
Subsidiaries of the Registrant
The Registrant's sole subsidiary is Eagletech Communications, Inc., a Florida
corporation, which is 100% owned by the Registrant.
Page 67 of 70
<PAGE> 1
EXHIBIT 23.1
Consent of Sweeney, Gates & Co.
{Letterhead of Sweeney, Gates & Co.]
To Whom It May Concern: December 6, 1999
The firm of Sweeney, Gates & Co., Certified Public Accountants, consents to the
inclusion of their report of September 28, 1999, on the Financial Statements of
Eagletech Communications, Inc., as of March 31, 1999, 1999, in any filings that
are necessary now or in the near future with the U.S. Securities and Exchange
Commission.
Very truly yours,
SWEENEY, GATES & CO.
Page 68 of 70
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED JUNE 30, 1999 QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 881,648
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 881,648
<PP&E> 5,352
<DEPRECIATION> 0
<TOTAL-ASSETS> 888,500
<CURRENT-LIABILITIES> 338,822
<BONDS> 0
0
0
<COMMON> 9,678,353
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 888,500
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,057,700
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,105
<INCOME-PRETAX> (8,063,805)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,063,805)
<EPS-BASIC> (1.41)
<EPS-DILUTED> (1.41)
</TABLE>
