SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Event Requiring Report: April 25, 2000
Telnet World Communications, Inc.
(Exact name of registrant as specified in its charter)
Utah 87-0291528
(State of Incorporation) (Commission (IRS Employer
File Number) Identification #)
----------------------------------------
(Address of Principal Executive Offices)
(206) 477-7000
----------------------------------------
(Registrant's telephone number, including area code)
601 5th Ave.
Seattle, Washington, 98101
---------------------------------------------------
(Registrant's Former Name and Address)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Pursuant to a Stock Purchase Agreement and Plan of Reorganization (the
"Agreement") effective April 19, 2000, Telnet World Communication, Inc., a Utah
corporation ("TWCI")acquired 335,000 outstanding shares of Triple S Parts, Inc.,
a Nevada corporation ("TSP"), for Two Hundred Twenty-Five Thousand ($225,000)
Dollars. As a result, TSP became a wholly-owned subsidiary of TWCI.
The Stock Purchase Agreement was approved by the unanimous consent of the
Board of Directors of TWCI on April 19, 2000.
Prior to the Agreement, TWCI 338,805 shares of common stock issued and
outstanding. Following the Agreement, TWCI had 673,805 shares of common stock
outstanding. TWCI was incorporated in the State of Utah on March 10, 1972.
Upon effectiveness of the Stock Purchase Agreement, pursuant to Rule
12g-3(a) of the General Rules and Regulations of the Securities and Exchange
Commission, TWCI became the successor issuer to TSP for reporting purposes under
the Securities Exchange Act of 1934 and elects to report under the Act effective
April 19, 2000.
A copy of the Agreement is filed as an exhibit to this Form 8-K and is
incorporated in its entirety herein. The foregoing description is modified by
such reference.
The following table contains information regarding the shareholdings of
the Company's current directors and executive officers and those persons or
entities who beneficially own more than 5% of the Company's common stock:
<PAGE>
NAME AMOUNT OF COMMON STOCK PERCENT OF COMMON STOCK
BENEFICIALLY OWNED(1) BENEFICIALLY OWNED
Dan Starczewski, 0 0
President, Secretary,
Treasurer & Director
Rick Hanna, 11,100 .02
Vice-President &
Director
(1)Based upon 673,805 outstanding shares of common stock.
COMPANY'S BUSINESS AND SUBSIDIARIES
The Company was incorporated in the State of Utah on March 10, 1972 as
Tropic Industries, Inc. Subsequently on February 24, 1987 Tropic Industries,
Inc. changed its name to United Datacopy, Incorporated then on March 21,1994
United Datacopy, Incorporated changed its name to Pen International, Inc. and on
March 4, 1998 Pen International, Inc. changed its name to TelNet World
Communications, Inc., (the "Company").
The Company was created for the purpose of making investments in real
property, oil and gas and other opportunities. The initial shareholders, of the
Company, made a capital contribution of $5,000 for the purchase of 250,000
shares of common stock. On March 20, 1972 pursuant to an effective registration,
in the State of Utah, the Company sold 3,500,000 shares of its common stock for
$.02 per share for gross proceeds of $70,000. All proceeds raised in the initial
public offering were spent by the Company prior to 1979. On December 28,1979
controlling interest in the Company was sold to Joseph Goott and others. At that
same time the issued and outstanding shares of the Company were reverse split
ten-for-one. On July 31, 1981 the Company effected a one-for-five reverse split
and changed the capital structure, of the Company from 30,000,000 common shares
with a par value of $.20 authorized to 6,000,000 common shares with a par value
of $1.00 authorized. After several years of unsuccessful operations the Company
ceased operations in August of 1985.
On February 18,1987 the Company entered into an agreement to acquire
Datacopy, Incorporated a photocopy and facsimile dealership located in
Washington State for 9,000,000 shares of the Company's common stock.
Simultaneous the Company changed its name from Tropical Industries, Inc. to
United Datacopy, Incorporated. After completion of the acquisition the Company
reverse split all of its issued and outstanding common shares one-for-five and
increased the authorized capital stock of the Company to 50,000,000 shares of
common stock with a par value of $.001 per share. In November of 1988 the
Company filed for protection under the bankruptcy code in the Western District
of Washington State, Case No. 87-08659. Based upon allegation of possible
misrepresentations of fraud by the management of United Datacopy and after a
hearing in Bankruptcy Court the acquisition of United Datacopy was rescinded
pursuant to a stipulated filing with the bankruptcy court and by the bankruptcy
trustee. An order approving the recission and discharging the trustee was
entered November 19,1991. The offending officers and directors resigned and Mr.
Groott was reappointed sole director and officer of the Company. Subsequently
the number of directors was increased to three. Mr. Groott died in 1997.
The shareholders approved an Agreement and Plan of Reorganization with
Pen National, Inc., a Utah corporation, in March of 1994. The Agreement and Plan
of Reorganization required the shareholders of Pen National, Inc. to exchange
all of their shares for 6,000,000 shares of the Company's common stock. Upon
<PAGE>
completion of the exchange the Company was renamed Pen National, Inc. and the
common stock of the Company was reverse split one for 4.66666 resulting in
1,499,500 common shares being issued and outstanding. As a part of the Agreement
and Plan of Reorganization, the principals of Pen National, Inc. were required
to raise $500,000 by selling or purchasing 500,000 shares of the Company's
common stock by March 21, 1994, which was extended to June 15, 1994 or the
transaction would thereafter be terminated and the shares issued to the former
shareholders of Pen National, Inc. would be cancelled. The management of Pen
National, Inc. failed to meet the dead line to complete the transaction and the
transaction was terminated and the shares issued to the former shareholders of
Pen National, Inc. were returned and cancelled on June 27, 1994.
From June 1994 till February of 1998 the Company was dormant. During
this time the officers of the Company were seeking a suitable merger candidate.
On February 11,1998 the Company entered into an Agreement and Plan of
Reorganization with TelNet Communications, Inc. a Delaware company ("TelNet").
The Company issued 10,600,000 shares of common stock for 99% of the outstanding
common stock of TelNet. Upon completion of the Agreement and Plan of
Reorganization the Company changed its name to TelNet World Communications, Inc.
On March 2, 1998 the shareholders approved a one for thirty reverse split of the
Company's common stock. On May 26, 1999 the shareholders approved a one for
thirty six reverse split of the Company's common stock. The common stock of the
Company outstanding after the May 26,1999 reverse split was 338,805 common
shares.
The Company believes that it is essential in its efforts to be a going
concern that it achieve a status as a reporting as well as trading entity on the
OTCBB, hence its merger with Triple S Parts, Inc.
The Company presently operates at a loss, minimal though it may be, and
has not received revenues from operations sufficient to maintain operations.
TWCI may opt to raise funds for operations through the sale of its securities.
PROPERTY
TWCI maintains its administrative offices at 601 5th Ave., Seattle, WA
98101. The Company does not lease office space nor pays rent.
DESCRIPTION OF SECURITIES
The Company has an authorized capitalization of 50,000,000 shares of
common stock,$0.001 par value per share and no authorized preferred stock. Upon
execution of this Agreement, the Company had issued and outstanding,673,805
shares of common stock.
MARKET FOR TWCI's SECURITIES
TWCI is a non-reporting publicly traded company with certain of its
securities exempt from registration under the Securities Act of 1933, as
amended, pursuant to Rule 504 of Regulation D of the General Rules and
Regulations of the Securities and Exchange Commission. TWCI's common stock is
traded on the NASD OTC Bulletin Board under the symbol "TWCI." The NASDAQ Stock
Market has implemented a change in its rules requiring all companies trading
securities on the NASD OTC Bulletin Board to become reporting companies under
the Securities Exchange Act of 1934.
<PAGE>
MANAGEMENT
Name Age Position
- - ---- --- --------
Dan Starczewski 53 President, Secretary,
Treasurer & Director
Ricki Hanna 48 Vice-President & Director
The foregoing persons should not be considered to be promoters of the
Company since they were not the founders of the Company and have not
participated from inception in the Company's business plans and affairs.
Biographies
The principal occupation of the directors and principal officers of the
Company for at least the past five years are as follows:
Dan Starczewski: In February 1975 established and currently still active "in a
partnership, Professional Business Service, an accounting firm in Winston-Salem
N.C. March 1970 to December 1974 Sun Finance as a branch manager. In January
1995, he became President of Creative Gaming Consultants, Inc. and in January
1996, he became President of Starr Consulting, Inc. Dan Starczewski graduated
May 1964 from Nathan B. Forest High School and attended St. John's River Jr.
College in Palatka, FL. He served four years in United States Air Force
Honorable discharge in March 1970
Ricki Hanna: From July 1992 to the present, E.R.A. Realty has employed Mr.
Hanna. Since 1995, Mr. Hanna has worked as an Associate Broker. Prior to his
current position, he was a Sales Agent for the same company. Mr. Hanna attended
two years of college in Liberal Arts programs at Fulton Montgomery Community
College and University of Colorado.
EXECUTIVE COMPENSATION
No executive compensation is being paid to any officers or directors of
the Company at this time and none is anticipated in the near future.
Further, there are no agreements, plans or other arrangements between
the Company or its subsidiaries and any of its officers which would provide
payment in the event of resignation, retirement or termination of employment
arising from a change-in-control of such entity or a change in an officer's
responsibilities following any such change in control.
THE COMPANY HAS BEEN AUDITED BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.
COMPETITION FROM LARGER AND MORE ESTABLISHED COMPANIES MAY HAMPER MARKETABILITY.
ISSUANCE OF FUTURE SHARES MAY DILUTE INVESTORS' SHARE VALUE.
The Company's Articles of Incorporation, as amended, of TWCI authorizes
the issuance of 50,000,000 shares of common stock. The future issuance of all or
part of the remaining authorized common stock may result in substantial dilution
in the percentage of the Company's common stock held by its then existing
shareholders. Moreover, any common stock issued in the future may be valued on
an arbitrary basis by TWCI. The issuance of the Company's shares for future
services or acquisitions or other corporate actions may have the effect of
diluting the value of the shares held by investors, and might have an adverse
effect on any trading market, should a trading market develop for the Company's
common stock.
PENNY STOCK REGULATION. Penny stocks generally are equity securities with a
price of less than $5.00 per share other than securities registered on certain
national securities exchanges or quoted on the NASDAQ Stock Market, provided
<PAGE>
that current price and volume information with respect to transactions in such
securities is provided by the exchange or system. The Company's securities may
be subject to "penny stock rules" that impose additional sales practice
requirements on broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally those with assets in
excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together
with their spouse). For transactions covered by these rules, the broker-dealer
must make a special suitability determination for the purchase of such
securities and have received the purchaser's written consent to the transaction
prior to the purchase. Additionally, for any transaction involving a penny
stock, unless exempt, the "penny stock rules" require the delivery, prior to the
transaction, of a disclosure schedule prescribed by the Commission relating to
the penny stock market. The broker-dealer also must disclose the commissions
payable to both the broker-dealer and the registered representative and current
quotations for the securities. Finally, monthly statements must be sent
disclosing recent price information on the limited market in penny stocks.
Consequently, the "penny stock rules" may restrict the ability of broker-dealers
to sell the Company's securities. The foregoing required penny stock
restrictions will not apply to the Company's securities if such securities
maintain a market price of $5.00 or greater. There can be no assurance that the
price of the Company's securities will reach or maintain such a level.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Not Applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable
ITEM 5. OTHER EVENTS
Successor Issuer Election.
Pursuant to Rule 12g-3(a) of the General Rules and Regulations of the
Securities and Exchange Commission, upon effectiveness of the Agreement, the
Company became the successor issuer to TSP for reporting purposes under the
Securities Exchange Act of 1934 and elects to report under the Act effective
April 25, 2000.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Pursuant to the terms of the aforementioned Agreement, the Registrant
has accepted the resignation of Tracie Pollak, the Registrant's President and a
Director as of April 19, 2000, and appointed Dan Starczewski as President and
Director of the Registrant. Rick Hanna who was an officer and director of Triple
S Parts, Inc. will stay on as an officer and director of Telnet World
Communications, Inc.
ITEM 7. FINANCIAL STATEMENTS
Financial statements for both Telnet World Communications, Inc. and
Triple S Parts, Inc., are filed herewith. The Registrant will file combined
audited financial statements by amendment hereto not later than 60 days after
the date that this Current Report on Form 8-K must be filed.
<PAGE>
TRIPLE S PARTS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
November 30, 1999 and December 31, 1998
<PAGE>
TRIPLE S PARTS, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
------
November 30, December 31,
1999 1998
-------- --------
(Unaudited)
CURRENT ASSETS
Cash $ 9,639 $ --
-------- --------
Total Current Assets 9,639 --
-------- --------
TOTAL ASSETS $ 9,639 $ --
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ -- $ --
Note payable 11,325 --
Accrued interest payable 499 --
-------- --------
Total Current Liabilities 11,824 --
-------- --------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: $0.0005 par value, 50,000,000 shares
authorized; 275,000 shares issued and outstanding 138 138
Additional paid-in capital 217 217
Accumulated deficit (2,540) (355)
-------- --------
Total Stockholders' Equity (Deficit) (2,185) --
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 9,639 $ --
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
TRIPLE S PARTS, INC.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
From
Inception on
For the February 22,
Eleven Months Ended For the Years Ended 1996 Through
November 30, December 31, November 30,
------------------------------------------------------------------------------------
1999 1998 1998 1997 1999
---------------- --------------- --------------- --------------- -------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
REVENUE $ - $ - $ - $ - $ -
---------------- --------------- --------------- --------------- --------------
OPERATING EXPENSE
General and administrative expenses 1,686 85 85 85 2,041
---------------- --------------- --------------- --------------- ---------------
Total Operating Expenses 1,686 85 85 85 2,041
---------------- --------------- --------------- --------------- ---------------
OPERATING LOSS (1,686) (85) (85) (85) (2,041)
---------------- --------------- --------------- --------------- ---------------
OTHER (EXPENSE)
Interest expense (499) - - - (499)
---------------- --------------- --------------- --------------- ---------------
Total Other (Expense) (499) - - - (499)
---------------- --------------- --------------- --------------- ---------------
NET LOSS $ (2,185) $ (85) $ (85) $ (85) $ (2,540)
================ =============== =============== =============== ===============
BASIC NET LOSS PER SHARE $ (0.01) $ (0.00) $ (0.00) $ (0.00)
================ =============== =============== ===============
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 275,000 275,000 275,000 264,000
================ =============== =============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
TRIPLE S PARTS, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
Deficit
Accumulated
From
Inception on
February 22,
Additional 1996 Through
Common Stock Paid-In November 30,
Shares Amount Capital 1999
------------------ ------------------ ------------------ ----------------
<S> <C> <C> <C> <C>
Balance at inception on February
22, 1996 - $ - $ - $ -
Founders shares issued at $0.00
per share 264,000 132 (132 ) -
Expenses paid by shareholder - - 185 -
Net loss for the year ended
December 31, 1996 - - - (185)
------------------ ------------------ ------------------ -----------------
Balance, December 31, 1996 264,000 132 53 (185)
Additional founders shares
issued at $0.00 per share 11,000 6 (6 ) -
Expenses paid by shareholder - - 85 -
Net loss for the year ended
December 31, 1997 - - - (85)
------------------ ------------------ ------------------ -----------------
Balance, December 31, 1997 275,000 138 132 (270)
Expenses paid by shareholder - - 85 -
Net loss for the year ended
December 31, 1998 - - - (85)
------------------ ------------------ ------------------ -----------------
Balance, December 31, 1998 275,000 138 217 (355)
Net loss for the eleven months
ended November 30, 1999
(unaudited) - - - (2,185)
------------------ ------------------ ------------------ -----------------
Balance, November 30, 1999
(unaudited) 275,000 $ 138 $ 217 $ (2,540)
================== ================== ================== =================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
TRIPLE S PARTS, INC.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception on
For the February 22,
Eleven Months Ended For the Years Ended 1996 Through
November 30, December 31, November 30,
--------------------------------------------------------------------------------------
1999 1998 1998 1997 1999
---------------- --------------- --------------- --------------- ---------------
(Unaudited) (Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING
ACTIVITIES
<S> <C> <C> <C> <C> <C>
Net (loss) $ (2,185) (85) $ (85) $ (85) $ (2,540)
Changes in operating liabilities:
Increase (decrease) in accrued
interest payable 499 - - - 499
---------------- --------------- --------------- --------------- ---------------
Net Cash Used in Operating
Activities (1,686) (85) (85) (85) (2,041)
---------------- --------------- --------------- --------------- ---------------
CASH FLOWS FROM INVESTING
ACTIVITIES - - - - -
---------------- --------------- --------------- --------------- ---------------
CASH FLOWS FROM FINANCING
ACTIVITIES
Contribution of capital - 85 85 85 355
Note payable proceeds 11,325 - - - 11,325
---------------- --------------- --------------- --------------- ---------------
Net Cash Provided by Financing
Activities 11,325 85 85 85 11,680
---------------- --------------- --------------- --------------- ---------------
NET INCREASE (DECREASE)
IN CASH 9,639 - - - 9,639
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD - - - - -
---------------- --------------- --------------- --------------- ---------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 9,639 $ - $ - $ - $ 9,639
================ =============== =============== =============== ===============
CASH PAID FOR:
Interest $ - $ - $ - $ - $ -
Income taxes $ - $ - $ - $ - $ -
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
TRIPLE S PARTS, INC.
(A Development Stage Company)
Notes to the Financial Statements
November 30, 1999
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the
Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of
operations and cash flows at November 30, 1999 and 1998 and for
all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It
is suggested that these condensed financial statements be read in
conjunction with the financial statements and notes thereto
included in the Company's December 31, 1998 audited financial
statements. The results of operations for periods ended November
30, 1999 and 1998 are not necessarily indicative of the operating
results for the full years.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the Company
does not have significant cash or other material assets, nor does
it have an established source of revenues sufficient to cover its
operating costs and to allow it to continue as a going concern. It
is the intent of the Company to seek a merger with an existing,
operating company. In the interim, shareholders of the Company
have committed to meeting its minimal operating expenses.
<PAGE>
ITEM 8. CHANGE IN FISCAL YEAR
TWCI has a December 31 fiscal year end. The fiscal year of TSP is
December 31. The Company will file a Transitional Report on Form 10-QSB, if
required.
EXHIBITS
2.1 Stock Purchase Agreement & Plan of Reorganization between TSP and TWCI,
dated April 19, 2000.
*27.1 Financial Data Schedule
- - ------------------------------
*To be filed by amendment, if required.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
By /s/ Dan Starczewski
----------------------
Dan Starczewski, President
Date: April 25, 2000
STOCK PURCHASE AGREEMENT AND PLAN OF REORGANIZATION
STOCK PURCHASE AGREEMENT AND PLAN OF REORGANIZATION, dated April 19, 2000,
between Telnet World Communications, Inc. ("Telnet") a Utah corporation and
Triple S Parts, Inc. a Nevada corporation, hereinafter for convenience ("Triple
S").
PLAN OF REORGANIZATION
The reorganization will comprise in general the acquisition by Telnet of Triple
S pursuant to an I.R.S. qualified tax free exchange. The acquisition shall be
accomplished by the payment of cash and stock as provided for herein making
Triple S a wholly owned subsidiary of Telnet upon completion of the acquisition
via the issuance by Telnet of shares of Telnet Common capital stock to the below
signed and listed shareholders of Triple S in consideration of the conveyance of
100% of the issued and outstanding shares of Triple S to Telnet, all subject to
the terms and conditions of the agreement hereinafter set forth. For purposes of
this Agreement the terms stock, shares and common capital stock shall be
interchangeable.
AGREEMENT
In order to consummate the foregoing Plan of Reorganization, and in
consideration of the premises and of the representations and undertakings herein
set forth, the parties agree as follows:
1.Transfer of shares. Upon and subject to the terms and conditions herein
stated, Telnet shall acquire from Triple S and Triple S shareholders shall
transfer, assign, and convey to Telnet all of the issued and outstanding shares
of Common stock of Triple S to Telnet in exchange for Telnet newly issued
restricted shares totaling Three Thirty-Five Thousand Shares. By virtue of the
transaction Telnet shall acquire Triple S as a going concern, including all of
the properties and assets of Triple S of every kind, nature, and description,
tangible and intangible, wherever situated, including, without limiting the
generality of the foregoing, its business as a going concern, its goodwill, and
the corporate name (subject to changes referred to or permitted herein or
occurring in the ordinary course of business prior to the time of closing
provided herein).
2. Issuance and delivery of stock. In consideration of and in exchange for the
foregoing transfer, assignment, and conveyance, and subject to compliance by
Telnet and Triple S with their warranties and undertakings contained herein,
Telnet shall issue and deliver to Triple S one or more stock certificates
registered in the name of the shareholders of Triple S, on a pro-rata basis
totaling 1,152,000 resulting from a 4:1 forward split of 288,000 together with
-1-
<PAGE>
payment for such shares as set forth in a Promissory Note between Triple S
Parts, Inc. and FMS Group and attached hereto as Exhibit "A", in exchange for
100% of the issued and outstanding shares of Triple S Common stock which, upon
such issuance and delivery, shall be fully paid and nonassessable.
3. Investment intent.
------------------
3.1 The Board of Directors and Officers of Triple S Parts, Inc.(
"Subscriber") understand and acknowledge that the Telnet Stock being
acquired hereunder have not been registered under the Securities Act of
1933 (the "Act") or applicable state securities laws; (ii) the Subscriber
cannot sell such Stock unless such securities are registered under the Act
and any applicable state securities laws or unless exemptions from such
registration requirements are available (iii) the Company has no obligation
to register the securities or assist the Subscriber in obtaining an
exemption from the various registration requirements except as set forth
herein or therein. Subscriber agrees not to resell the shares of Stock
without compliance with the terms of this Subscription Agreement, the Act
and any applicable state securities laws.
3.2 Such Subscriber(i) is acquiring the Shares solely for the Subscriber's
own account for investment purposes only and not with a view toward resale
or distribution, either in whole or in part; (ii) has no contract,
undertaking, agreement or other arrangement, in existence or contemplated,
to sell, pledge, assign or otherwise transfer the Shares to any other
person; (iii) agrees not to sell or otherwise transfer the Subscriber's
Shares unless and until such securities are subsequently registered under
the Act and any applicable state securities laws or unless an exemption
from any such registration is available; and (iv) agrees, in any event, not
to sell or otherwise transfer the Subscriber's securities for up to 90 days
after the effective date of the Company's registration statement under the
Act relating to the offer, sale and original issuance of its capital stock
in a public offering provided such registration statement includes the
Subscriber's securities.
3.3 Such Subscriber understands that an investment in the Shares involves
substantial risks and Subscriber recognizes and understands the risks
relating to this transaction and acquisition of the Telnet shares.
3.4 Such Subscriber has, either alone or together with the Subscriber's
Purchaser Representative (as that term is defined in Regulation D under the
Act), such knowledge and experience in financial and business matters that
the Subscriber is capable of evaluating the merits and risks of the
acquisition by Telnet.
4. Dissenting shares: There shall be no dissenting shares as a result of the
acquisition
5. Place of closing. The closing of this agreement and all deliveries hereunder
shall take place at the offices of Triple S Parts, Inc.
-2-
<PAGE>
6. Time of closing. The closing shall be 3:00 PM, Eastern Standard time April
19, 2000, unless extended by mutual agreement of the parties. The last date
fixed by mutual agreement of the parties or otherwise becoming effective under
this paragraph shall constitute the closing date.
7. Representations and warranties of Triple S. Triple S and its shareholders
represent and warrant to Telnet that: (a) Corporate status. Triple S is a
corporation duly organized and existing under the laws of the State of Nevada,
with an authorized capital stock consisting of 50,000,000 Common shares, of
which 338,805 are currently issued and outstanding; and no Preferred shares
authorized or outstanding. Triple S has no .
(b) Disposition of assets. Since January 1, 2000, there has been no material
adverse change in the assets or liabilities or in the condition, financial or
other, of Triple S, except changes occurring in the ordinary course of business
and changes referred to or permitted herein.
(c) Lawsuits and claims. Triple S is not a party to or threatened by any
litigation, proceeding, or controversy before any court or administrative agency
which might result in any change in the business or properties of Triple S or
which change would be substantially adverse taking into account the entire
business and properties of Triple S; Triple S is not in default with respect to
any judgment, order, writ, injunction, decree, rule, or regulation of any court
or administrative agency.
(d) Taxes. Triple S has filed with the appropriate governmental agencies all tax
returns required by such agencies to be filed by it and is not in default with
respect to any such filing. Triple S has paid all taxes claimed to be due by
state and local taxing authorities and has not been examined by representatives
of the United States Internal Revenue Service for federal taxes since inception.
(e) Triple S and its shareholders have or will have disclosed all material facts
relating to the business and its products to Telnet and shall not have omitted
to disclose any material fact, which, if known by Telnet, would affect its
decision to enter into this transaction.
8. Representations and warranties of Telnet. Telnet represents and warrants to
Triple S that:
(a) Corporate status. Telnet is a corporation duly organized and existing under
the laws of the State of Utah, with an authorized capital stock consisting of
Fifty Million shares of Common stock, of which 338,805 are issued and
outstanding and are fully paid and nonassessable; and no shares of Preferred
stock. Telnet has no .
-3-
<PAGE>
(b) Corporate authority. Telnet has the corporate right and authority to acquire
and operate the properties and business now owned and operated by it and to
issue and deliver the number of shares of its Common stock required to be issued
hereunder to Triple S.
(c) Disposition of assets. Since December 31, 1999, there has been no material
adverse change in the assets or liabilities or in the condition, financial or
other, of Telnet except changes occurring in the ordinary course of business and
changes referred to or permitted herein.
(d) Lawsuits and claims. Telnet is not a party to or threatened by any
litigation, proceeding, or controversy before any court or administrative agency
which might result in any change in the business or properties of Telnet or
which change would be substantially adverse, taking into account the entire
business and properties of Telnet.
(e) Taxes. Telnet has filed with the appropriate governmental agencies all tax
returns required by such agencies to be filed by it and is not in default with
respect to any such filing. Telenet has paid all taxes claimed to be due by
state and local taxing authorities and has not been examined by representatives
of the United States Internal Revenue Service for federal taxes during the past
three fiscal years.
9. Interim conduct of business by Triple S. Until the time of closing, Triple S
will conduct its business in the ordinary and usual course, and prior to the
time of closing it will not, without the written consent of Telnet, borrow any
money, incur any liability other than in the ordinary and usual course of
business or in connection with the performance or consummation of this
agreement, encumber or permit to be encumbered any of its properties and assets,
dispose or contract to dispose of any property except in the regular and
ordinary course of business, enter into any lease or contract for the purchase
of real estate, form or cause to be formed any , pay any bonus or special
remuneration to any officer or employee, declare or pay any dividends, make any
other distributions to its shareholders, or issue, sell, or purchase any stock,
notes, or other securities.
10. Access to information. From the date hereof each party shall allow the other
free access to its files and audits, including any and all information relating
to taxes, commitments, and contracts, real estate and personal property titles,
and financial condition. From the date hereof each party agrees to cause its
auditors to cooperate with the other in making available all financial
information requested, including the right to examine all working papers
pertaining to audits made by such auditors.
11. Conditions and obligations of Triple S. Unless, at the time of closing, the
following conditions are satisfied, Triple S shall not be obligated to make the
-4-
<PAGE>
transfer, assignment, and conveyance provided in paragraph 1. to be made by it
and otherwise to effectuate its part of the reorganization herein provided:
(a) The representations and warranties of Telnet set forth herein, are, on the
date hereof and as of the time of closing, substantially correct.
(b) The directors of Telnet have approved the consummation of this agreement and
the matters herein provided.
(c) No litigation or proceeding is threatened or pending for the purpose of with
the probably effect of enjoining or preventing the consummation of this
agreement or which would materially affect Telnet operation or its assets.
(d) Telnet has complied with its agreements herein to be performed by it prior
to the time of closing.
12. Conditions of obligations of Telnet. Unless at the time of closing the
following conditions are satisfied, Telnet shall not be obligated to issue and
deliver the shares of its Common stock as provided in paragraph 1. and otherwise
to effectuate its part of the reorganization herein provided:
(a) The representations and warranties of Triple S set forth in paragraph 9.
are, on the date hereof and as of the time of closing, substantially correct
subject to any change made because of any action approved by Telnet.
(b) The directors of Triple S have approved and the holders of all outstanding
shares of Telnet have voted in favor of the consummation of this agreement and
the matters herein provided.
(c) No litigation or proceeding is threatened or pending for the purpose or with
the probable effect of enjoining or preventing the consummation of this
agreement or which would materially affect Triple S operation of the properties
and business to be acquired by it hereunder.
(d) Triple S has complied with its agreements herein to be performed by it prior
to the time of closing.
13. Abandonment of agreement. If by reason of the provisions of paragraphs 11.
or 12. above either party is not obligated to effectuate the reorganization,
then either party which is not so obligated may terminate and abandon this
agreement by delivering to the other party written notice of termination prior
-5-
<PAGE>
to the time of closing, and thereupon this agreement shall be terminated without
further obligation or liability upon either party in favor of the other.
14. Authorization by shareholders. Telnet and Triple S shall promptly take such
action as may be legally necessary to call special meetings of their respective
shareholders to authorize the consummation of this agreement and the matters
herein provided, and each will recommend to its shareholders that this agreement
and the matters herein provided, and all other matters necessary or incident
thereto, be approved, authorized, and consummated.
15. Listing of Telnet stock issued to Triple S. Telnet shall not be required to
prepare and file a registration statement under the Securities Act of 1933
covering the shares of Common stock to be delivered hereunder.
16. Brokers' fees. Neither party has incurred nor will incur any liability for
brokerage fees or agents' commissions in connection with the transactions
contemplated hereby.
17. Execution of documents. At any time and from time to time after the time of
closing, Triple S will execute and deliver to Telnet such further conveyances,
assignments, and other written assurances as Telnet shall reasonably request in
order to vest and confirm Telnet title to the shares, assets and properties to
be and intended to be transferred, assigned, and conveyed hereunder.
18. Parties in interest. Nothing herein expressed or implied is intended or
shall be construed to confer upon or to give any person, firm, or corporation
other than the parties hereto any rights or remedies under or by reason hereof.
19. Completeness of agreement. This agreement contains the entire understanding
between
the parties hereto with respect to the transactions contemplated hereby.
20. Survival of Representations and Warranties. Each of the parties hereto
hereby agrees that all representations and warranties made by or on behalf of
him or it in this Agreement or in any document or instrument delivered pursuant
hereto shall survive for a period of three (3) years following the Closing Date
and the consummation of the transactions contemplated hereby, except with
respect to the representation and warranties set forth in Section 4 which shall
survive applicable statute of limitations period.
IN WITNESS HEREOF, the Parties hereto have hereunder set their hands and seals,
effective on the date above stated, as witnessed below:
-6-
<PAGE>
TELNET WORLD COMMUNICATIONS, INC.
A Utah corporation
By:/s/ Douglas Grobe
- - --------------------
Douglas Grobe, President
TRIPLE S PARTS, INC.
A Nevada Corporation
By:/s/ Tracie Pollack
- - ---------------------
Tracie Pollak, President
-7-
