<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to _________
Commission file Number 0-29275
EAGLETECH COMMUNICATIONS, INC.
(Name of Small Business Issuer in its charter)
Nevada 13-4020694
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
305 South Andrews Avenue, Fort Lauderdale, Florida 33301
(Address of principal executive offices) (Zip code)
Issuer's telephone number: (954) 462-1494
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No[ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 10,346,573 Shares of Common Stock
Transitional Small Business Disclosure Format (Check One): Yes [ ] No [X]
1
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
EAGLETECH COMMUNICATIONS, INC.
(a development stage company)
BALANCE SHEET
SEPTEMBER 30, 2000
<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 584,042
Prepaid insurance 39,284
------------
Total current assets 623,326
------------
Property and equipment 672,370
Less accumulated deprecation (87,342)
------------
585,028
------------
Patents, net 20,806
------------
$ 1,229,160
------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 7,431
Stock dividend payable 78,247
Prepaid interest 32,000
Judgments payable 24,638
------------
Total current liabilities 142,316
------------
Long term-portion of prepaid interest 20,000
------------
Stockholders' equity :
Series A convertible preferred stock, $.01 par value, 10,000,000
shares authorized; 321,389 shares issued and outstanding 3,214
Common stock, $.0001 par value, 100,000,000 shares
authorized; 10,346,573 shares issued and outstanding 1,035
Additional paid-in capital 14,082,950
Deferred compensation (69,253)
Preferred stock receivable (400,000)
Deficit accumulated during the development stage (12,551,102)
------------
Stockholders' equity 1,066,844
------------
$ 1,229,160
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 2
<PAGE> 3
EAGLETECH COMMUNICATIONS, INC.
(a development stage company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
December 20, 1996
Three months ended Six months ended Inception
September 30, September 30, to September 30,
2000 1999 2000 1999 2000
------------ ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Sales $ -- $ -- $ -- $ -- $ --
Operating expenses:
Selling, general and administrative 621,948 8,257,188 1,466,326 8,771,120 2,788,225
Research and development 28,786 -- 56,857 -- 208,266
Stock issued for services -- 7,543,768 -- -- 9,500,388
------------ ------------ ------------ ----------- ------------
Total operating expenses 650,734 15,800,956 1,523,183 8,771,120 12,496,879
------------ ------------ ------------ ----------- ------------
Loss from operations (650,734) (15,800,956) (1,523,183) (8,771,120) (12,496,879)
------------ ------------ ------------ ----------- ------------
Other income (expense):
Interest expense (616) (1,034) (1,232) (5,071) (35,943)
Interest income 20,953 5,081 35,413 5,081 50,453
Gain on settlement of judgments -- -- -- -- 32,476
Loss on disposal of property and equipment -- -- -- -- (22,962)
------------ ------------ ------------ ----------- ------------
Total other income (expense) 20,337 4,047 34,181 10 24,024
------------ ------------ ------------ ----------- ------------
Net loss (630,397) (15,796,909) (1,489,002) (8,771,110) (12,472,855)
Preferred stock dividends (78,247) -- (78,247) -- (78,247)
------------ ------------ ------------ ----------- ------------
Net loss available to common stockholders $ (708,644) $(15,796,909) $ (1,567,249) $(8,771,110) $(12,551,102)
============ ============ ============ =========== ============
Loss per share, basic and diluted $ (0.07) $ (2.61) $ (0.15) $ (1.45)
============ ============ =========== ============
Weighted averages shares outstanding 10,346,573 6,050,308 10,344,879 6,042,984
============ ============ =========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 3
<PAGE> 4
EAGLETECH COMMUNICATIONS, INC.
(a development stage company)
STATEMENTS OF CHANGES TO STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Series A
preferred stock Common stock
---------------- ------------ Paid-in
Shares Amount Shares Amount capital
------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Issuance of stock,
December 20, 1996 -- $ -- 4,882,401 $ 488 $ (486)
------ ------ ---------- ------ -----------
Net loss for year ended
March 31, 1997 -- -- -- -- --
------ ------ ---------- ------ -----------
Balance, March 31, 1997 -- -- 4,882,401 488 (486)
Net loss for year ended
March 31, 1998 -- -- -- -- --
------ ------ ---------- ------ -----------
Balance, March 31, 1998 -- -- 4,882,401 488 (486)
Net loss for year ended
March 31, 1999 -- -- -- -- --
------ ------ ---------- ------ -----------
Balance, March 31, 1999 -- -- 4,882,401 488 (486)
Recapitalization -- -- 903,450 90 68
Sale of common stock -- -- 3,455,833 345 1,750,655
Issuance of stock for compensation -- -- 735,402 74 6,281,819
Issuance of stock options -- -- 1,162,500
Issuance of stock for services -- -- 240,000 24 2,609,976
Notes converted to common stock -- -- 117,599 12 88,188
Issuance of stock for settlement
of liabilities -- -- 6,888 1 19,999
Contribution of interest -- -- -- -- 25,091
Net loss for the year ended
March 31, 2000 -- -- -- -- --
------ ------ ---------- ------ -----------
Balance, March 31, 2000 -- $ -- 10,341,573 $1,034 $11,937,810
------ ------ ---------- ------ -----------
</TABLE>
<TABLE>
<CAPTION>
Deficit
accumulated
Preferred during the
Deferred stock development
compensation receivable stage Total
------------ ---------- ----- -----
<S> <C> <C> <C> <C>
Issuance of stock,
December 20, 1996 $ -- $ -- $ -- $ 2
---------- -------- ------------ ------------
Net loss for year ended
March 31, 1997 -- -- (98,010) (98,010)
---------- -------- ------------ ------------
Balance, March 31, 1997 -- -- (98,010) (98,008)
Net loss for year ended
March 31, 1998 -- -- (136,292) (136,292)
---------- -------- ------------ ------------
Balance, March 31, 1998 -- -- (234,302) (234,300)
Net loss for year ended
March 31, 1999 -- -- (57,481) (57,481)
---------- -------- ------------ ------------
Balance, March 31, 1999 -- -- (291,783) (291,781)
Recapitalization -- -- -- 158
Sale of common stock -- -- -- 1,751,000
Issuance of stock for compensation -- -- -- 6,281,893
Issuance of stock options (554,004) -- -- 608,496
Issuance of stock for services -- -- -- 2,610,000
Notes converted to common stock -- -- -- 88,200
Issuance of stock for settlement
of liabilities -- -- -- 20,000
Contribution of interest -- -- -- 25,091
Net loss for the year ended
March 31, 2000 -- -- (10,692,070) (10,692,070)
---------- -------- ------------ ------------
Balance, March 31, 2000 $ (554,004) $ -- $(10,983,853) $ 400,987
---------- -------- ------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 4
<PAGE> 5
EAGLETECH COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES TO STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Series A
preferred stock Common stock
------------------ ------------ Paid-in
Shares Amount Shares Amount capital
------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Sale of Series A preferred stock 321,389 $3,214.00 -- $ -- $ 1,963,101
Issuance of stock for settlement
of liabilities -- -- 5,000 1 30,937
Amortization of deferred compensation -- -- -- -- --
Amortization of preferred stock warrants -- -- -- -- 151,102
Net loss for the period ended
September 30, 2000 -- -- -- -- --
------- --------- ---------- ------ -----------
Balance, September 30, 2000 321,389 $ 3,214 10,346,573 $1,035 $14,082,950
======= ========= ========== ====== ===========
</TABLE>
<TABLE>
<CAPTION>
Deficit
accumulated
Preferred during the
Deferred stock development
compensation receivable stage Total
------------ ---------- ----- -----
<S> <C> <C> <C> <C>
Sale of Series A preferred stock $ -- $(400,000) $ -- $1,566,315.00
Issuance of stock for settlement
of liabilities -- -- -- 30,938
Amortization of deferred compensation 484,751 -- -- 484,751
Amortization of preferred stock warrants -- -- -- 151,102
Net loss for the period ended
September 30, 2000 -- -- (1,567,249) (1,567,249)
--------- --------- ------------ -------------
Balance, September 30, 2000 $ (69,253) $(400,000) $(12,551,102) $ 1,066,844
========= ========= ============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE> 6
EAGLETECH COMMUNICATIONS, INC.,
(a development stage company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
December 20, 1996
(inception)
Six months ended September 30, September 30,
2000 1999 2000
----------- ----------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(1,567,249) $(8,771,110) $(12,551,102)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 57,921 3,622 94,377
Amortization of deferred compensation 484,751 -- 484,751
Issuance of stock for services and compensation 30,938 8,006,893 8,922,831
Issuance of stock options to purchase common stock -- -- 608,496
Amortization of value of preferred stock warrants 151,102 -- 151,102
Preferred stock dividend 78,247 -- 78,247
Start up expense -- 204,000 20,160
Loss on disposal of property and
equipment -- -- 22,962
Changes in operating assets and liabilities:
(Increase) decrease in prepaid insurance (39,284) -- (39,284)
Increase (decrease) in accounts payable
and accrued expenses (42,689) (14,527) 32,519
Increase (decrease) in other assets -- (7,208) 24,638
----------- ----------- ------------
Net cash used in operating activities (846,263) (578,330) (2,150,303)
----------- ----------- ------------
Cash flows from investing activities:
Patents (5,649) -- (21,190)
Purchases of property and equipment (421,355) (147,476) (701,983)
----------- ----------- ------------
Net cash used in investing activities $ (427,004) $ (147,476) $ (723,173)
----------- ----------- ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 6
<PAGE> 7
EAGLETECH COMMUNICATIONS, INC.,
(a development stage company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
December 20, 1996
Six months ended (inception)
September 30, to September 30,
2000 1999 2000
---------- ----------- -----------
<S> <C> <C> <C>
Proceeds from debt $ -- $ -- $ 176,330
Proceeds from sale of preferred stock 1,618,315 -- 1,618,315
Proceeds from sale of stock -- 1,261,000 1,751,000
Payments on related party notes -- (54,225) (88,127)
---------- ----------- -----------
Net cash provided by financing activities 1,618,315 1,206,775 3,457,518
---------- ----------- -----------
Net increase in cash and cash
equivalents: 345,048 480,969 584,042
---------- ----------- -----------
Cash and cash equivalents, beginning of period 238,994 -- --
---------- ----------- -----------
Cash and cash equivalents, end of period $ 584,042 $ 480,969 $ 584,042
========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for interest during the period $ -- $ -- $ --
========== =========== ===========
Cash paid for income taxes during the period $ -- $ -- $ --
========== =========== ===========
Schedule of noncash investing and financing activities:
Interest on convertible and related party notes contributed to
additional paid-in capital $ -- $ 12,138 $ 25,091
========== =========== ===========
Issuance of common stock to settle liabilities $ 30,938 $ 25,000 $ 50,938
========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 7
<PAGE> 8
EAGLETECH COMMUNICATIONS, INC.,
(A DEVELOPMENT STAGE COMPANY)
SELECTED NOTES TO FINANCIAL STATEMENTS
1. UNAUDITED INTERIM FINANCIAL STATEMENTS
The accompanying financial statements of the Company for the six months ended
September 30, 2000 and 1999, and for the period from December 20, 1996
(inception) to September 30, 2000, 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 these financial statements in
accordance with generally accepted accounting principles. The preparation of
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amount of revenue and expense during the
reporting period. Actual results could differ from those estimates.
The results of operations for an interim period are not necessarily indicative
of the results for a full year.
The interim unaudited financial statements should be read in conjunction with
the financials statements and notes for the year ended March 31, 2000 filed as
part of the Company's Form 10-KSB.
2. SALE OF SECURITIES
The following equity transactions occurred subsequent to the Company's year-end
on March 31, 2000.
On May 19, 2000, the Company completed a private placement of 321,389 shares of
Series A convertible preferred stock for $1,556,315, net of expenses. The
preferred shares may be converted at any time, at the option of the holder, into
common stock of the Company. The conversion price is the lesser of the purchase
price ($6.70 per share) or 80% of the average of the lowest three closing prices
during the twenty trading days prior to conversion. If the conversion price at
the time of any conversion is less than $5.00, then at the option of the
Company, the preferred stock may be redeemed by the Company at a price equal to
120% of the purchase price. The preferred stock is entitled to a 10% annual
dividend. The dividend will be payable in cash or in common stock.
In addition, the preferred stockholders received 1.2 warrants for each share of
preferred stock purchased. The warrants entitle the holders to purchase common
stock at $6.70 per share at any time until May 19, 2003. The warrants have been
valued at $3.23 per warrant or a total of $1,247,257 using the Black-Scholes
formula. As of September 30, 2000, $151,102 has been expensed for warrants and
paid-in capital has increased the same amount.
Page 8
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EAGLETECH COMMUNICATIONS, INC.,
(A DEVELOPMENT STAGE COMPANY)
SELECTED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SALE OF SECURITIES (CONTINUED)
In connection with this transaction, the Company received notes from two
preferred stockholders totaling $400,000. The notes are secured by the preferred
shares, are due May 16, 2002, and bear an interest rate of 8%. The preferred
stockholders prepaid interest of $64,000 for the two-year period. Interest
income of $12,000 has been recorded through September 30, 2000.
On June 1, 2000, the Company issued 5,000 shares of common stock as settlement
of a liability. The shares were valued at the closing market price on June 1,
2000, for a total of $30,938.
On September 11, 2000, the Company issued 199,998 shares of common stock to an
existing stockholder. These shares had not been issued by the transfer agent in
connection with the Company's reverse stock split in 1999. The prior year's
financial statements have been restated for this error. The result had no effect
on the loss for the year ended March 31, 2000.
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<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
PLAN OF OPERATIONS
This Plan of Operations may be deemed to include forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
that involve risk and uncertainty, including financial, regulatory environment
and trend projections, estimated costs to complete or possible future revenues
from the Company's expansion plans, the likelihood of successful completion of
such plans, as well as any statements preceded by, followed by, or that include
the words "intends," "estimates," "believes," "expects," "anticipates,"
"should," "could," or similar expressions; and other statements contained herein
regarding matters that are not historical facts. Although the Company believes
that its expectations are based on reasonable assumptions, it can give no
assurance that its expectations will be achieved. The important factors that
could cause actual results to differ materially from those in the
forward-looking statements below (the "Cautionary Statements") include, without
limitation: (1) the ability of the Company to continue its national rollout of
its service bureaus; (2) the ability of the Company to market its suite of
telecommunications connectivity services to small and medium size businesses in
its service areas; (3) the effects of vigorous competition in the markets in
which the Company operates; (4) the impact of technological change on the
Company's businesses, new entrants and alternative technologies in the Company's
business; (5) regulatory risks, including the impact of the Telecommunications
Act of 1996; (6) the impact of competitive services and pricing; (7) risks
associated with debt service requirements and interest rate fluctuations; and
(8) other risks referenced from time to time in the Company's filings with the
SEC, including the Form 10-KSB for the year ended March 31, 2000. All subsequent
written and oral forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by the
Cautionary Statements. The Company does not undertake any obligation to release
publicly any revisions to such forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
The following discussion and analysis relates to the financial
condition and results of operations of the Company for the three and six months
ended September 30, 2000, and 1999. The information should be read in
conjunction with the "Plan of Operations" and consolidated financial statements
and notes thereto contained herein and in the Form 10-KSB for the year ended
March 31, 2000.
Over the next twelve months, Eagletech intends to continue to rollout
its EagleOne(TM) service bureau product throughout the Southeastern United
States. Eagletech believes that such an
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expansion will require substantial investment in equipment and administrative
personnel. Eagletech will continue to outsource marketing, technical assistance
and manufacturing. Because Eagletech has its equipment manufactured by a third
party under a fixed-cost contract, Eagletech can estimate the cost of producing
new service bureaus. Eagletech must negotiate with local telephone service
providers to site equipment. Eagletech has received a patent (Patent No.
6,058,180) from the United States Patent and Trademark Office ("USPTO") for its
core technology that allows the use of one telephone line for "One Number,
Follow Me" service. On October 11, 2000, Eagletech received a Notice of
Allowance from the USPTO on an additional utility patent covering its
technology. Although Eagletech intends to continually update and refine its
products and services to increase customer satisfaction, Eagletech does not need
additional research and development to operate its existing and planned service
bureaus.
REVENUES
The Company has not had any revenues from operations during this
period. The Company believes that this is due to the unanticipated difficulty
the Company has encountered in introducing a new type of service to its target
market. The Company expects to begin generating revenues beginning in November
2000 for services provided beginning in October 2000.
LIQUIDITY AND CAPITAL RESOURCES
At the end of the quarter ended September 30, 2000, Eagletech had cash
resources of $584,042 and no long-term debt or currently due debt, except for
normal trade payables. At the end of the quarter ended September 30, 2000,
Eagletech has accrued $78,247 in dividends payable on its Series A Preferred
Stock, which is payable annually. The cash on hand represents the remaining
proceeds of the Company's private placement that closed on May 19, 2000. Based
on Eagletech's existing expenses, this is sufficient capital for six months of
operations if Eagletech generated no revenues from operations and raised no
additional funds. Eagletech expects to begin to receive cash flow from
operations beginning in November 2000. On this basis, if Eagletech did not
expand beyond its present size, Eagletech believes it could operate on a
profitable basis, but Eagletech's expansion beyond its present market would be
extremely slow.
By the end of September, 2000, Eagletech finished installing the
equipment necessary to establish EagleOne(TM) service bureaus in the Atlanta,
Georgia and Charlotte, North Carolina markets. Eagletech has already purchased
the equipment necessary to service these markets with the proceeds of its
private placement that closed on May 19, 2000. Eagletech plans to greatly expand
its operations and is in negotiations with two sources of additional financing
to raise approximately $2,000,000 through the sale of additional equity to fund
the national roll-out of the EagleOne(TM) service bureau product. Eagletech
believes that this additional funding will allow us to expand the EagleOne(TM)
service bureau product to an additional eight to ten markets within the nine
state BellSouth service area. Of this funding, approximately $800,000 will be
used for purchase of equipment, $400,000 for marketing and $800,000 for general
working capital. Eagletech may need to hire additional administrative and
customer service personnel as part of this expansion.
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<PAGE> 12
COMPETITION
Eagletech competes with a variety of companies that provide some type
of 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 users.
Eagletech's competitors include voice mail service bureaus, which are
typically local paging companies that offers basic voice mail/pager notification
mailboxes at bargain prices but without advanced features. These services
require the user to call in for voice mail messages and do not automatically
connect calls. 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 of the type provided by Eagletech is not available.
These services are similar in that the system accepts the call, places the
caller on hold and then opens a second line to call the subscriber. If that call
does not connect, the system opens another line to try a second number, and so
on. Once the parties are connected, the call remains routed through the system
hardware until the call is completed, tying up available lines.
In contrast, Eagletech's proprietary technology uses only one line for
both the incoming and outgoing call and, once the parties are connected, the
system is able to free-up that line for the next call. In this way, Eagletech
believes that its system makes much more efficient use of available telephone
lines and thus Eagletech is able to provide its services for one flat rate per
month of $24.95.
Eagletech most direct competitor is Linx Communications. Founded in
1996 as a distributor for the Wildfire product line, Linx is now a national
communications service provider offering businesses and consumers local and
toll-free access to a number 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
makes its users accessible through a single number (local or toll-free) and
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.
There are several important differences between the EagleOne and
LinxConnect. LinxConnect rings three numbers simultaneously while EagleOne rings
them in sequence. The LinxConnect configuration requires the use of multiple
lines at the same time, thereby limiting the number of subscribers possible per
switch to less than the 300 possible under Eagletech's system, where only two
lines are used. EagleOne's 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
4
<PAGE> 13
distance calls that may result in the user paying more per minute than under his
or her current long distance provider. EagleOne's patented proprietary
technology provides Eagletech with a competitive advantage while providing the
customer with a fixed rate solution.
GOVERNMENT REGULATIONS
The Telecommunications Act of 1996 was enacted to foster competition in
the telecommunications industry. Under the act, Eagletech is considered an
Exempt Telecommunications Company (an "Information Service Provider" or "ISP")
because it is in the business of providing telecommunications services using
facilities and services of a regulated telecommunications carrier. As an ISP,
Eagletech is not required to pay access fees, as compared to a "carrier" which
is required to pay access fees to the local exchange carriers. The FCC is
currently reviewing the issue of access fee reform and has taken the position
that ISP should remain free from access fees.
Eagletech has 5 full 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. Eagletech also leases space
for its Atlanta and Charlotte, North Carolina service bureaus.
Eagletech has significant capital needs, which to date Eagletech has
met through private sales of its equity and loans. Eagletech 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. Eagletech is in negotiations with two sources of
additional financing to raise approximately $2,000,000 through the sale of
equity to fund the national rollout of the EagleOne(TM) service bureau product.
Eagletech believes that this additional funding will allow us to expand the
EagleOne(TM) service bureau product to an additional six to eight markets in the
nine state BellSouth service area, beyond the three markets where Eagletech has
service bureaus. Of this possible funding, approximately $800,000 will be used
for purchase of equipment, $400,000 for marketing and $800,000 for general
working capital. Eagletech may need to hire additional administrative and
customer service personnel as part of this expansion.
PART II-OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not Applicable.
ITEM 2. CHANGES IN SECURITIES.
On September 11, 2000, the Company issued 199,998 shares of common
stock to an existing stockholder, which represented shares that should have been
issued to that stockholder after the Company's reverse stock split in 1999, but
which were issued prior to the reverse stock split due to an error by the
transfer agent.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
5
<PAGE> 14
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibit
No
(3) Articles of Incorporation and Bylaws
3.1 Articles of Incorporation+
3.1(a) Amendment to Articles of Incorporation#
3.2 Bylaws+
(4) Instruments Defining Rights of Holders
4.1 Form of Warrant#
(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+
10.6 Form of Securities Purchase Agreement#
10.7 Form of Registration Rights Agreement#
(21) Subsidiaries of the Registrant
21.1 Subsidiaries of the Registrant+
(27) Financial Data Schedule
27.1 Financial Data Schedule++
--------
+ Filed with the Company's initial filing on Form 10-SB filed February 1, 2000.
++ Filed herewith
# Filed with the Company's Form 8-K on June 2, 2000.
6
<PAGE> 15
REPORTS ON FORM 8-K
Not applicable.
7
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf of the undersigned, thereunto duly
authorized.
EAGLETECH COMMUNICATIONS, INC.
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(Registrant)
Date: 11/10/2000 /S/ ROBERT J. DOBBS, JR.
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Robert J. Dobbs, Jr. President and
Chief Executive Officer
