U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended September 30, 2000
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _______________ to ________________
Commission File No.: 000-29639
RDC International, Inc.
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(Name of small business registrant in its charter)
Florida 65-0950425
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1819 Main Street, Suite 702
Sarasota, FL 34236
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (941) 365-9955
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange
on which registered
None
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Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.0001 par value
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(Title of class)
Copies of Communications Sent to:
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696 Fax: (561) 659-5371
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Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
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Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
State registrant's revenues for its most recent fiscal year. $0
Of the 6,840,000 shares of voting stock of the registrant issued and
outstanding as of September 30, 2000, 2,720,000 shares were held by
non-affiliates. Because of the absence of an established trading market for the
voting stock, the registrant is unable to calculate the aggregate market value
of the voting stock held by non-affiliates as of a specified date within the
past 60 days.
PART I
Item 1. Description of Business
(a) Business Development
RDC International, Inc. (the "Company" or "RDC") is incorporated in the
State of Florida. The Company was originally incorporated as Lautrec, Inc. on
September 18, 1995. It changed its name to the current name in connection with a
share exchange between the Company, Retrieval Dynamics Corporation, a Florida
corporation ("Retrieval") and all of the shareholders of Retrieval on June 30,
2000 (the "Agreement"). The Company is not presently trading on an exchange, but
has applied to have its Common Stock quoted on the Over the Counter Bulletin
Board by submitting its 15c2-11 application to the National Association of
Securities Dealers. Its executive offices are presently located at 630 South
Orange Avenue, Sarasota, FL 34236. Its telephone number is (941) 365-9955 and
its facsimile number is (941) 265-9966.
The Company is filing this Form 10-KSB in compliance with the
effectiveness of its filing on Form 10-SB. The Company will file periodic
reports in the event its obligation to file such reports is suspended under the
Securities and Exchange Act of 1934 (the "Exchange Act".)
The Company was formed with the contemplated purpose to export and sell
products in France. The incorporator was unable to successfully implement the
initial business plan. After development of a business plan and efforts to
develop the business failed, all such efforts were abandoned in August 1996. In
June 2000, at the time it acquired Retrieval as a wholly-owned
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subsidiary, its purpose changed to Retrieval's initial purpose of providing
industry-specific wireless software and service solutions for mobile
professionals.
The Company relied upon Section 4(2) of the Securities Act of 1933, as
amended (the "Act") and Rule 506 of Regulation D promulgated thereunder ("Rule
506") for several transactions regarding the issuance of its unregistered
securities. In each instance, such reliance was based upon the fact that (i) the
issuance of the shares did not involve a public offering, (ii) there were no
more than thirty-five (35) investors (excluding "accredited investors"), (iii)
each investor who was not an accredited investor either alone or with his
purchaser representative(s) has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of the
prospective investment, or the issuer reasonably believes immediately prior to
making any sale that such purchaser comes within this description, (iv) the
offers and sales were made in compliance with Rules 501 and 502, (v) the
securities were subject to Rule 144 limitations on resale and (vi) each of the
parties was a sophisticated purchaser and had full access to the information on
the Company necessary to make an informed investment decision by virtue of the
due diligence conducted by the purchaser or available to the purchaser prior to
the transaction (the "506 Exemption").
In September 1999, prior to its acquisition by the Company, Retrieval
entered into an employment agreement with John Harkola, the Company's current
Chairman and Chief Executive Officer. Mr. Harkola received a monthly installment
based upon an annual salary in the amount of $110,000 until November 2000. At
that time, his annual salary (and his monthly installment) was increased to
$160,000. He receives an automobile allowance of $1,000 per month and cellular
phone service at the expense of Retrieval. He is also entitled to other benefits
including life insurance, health insurance, participation in Retrieval's bonus
incentive program and participation in a stock option plan as they become
available. The term is for a period of two (2) years. See Part I, Item 1.
"Description of Business - (b) Business of Registrant - Employees and
Consultants"; Part III, Item 10. "Executive Compensation - Employee Contracts
and Agreements"; Part III, Item 11. "Security Ownership of Certain Beneficial
Owners and Management"; and Part III, Item 12. "Certain Relationships and
Related Transactions".
In March 2000, prior to its acquisition by the Company, Retrieval
entered into an employment agreement with Anthony Cella, the Company's current
Chief Financial Officer and Vice-Chairman. Mr. Cella received a monthly
installment based upon an annual salary in the amount of $120,000 until November
2000. At that time, his annual salary (and his monthly installment) was
increased to $160,000. He receives an automobile allowance of $1,000 per month
and cellular phone service at the expense of Retrieval. He is also entitled to
other benefits including life insurance, health insurance, participation in
Retrieval's bonus incentive program and participation in a stock option plan as
they become available. The term is for a period of two (2) years. See Part I,
Item 1. "Description of Business - (b) Business of Registrant - Employees and
Consultants"; Part III, Item 10. "Executive Compensation - Employee Contracts
and Agreements"; Part III, Item 11. "Security Ownership of Certain Beneficial
Owners and Management"; and Part III, Item 12. "Certain Relationships and
Related Transactions".
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In March 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Clifford L. Tager, the Company's current
Secretary and Director, in the principal amount of $15,000. The note bears
interest at a rate of nine percent (9%) per annum. The note matures thirty (30)
days following the earlier of (i) an initial public offering of the Company's
Common Stock, through a 1933 Act Registration, (ii) a merger or a reverse
merger, or (iii) a buyout of the corporation. At maturity, the holder has the
option to: (i) request repayment of all principal and interest, (ii) convert all
or part of the principal and/or the interest into shares of the Company's Common
Stock at a price equal to fifty percent (50%) of the market price, or (iii)
request that the Company convert the note into shares of the Company's Preferred
Stock if available. In November 2000, the holder elected to convert all of said
principal but none of the interest to 30,000 shares of the Company's restricted
Common Stock The interest is still outstanding. For such offering, the Company
relied upon the 506 Exemption and Section 36b-31-21b-9b of the Connecticut Code.
See Part I, Item 1. "Description of Business - (b) Business of Registrant -
Employees and Consultants"; Part I, Item 6. "Management's Discussion and
Analysis or Plan of Operation - Financial Condition, Liquidity and Capital
Resources"; Part III, Item 10. "Executive Compensation - Employee Contracts and
Agreements"; Part III, Item 11. "Security Ownership of Certain Beneficial Owners
and Management"; and Part III, Item 12. "Certain Relationships and Related
Transactions".
The facts relied upon to make the Connecticut exemption applicable,
include the following: (i) the aggregate commission, discount or other similar
remuneration paid or given directly or indirectly in connection with the sale,
excluding legal, accounting and printing fees, did not exceed fifteen percent
(15%) of the initial offering price, (ii) the issuer exercised reasonable care
to ensure compliance with limitations on resale, and (ii) prior to the first
sale of securities in Connecticut, the issuer filed with the Connecticut
commissioner, manually signed notice on Form D, which notice included an
undertaking by the issuer to furnish state securities administrators, upon their
written request, with information furnished by the issuer to offerees, consent
to service of process on Form U-2 , the filing fee proscribed by the general
statutes and the name and address of the person who offered and sold the
securities in Connecticut.
In April 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Clifford L. Tager, the Company's current
Secretary and Director, in the principal amount of $6,000. The note bears
interest at a rate of nine percent (9%) per annum. The note matures thirty (30)
days following the earlier of (i) an initial public offering of the Company's
Common Stock, through a 1933 Act Registration, (ii) a merger or a reverse
merger, or (iii) a buyout of the corporation. At maturity, the holder has the
option to: (i) request repayment of all principal and interest, (ii) convert all
or part of the principal and/or the interest into shares of the Company's Common
Stock at a price equal to fifty percent (50%) of the market price, or (iii)
request that the Company convert the note into shares of the Company's Preferred
Stock if available. The note is still outstanding. For such offering, the
Company relied upon the 506 Exemption and Section 36b- 31-21b-9b of the
Connecticut Code. See Part I, Item 1. "Description of Business - (b) Business of
Registrant - Employees and Consultants"; Part I, Item 6. "Management's
Discussion and Analysis or Plan of Operation - Financial Condition, Liquidity
and Capital Resources"; Part III, Item 10. "Executive Compensation - Employee
Contracts and Agreements"; Part III, Item 11. "Security Ownership of Certain
Beneficial Owners and Management"; and Part III, Item 12. "Certain
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Relationships and Related Transactions".
The facts relied upon to make the Connecticut exemption applicable,
include the following: (i) the aggregate commission, discount or other similar
remuneration paid or given directly or indirectly in connection with the sale,
excluding legal, accounting and printing fees, did not exceed fifteen percent
(15%) of the initial offering price, (ii) the issuer exercised reasonable care
to ensure compliance with limitations on resale, and (ii) prior to the first
sale of securities in Connecticut, the issuer filed with the Connecticut
commissioner, manually signed notice on Form D, which notice included an
undertaking by the issuer to furnish state securities administrators, upon their
written request, with information furnished by the issuer to offerees, consent
to service of process on Form U-2 , the filing fee proscribed by the general
statutes and the name and address of the person who offered and sold the
securities in Connecticut.
In April 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Ned W. Shawkey and Helen Shawkey,
Trustees in the principal amount of $10,000. The note bears interest at a rate
of nine percent (9%) per annum. The note matures thirty (30) days following the
earlier of (i) an initial public offering of the Company's Common Stock, through
a 1933 Act Registration, (ii) a merger or a reverse merger, or (iii) a buyout of
the corporation. At maturity, the holder has the option to: (i) request
repayment of all principal and interest, (ii) convert all or part of the
principal and/or the interest into shares of the Company's Common Stock at a
price equal to fifty percent (50%) of the market price, or (iii) request that
the Company convert the note into shares of the Company's Preferred Stock if
available. In November 2000, the holder elected to convert $1,000 of said
principal to 2,000 shares of the Company's restricted Common Stock The remaining
principal and interest is still outstanding. For such offering, the Company
relied upon the 506 Exemption and Section 517.061(11) of the Florida Code. See
Part I, Item 6. "Management's Discussion and Analysis or Plan of Operation -
Financial Condition, Liquidity and Capital Resources"; and Part III, Item 12.
"Certain Relationships and Related Transactions".
The facts relied upon to make the Florida exemption available include
the following: (i) sales of the shares of Common Stock were not made to more
than 35 persons; (ii) neither the offer nor the sale of any of the shares was
accomplished by the publication of any advertisement; (iii) all purchasers
either had a preexisting personal or business relationship with one or more of
the executive officers of the Company or, by reason of their business or
financial experience, could be reasonably assumed to have the capacity to
protect their own interests in connection with the transaction; (iv) each
purchaser represented that he was purchasing for his own account and not with a
view to or for sale in connection with any distribution of the shares; and (v)
prior to sale, each purchaser had reasonable access to or was furnished all
material books and records of the Company, all material contracts and documents
relating to the proposed transaction, and had an opportunity to question the
executive officers of the Company. Pursuant to Rule 3E-500.005, in offerings
made under Section 517.061(11) of the Florida Statutes, an offering memorandum
is not required; however each purchaser (or his representative) must be provided
with or given reasonable access to full and fair disclosure of material
information. An issuer is deemed to be satisfied if such purchaser or his
representative has been given access to all material books and records of the
issuer; all material contracts and documents relating to the proposed
transaction; and an opportunity to question the
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appropriate executive officer. In that regard, Mr. Voghel supplied such
information and was available for such questioning.
In April 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Charles H. Fridley and Teresa S. Fridley
in the principal amount of $50,000. The note bears interest at a rate of nine
percent (9%) per annum. The note matures thirty (30) days following the earlier
of (i) an initial public offering of the Company's Common Stock, through a 1933
Act Registration, (ii) a merger or a reverse merger, or (iii) a buyout of the
corporation. At maturity, the holder has the option to: (i) request repayment of
all principal and interest, (ii) convert all or part of the principal and/or the
interest into shares of the Company's Common Stock at a price equal to fifty
percent (50%) of the market price, or (iii) request that the Company convert the
note into shares of the Company's Preferred Stock if available. In November
2000, the holder elected to convert $25,000 of said principal plus $2493.49 of
interest to 54,987 shares of the Company's restricted Common Stock The remaining
principal and interest is still outstanding. For such offering, the Company
relied upon the 506 Exemption and Section 517.061(11) of the Florida Code. See
Part I, Item 6. "Management's Discussion and Analysis or Plan of Operation -
Financial Condition, Liquidity and Capital Resources"; and Part III, Item 12.
"Certain Relationships and Related Transactions".
The facts relied upon to make the Florida exemption available include
the following: (i) sales of the shares of Common Stock were not made to more
than 35 persons; (ii) neither the offer nor the sale of any of the shares was
accomplished by the publication of any advertisement; (iii) all purchasers
either had a preexisting personal or business relationship with one or more of
the executive officers of the Company or, by reason of their business or
financial experience, could be reasonably assumed to have the capacity to
protect their own interests in connection with the transaction; (iv) each
purchaser represented that he was purchasing for his own account and not with a
view to or for sale in connection with any distribution of the shares; and (v)
prior to sale, each purchaser had reasonable access to or was furnished all
material books and records of the Company, all material contracts and documents
relating to the proposed transaction, and had an opportunity to question the
executive officers of the Company. Pursuant to Rule 3E-500.005, in offerings
made under Section 517.061(11) of the Florida Statutes, an offering memorandum
is not required; however each purchaser (or his representative) must be provided
with or given reasonable access to full and fair disclosure of material
information. An issuer is deemed to be satisfied if such purchaser or his
representative has been given access to all material books and records of the
issuer; all material contracts and documents relating to the proposed
transaction; and an opportunity to question the appropriate executive officer.
In that regard, Mr. Voghel supplied such information and was available for such
questioning.
In April 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Janet Molino-Bem in the principal amount
of $25,000. The note bore interest at a rate of nine percent (9%) per annum. The
note matured thirty (30) days following the earlier of (i) an initial public
offering of the Company's Common Stock, through a 1933 Act Registration, (ii) a
merger or a reverse merger, or (iii) a buyout of the corporation. At maturity,
the holder has the option to: (i) request repayment of all principal and
interest, (ii) convert all or part of the principal
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and/or the interest into shares of the Company's Common Stock at a price equal
to fifty percent (50%) of the market price, or (iii) request that the Company
convert the note into shares of the Company's Preferred Stock if available. The
note has since been repaid in full. For such offering, the Company relied upon
the 506 Exemption and Section 517.061(11) of the Florida Code. See Part I, Item
6. "Management's Discussion and Analysis or Plan of Operation - Financial
Condition, Liquidity and Capital Resources"; and Part III, Item 12. "Certain
Relationships and Related Transactions".
The facts relied upon to make the Florida exemption available include
the following: (i) sales of the shares of Common Stock were not made to more
than 35 persons; (ii) neither the offer nor the sale of any of the shares was
accomplished by the publication of any advertisement; (iii) all purchasers
either had a preexisting personal or business relationship with one or more of
the executive officers of the Company or, by reason of their business or
financial experience, could be reasonably assumed to have the capacity to
protect their own interests in connection with the transaction; (iv) each
purchaser represented that he was purchasing for his own account and not with a
view to or for sale in connection with any distribution of the shares; and (v)
prior to sale, each purchaser had reasonable access to or was furnished all
material books and records of the Company, all material contracts and documents
relating to the proposed transaction, and had an opportunity to question the
executive officers of the Company. Pursuant to Rule 3E-500.005, in offerings
made under Section 517.061(11) of the Florida Statutes, an offering memorandum
is not required; however each purchaser (or his representative) must be provided
with or given reasonable access to full and fair disclosure of material
information. An issuer is deemed to be satisfied if such purchaser or his
representative has been given access to all material books and records of the
issuer; all material contracts and documents relating to the proposed
transaction; and an opportunity to question the appropriate executive officer.
In that regard, Mr. Voghel supplied such information and was available for such
questioning.
In June 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Kirk Groome and Alma Groome JT in the
principal amount of $3,000. The note bore interest at a rate of nine percent
(9%) per annum. The note matured thirty (30) days following the earlier of (i)
an initial public offering of the Company's Common Stock, through a 1933 Act
Registration, (ii) a merger or a reverse merger, or (iii) a buyout of the
corporation. At maturity, the holder had the option to: (i) request repayment of
all principal and interest, (ii) convert all or part of the principal and/or the
interest into shares of the Company's Common Stock at a price equal to fifty
percent (50%) of the market price, or (iii) request that the Company convert the
note into shares of the Company's Preferred Stock if available. In November
2000, the holder elected to convert all principal and interest to 6,206 shares
of the Company's restricted Common Stock. For such offering, the Company relied
upon the 506 Exemption and Section 517.061(11) of the Florida Code. See Part I,
Item 6. "Management's Discussion and Analysis or Plan of Operation - Financial
Condition, Liquidity and Capital Resources"; and Part III, Item 12. "Certain
Relationships and Related Transactions".
The facts relied upon to make the Florida exemption available include
the following: (i) sales of the shares of Common Stock were not made to more
than 35 persons; (ii) neither the offer nor the
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sale of any of the shares was accomplished by the publication of any
advertisement; (iii) all purchasers either had a preexisting personal or
business relationship with one or more of the executive officers of the Company
or, by reason of their business or financial experience, could be reasonably
assumed to have the capacity to protect their own interests in connection with
the transaction; (iv) each purchaser represented that he was purchasing for his
own account and not with a view to or for sale in connection with any
distribution of the shares; and (v) prior to sale, each purchaser had reasonable
access to or was furnished all material books and records of the Company, all
material contracts and documents relating to the proposed transaction, and had
an opportunity to question the executive officers of the Company. Pursuant to
Rule 3E-500.005, in offerings made under Section 517.061(11) of the Florida
Statutes, an offering memorandum is not required; however each purchaser (or his
representative) must be provided with or given reasonable access to full and
fair disclosure of material information. An issuer is deemed to be satisfied if
such purchaser or his representative has been given access to all material books
and records of the issuer; all material contracts and documents relating to the
proposed transaction; and an opportunity to question the appropriate executive
officer. In that regard, Mr. Voghel supplied such information and was available
for such questioning.
In June 2000, the Company effected a forward stock split of its Common
Stock at a rate of five (5) to one (1), for holders of record on June 15, 2000,
with distribution effective June 25, 2000. See Part I, Item 5 "Market for Common
Equity and Related Stockholder Matters."
In June 2000, the Company conducted a share exchange with Retrieval and
the shareholders of Retrieval, whereby the Company issued 4,000,000 shares of
its Common Stock in exchange for shares representing one hundred percent (100%)
of the issued and outstanding Common Stock of Retrieval. Retrieval became a
wholly owned subsidiary of the Company as part of this transaction. In
connection with the exchange, Peter Voghel, the Company's past Chairman and
Chief Executive Officer received 1,480,000 shares, John Harkola, the Company's
current Chairman and Chief Executive Officer received 800,000 shares, Brad
Vossler, a current Director of the Company received 600,000 shares, Anthony
Cella, the Company's current Chief Financial Officer and Vice- Chairman received
80,000 shares and Alan Reiter a current Director received 40,000 shares. For
such offering, the Company relied upon the 506 Exemption, Section 517.061(11) of
the Florida Code, Section 11.602 of the Maryland Code and Section 8-1111(14) of
the Nebraska Code. See Part I, Item 1. "Description of Business - (b) Business
of Registrant - Employees and Consultants"; Part I, Item 6. "Management's
Discussion and Analysis - Stockholder's Deficit; Part III, Item 10. "Executive
Compensation - Employee Contracts and Agreements"; Part III, Item 11. "Security
Ownership of Certain Beneficial Owners and Management"; and Part III, Item 12.
"Certain Relationships and Related Transactions".
The facts relied upon to make the Florida exemption available include
the following: (i) sales of the shares of Common Stock were not made to more
than 35 persons; (ii) neither the offer nor the sale of any of the shares was
accomplished by the publication of any advertisement; (iii) all purchasers
either had a preexisting personal or business relationship with one or more of
the executive officers of the Company or, by reason of their business or
financial experience, could be reasonably assumed to have the capacity to
protect their own interests in connection with the
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transaction; (iv) each purchaser represented that he was purchasing for his own
account and not with a view to or for sale in connection with any distribution
of the shares; and (v) prior to sale, each purchaser had reasonable access to or
was furnished all material books and records of the Company, all material
contracts and documents relating to the proposed transaction, and had an
opportunity to question the executive officers of the Company. Pursuant to Rule
3E-500.005, in offerings made under Section 517.061(11) of the Florida Statutes,
an offering memorandum is not required; however each purchaser (or his
representative) must be provided with or given reasonable access to full and
fair disclosure of material information. An issuer is deemed to be satisfied if
such purchaser or his representative has been given access to all material books
and records of the issuer; all material contracts and documents relating to the
proposed transaction; and an opportunity to question the appropriate executive
officer. In that regard, Ms. Campbell supplied such information and was
available for such questioning.
The facts relied upon to make the Maryland Exemption available include
the following: (i) the Company submitted a manually signed SEC Form D, Notice of
Sale of Securities Pursuant to Regulation D with the Securities Division; (ii)
the form was filed no later than 15 days after the securities were first sold in
Maryland; (iii) the Company submitted a Form U-2, Uniform Consent to Service of
Process, and a Form U-2A, Uniform Corporate Resolution consenting to service of
process in Maryland; (iv) the Company provided the Securities Division with the
date of the first sale of the securities in Maryland under the offering; (v) the
Company provided the Securities Division with the name and CRD number, if any,
of at least one broker-dealer or issuer agent that will effect transactions in
the securities in Maryland; and (vi) the Company paid the appropriate fee of
$100 to the State of Maryland.
The facts relied upon to make the Nebraska exemption available include
the following: (i) the transaction was incident to a right of conversion or a
statutory or judicially approved reclassification, recapitalization,
reorganization, quasi-reorganization, stock split, merger, consolidation or sale
of assets.
From the date of the Agreement in June 2000, to the end of the fiscal
year (September 30, 2000), the Company sold 120,000 shares to three (3)
investors for a total of $120,000. For such offering, the Company relied upon
the 506 Exemption, Section 517.061(11) of the Florida Code and Section
460-44A-506 of the Washington Code. See Part III, Item 12. "Certain
Relationships and Related Transactions".
The facts relied upon to make the Florida exemption available include
the following: (i) sales of the shares of Common Stock were not made to more
than 35 persons; (ii) neither the offer nor the sale of any of the shares was
accomplished by the publication of any advertisement; (iii) all purchasers
either had a preexisting personal or business relationship with one or more of
the executive officers of the Company or, by reason of their business or
financial experience, could be reasonably assumed to have the capacity to
protect their own interests in connection with the transaction; (iv) each
purchaser represented that he was purchasing for his own account and not with a
view to or for sale in connection with any distribution of the shares; and (v)
prior to sale, each purchaser had reasonable access to or was furnished all
material books and records of the Company,
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all material contracts and documents relating to the proposed transaction, and
had an opportunity to question the executive officers of the Company. Pursuant
to Rule 3E-500.005, in offerings made under Section 517.061(11) of the Florida
Statutes, an offering memorandum is not required; however each purchaser (or his
representative) must be provided with or given reasonable access to full and
fair disclosure of material information. An issuer is deemed to be satisfied if
such purchaser or his representative has been given access to all material books
and records of the issuer; all material contracts and documents relating to the
proposed transaction; and an opportunity to question the appropriate executive
officer. In that regard, Mr. Voghel supplied such information and was available
for such questioning.
The facts relied upon to make the Washington Exemption include the
following: (i) the Company filed a completed SEC Form D with the Washington
Department of Financial Institutions, Securities Division; (ii) the Form was
filed not later than 15 days after the first sale; and (iii) the Company
executed a Form U-2 consent to service of process, and (iv) the Company paid an
appropriate filing fee of $300.00 to the Washington State Treasurer.
In July 2000, the Company authorized issuance of 120,000 shares to
Anthony Cella, the Company's current Chief Financial Officer and Vice-Chairman
for services rendered to the Company, although the shares were not issued until
November 2000. For such offering, the Company relied upon the 506 Exemption and
Section 517.061(11) of the Florida Code. See Part I, Item 1. "Description of
Business - (b) Business of Registrant - Employees and Consultants"; Part III,
Item 10. "Executive Compensation - Employee Contracts and Agreements"; Part III,
Item 11. "Security Ownership of Certain Beneficial Owners and Management"; and
Part III, Item 12. "Certain Relationships and Related Transactions".
The facts relied upon to make the Florida exemption available include
the following: (i) sales of the shares of Common Stock were not made to more
than 35 persons; (ii) neither the offer nor the sale of any of the shares was
accomplished by the publication of any advertisement; (iii) all purchasers
either had a preexisting personal or business relationship with one or more of
the executive officers of the Company or, by reason of their business or
financial experience, could be reasonably assumed to have the capacity to
protect their own interests in connection with the transaction; (iv) each
purchaser represented that he was purchasing for his own account and not with a
view to or for sale in connection with any distribution of the shares; and (v)
prior to sale, each purchaser had reasonable access to or was furnished all
material books and records of the Company, all material contracts and documents
relating to the proposed transaction, and had an opportunity to question the
executive officers of the Company. Pursuant to Rule 3E-500.005, in offerings
made under Section 517.061(11) of the Florida Statutes, an offering memorandum
is not required; however each purchaser (or his representative) must be provided
with or given reasonable access to full and fair disclosure of material
information. An issuer is deemed to be satisfied if such purchaser or his
representative has been given access to all material books and records of the
issuer; all material contracts and documents relating to the proposed
transaction; and an opportunity to question the appropriate executive officer.
In that regard, Mr. Voghel supplied such information and was available for such
questioning.
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In July 2000, the Company issued Quantam Financial Manager Company, a
Florida corporation ("Quantam") an option to purchase 100,000 shares of the
Company's restricted Common Stock at a an exercise price of $0.001 per share.
Such option was exercisable for a period of one (1) year. Until the option was
exercised, the option carried certain anti-dilution rights. In July 2000,
Quantam exercised such option, but was not issued 100,000 shares until November
2000. The shares carry piggy-back registration rights. For such offering, the
Company relied upon the 506 Exemption and Section 517.061(11) of the Florida
Code. See Part III, Item 12. "Certain Relationships and Related Transactions".
The facts relied upon to make the Florida exemption available include
the following: (i) sales of the shares of Common Stock were not made to more
than 35 persons; (ii) neither the offer nor the sale of any of the shares was
accomplished by the publication of any advertisement; (iii) all purchasers
either had a preexisting personal or business relationship with one or more of
the executive officers of the Company or, by reason of their business or
financial experience, could be reasonably assumed to have the capacity to
protect their own interests in connection with the transaction; (iv) each
purchaser represented that he was purchasing for his own account and not with a
view to or for sale in connection with any distribution of the shares; and (v)
prior to sale, each purchaser had reasonable access to or was furnished all
material books and records of the Company, all material contracts and documents
relating to the proposed transaction, and had an opportunity to question the
executive officers of the Company. Pursuant to Rule 3E-500.005, in offerings
made under Section 517.061(11) of the Florida Statutes, an offering memorandum
is not required; however each purchaser (or his representative) must be provided
with or given reasonable access to full and fair disclosure of material
information. An issuer is deemed to be satisfied if such purchaser or his
representative has been given access to all material books and records of the
issuer; all material contracts and documents relating to the proposed
transaction; and an opportunity to question the appropriate executive officer.
In that regard, Mr. Voghel supplied such information and was available for such
questioning.
In August 2000, Retrieval executed a convertible note in favor of
Clifford L. Tager, the Company's current Secretary and Director, in the
principal amount of $30,750. The note bears interest at a rate of nine percent
(9%) per annum. The note matures thirty (30) days following the earlier of (i)
an initial public offering of the Company's Common Stock, through a 1933 Act
Registration, (ii) a merger or a reverse merger, or (iii) a buyout of the
corporation. At maturity, the holder has the option to: (i) request repayment of
all principal and interest, (ii) convert all or part of the principal and/or the
interest into shares of the Company's Common Stock at a price equal to fifty
percent (50%) of the market price, or (iii) request that the Company convert the
note into shares of the Company's Preferred Stock if available. The note is
still outstanding. For such offering, the Company relied upon the 506 Exemption
and Section 36b-31-21b-9b of the Connecticut Code. See Part I, Item 1.
"Description of Business - (b) Business of Registrant - Employees and
Consultants"; Part I, Item 6. "Management's Discussion and Analysis or Plan of
Operation - Financial Condition, Liquidity and Capital Resources"; Part III,
Item 10. "Executive Compensation - Employee Contracts and Agreements"; Part III,
Item 11. "Security Ownership of Certain Beneficial Owners and Management"; and
Part III, Item 12. "Certain Relationships and Related Transactions".
11
<PAGE>
The facts relied upon to make the Connecticut exemption applicable,
include the following: (i) the aggregate commission, discount or other similar
remuneration paid or given directly or indirectly in connection with the sale,
excluding legal, accounting and printing fees, did not exceed fifteen percent
(15%) of the initial offering price, (ii) the issuer exercised reasonable care
to ensure compliance with limitations on resale, and (ii) prior to the first
sale of securities in Connecticut, the issuer filed with the Connecticut
commissioner, manually signed notice on Form D, which notice included an
undertaking by the issuer to furnish state securities administrators, upon their
written request, with information furnished by the issuer to offerees, consent
to service of process on Form U-2 , the filing fee proscribed by the general
statutes and the name and address of the person who offered and sold the
securities in Connecticut.
In September 2000, Retrieval entered into a cooperation agreement with
Phone Online, Inc., a Tennessee corporation ("POI"), whereby both companies can
take advantage of each others clients and contacts, resulting in a paid
commission to the other. The commission is a fee of ten percent (10%) of net
revenue generated by the relationship in the first twelve (12) months. The term
of the contract is indefinite, but either party may terminate by thirty (30)
days written notice to the other.
In September 2000, Retrieval contracted with MethodFactory, Inc.
("MFI") to produce the website design and the web-based management facility for
the Retrieval's Qxprint(TM) product. For such services, Retrieval is to pay MFI
$21,500.
In October 2000, Retrieval contracted with MFI to create a contact
import and customer service representative administration panel for its
Qxprint(TM) software product. For such services, Retrieval is to pay MFI
$12,500.
In October 2000, Retrieval entered into a master service agreement with
POI. The term of the agreement is the later of four (4) years and the conclusion
of services under any then current work statement. The agreement is
automatically renewable for successive one (1) year periods. Beginning February
2001 and for a period of three (3) years thereafter, Retrieval must pay POI
eight percent (8%) of its gross revenues generated. POI granted Retrieval a one
(1) year license to use and operate its Blue Moon software on Retrieval
computers. Such license is automatically renewable for successive one (1) year
periods. For such license, Retrieval must pay POI an annual license fee
determined by multiplying the last full month hosting fee by twelve (12). The
first work statement generated under the master service agreement was for
Retrieval's Qxprint(TM) 1.0 software product. The project is scheduled to be
completed by January 19, 2001. The contract price is $98,000.
In November 2000, Retrieval entered into a lease with Osprey, S.A.,
Ltd. for the premises located at 1819 Main Street, Suites 702 and 703, Sarasota,
FL 34236. The lease is for a period of five (5) years. Rent for the first year
is $8,008 per month, for the second year is $13,156 per month, for the third
year is $13,728 per month, for the fourth year is $14,300 per month and for the
fifth year is $14,872 per month. The property serves as both Retrieval's and the
Company's main headquarters and consists of approximately six thousand eight
hundred sixty four (6,864) square feet of office space. See Part 1, Item 2.
"Description of Property" and Part III, Item 12. "Certain Relationships and
Related Transactions".
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See (b) "Business of Registrant" immediately below for a description of
the Company's business.
(b) Business of Registrant
General
The Company was formed in September 1995 and had little or no
operations until June, 2000, when it acquired Retrieval. The Company is
headquartered in Sarasota, Florida. The Company conceives and develops
industry-specific wireless software and service solutions for mobile
professionals. The Company is known as an eWASP (electronic wireless service
provider). As a service provider, the Company develops and offers wireless
application services.
Wireless Industry Overview
Introduction
Data communications is the fastest growing segment of the
communications industry. The Internet, in particular, has emerged as one (1) of
the fastest growing communications media in history and is dramatically changing
how businesses and individuals communicate and share information.
Traditionally, small and medium sized businesses have relied on low
speed lines for data transport. Data communications, particularly through the
Internet, have made it possible for smaller companies to compete more
effectively with larger competitors. Most companies, particularly small and
medium sized businesses, lack the expertise, capital or personnel required to
install, maintain and monitor their own web infrastructures. With the
convergence of wireless communications and Internet services, more businesses
each quarter are opting for wireless technology to meet their data and
communication needs.
In recent years, the proliferation of wireless communications solutions
has extended the reach and connectivity of mobile professionals. For example, in
voice communications, cellular telephones have enabled mobile users to place
phone calls from virtually any location. Similarly, advances in wireless data
communication, including wireless local area networks ("LANs") have enabled the
extension of enterprise networks to the notebook computers and the handheld
information communication devices of mobile users. The projected growth of
wireless data communication systems, driven by increasing connectivity options
for mobile users, should result in increased accuracy, timeliness and
convenience of information access, thereby reducing costs and improving
productivity.
Mobile professionals need tools that provide them with real-time access
to mission-critical information at all times. The Company is in the business of
providing mobile professionals with the tools they need to access data from
anywhere in the world with convenience, speed, reliability and security.
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Wireless data telegraphy is defined as communication without wires over
distance by the use of arbitrary codes. Primitive examples include waving
lanterns by night or sending smoke signals. Modern examples include hand-held
devices like pagers, smart phones and personal digital assistants ("PDAs") using
wireless modems to enable wireless data communications.
Wireless data: basic types and applications
While the technologies, protocols and network infrastructure supporting
wireless data are often complex, most data applications can be simply divided
into three (3) main types: bursty, query-response and batch-files
Bursty data -- quick bursts of data are sent from point-to-point. Emerging
applications in this area include remote electric power meter readings, wireless
burglar alarms and other remote sensing applications.
Query/response -- query and response lies at the heart of new wireless data
applications and devices that allow for wireless e-mail and Internet access.
Twenty (20) years ago commercial uses for wireless data were largely
confined to private microwave data networks used by railroad companies and
specialized mobile radio systems used for dispatch services by taxi companies
and the local police.
Technological advances (such as digitalization, data compression,
smaller devices) and critical regulatory decisions (to license new spectrum for
cellular telephony and other new applications) have greatly increased the
availability of wireless communications while reducing costs to consumers.
The result has been dramatic growth in the market for cellular
telephones. (For example, cellular telephone subscriptions have increased from
just over two million (2,000,000) to over sixty million (60,000,000) in the last
ten (10) years. Many feel the wireless data industry is now poised for similar
growth.)
Voice to data
Until recently, wireless data was essentially a niche market largely
confined to vertical applications within large companies. For example, IBM,
Federal Express and UPS built successful private wireless data networks to allow
their field service personnel to operate more efficiently. The explosion of the
Internet, of corporate intranets and the convergence of the computing and
communications industries are creating new opportunities.
Barriers to entry for users are coming down. There are little, sleek,
light types of devices available to the consumer, network infrastructures are in
place, network operating costs are going down, all making it economical to
develop new services that make financial sense. With the Internet and intranets,
mobile users can access content that previously was not available.
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<PAGE>
The wireless data marketplace includes the following classes:
Wireless Handset Manufacturers: These are the companies which make wireless
devices such as Nokia, Ericsson, Palm, Handspring, RIM and Motorola. These
companies are generally large and are typically slow to implement new
applications to their devices.
Carriers: The carriers are the phone companies which own the networks. These
include: Sprint, AT&T, Verizon, Alltel, BellSouth, Skytel, etc. These companies
all have different technologies and different standards making it extremely
difficult to develop applications which operate on all devices. Because these
companies are generally large and slow to adopt new technologies, a new
middleware marketplace has recently opened up.
Middleware: There are several companies which have developed platforms that
allow developers to deliver wireless applications to all of the different
devices utilizing any of the carriers' networks. Most of these platforms are XML
driven. They usually purchase a gateway or subscribe to the carrier's gateways.
These companies include: Broadbeam, Air2Web, Anydevice, Everypath,
PhoneOnline.com, etc.
Wireless Application Service Providers: This is one of the largest and fastest
growing groups of Wireless data companies. These companies usually license and
resale each other's applications, host their own applications and provide
middleware services as well. Many of the middleware companies are deeming
themselves application service providers, because they host other companies'
applications. Retrieval fits in this category as well as Aether Systems, 724
Solutions, Everypath, Air2Web and many others.
Wireless Application Developers: These are the companies that are developing
wireless data applications. This is by far the largest group in the wireless
industry. The middleware and WASP's are also writing their own applications.
Retrieval is also included in this category. Other companies include: Aether,
Idini, Fusion One, @hand, Virtualtek, etc.
Wireless Internet Service Providers (WISP's): These are the companies that
provide wireless internet access. There are two (2) different types - one (1)
provides internet access to the mobile professional, ie: GoAmerica, Wynd
Communications, AT&T and other CDPD providers; the other provides fixed
"wireless" internet services, ie: Array Communications, Breakfree Wireless and
Clear Access Communications.
Adoptives for growth of Wireless data applications:
The wireless industry must advance the following areas in order to make data
applications phone- centric:
1. Change the paradigm for wireless data applications to suit the needs and
expectations of the mobile user by adopting push technology in place of
browsing.
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2. Eliminate users' need to interactively search for information by having them
set alerts that trigger information to be pushed to them when their criteria is
met. Alert agents can then work on behalf of users, even when they are
disconnected.
3. Present only information relevant to users. This decreases the amount of
information they have to read, and it increases its value. The alert
notification only should contain the information that changed and/or the link to
the data.
4. Decrease users' airtime costs. Presenting only relevant information and using
push technology will assist in this.
Beyond these changes, applications need to be more accessible by mobile
users. They must gain access to Web sites without having to type long Web site
names, because typing on a phone is difficult and cumbersome. Setting alerts
while mobile and receiving notifications from corporate websites and
applications will address all of these issues.
Scores of alerts are likely to be set by individual mobile users to
address a variety of circumstances, including flight delays, price reductions,
sale notifications, inventory changes and updated job orders. Thus, it's likely
alert-based systems will enable mobile users to determine what information they
want delivered by setting alerts simply and quickly from their phones. This will
help eliminate form factor and other inherent limitations of mobile phones that
have, to date, proved to be barriers to pervasive wireless data services use.
Wireless data transmission: how it works
Analog vs. digital
Until recently, most wireless data transmitted through radio
communications have been analog. Analog systems use continuous electrical
signals for the transmission and reception of information. Next generation
wireless data systems are turning towards the use of digital signals, whose
amplitude variations with respect to time are not continuous but discrete.
Digital
Digital systems have several advantages including allowing better
coverage, more calls per channel, less noise interference and the ability to add
new features and functions such as short messaging.
Session v. packet transmission
Session based communications assign users a discrete line or radio
channel that is dedicated to the users until the session is completed. The
circuit for the data exchange is "tied up" until the communication is complete.
Packet data communications are more efficient
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In packet transmissions, packets from a number of different
conversations or data messages can traverse the same channel. Packets are mixed
on the channel but are re-assembled correctly at the receiving end.
Wireless data: apparatus types
No single "form factor" meets the needs of every customer. For some,
small size is key. For others, performance and flexibility matter more. The
following is a categorization of devices on the market which utilize wireless
data:
PDAs: Palm Pilot, Newton , Handspring
Smart Phones: Mitsubishi, Ericsson, Samsung, Nokia Communicator, Sony
Hand-held computers: Hewlett Packard
Two-way pagers: RIM, Skytel
Automobile applications: Highway Master
Wireless modems: Sierra Wireless, NovAtel, 3Com
Wireless data: network infrastructures
While the customer usually sees seamless and reliable service, behind
the scenes the wireless data industry is still working out the "kinks" in
developing and building data transmission networks and agreeing on standards and
protocols. There is more than one (1) competing vision. In the end, many experts
believe that the growing market for wireless data will support multiple networks
and protocols and faster speeds.
Wired modem speeds
Modem speeds started at 300 bits-per-second, progress rapidly through
1200, 2400, 4800, 9600, 14,400, 19,200, 28,800, 33,600 and now 56,600 bps or
56.6 Kbps (kilobytes per second). The current standard for dial-up services is
56.6 Kbps. With the advent of broadband, it is possible to provide speeds from
128Kbps up to 32Mbps (mega bytes per second).
Wireless networks speeds: today
<TABLE>
<S> <C> <C>
Ardis 19.2/4.8 Kbps Packet
CDMA 19.2Kbps Packet
CDPD 19.2Kbps Packet
Cellular (Analog) 14.4/9.6Kbps Dial up
GSM 9.6Kbps Dial up
Metricom 56.6Kbps Dial up/packet
i-Mode 9.6Kbps Packet
</TABLE>
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<PAGE>
Networks speeds: near term
<TABLE>
<S> <C> <C>
Ardis 28.8 Kbps Packet
CDMA 28.8 Kbps Circuit/packet
CDPD 28.8 Kbps Packet
Cellular(analog) 28.8 Kbps Circuit/packet
GSM 14.4 Kbps Circuit/packet
Metricom 128 Kbps Dial up/packet
</TABLE>
Products
The Company's products currently consist of two (2) software devices
for mobile data technology, which are nearing rollout stage.
The Company's initial product, Qxprint(TM), is a back office tool for
the mobile professional. Qxprint(TM) is best described as a thin client
application that the user can access with any wireless data device. Qxprint(TM)
should offer a sample document library which can be selected, viewed, customized
and cataloged for users of Wireless Application Protocol ("WAP") cell phones,
Research in Motion's ("RIM") and Motorola's two-way pagers, Palm devices and any
other wireless device. The service will be accessed through Retrieval's website.
The customer will be able to manage and upload documents which will be
convertible to a secure read-only Adobe PDF file which can be accessed via a
wireless device and sent via e-mail, fax or printed mail to the customer's
selected contact.
The Company's other wireless application, DocLYNX7(TM), will enable
users to warehouse documents, forms, pictures and streaming video; send e-mail
and faxes; print on demand; provide text to speech capabilities; and retrieve
the stored mediums to their laptop or hand-held computer. DocLYNX7(TM) will be a
client application that the user will install via CD-ROM or download on their
desktop, laptop or handheld computer.
Currently, this product works on a Windows NT/98 platform, which is
useable on most laptops with a Cellular Data Packet Distribution ("CDPD") and
normal wired dial-up. The Company plans to manage information by spooling
information from the DocLYNX7(TM) client to other handheld platforms such as
Windows CE devices, cell phone browsers such as Phone.com's Unwired Planet and
RIM two-way pagers. The Company plans to partner with middleware providers such
as Broadbeam and Air2Web to deliver the content via WAP, Short Messaging System
(SMS) phones or any other medium, although no such contract is in place.
Qxprint(TM)
The Qxprint(TM) engine was designed to allow wireless devices the
capability to direct the retrieval of data to a fulfillment center. The
additional functionality of attaching real-time information to the retrieved
data opens limitless possibilities. Wireless devices connect via thin client
software to the Internet and our data transaction application server. The real
time data is merged with the retrieved data and the new information is formatted
and passed on for distribution. An e-mailed confirmation message is bounced back
to the originator. The transaction is recorded and can be easily accessed for
review and auditing.
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The Qxprint(TM) engine is an enterprise solution making possible
variable order entry and fulfillment on a wireless platform. Any enterprise with
a mobile professional base can use the Qxprint(TM) solution to more cost
effectively facilitate any number of functions from remote ordering to back
office services.
Qxprint(TM) will work on virtually any wireless appliance ranging from
the RIM two-way pagers, WAP phones, and assorted PDAs. Each wireless device will
be presented with a unique custom interface consisting of menu choices driven by
our transaction servers.
Qxprint.com
Through Qxprint.com, Retrieval will be able to offer a sophisticated
real-time back office solution to the mobile professional. Qxprint.com will
allow the user to merge contacts to customer selected documents. With a simple
execute command, the information will be sent to the print-on- demand facility
for fulfillment by postal, e-mail or fax. A return e-mail confirmation receipt
is sent to the client. The service will work on virtually any wireless appliance
ranging from the RIM two- way pagers, WAP phones, and assorted PDAs.
The most exciting element of Qxprint.com is that the service is driven
by customers. Qxprint.com will allow customers to upload and store several
documents which they can choose to fax, e-mail or mail hard copy to their
prospects at any time from their wireless device. The website will contain a
secured customer log-in and account management section which will allow the
customer to audit their transactions and edit their documents and contacts
online. Furthermore, an Active X script will allow the customers to export and
store their Outlook(R), Lotus(R), Act(R), or Goldmine(R) contact lists to the
Company's website for easy access anywhere and anytime. In the future Retrieval
plans to retail wireless devices and solutions from the public section of the
site. By doing so, Retrieval would be able to offer several complete packaged
solutions.
DocLYNX7(TM)
DocLYNX7(TM) will provide the mobile professional with a wireless data
application and/or information tool that is capable of interfacing with a
variety of networks, operating systems and platforms, thereby minimizing the
complexity associated with wireless networks.
The DocLYNX7(TM) is a suite of vertically specific, but scalable
services bundled in a client application with an application server which
provides wireless access to shared information. The DocLYNX7(TM) documentation
is easy to use, having been written by writers and end-users rather than
software designers. DocLYNX7(TM) is explained in exceptionally clear and
understandable terms. The key is the Company's user-defined interface. The
Company believes that the mobile professional has never had such capabilities in
an easy-to-use tool.
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Many products on the market today can help professionals to perform
their jobs better. There are Personal Information Managers, schedulers,
collaboration tools and any number of other applications that could be of use,
but few people have the time and patience to learn how to use them. Most people
end up using a fraction of what is available and benefit from only a fraction of
the functions of those tools they do use. Additionally, people seldom learn
their tools well enough to use them together to help them most efficiently
achieve their goals.
DocLYNX7TM has addressed this problem by providing many useful tools
in a single, simple, integrated interface: email, calendar, scheduling, picture
capture and retrieval, forms processing, document warehousing, collaboration and
more, all from within the same interface and all just a click away. This allows
the user to learn one (1) methodology for performing several tasks, which
increases efficiency and effectiveness and reduces learning time. Each component
of DocLYNX7TM has been built to work with every other component to provide
seamless sharing of information and functionality between all components.
Common tasks such as sending a document to a client or associate,
faxing a proposal or listing a new property have been automated by the use of
intelligent wizards. These wizards step the user through each phase of the
process to allow them to accomplish their goals as easily as possible. The
integration of technologies is what makes DocLYNX7TM unique in the technology
marketplace.
Features of DocLYNX7TM
Document Library. The document library allows the professional to scan documents
into the database from a national business support company. The Company is
currently seeking a strategic relationship with a national organization to
provide not only the scanning capabilities, but also a large number of
print-on-demand features and other business support functions. The documents
scanned into the library are easy to search and retrieve based on keyword, date
or subject. The professional queries the library by any number of terms; for
example, the real estate professional could enter street address, closer, buyer,
etc. The document is displayed as a result of the search. The professional is
then able to print the document to mail, send electronically, or fax on demand
for a total collaborative effort.
Forms. DocLYNX7(TM) will provide on demand all forms relevant to the industry.
All state and federal certified forms are expected to be available in the
system. The professional will have the ability to recall these forms as needed
and share them much in the same way as those completed forms which have been
scanned into the document library. The state and federal forms will be available
for print, fax or e-mail as needed.
Pictures. DocLYNX7(TM) allows professionals to post still pictures and streaming
video to web sites via hand-held picture books or through wireless or wireline
communication networks. These captured images may be shared via e-mail
immediately upon capture. Additionally, with the picture book and wireless
transmission, the professional is able to retrieve pictures on demand and share
that information with their clients or co-workers in real time in the field.
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<PAGE>
E-mail and Faxing, E-faxing. DocLYNX7(TM)provides for e-mail and faxing services
at any time.
Video Conferencing. The video conferencing features of DocLYNX7(TM) allow for
remote mentoring with continued education and training and interaction with
other DocLYNX7(TM) users. Often, training is done at a remote location with
little or no follow-up on technique and application. The video capture feature
of picture book equipment allows trainees to broadcast their client interactions
to a mentor for evaluation and improvement. A professional seeking advice on a
particular issue is able to interact with other users in real time who may have
already experienced and overcome the issue.
Voice Recognition. Using voice recognition, DocLYNX7(TM) users are able to
reduce the time they spend transcribing notes or entering information. The
professional is able to dictate the information directly into the system for
immediate upload and possible printing. Additionally, voice recognition allows
the user to attach audio files to text or files for further explanation of
listing or features.
Business Strategy
The Company's business strategy, which is dependent upon its continuing
to have sufficient cash flow from operations and/or obtaining sufficient
additional financing with which to enhance the commercialization of existing and
future products, is to be a niche provider of eWASP(TM) technology and
information management tools by using the expertise of its staff in application
development. The Company is in the process of developing Qxprint(TM) as a back
office tool which will enable clients to send documents from wireless devices in
real-time through print, fax or e-mail. DocLYNX7(TM), a second software product
being developed by the Company, will provide the mobile professional a data
application and information tool, bundled with vertically specific functionality
offering a complete wireless solutions for their business needs. The Company
seeks to maximize its recurring revenue stream initially by extending its
eWASP(TM) services to a variety of professional vertical markets. Its objectives
for its software applications include the following key elements:
o sell the Company's products in many vertical markets, as the market
for wireless technologies is developing;
o successfully launch Qxprint(TM)as a horizontal wireless application
marketed to mobile sales professionals;
o pursue marketing opportunities which allow the Company to develop the
market presence needed to support sales goals and to attract
developers of new products and services;
o maintain and strengthen strategic relationships with suppliers and
customers;
o focus on providing a quality product, in addition to support and
development after the sale; o utilize expertise in management to
deliver products and services in a timely manner, control costs and
manage budgets;
o pursue selective partnerships to expand the Company's capabilities,
products and services; o build the infrastructure to support future
broadcasting services.
The Company's revenues to date are zero and it is therefore entirely
based upon its capital raising activities. Future revenues are expected to be
based upon the sales of its Qxprint(TM) and
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DocLYNX7(TM) products, as well as additional monies received as a result of
sales of the Company's Common Stock. The Company's revenues are dependent on the
volume of sales from its products it provides.
Revenues from sales are recognized in the period in which sales are
made. The Company's gross profit margin will be determined in part by its
ability to estimate and control direct costs of production and shipping and its
ability to incorporate such costs in the price charged to its distributors.
Marketing and Distribution
The integration of wireless networks with the Internet combined with
the convergence of "smart" mobile devices incorporating newly-designed web
browsers and operating systems that will accommodate third-party applications is
anticipated to drastically change the way people around the world conduct their
businesses and utilize their leisure time. The strongest user demand for
wireless Internet services comes from three (3) categories: e-mail messaging,
World Wide Web browsing, and pull content (also known as Web clipping). Of the
three (3), e-mail messaging is the most critical. Workers rely on e-mail and
want access to it all the time, even when they don't have access to a phone
jack.
Other popular applications for the mobile professional include document
retrieval, print and fax on demand, voice recognition, video conferencing and
personal information management. Vendors have developed new portable computing
devices at breakneck speed. Wireless data currently allows customer service,
sales executives and other members of the team to perform where customer demands
dictate and with minimal restriction. This should be a key revenue producer for
companies with one hundred (100) or more employees and should provide a wide
marketing opportunity for wireless equipment, wireless applications development
and wireless services.
Today's wireless data transmission rates of 9.6 Kbps and 14.4 Kbps are
too slow for most users when dealing with e-mail attachments such as word
processing and spreadsheet documents. Slow speed isn't the only barrier to user
satisfaction. Many of the portable devices available today such as pagers and
palmtop computers cannot accommodate viewing attachments due to a small screen
size.
As with any emerging market, companies are scrambling to offer their
solutions. Such business models that currently exist in the wireless industry
include wireless Internet service providers, wireless application service
providers, and wireless applications developers. WISPs include Sprint PCS, AT&T,
GoAmerica, Palm, and Verizon (Bell Atlantic and Vodaphone's joint venture
company). WASPs include Aether Systems, Geoworks, and Retrieval. Application
Developers include Microsoft, Phone.com, Aether and Retrieval.
Retrieval Dynamics Corporation's marketing plan is to provide a total
solution to the mobile professional. The Company is positioning itself as a
vertical centered Wireless Application Service Provider. Also, the company will
continue to develop multi-platform applications to benefit mobile
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professionals. The Company's potential client has an income of over $85,000
annually and is either self-employed or a partner in a firm. The Company's goal
is to convert twenty percent (20%) of mobile professionals to DocLYNX7(TM)
subscriptions within three (3) years by providing them with tools that allow
them to access real-time information on demand.
The Company's objective for Qxprint(TM) is to achieve five thousand
(5,000) customers in the first fiscal year, seventy percent (70%) from direct
mail and thirty percent (30%) from basic marketing.
The Company's strategy is to become a dominant provider of wireless
data applications and information management solutions by using management's
expertise and knowledge of information management; aggressively promoting the
Company's products through direct sales, advertising, Internet branding and
trade show marketing, and forming strategic alliances with key industry leaders.
The Company seeks to maximize its recurring revenues by providing monthly ISP
and wireless services for its applications along with site licenses for its
enterprise editions. Management also plans to enter new domestic and foreign
markets by expanding into other vertical and horizontal markets, increasing the
number of our channel partner relationships and fostering new strategic
alliances.
Keys to meeting our strategic marketing objectives include the following:
Build critical mass: The Company must build a branding strategy through
aggressive promotion of its vertical market based applications. This can be done
through advertisements in various trade specific magazines and websites. The
Company plans to participate at several trade shows where representatives can
demonstrate Company products and services. The Company's marketing strategy
includes press releases on new developments along with speaking engagements for
top managers to promote and build brand awareness. Also the Company may seek the
expertise of a large public relations firm to build top of mind awareness not
only in its vertical markets, but also the investment community.
Develop the market for existing and new products for mobile professionals: The
Company's initial focus is to meet the needs of the mobile professional. The
Company will focus on the sales professional who understands the value of real
time information and the ability to share that information with their clients,
colleagues and offices in a timely manner. The Company plans to develop a
complete solution, which includes the software as well as the platform on which
to drive customer information needs. The Company plans the development of
additional services, which will expand and enhance the capabilities of
DocLYNX7(TM) and Qxprint(TM). These enhanced functions will empower the
Company's professional clients to use information more efficiently and
effectively.
Expand into new industries: Management believes that it can apply the Company's
information management solutions and wireless applications in any market,
including, but not limited to, real estate, financial, insurance, construction,
industrial and legal. Additionally, the products are easily adaptable to
horizontal markets including traditional industrial businesses, manufacturing
and distribution.
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The Company's long-term strategy is to become a business content
broadcaster/manager through DocLYNX7(TM) Broadcasting. As wireless speeds
increase, this service will become a larger part of the Company's strategic plan
for subscriber retention. Management envisions a time when Company clients will
participate in an online community where one can watch video, conference with
peers and clients and view remote professional activities with wireless
streaming video.
Pursue channel partners, direct response marketing, and strategic acquisitions:
The Company intends to market its products through channel partners who share
Company goals and values, direct marketing efforts and traditional marketing.
Additionally, the Company is seeking strategic alliances with companies who
could provide the Company access to their databases.
Develop our customer base and strengthen the DocLYNX7(TM) and Qxprint(TM) brands
through enhanced sales and marketing promotions: The Company intends to be
aggressive in its marketing mix by promoting the DocLYNX7(TM) and Qxprint(TM)
brands. The Company intends to target DocLYNX7(TM) in the real estate industry,
property management, financial services, insurance, construction, etc.
Initially, Company plans include a beta testing phase which should allow
management to collect and analyze customer feedback. With this information, it
hopes to formulate a print and Internet advertising campaign along with
presentations and exhibits at trade shows to generate top of mind awareness
targeted to the mobile professional.
Other immediate sources of promotion for both DocLYNX7(TM) and
Qxprint(TM) will include direct mailings, e-mail blasts, telemarketing,
aggressive one-on-one sales and event marketing. As the Company is capitalized,
its plans to begin a direct sales campaign by contracting with regional sales
offices and software resellers. The Company will potentially use sales
coordinators to set fifty percent (50%) of its sales teams' engagements as well
as to remove the administrative burden associated with field sales. Its
reporting methodology should allow the Company to accurately forecast sales
events and to track activities remotely at a high level.
Develop an in-house marketing communications and customer support program:
Company marketing staff will develop marketing and sales literature along with a
demonstration compact disk that will be used as a sales tool and in direct
mailings. The Company website is scheduled to be constantly updated to show most
recent developments and partnerships.
The Company will strive to offer the best customer service possible by
providing solutions and answers in a timely fashion. The company will automate
e-mail responses for common questions or problems. To achieve long-term success,
the Company must strive for other elements: superior customer service,
customization of products and services, interactivity and maximum buying
convenience.
Maintain and strengthen our strategic relationships with suppliers and
customers: A key to the Company's ability to provide quality products and
services to its customers is to form strategic relationships with wireless
application service providers, wireless Internet service providers and
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manufacturers of wireless equipment. The Company is pursuing relationships with
print on demand companies and middleware providers for the wireless industry.
Management will pursue partnerships with other WASPs that provide wireless
integration platforms, although no partnerships are in place at this time. Other
strategic alliances should include hardware manufacturers. It is also vital to
partner with multiple carriers. These relationships should allow the Company to
provide its customers with the complete service they require. Fostering these
relationships at this stage could potentially provide the Company with an
advantage over its current and potential competitors.
Pursue selective acquisitions to expand our capabilities: The Company will
pursue acquisitions that management believes will allow the Company to expand
its available resources such as a wireless ISP, imaging print on demand company,
other wireless application service provider or software development company. No
acquisitions are planned or pending at this time.
Status of Publicly Announced Products and Services
Qxprint(TM) : Version 1.0 is scheduled to be released January 19, 2001.
DocLYNX7(TM): is scheduled to be released at the end of fiscal 2001 or
beginning of fiscal 2002.
Competition
The Company faces competition from large, well-established companies
with considerably greater financial, marketing, sales and technical resources
than those available to the Company. Additionally, many of the Company's present
and potential competitors have capabilities that may allow such competitors to
offer its products at prices which may compete with the Company's products. The
Company's products could be made uneconomical by the introduction of new
products, changes affecting the cost of packaging and shipping, or marketing or
pricing actions by one or more of the Company's competitors. The Company's
business, financial condition or results of operations could be materially
adversely affected by one or more of such developments. There can be no
assurance that the Company will be able to compete successfully against current
or future competitors or that competition will not have an material adverse
effect on the Company's business, financial condition or results of operations.
The market for wireless data services is becoming increasingly
competitive. Companies such as OpenSky, Aether Systems and Riverbed are
providing limited content but have the resources to offer similar services. The
Company plans to partner with large systems integrators or similar companies to
offset any encroachment by these firms. As the barriers for entry into wireless
communications decrease, the number of competitors will increase.
Initial competition for DocLYNX7(TM) will come from companies such as
CreSenda, Tegris, and Cyclovision. These companies provide a service to the real
estate agent, which is only one (1) vertical of the DocLYNX7(TM) solution.
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Other competitors include: vVault.com which provides a similar solution
to Qxprint(TM) called BeamDocs. BeamDocs' solution lacks a print on demand
feature offered in Qxprint(TM).
Sources and Availability of Raw Materials
The materials and equipment needed to produce the Company's software
products are widely available from numerous third parties. No shortage of
materials is expected in the foreseeable future.
Dependence on one or few customers
The Company will rely heavily on its customers' preferences to best
determine the products which will be produced. The commercial success of the
Company's products will depend on its ability to predict the type of product
that will appeal to a broad spectrum of the populous and will be affordable.
Although the Company plans to test market their products prior to their release,
there can be no assurance that the Company will be able to predict the appeal of
its products before their production. Considerable expense is expended on
production costs before a product can be test marketed. Therefore, although a
product which tests poor can be scrapped before additional expense is incurred
associated with release including marketing and distribution, the Company may
have to bear the expense of production of some products, which may never be
released. This may have a material adverse effect on the Company.
Research and Development
The Company believes that research and development is an important
factor in its future growth. The software industry and data storage and
transmission are closely linked to the latest technological advances. Therefore,
the Company must continually invest in the technology to provide the best
quality product to the public and to effectively compete with other companies in
the industry. No assurance can be made that the Company will have sufficient
funds to purchase technological advances as they become available. Additionally,
due to the rapid advance rate at which technology advances, the Company's
equipment may be outdated quickly, preventing or impeding the Company from
realizing its full potential profits.
Patents, Copyrights and Trademarks
The Company intends to protect its original intellectual property with
patents, copyrights and/or trademarks as appropriate.
Retrieval Dynamics, DocLYNX7(TM), Qxprint(TM), Qxprint+(TM), eWASP(TM),
"partnering the powerful with the personal(TM)" are trademark protected.
Governmental Regulation
Federal
The Company intends to utilize the Internet for transmission of data
across state lines.
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Presently, the FCC and other federal government agencies do not regulate
companies that provide these services. Notwithstanding the current state of the
rules, the FCC's potential jurisdiction over the Internet is broad because the
Internet relies on wire and radio communications facilities and services over
which these regulatory authorities have long-standing authority.
In Canada, the Canadian Radio-Television and Telecommunication
Commission ("CRTC") determined in 1998 that Internet Telephony services
providers must pay local contribution charges for calls terminating on local
telephone networks, while those calls that originate and terminate on computers
are not subject to these charges. The possibility exists that regulatory
authorities may one day make a determination to apply international call
termination fees or otherwise tariff data transmissions which terminate on local
telephone networks or even which terminate on computers.
The Company also will be required to comply with the regulations
regarding the operation of its business in several foreign jurisdictions and
will be subject to compliance with the requirements of the authorities of these
locales regarding the establishment and operation of its business.
Access charges are assessed by local telephone companies to long
distance companies for the use of the local telephone network to originate and
terminate long distance calls generally on a per minute basis. Access charges
have long been a source of dispute; with long distance companies arguing that
the access rates are substantially in excess of cost and local telephone
companies arguing that access rates are needed to subsidize lower local rates
for end user and other purposes. The FCC currently is considering whether
subscriber calls to Internet service providers should be classified as "local"
or "interstate" calls. Although the FCC to date has determined that Internet
service providers should not be required to pay interstate access charges to
local telephone companies, this decision may be reconsidered in the future if
the FCC finds these calls to be "interstate." The Company's costs for doing
business would increase if the Company were required to pay interstate access
charges.
State
The Company is subject to varying levels of regulation in the states in
which it currently anticipates providing data transmission services. The vast
majority of the states will not require the Company to apply for licensing as a
foreign corporation conducting business in that state, nor do they currently
require the Company to be found exempt from regulation, before commencing
intrastate data transmission service.
If the Company were found to be a telecommunications service carrier or
provider, many states impose various reporting requirements and/or require prior
approval for transfers of control of certified carriers, corporate
reorganizations, acquisitions of telecommunications operations, assignments of
carrier assets, including subscriber bases, carrier stock offerings and
incurrence by carriers of significant debt obligations. Certificates of
authority can generally be conditioned, modified, canceled, terminated or
revoked by state regulatory authorities for failure to comply with state law and
the rules, regulations and policies of the state regulatory authorities. Fines
and other penalties, including the return of all monies received for intrastate
traffic from residents of a state, may be imposed for such violations. In
certain states, prior regulatory approval may be required for acquisitions of
telecommunications operations.
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As the Company expands its efforts to new products and services, the
Company will have to remain attentive to relevant federal and state regulations.
The Company intends to comply fully with all laws and regulations, and the
constraints of federal and state restrictions could impact the success of the
Company's efforts.
The Company is not currently subject to any State regulation with
respect to its Internet related services. However, there can be no assurances
that the Company will not be subject to such regulations in the future.
Additionally, the Company is not aware of any pending legislation that would
have a material adverse effect on the Company's operations.
Effect of Probable Governmental Regulation on the Business
As the Company's services are available over the Internet in multiple
states and foreign countries, these jurisdictions may claim that the Company is
required to qualify to do business as a foreign corporation in each such state
and foreign country. New legislation or the application of laws and regulations
from jurisdictions in this area could have a detrimental effect upon the
Company's business.
A governmental body could impose sales and other taxes on the provision
of the Company's services, which could increase the costs of doing business. A
number of state and local government officials have asserted the right or
indicated a willingness to impose taxes on Internet-related services and
commerce, including sales, use and access taxes; however, no such laws have
become effective to date. The Company cannot accurately predict whether the
imposition of any such taxes would materially increase its costs of doing
business or limit the services which it provides, since it may be possible to
pass on some of these costs to the consumer and continue to remain competitive.
If, as the law in this area develops, the Company becomes liable for
information carried on, stored on, or disseminated through its data services, it
may be necessary for the Company to take steps to reduce its exposure to this
type of liability through alterations in its equipment, insurance or other
methods. This may require the Company to spend significant amounts of money for
new equipment or premiums and may also require it to discontinue offering
certain of its products or services.
Due to the increasing popularity and use of the Internet, it is
possible that additional laws and regulations may be adopted with respect to the
Internet, covering issues such as content, privacy, access to adult content by
minors, pricing, bulk e-mail (spam), encryption standards, consumer protection,
electronic commerce, taxation, copyright infringement and other intellectual
property issues. RDC cannot predict the impact, if any, that future regulatory
changes or developments may have on the Company's business, financial condition,
or results of operation. Changes in the regulatory environment relating to the
Internet access industry, including regulatory changes that directly or
indirectly affect telecommunication costs or increase the likelihood or scope of
competition from regional data service providers or others, could increase the
Company's operating costs, limit its ability to offer services and reduce the
demand for its services.
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Local telephone companies assess access charges to long distance
companies for the use of the local telephone network to originate and terminate
long distance calls, generally on a per-minute basis. Access charges have been a
matter of continuing dispute, with long distance companies complaining that the
rates are substantially in excess of cost, and local telephone companies arguing
that access rates are justified to subsidize lower local rates for end users and
other purposes. Both local and long distance companies, however, contend that
Internet-based telephony should be subject to these charges. Since the Company
has current plans to transmit large data files over the internet, it may be
indirectly affected by these developments. However, RDC cannot predict whether
these debates will cause the FCC to reconsider its current policy of not
regulating Internet service providers.
Cost of Research and Development
For fiscal year 2000, the Company expended $199,008 on research and
development efforts. At the current time, none of the costs associates with
research and development are bourne directly by the customer; however there is
no guarantee that such costs will not be bourne by customers in the future and,
at the current time, the Company does not know the extent to which such costs
will be bourne by the customer, if at all.
Cost and Effects of Compliance with Environmental Laws
The Company's business is not subject to regulation under the state and
Federal laws regarding environmental protection and hazardous substances
control. The Company is unaware of any bills currently pending in Congress which
could change the application of such laws so that they would affect the Company.
Employees and Consultants
At September 30, 2000, the Company employed twelve (12) persons. None
of these employees are represented by a labor union for purposes of collective
bargaining. The Company considers its relations with its employees to be
excellent. The Company plans to employ additional personnel as needed upon
product rollout to accommodate fulfillment needs.
In September 1999, prior to its acquisition by the Company, Retrieval
entered into an employment agreement with John Harkola, the Company's current
Chairman and Chief Executive Officer. Mr. Harkola received a monthly installment
based upon an annual salary in the amount of $110,000 until November 2000. At
that time, his annual salary (and his monthly installment) was increased to
$160,000. He receives an automobile allowance of $1,000 per month and cellular
phone service at the expense of Retrieval. He is also entitled to other benefits
including life insurance, health insurance, participation in Retrieval's bonus
incentive program and participation in a stock option plan as they become
available. The term is for a period of two (2) years. See Part III, Item 10.
"Executive Compensation - Employee Contracts and Agreements"; Part III, Item 11.
"Security Ownership of Certain Beneficial Owners and Management"; and Part III,
Item 12. "Certain Relationships and Related Transactions".
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In March 2000, prior to its acquisition by the Company, Retrieval
entered into an employment agreement with Anthony Cella, the Company's current
Chief Financial Officer and Vice-Chairman. Mr. Cella received a monthly
installment based upon an annual salary in the amount of $120,000 until November
2000. At that time, his annual salary (and his monthly installment) was
increased to $160,000. He receives an automobile allowance of $1,000 per month
and cellular phone service at the expense of Retrieval. He is also entitled to
other benefits including life insurance, health insurance, participation in
Retrieval's bonus incentive program and participation in a stock option plan as
they become available. The term is for a period of two (2) years. See Part III,
Item 10. "Executive Compensation - Employee Contracts and Agreements"; Part III,
Item 11. "Security Ownership of Certain Beneficial Owners and Management"; and
Part III, Item 12. "Certain Relationships and Related Transactions".
In March 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Clifford L. Tager, the Company's current
Secretary and Director, in the principal amount of $15,000. The note bears
interest at a rate of nine percent (9%) per annum. The note matures thirty (30)
days following the earlier of (i) an initial public offering of the Company's
Common Stock, through a 1933 Act Registration, (ii) a merger or a reverse
merger, or (iii) a buyout of the corporation. At maturity, the holder has the
option to: (i) request repayment of all principal and interest, (ii) convert all
or part of the principal and/or the interest into shares of the Company's Common
Stock at a price equal to fifty percent (50%) of the market price, or (iii)
request that the Company convert the note into shares of the Company's Preferred
Stock if available. In November 2000, the holder elected to convert all of said
principal but none of the interest to 30,000 shares of the Company's restricted
Common Stock The interest is still outstanding. For such offering, the Company
relied upon the 506 Exemption and Section 36b-31-21b-9b of the Connecticut Code.
See Part I, Item 6. "Management's Discussion and Analysis or Plan of Operation -
Financial Condition, Liquidity and Capital Resources"; Part III, Item 10.
"Executive Compensation - Employee Contracts and Agreements"; Part III, Item 11.
"Security Ownership of Certain Beneficial Owners and Management"; and Part III,
Item 12. "Certain Relationships and Related Transactions".
In April 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Clifford L. Tager, the Company's current
Secretary and Director, in the principal amount of $6,000. The note bears
interest at a rate of nine percent (9%) per annum. The note matures thirty (30)
days following the earlier of (i) an initial public offering of the Company's
Common Stock, through a 1933 Act Registration, (ii) a merger or a reverse
merger, or (iii) a buyout of the corporation. At maturity, the holder has the
option to: (i) request repayment of all principal and interest, (ii) convert all
or part of the principal and/or the interest into shares of the Company's Common
Stock at a price equal to fifty percent (50%) of the market price, or (iii)
request that the Company convert the note into shares of the Company's Preferred
Stock if available. The note is still outstanding. For such offering, the
Company relied upon the 506 Exemption and Section 36b- 31-21b-9b of the
Connecticut Code. See Part I, Item 6. "Management's Discussion and Analysis or
Plan of Operation - Financial Condition, Liquidity and Capital Resources"; Part
III, Item 10. "Executive Compensation - Employee Contracts and Agreements"; Part
III, Item 11. "Security Ownership of Certain Beneficial Owners and Management";
and Part III, Item 12. "Certain Relationships and Related Transactions".
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In June 2000, the Company conducted a share exchange with Retrieval and
the shareholders of Retrieval, whereby the Company issued 4,000,000 shares of
its Common Stock in exchange for shares representing one hundred percent (100%)
of the issued and outstanding Common Stock of Retrieval. Retrieval became a
wholly owned subsidiary of the Company as part of this transaction. In
connection with the exchange, Peter Voghel, the Company's past Chairman and
Chief Executive Officer received 1,480,000 shares, John Harkola, the Company's
current Chairman and Chief Executive Officer received 800,000 shares, Brad
Vossler, a current Director of the Company received 600,000 shares, Anthony
Cella, the Company's current Chief Financial Officer and Vice- Chairman received
80,000 shares and Alan Reiter a current Director received 40,000 shares. For
such offering, the Company relied upon the 506 Exemption, Section 517.061(11) of
the Florida Code, Section 11.602 of the Maryland Code and Section 8-1111(14) of
the Nebraska Code. See Part I, Item 6. "Management's Discussion and Analysis -
Stockholder's Deficit; Part III, Item 10. "Executive Compensation - Employee
Contracts and Agreements"; Part III, Item 11. "Security Ownership of Certain
Beneficial Owners and Management"; and Part III, Item 12. "Certain Relationships
and Related Transactions".
In July 2000, the Company authorized issuance of 120,000 shares to
Anthony Cella, the Company's current Chief Financial Officer and Vice-Chairman
for services rendered to the Company, although the shares were not issued until
November 2000. For such offering, the Company relied upon the 506 Exemption and
Section 517.061(11) of the Florida Code. See Part III, Item 10. "Executive
Compensation - Employee Contracts and Agreements"; Part III, Item 11. "Security
Ownership of Certain Beneficial Owners and Management"; and Part III, Item 12.
"Certain Relationships and Related Transactions".
In August 2000, Retrieval executed a convertible note in favor of
Clifford L. Tager, the Company's current Secretary and Director, in the
principal amount of $30,750. The note bears interest at a rate of nine percent
(9%) per annum. The note matures thirty (30) days following the earlier of (i)
an initial public offering of the Company's Common Stock, through a 1933 Act
Registration, (ii) a merger or a reverse merger, or (iii) a buyout of the
corporation. At maturity, the holder has the option to: (i) request repayment of
all principal and interest, (ii) convert all or part of the principal and/or the
interest into shares of the Company's Common Stock at a price equal to fifty
percent (50%) of the market price, or (iii) request that the Company convert the
note into shares of the Company's Preferred Stock if available. The note is
still outstanding. For such offering, the Company relied upon the 506 Exemption
and Section 36b-31-21b-9b of the Connecticut Code. See Part I, Item 6.
"Management's Discussion and Analysis or Plan of Operation - Financial
Condition, Liquidity and Capital Resources"; Part III, Item 10. "Executive
Compensation - Employee Contracts and Agreements"; Part III, Item 11. "Security
Ownership of Certain Beneficial Owners and Management"; and Part III, Item 12.
"Certain Relationships and Related Transactions".
Item 2. Description of Property
The Company maintains its executive offices at 1819 Main Street, Suites
702 and 703, Sarasota, FL 34236. Its telephone number is (941) 365-9955 and its
facsimile number is (941) 365- 9966.
In November 2000, Retrieval entered into a lease with Osprey, S.A.,
Ltd. for the premises located at 1819 Main Street, Suites 702 and 703, Sarasota,
FL 34236. The lease is for a period of five (5) years. Rent for the first year
is $8,008 per month, for the second year is $13,156 per month, for the third
year is $13,728 per month, for the fourth year is $14,300 per month and for the
fifth year is $14,872 per month. The property serves as both Retrieval's and the
Company's main headquarters and consists of approximately six thousand eight
hundred sixty four (6,864) square feet of office space. See Part III, Item 12.
"Certain Relationships and Related Transactions".
The Company owns no real property and no personal property.
Item 3. Legal Proceedings
No legal proceedings have been initiated either by or against the
Company to date.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of the Company's shareholders,
through the solicitation of proxies or otherwise from the Company's inception to
the close of the 2000 fiscal year ended September 30, 2000, covered by this
report.
Item 5. Market for Common Equity and Related Stockholder Matters.
Shares of the Company's Common Stock have previously been registered
with the Securities and Exchange Commission (the "Commission"). The Company
intends to make application to NASD for the Company's shares to be quoted on the
OTC Bulletin Board. The Company's application to the NASD will consist of
current corporate information, financial statements and other documents as
required by Rule 15c2-11 of the Exchange Act. Inclusion on the OTC Bulletin
Board, when approved, permits price quotation for the Company's shares to be
published by such service.
The Company is not aware of any existing trading market for its Common
Stock. The Company's Common Stock has never traded in a public market. There are
no plans, proposals, arrangements or understandings with any person(s) with
regard to the development of a trading market in any of the Company's
securities.
If and when the Company's Common Stock is traded in the
over-the-counter market, most likely the shares will be subject to the
provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of
1934, as amended (the Exchange Act"), commonly referred to as the "penny stock"
rule. Section 15(g) sets forth certain requirements for transactions in penny
stocks and Rule 15g9(d)(1) incorporates the definition of penny stock as that
used in Rule 3a51-1 of the Exchange Act.
The Commission generally defines penny stock to be any equity security
that has a market price less than $5.00 per share, subject to certain
exceptions. Rule 3a51-1 provides that any equity
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security is considered to be a penny stock unless that security is: registered
and traded on a national securities exchange meeting specified criteria set by
the Commission; authorized for quotation on The NASDAQ Stock Market; issued by a
registered investment company; excluded from the definition on the basis of
price (at least $5.00 per share) or the registrant's net tangible assets; or
exempted from the definition by the Commission. If the Company's shares are
deemed to be a penny stock, trading in the shares will be subject to additional
sales practice requirements on broker- dealers who sell penny stocks to persons
other than established customers and accredited investors, generally persons
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, broker-dealers must make a
special suitability determination for the purchase of such securities and must
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 rules require the delivery, prior to the first transaction, of a
risk disclosure document relating to the penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, and current quotations for the securities. Finally,
the monthly statements must be sent disclosing recent price information for the
penny stocks held in the account and information on the limited market in penny
stocks. Consequently, these rules may restrict the ability of broker dealers to
trade and/or maintain a market in the Company's Common Stock and may affect the
ability of shareholders to sell their shares.
In June 2000, the Company effected a forward stock split of its Common
Stock at a rate of five (5) to one (1), for holders of record on June 15, 2000,
with distribution effective June 25, 2000.
As of September 30, 2000, there were thirty eight (38) holders of
record of the Company's Common Stock.
As of September 30, 2000, the Company had 6,840,000 shares of its
Common Stock issued and outstanding, 5,340,000 of which were restricted Rule 144
shares and 1,500,000 of which were free-trading. Of the Rule 144 shares, none
have been held by affiliates of the Company for more than one (1) year.
Dividend Policy
The Company has never paid or declared any dividends on its Common
Stock and does not anticipate paying cash dividends in the foreseeable future.
Item 6. Management's Discussion and Analysis
The Company was formed with the contemplated purpose to export and sell
products in France. The incorporator was unable to successfully implement the
initial business plan. After development of a business plan and efforts to
develop the business failed, all such efforts were abandoned in August 1996. In
June 2000, at the time it acquired Retrieval as a wholly-owned subsidiary, its
purpose changed to Retrieval's initial purpose of providing industry-specific
wireless software and service solutions for mobile professionals.
32
<PAGE>
The Company was still in the development stage until June 2000 when the
Agreement took place between Retrieval and the Company and is still emerging
from that stage. The Company is planning rollout of its initial product
Qxprint(TM) later this month. From the date of the Agreement in June 2000
through September 30, 2000, the Company generated no revenues. Since inception
of Retrieval (September 8, 1999) through September 30, 2000, the Company has
generated cumulative losses of approximately $965,105. Due to the Company's
limited operating history and limited resources, among other factors, there can
be no assurance that profitability or significant revenues on a quarterly or
annual basis will occur in the future.
In anticipation of rollout of Qxprint(TM), the Company has begun to
make preparations for a period of growth, which may require it to significantly
increase the scale of its operations. This increase will include the hiring of
additional personnel in all functional areas and will result in significantly
higher operating expenses. The increase in operating expenses is expected to be
matched by a concurrent increase in revenues. However, the Company's net loss
may continue even if revenues increase and operating expenses may still continue
to increase. Expansion of the Company's operations may cause a significant
strain on the Company's management, financial and other resources. The Company's
ability to manage recent and any possible future growth, should it occur, will
depend upon a significant expansion of its accounting and other internal
management systems and the implementation and subsequent improvement of a
variety of systems, procedures and controls. There can be no assurance that
significant problems in these areas will not occur. Any failure to expand these
areas and implement and improve such systems, procedures and controls in an
efficient manner at a pace consistent with the Company's business could have a
material adverse effect on the Company's business, financial condition and
results of operations. As a result of such expected expansion and the
anticipated increase in its operating expenses, as well as the difficulty in
forecasting revenue levels, the Company expects to continue to experience
significant fluctuations in its revenues, costs and gross margins, and therefore
its results of operations.
Results of Operations - For the Year Ended September 30, 2000 and For the Period
From Inception of the Company's Subsidiary (September 8, 1999) To September 30,
1999
Results of operation have been compared for the year ended September
30, 2000 and for the period from inception of the Company's wholly-owned
subsidiary to September 30, 1999. This is because the Company conducted no
operations from the time the Company's business plan failed shortly after
inception to the date of the Agreement in June 2000. Management feels that any
other comparison of financial information would not serve to inform the
investing public of relevant data and may have been misleading.
Revenues
Revenues for the year ended September 30, 2000 were $0 and for the
period from inception of the Company's subsidiary (September 8, 1999) to
September 30, 1999 were $0.
33
<PAGE>
Operating Costs and Startup Expenses
Operating costs and startup expenses for the year ended September 30,
2000 were $929,505 versus $35,600 for the period from inception of the Company's
subsidiary (September 8, 1999) to September 30, 1999. Net loss was $929,505 and
$35,600 respectively.
Assets and Liabilities
Assets were $40,868 as of September 30, 2000, and $1,619 for the period
from inception of the Company's subsidiary (September 8, 1999) to September 30,
1999. As of September 30, 2000, assets consisted primarily of equipment and
prepaid expenses and deposits with a combined net book value of $34,459. For the
period from inception of the Company's subsidiary (September 8, 1999) to
September 30, 1999, the Company had no assets. Liabilities were $801,092 and $0
as of September 30, 2000 and for the period from inception of the Company's
subsidiary (September 8, 1999) to September 30, 1999 respectively. As of
September 30, 2000 liabilities consisted primarily of accounts payable to
stockholders.
Stockholders' Deficit
Stockholders' deficit was (804,224) as of September 30, 2000 and 0 for
the period from inception of the Company's subsidiary (September 8, 1999) to
September 30, 1999.
In June 2000, the Company conducted a share exchange with Retrieval and
the shareholders of Retrieval, whereby the Company issued 4,000,000 shares of
its Common Stock in exchange for shares representing one hundred percent (100%)
of the issued and outstanding Common Stock of Retrieval. Retrieval became a
wholly owned subsidiary of the Company as part of this transaction. In
connection with the exchange, Peter Voghel, the Company's past Chairman and
Chief Executive Officer received 1,480,000 shares, John Harkola, the Company's
current Chairman and Chief Executive Officer received 800,000 shares, Brad
Vossler, a current Director of the Company received 600,000 shares, Anthony
Cella, the Company's current Chief Financial Officer and Vice- Chairman received
80,000 shares and Alan Reiter a current Director received 40,000 shares. For
such offering, the Company relied upon the 506 Exemption, Section 517.061(11) of
the Florida Code, Section 11.602 of the Maryland Code and Section 8-1111(14) of
the Nebraska Code. See Part III, Item 10. "Executive Compensation - Employee
Contracts and Agreements"; Part III, Item 11. "Security Ownership of Certain
Beneficial Owners and Management"; and Part III, Item 12. "Certain Relationships
and Related Transactions".
Financial Condition, Liquidity and Capital Resources
At September 30, 2000 the Company had cash and cash equivalents of
$1,409 as compared to $0 for the period from inception of the Company's
subsidiary (September 8, 1999) to September 30, 1999.
In March 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Clifford L. Tager, the Company's current
Secretary and Director, in the principal amount
34
<PAGE>
of $15,000. The note bears interest at a rate of nine percent (9%) per annum.
The note matures thirty (30) days following the earlier of (i) an initial public
offering of the Company's Common Stock, through a 1933 Act Registration, (ii) a
merger or a reverse merger, or (iii) a buyout of the corporation. At maturity,
the holder has the option to: (i) request repayment of all principal and
interest, (ii) convert all or part of the principal and/or the interest into
shares of the Company's Common Stock at a price equal to fifty percent (50%) of
the market price, or (iii) request that the Company convert the note into shares
of the Company's Preferred Stock if available. In November 2000, the holder
elected to convert all of said principal but none of the interest to 30,000
shares of the Company's restricted Common Stock The interest is still
outstanding. For such offering, the Company relied upon the 506 Exemption and
Section 36b-31-21b-9b of the Connecticut Code. See Part III, Item 10. "Executive
Compensation - Employee Contracts and Agreements"; Part III, Item 11. "Security
Ownership of Certain Beneficial Owners and Management"; and Part III, Item 12.
"Certain Relationships and Related Transactions".
In April 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Clifford L. Tager, the Company's current
Secretary and Director, in the principal amount of $6,000. The note bears
interest at a rate of nine percent (9%) per annum. The note matures thirty (30)
days following the earlier of (i) an initial public offering of the Company's
Common Stock, through a 1933 Act Registration, (ii) a merger or a reverse
merger, or (iii) a buyout of the corporation. At maturity, the holder has the
option to: (i) request repayment of all principal and interest, (ii) convert all
or part of the principal and/or the interest into shares of the Company's Common
Stock at a price equal to fifty percent (50%) of the market price, or (iii)
request that the Company convert the note into shares of the Company's Preferred
Stock if available. The note is still outstanding. For such offering, the
Company relied upon the 506 Exemption and Section 36b- 31-21b-9b of the
Connecticut Code. See Part III, Item 10. "Executive Compensation - Employee
Contracts and Agreements"; Part III, Item 11. "Security Ownership of Certain
Beneficial Owners and Management"; and Part III, Item 12. "Certain Relationships
and Related Transactions".
In April 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Ned W. Shawkey and Helen Shawkey,
Trustees in the principal amount of $10,000. The note bears interest at a rate
of nine percent (9%) per annum. The note matures thirty (30) days following the
earlier of (i) an initial public offering of the Company's Common Stock, through
a 1933 Act Registration, (ii) a merger or a reverse merger, or (iii) a buyout of
the corporation. At maturity, the holder has the option to: (i) request
repayment of all principal and interest, (ii) convert all or part of the
principal and/or the interest into shares of the Company's Common Stock at a
price equal to fifty percent (50%) of the market price, or (iii) request that
the Company convert the note into shares of the Company's Preferred Stock if
available. In November 2000, the holder elected to convert $1,000 of said
principal to 2,000 shares of the Company's restricted Common Stock The remaining
principal and interest is still outstanding. For such offering, the Company
relied upon the 506 Exemption and Section 517.061(11) of the Florida Code. See
Part III, Item 12. "Certain Relationships and Related Transactions".
In April 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Charles H. Fridley and Teresa S. Fridley
in the principal amount of $50,000. The note bears interest at a rate of nine
percent (9%) per annum. The note matures thirty (30) days following
35
<PAGE>
the earlier of (i) an initial public offering of the Company's Common Stock,
through a 1933 Act Registration, (ii) a merger or a reverse merger, or (iii) a
buyout of the corporation. At maturity, the holder has the option to: (i)
request repayment of all principal and interest, (ii) convert all or part of the
principal and/or the interest into shares of the Company's Common Stock at a
price equal to fifty percent (50%) of the market price, or (iii) request that
the Company convert the note into shares of the Company's Preferred Stock if
available. In November 2000, the holder elected to convert $25,000 of said
principal plus $2493.49 of interest to 54,987 shares of the Company's restricted
Common Stock The remaining principal and interest is still outstanding. For such
offering, the Company relied upon the 506 Exemption and Section 517.061(11) of
the Florida Code. See Part III, Item 12. "Certain Relationships and Related
Transactions".
In April 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Janet Molino-Bem in the principal amount
of $25,000. The note bore interest at a rate of nine percent (9%) per annum. The
note matured thirty (30) days following the earlier of (i) an initial public
offering of the Company's Common Stock, through a 1933 Act Registration, (ii) a
merger or a reverse merger, or (iii) a buyout of the corporation. At maturity,
the holder has the option to: (i) request repayment of all principal and
interest, (ii) convert all or part of the principal and/or the interest into
shares of the Company's Common Stock at a price equal to fifty percent (50%) of
the market price, or (iii) request that the Company convert the note into shares
of the Company's Preferred Stock if available. The note has since been repaid in
full. For such offering, the Company relied upon the 506 Exemption and Section
517.061(11) of the Florida Code. See Part III, Item 12. "Certain Relationships
and Related Transactions".
In June 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Kirk Groome and Alma Groome JT in the
principal amount of $3,000. The note bore interest at a rate of nine percent
(9%) per annum. The note matured thirty (30) days following the earlier of (i)
an initial public offering of the Company's Common Stock, through a 1933 Act
Registration, (ii) a merger or a reverse merger, or (iii) a buyout of the
corporation. At maturity, the holder had the option to: (i) request repayment of
all principal and interest, (ii) convert all or part of the principal and/or the
interest into shares of the Company's Common Stock at a price equal to fifty
percent (50%) of the market price, or (iii) request that the Company convert the
note into shares of the Company's Preferred Stock if available. In November
2000, the holder elected to convert all principal and interest to 6,206 shares
of the Company's restricted Common Stock. For such offering, the Company relied
upon the 506 Exemption and Section 517.061(11) of the Florida Code. See Part
III, Item 12. "Certain Relationships and Related Transactions".
In August 2000, Retrieval executed a convertible note in favor of
Clifford L. Tager, the Company's current Secretary and Director, in the
principal amount of $30,750. The note bears interest at a rate of nine percent
(9%) per annum. The note matures thirty (30) days following the earlier of (i)
an initial public offering of the Company's Common Stock, through a 1933 Act
Registration, (ii) a merger or a reverse merger, or (iii) a buyout of the
corporation. At maturity, the holder has the option to: (i) request repayment of
all principal and interest, (ii) convert all or part of the principal and/or the
interest into shares of the Company's Common Stock at a price equal to fifty
percent (50%) of the market price, or (iii) request that the Company convert the
note into shares of the Company's Preferred Stock if available. The note is
still outstanding. For such offering, the
36
<PAGE>
Company relied upon the 506 Exemption and Section 36b-31-21b-9b of the
Connecticut Code. See Part III, Item 10. "Executive Compensation - Employee
Contracts and Agreements"; Part III, Item 11. "Security Ownership of Certain
Beneficial Owners and Management"; and Part III, Item 12. "Certain Relationships
and Related Transactions".
The Company may raise additional capital through private and/or public
sales of securities in the future but has no definite commitments at this time.
Forward-Looking Statements
This Form 10-KSB includes "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. All statements, other
than statements of historical facts, included or incorporated by reference in
this Form 10-KSB which address activities, events or developments which the
Company expects or anticipates will or may occur in the future, including such
things as future capital expenditures (including the amount and nature thereof),
demand for the Company's products and services, expansion and growth of the
Company's business and operations, and other such matters are forward-looking
statements. These statements are based on certain assumptions and analyses made
by the Company in light of its experience and its perception of historical
trends, current conditions and expected future developments as well as other
factors it believes are appropriate in the circumstances. However, whether
actual results or developments will conform with the Company's expectations and
predictions is subject to a number of risks and uncertainties, general economic
market and business conditions; the business opportunities (or lack thereof)
that may be presented to and pursued by the Company; changes in laws or
regulation; and other factors, most of which are beyond the control of the
Company. Consequently, all of the forward-looking statements made in this Form
10-KSB are qualified by these cautionary statements and there can be no
assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequence to or effects on the Company or its business or operations.
Item 7. Financial Statements
The Company's financial statements have been examined to the extent
indicated in their reports by Pender Newkirk & Company, Certified Public
Accountants and have been prepared in accordance with generally accepted
accounting principles and pursuant to Regulation S-B as promulgated by the
Securities and Exchange Commission and are included herein, on Page F-1 hereof
in response to Part F/S of this Form 10-KSB.
Item 8. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure.
The Company has used the accounting firm of Pender Newkirk & Company,
Certified Public Accountants since June 2000, following the Agreement. Their
address is 100 South Ashley Drive, Suite 1650, Tampa, FL 33602. There has been
no change in the Company's independent accountant during the period commencing
with the Company's retention of Pender Newkirk & Company, Certified Public
Accountants through the date hereof.
37
<PAGE>
RDC International, Inc. and Subsidiary
(A Development Stage Enterprise)
Consolidated Financial Statements
Year Ended September 30, 2000
and Periods September 8, 1999 (Date of Inception)
through September 30, 2000 and 1999
Contents
Independent Auditors' Report on Consolidated Financial Statements...........F-1
Consolidated Financial Statements:
Consolidated Balance Sheet.............................................F-2
Consolidated Statements of Operations..................................F-3
Consolidated Statements of Changes in Stockholders' Deficit............F-4
Consolidated Statements of Cash Flows..................................F-5
Notes to Consolidated Financial Statements.............................F-6
<PAGE>
Independent Auditors' Report
Board of Directors
RDC International, Inc. and Subsidiary
(A Development Stage Enterprise)
Sarasota, Florida
We have audited the accompanying consolidated balance sheet of RDC
International, Inc. and Subsidiary (a development stage enterprise) as of
September 30, 2000 and the related consolidated statements of operations,
changes in stockholders' deficit, and cash flows for the year then ended and for
the periods September 8, 1999 (date of inception) through September 30, 2000 and
1999. These consolidated financial statements are the responsibility of the
management of RDC International, Inc. and Subsidiary. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. These standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of RDC International,
Inc. and Subsidiary (a development stage enterprise) as of September 30, 2000
and the results of its operations and its cash flows for the year then ended and
for the periods September 8, 1999 (date of inception) through September 30, 1999
and 2000 in conformity with accounting principles generally accepted in the
United States of America.
/s/ Pender Newkirk & Company
Pender Newkirk & Company
Certified Public Accountants
Tampa, Florida
November 16, 2000
<PAGE>
<TABLE>
<CAPTION>
RDC International, Inc. and Subsidiary
(A Development Stage Enterprise)
Consolidated Balance Sheet
September 30, 2000
<S> <C>
Assets
Current assets:
Cash $ 1,409
Prepaid expenses and deposits 16,350
----------------
Total current assets 17,759
Equipment 18,109
Other assets 5,000
----------------
$ 40,868
================
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable, trade $ 202,660
Accounts payable, stockholders 480,484
Notes payable, less unamortized debt discount of $30,750 65,000
Accrued expenses 52,948
----------------
Total current liabilities 801,092
----------------
Notes payable, stockholder, less current portion 44,000
----------------
Stockholders' deficit:
Preferred stock; no par value; 10,000,000 shares authorized;
zero shares issued and outstanding
Common stock; $.0001 par value; 50,000,000 shares authorized;
6,840,000 shares issued and outstanding 684
Additional paid-in capital 261,697
Subscription receivable (1,500)
Deferred offering costs (100,000)
Deficit accumulated during development stage (965,105)
----------------
Total stockholders' deficit (804,224)
----------------
$ 40,868
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
RDC International, Inc. and Subsidiary
(A Development Stage Enterprise)
Consolidated Statements of Operations
Period September 8,
1999 (Date of Inception)
Year Ended through September 30,
September 30, -----------------------------
2000 1999 2000
--------------- ------------- --------------
<S> <C> <C> <C>
Operating costs and start-up expenses $ 929,505 $ 35,600 $ 965,105
=============== ============= ==============
Net loss $ (929,505) $ (35,600) $ (965,105)
=============== ============= ==============
Net loss per share $ (.14) $ (.00) $ (.14)
=============== ============= ==============
Weighted average number of common shares 6,555,945 0 6,552,629
=============== ============= ==============
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
RDC International, Inc. and Subsidiary
(A Development Stage Enterprise)
Consolidated Statements of Changes in Stockholders' Deficit
Year Ended September 30, 2000 and Periods September 8,
1999 (Date of Inception) through September 30, 2000 and 1999
Deficit
Accumulated
Additional During Deferred
Common Stock Paid -In Development Stock Offering
Shares Amount Capital Stage Subscription Cost Total
----------- ---------- ---------- ----------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, September 8, 1999 (date of
inception) 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Net loss for the period (35,600) (35,600)
----------- ---------- ---------- ----------- --------- ------------ ----------
Balance, September 30, 1999 0 0 0 (35,600) 0 0 (35,600)
Issuance of common stock, December
1999 1,000,000 10,000 (10,000)
Capital contributions, December 1999 1,619 1,619
Collection of stock subscription, March
2000 4,000 4,000
Collection of stock subscription, June
2000 4,000 4,000
Acquisition of company 6,500,000 650 11,850 (12,500)
Recapitalization (1,000,000) (10,000) (2,500) 12,500
Net loss for the period (929,505) (929,505)
Collection of stock subscription,
September 2000 500 500
Issuance of common stock for cash, 120,000 12 12
July 2000
Issuance of common stock for cash, 15,000 1 14,999
July 2000 15,000
Issuance of common stock for cash, 100,000 10 99,990
August 2000 100,000
Issuance of common stock for cash, 5,000 1 4,999
September 2000 5,000
Issuance of stock for services, 100,000 10 99,990 (100,000)
September 2000
Intrinsic value of beneficial conversion
feature of convertible debt, September
2000 30,750 30,750
----------- ---------- ---------- ----------- --------- ------------ ----------
Balance, September 30, 2000 6,840,000 $ 684 $ 261,697 $ (965,093) $ (1,500) $ (100,000) $ (804,224)
=========== ========== ========== =========== ========= ============ ==========
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
RDC International, Inc. and Subsidiary
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows
Year Ended Period September 8, 1999 (Date of
September 30, Inception through September 30,
------------ ------------ -----------
2000 1999 2000
------------ ------------ -----------
<S> <C> <C> <C>
Operating activities
Net loss $ (929,505) $ (35,600) $ (965,105)
Adjustments to reconcile net loss to net cash used by
operating activities:
Note issued in satisfaction of services 30,750 30,750
Stock transactions for services (3,988) (3,988)
Increase in:
Prepaids and other assets (21,350) (21,350)
Accounts payable and accrued expenses 722,492 35,600 758,092
------------ ------------ -----------
Net cash used by operating activities (201,601) 0 (201,601)
------------ ------------ -----------
Investing activities
Acquisition of equipment (16,490) (16,490)
------------ ------------ -----------
Financing activities
Issuance of stock subscription (1,500) (1,500)
Proceeds from issuance of common stock 130,000 130,000
Proceeds from incurrence of notes payable 91,000 91,000
------------ ------------ -----------
Net cash provided by financing activities 219,500 0 219,500
------------ ------------ -----------
Net increase in cash 1,409 0 1,409
Cash at beginning of period
------------ ------------ -----------
Cash at end of period $ 1,409 $ 0 $ 1,409
============ ============ ===========
</TABLE>
Supplemental disclosures of cash flow information:
During the period ended September 30, 1999, a stockholder contributed
$1,619 of office equipment to the Company.
During the year ended September 30, 2000, the Company exchanged $22,000 of
accrued liabilities for $18,000 of convertible notes payable and $4,000 in
satisfaction of stock subscriptions receivable.
During the year ended September 30, 2000, the Company exchanged $30,750 of
accrued liabilities for $30,750 of convertible notes payable.
During the year ended September 30, 2000, the Company issued 100,000 shares
of common stock for offering costs, valued at fair market value.
The accompanying notes are an integral part of the consolidated financial
statements.
F-5
<PAGE>
RDC International, Inc. and Subsidiary
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
Year Ended September 30, 2000 and Periods September 8,
1999 (Date of Inception) through September 30, 2000 and 1999
1. Background Information and Business Combination
RDC International, Inc. (the "Company"), formerly Lautrec, Inc., was
incorporated in September 1995 under the laws of the state of Florida. The
Company changed its name in December 1999 and has been in its development stage
since its incorporation. The Company failed in its attempt to successfully
develop its initial business plan and during August 1996, abandoned its efforts.
The Company had no operations for the period prior to August 1996. The Company
was inactive and there were no transactions from August 1996 to the date of
reinstatement by the state of Florida on October 1, 1999.
Retrieval Dynamics Corporation ("Retrieval") was a development stage enterprise
incorporated under the laws of the state of Florida on September 8, 1999. This
company's principal line of business is as an electronic wireless application
provider for mobile professionals. To date, the company's activities have been
limited to organizational matters, the structuring of its business plan, the
solicitation of capital, and the preliminary negotiation of certain agreements
required for initial operations. The corporate headquarters is located in
Sarasota, Florida.
On June 30, 2000, Retrieval, the Company, and the individual holders of all of
the outstanding capital stock of Retrieval consummated a reverse acquisition
pursuant to a certain Share Exchange Agreement (the "Agreement") of such date.
Pursuant to the Agreement, the stockholders of Retrieval exchanged all issued
and outstanding shares of their common stock in exchange for 4,000,000 shares of
common stock of the Company. The reorganization is being accounted for as a
reverse acquisition. The accompanying consolidated financial statements
effectively treat the reorganization as a recapitalization of Retrieval. The
historical financial statements are those of Retrieval.
As part of the reorganization, the Company effected a 4-for-1 forward split and
a cancellation of 27,500,000 shares. The Company also adopted a September 30
year-end in conjunction with the reorganization.
F-6
<PAGE>
RDC International, Inc. and Subsidiary
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
Year Ended September 30, 2000 and Periods September 8,
1999 (Date of Inception) through September 30, 2000 and 1999
1. Background Information and Business Combination (continued)
The following pro forma information (unaudited) assumes the acquisition and
reorganization had occurred on September 8, 1999:
<TABLE>
<CAPTION>
Period September
8, Year Ended 1999 (Date of Inception)
September 30, through September 30,
2000 1999 2000
----------- ------ -------
<S> <C> <C> <C>
Operating costs and start-up expenses $ (940,505) $ (35,600) $ (976,105)
Loss per share $ (.14) $ (.00) $ (.14)
</TABLE>
2. Significant Accounting Policies
The significant accounting policies followed are:
The financial statements for the period September 8, 1999 (date of inception of
Retrieval) through September 30, 1999 include only the operations of Retrieval.
The consolidated financial statements as of September 30, 2000 and the year then
ended and the period September 8, 1999 (date of inception) through September 30,
2000 include the operations of Retrieval and the Company from the date of the
reverse acquisition, June 30, 2000. Intercompany transactions and balances have
been eliminated in consolidation.
The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America require
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
F-7
<PAGE>
RDC International, Inc. and Subsidiary
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
Year Ended September 30, 2000 and Periods September 8,
1999 (Date of Inception) through September 30, 2000 and 1999
2. Significant Accounting Policies (continued)
Equipment is stated at cost. Additions and improvements to equipment are
capitalized. Maintenance and repairs are expensed as incurred. When equipment is
retired or otherwise disposed of, the cost and related accumulated depreciation
are removed from the accounts and any resulting gain or loss is recognized in
operations. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets.
Deferred tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the consolidated financial
statements carrying amounts of existing assets and liabilities and their
respective income tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized as income in the period that included the enactment date.
Advertising costs (except for costs associated with direct-response advertising)
are charged to operations when incurred. The costs for direct-response
advertising are capitalized and amortized over the period during which future
benefits are expected to be received. Advertising expense for the year ended
September 30, 2000 and the periods September 8, 1999 (date of inception) through
September 30, 2000 and 1999 amounted to $69,257; $69,257; and $0, respectively.
There were no direct-response advertising during any periods presented.
Research and development costs are charged to operations when incurred. The
amounts charged for the year ended September 30, 2000 and the periods September
8, 1999 (date of inception) through September 30, 2000 and 1999 amounted to
$199,008; $199,008; and $0, respectively.
The Company expenses all costs of developing software to be sold until it is
determined that the software is technologically feasible as defined by Statement
of Financial Accounting Standards (SFAS) No. 86. As of September 30, 2000,
management has determined that they have not met the requirements of SFAS No. 86
to begin capitalizing such costs.
F-8
<PAGE>
RDC International, Inc. and Subsidiary
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
Year Ended September 30, 2000 and Periods September 8,
1999 (Date of Inception) through September 30, 2000 and 1999
2. Significant Accounting Policies (continued)
Loss per share has been calculated by dividing the net loss for each period by
the weighted average number of common shares outstanding in connection with the
acquisition as discussed in Note 1. Common share equivalents include convertible
debt that was not included in computing diluted loss per share because their
effects are anti-dilutive.
3. Notes Payable
Notes payable as of September 30, 2000 consist of notes totaling $109,000, which
is net of a $30,750 unamortized debt discount. These notes call for interest at
a rate of nine percent per annum, are payable at maturity, and are unsecured.
The notes call for payment within 30 days of certain events, one of which was
upon the Company entering into an agreement to merge or reverse merge with
another corporation. Due to the business acquisition discussed in Note 1, these
notes are currently due. The maker of the note can convert any or all of the
principal and interest balance into common stock at a price equal to 50 percent
of the market price or the bid/ask price.
The unamortized debt discount is the result of the intrinsic value of the
beneficial conversion feature of the note. The debt discount is being amortized
over the life of the note.
Subsequent ot year end the Company issued stock in satisfaction of $44,000 of
notes. This amount has been reflected as Long Term in the accompanying balance
sheet.
4. Commitments
The Company has entered into a broker agreement with an individual. The
individual is to provide investor financing for the Company. In return, the
Company will pay the individual three percent of the amount raised, with
incremental increases based on the amounts raised. The agreement is for six
months and is renewable upon written agreement by both parties.
The Company has also entered into a broker agreement for financing with another
broker. The Company will pay the broker eight percent of the amount raised. The
agreement is for no less than 180 days and no more than two years. After 180
days, the agreement can be terminated by either party upon written notice.
F-9
<PAGE>
RDC International, Inc. and Subsidiary
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
Year Ended September 30, 2000 and Periods September 8,
1999 (Date of Inception) through September 30, 2000 and 1999
4. Commitments (continued)
During the year ended September 30, 2000, the Company entered into an agreement
to lease space for corporate offices. The lease term is seven years with an
option to renew for an additional five years. The agreement calls for an annual
rental amount of $72,784, payable in monthly installments of $6,065. In addition
to the monthly rental, the Company is obligated to pay an annual common area
maintenance fee (CAM) of $15,922, payable in monthly installments of $1,327. The
amounts charged to rent expense for the year ended September 30, 2000 and the
periods September 8, 1999 (date of inception) through September 30, 2000 and
1999 amounted to $21,596; $21,596; and $0, respectively.
Both the rental amount and CAM shall be increased annually by the percentage of
increase in the Consumer Price Index, if any.
The Company also entered into an employment agreement during the year ended
September 30, 2000 with one of its employees and two of its officers. Under the
terms of these two year agreements, the Company is to pay these individuals an
aggregate of $3800,000 and $450,000 for each year respectively. If the
individuals positions are eliminated, the Company must pay them an amount equal
to six months salary.
During the year ended September 30, 2000, the Company entered into an agreement
which provided the company access to any entity's contacts and clients. The
Compnay has agreed to pay an ten percent commission on any revenues generated as
a result of this agreement. In addition, subsequent to year end, the Company
entered into an agreement with this entity for the development and service of
software. The company has agreed to pay a fee of $98,000 for the first project
and 8% of revenues generated from the use of this software.
5. Related Party Transactions
During the year ended September 30, 2000, various stockholders performed
services and advanced funds to the Company. Included in the Company's
consolidated financial statements is $480,484 owed to these stockholders at
September 30, 2000. This amount is unsecured and is non-interest bearing.
The above amount is not necessarily indicative of the amount nor terms that
would have been incurred or agreed to had a comparable transaction been entered
into with independent parties.
F-10
<PAGE>
RDC International, Inc. and Subsidiary
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
Year Ended September 30, 2000 and Periods September 8,
1999 (Date of Inception) through September 30, 2000 and 1999
6. Income Taxes
Temporary differences giving rise to the deferred tax asset consist primarily of
loss carryforwards of approximately $933,000, which may be applied against
future taxable income, and approximately $19,000 of net start-up expenses
amortizable for tax purposes over five years. These differences give rise to
deferred tax assets at September 30, 2000 of approximately $320,000. Management
has established a valuation allowance equal to the amount of the deferred tax
asset due to the uncertainty of the Company's realization of these benefits.
The loss carryforward expires on December 31, 2019.
7. Subsequent Events
On October 1, 2000, the Company released a private placement memorandum to sell
an additional 5,000,000 shares of common stock at $1.00 per share. The proceeds
will be used for operating expenses, partnership development, product research
and development, and working capital. As of November 16, 2000, the Company has
collected approximately $1,706,000.
The following pro forma condensed consolidated balance sheet gives effect to the
above event as if it had occurred on September 30, 2000:
<TABLE>
<S> <C>
Assets
Current assets $ 1,723,759
Other assets 23,109
Total assets $ 1,746,868
Liabilities and Stockholders' Equity
Current liabilities $ 801,092
Long term liabilities 44,000
Stockholders' equity:
Preferred stock 0
Common stock 855
Additional paid-in capital 1,867,526
Subscription receivable (1,500)
Deficit accumulated during development stage (965,105)
Total stockholders' equity 901,776
Total liabilities and stockholders' equity $ 1,746,868
</TABLE>
F-11
<PAGE>
RDC International, Inc. and Subsidiary
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
Year Ended September 30, 2000 and Periods September 8,
1999 (Date of Inception) through September 30, 2000 and 1999
7. Subsequent Events (continued)
The Company entered into an agreement to lease space for corporate offices on
November 1, 2000. The lease term is for five years. The agreement calls for an
annual rental amount of $96,096 payable in monthly installments of $8,008, for
the first year. The lease contains scheduled annual increases in rent over the
lease term. The following is a schedule of the future payments required under
this lease.
Year ended September 30
------------------------
2001 $ 88,088
========
2002 $152,724
========
2003 $164,164
========
2004 $171,028
========
2005 $177,892
========
2006 $ 14,872
========
F-12
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act
(a) Set forth below are the names, ages, positions, with the Company
and business experiences of the executive officers and directors of the Company.
Name Age Position(s) with Company
--------------- ----- -----------------------------------------
John Harkola 48 Chairman, Chief Executive Officer
Anthony Cella 55 Chief Financial Officer, Vice-Chairman
Clifford Tager 42 Secretary, Director
Donald Mintmire 56 Director
Alan Reiter 48 Director
Brad Vossler 44 Director
All directors hold office until the next annual meeting of the
Company's shareholders and until their successors have been elected and qualify.
Officers serve at the pleasure of the Board of Directors. The officers and
directors will devote such time and effort to the business and affairs of the
Company as may be necessary to perform their responsibilities as executive
officers and/or directors of the Company.
Family Relationships
There are no family relationships between or among the executive
officers and directors of the Company.
Business Experience
John Harkola is Chairman and Chief Executive Officer. His 30-year career in
executive management and marketing for a client base that included such firms as
Kodak, Bausch & Lomb, Xerox and IBM is steeped in technology applications. He
has won international and national awards and industry honors. Mr. Harkola was
previously the executive vice president/director of a marketing/media production
company based in Rochester, New York and Dallas, Texas, and of a marketing
communications firm in Lincoln, Nebraska.
Anthony A. Cella, C.P.A., is Chief Financial Officer and Vice-Chairman. He is a
graduate of St. John's University in New York and received his masters degree in
finance from NYU. His background is in SEC filings and financing start-up
operations. Prior to joining the company, he was CFO with a technology-based
operation. Mr. Cella started his career with Ernst & Young, a New York-based
public accounting firm, and moved into private industry in 1970, with USV
Pharmaceutical Corporation and Ametek, Inc.
50
<PAGE>
Clifford Tager is the Intellectual Property Counsel, Corporate Secretary, and a
member of the Board of Directors. Mr. Tager established his private law practice
in 1991. He specializes in all aspects of intellectual property law matters
including patents, trademarks, copyrights, trade secrets, trade dress, computer
software, licensing and litigation. Mr. Tager received a Juris Doctorate from
The George Washington University, National Law Center.
Donald F. Mintmire, a Director, was born August 15, 1944, graduate of University
of Kentucky (J.D. 1969); Georgetown University (LLM 1980); admitted to practice
in Kentucky, Maryland, District of Columbia, Tennessee and Florida. Mr. Mintmire
currently maintains his practice at 265 Sunrise Avenue, Suite 204, Palm Beach,
Florida 33480.
Alan Reiter, a Director, is president of the pioneering consulting firm Wireless
Internet & Mobile Computing. Mr. Reiter has been analyzing the convergence of
the wireless communications and computing industries since 1978. His firm
analyzes such areas as smart wireless devices, wireless e-commerce, wireless
information services, wireless portals, wireless access to corporate databases,
wireless security and wireless advertising. Clients range from multinationals to
small startups and have included/include: BellSouth, Ericsson, Motorola, Nokia,
Proxicom and the Wireless Data Forum. Previously, Mr. Reiter established the
world's first wireless computing newsletter and was instrumental in establishing
the world's first cellular magazine. He also established the first cellular
conference, the first wireless data conference and helped develop Telocator
Network of America (now called the Personal Communications Industry
Association). Mr. Reiter has a B.A. in English and Writing, a M.S. in
broadcasting, and has completed additional graduate courses in electrical
engineering for telecommunications, and science, technology and foreign affairs.
Bradley J. Vossler, a Director, is the Chief Development Officer for Retrieval
and has been at the forefront of computer applications technology for the past
ten (10) years. He has extensive experience with Internet-related technologies
and specializes in using both emerging and established technology to satisfy
business needs. His unique blend of business and computer education from the
University of Nebraska-Lincoln and experience allows him to envision and build
practical applications for today's business world. Mr. Vossler has worked with
businesses of every size from single-owner consulting companies to
multi-national information technology corporations. His background includes the
use of several programming platforms; Internet and Intranet networking planning,
installation and configuration; and SQL database management and configuration.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
No Director, Officer, Beneficial Owner of more than ten percent (10%)
of any class of equity securities of the Company failed to file on a timely
basis reports required by Section 16(a) of the Exchange Act during the most
recent fiscal year or prior fiscal years.
51
<PAGE>
Item 10. Executive Compensation
<TABLE>
<CAPTION>
Name and Post Year Annual Annual Annual LT LT Comp Options LTIP All Other (1)
Comp Comp Comp Comp Payouts
Salary Bonus($) Other Rest
(1) Stock
------------ ----- ------- -------- ----- ------ --------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John Harkola, 1999 $9,200 (2) $26,992
Chairman, and (relocation)
CEO(3) 2000 $110,000
Anthony Cella, 1999 $0 (2) $6,909
Vice-Chairman (expenses)
and Director 2000 $80,000
(4)(8)
Clifford Tager, 1999 $0 $51,750
Secretary and 2000 (legal fees)
Director $0
(5)(6)(7)
Donald 1999 $0
Mintmire,
Director 2000 $0
Alan Reiter, 1999 $0 (2)
Director
2000 $0
Brad Vossler, 1999 $9,200 (2) $210
Director (expenses)
2000 $54,400
</TABLE>
(1) All other compensation includes certain health and life insurance benefits
paid by the Company on behalf of its employees.
(2) In June 2000, the Company conducted a share exchange with Retrieval and the
shareholders of Retrieval, whereby the Company issued 4,000,000 shares of
its Common Stock in exchange for shares representing one hundred percent
(100%) of the issued and outstanding Common Stock of Retrieval. Retrieval
became a wholly owned subsidiary of the Company as part of this
transaction. In connection with the exchange, Peter Voghel, the Company's
past Chairman and Chief Executive Officer received 1,480,000 shares, John
Harkola, the Company's current Chairman and Chief Executive Officer
received 800,000 shares, Brad Vossler, a current Director of the Company
received 600,000 shares, Anthony Cella, the Company's current Chief
Financial Officer and Vice-Chairman received 80,000 shares and Alan Reiter
a current Director received 40,000 shares. For such offering, the Company
relied upon the 506 Exemption, Section 517.061(11) of the Florida Code,
Section 11.602 of the Maryland Code and Section 8-1111(14) of the Nebraska
Code. See Part III, Item 11. "Security Ownership of Certain Beneficial
Owners and Management"; and Part III, Item 12. "Certain Relationships and
Related Transactions".
(3) In September 1999, prior to its acquisition by the Company, Retrieval
entered into an employment agreement with John Harkola, the Company's
current Chairman and Chief Executive Officer. Mr. Harkola received a
monthly installment based upon an annual salary in the amount of $110,000
until November 2000. At that time, his annual salary (and his monthly
installment) was increased to $160,000. He receives an automobile allowance
of $1,000 per month and cellular phone service at the expense of Retrieval.
He is also entitled to other benefits including life insurance, health
insurance, participation in Retrieval's bonus
52
<PAGE>
incentive program and participation in a stock option plan as they become
available. The term is for a period of two (2) years. See Part III, Item
11. "Security Ownership of Certain Beneficial Owners and Management"; and
Part III, Item 12. "Certain Relationships and Related Transactions".
(4) In March 2000, prior to its acquisition by the Company, Retrieval entered
into an employment agreement with Anthony Cella, the Company's current
Chief Financial Officer and Vice-Chairman. Mr. Cella received a monthly
installment based upon an annual salary in the amount of $120,000 until
November 2000. At that time, his annual salary (and his monthly
installment) was increased to $160,000. He receives an automobile allowance
of $1,000 per month and cellular phone service at the expense of Retrieval.
He is also entitled to other benefits including life insurance, health
insurance, participation in Retrieval's bonus incentive program and
participation in a stock option plan as they become available. The term is
for a period of two (2) years. See Part III, Item 11. "Security Ownership
of Certain Beneficial Owners and Management"; and Part III, Item 12.
"Certain Relationships and Related Transactions".
(5) In March 2000, prior to its acquisition by the Company, Retrieval executed
a convertible note in favor of Clifford L. Tager, the Company's current
Secretary and Director, in the principal amount of $15,000. The note bears
interest at a rate of nine percent (9%) per annum. The note matures thirty
(30) days following the earlier of (i) an initial public offering of the
Company's Common Stock, through a 1933 Act Registration, (ii) a merger or a
reverse merger, or (iii) a buyout of the corporation. At maturity, the
holder has the option to: (i) request repayment of all principal and
interest, (ii) convert all or part of the principal and/or the interest
into shares of the Company's Common Stock at a price equal to fifty percent
(50%) of the market price, or (iii) request that the Company convert the
note into shares of the Company's Preferred Stock if available. In November
2000, the holder elected to convert all of said principal but none of the
interest to 30,000 shares of the Company's restricted Common Stock The
interest is still outstanding. For such offering, the Company relied upon
the 506 Exemption and Section 36b-31-21b-9b of the Connecticut Code. See
Part III, Item 11. "Security Ownership of Certain Beneficial Owners and
Management"; and Part III, Item 12. "Certain Relationships and Related
Transactions".
(6) In April 2000, prior to its acquisition by the Company, Retrieval executed
a convertible note in favor of Clifford L. Tager, the Company's current
Secretary and Director, in the principal amount of $6,000. The note bears
interest at a rate of nine percent (9%) per annum. The note matures thirty
(30) days following the earlier of (i) an initial public offering of the
Company's Common Stock, through a 1933 Act Registration, (ii) a merger or a
reverse merger, or (iii) a buyout of the corporation. At maturity, the
holder has the option to: (i) request repayment of all principal and
interest, (ii) convert all or part of the principal and/or the interest
into shares of the Company's Common Stock at a price equal to fifty percent
(50%) of the market price, or (iii) request that the Company convert the
note into shares of the Company's Preferred Stock if available. The note is
still outstanding. For such offering, the Company relied upon the 506
Exemption and Section 36b-31-21b-9b of the Connecticut Code. See Part III,
Item 11. "Security Ownership of Certain Beneficial Owners and Management";
and Part III, Item 12. "Certain Relationships and Related Transactions".
(7) In August 2000, Retrieval executed a convertible note in favor of Clifford
L. Tager, the Company's current Secretary and Director, in the principal
amount of $30,750. The note bears interest at a rate of nine percent (9%)
per annum. The note matures thirty (30) days
53
<PAGE>
following the earlier of (i) an initial public offering of the Company's
Common Stock, through a 1933 Act Registration, (ii) a merger or a reverse
merger, or (iii) a buyout of the corporation. At maturity, the holder has
the option to: (i) request repayment of all principal and interest, (ii)
convert all or part of the principal and/or the interest into shares of the
Company's Common Stock at a price equal to fifty percent (50%) of the
market price, or (iii) request that the Company convert the note into
shares of the Company's Preferred Stock if available. The note is still
outstanding. For such offering, the Company relied upon the 506 Exemption
and Section 36b-31-21b-9b of the Connecticut Code. See Part III, Item 11.
"Security Ownership of Certain Beneficial Owners and Management"; and Part
III, Item 12. "Certain Relationships and Related Transactions".
(8) In July 2000, the Company authorized issuance of 120,000 shares to Anthony
Cella, the Company's current Chief Financial Officer and Vice-Chairman for
services rendered to the Company, although the shares were not issued until
November 2000. For such offering, the Company relied upon the 506 Exemption
and Section 517.061(11) of the Florida Code. See Part III, Item 11.
"Security Ownership of Certain Beneficial Owners and Management"; and Part
III, Item 12. "Certain Relationships and Related Transactions".
Compensation of Directors
The Company has no standard arrangements for compensating the directors
of the Company for their attendance at meetings of the Board of Directors.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of September 30, 2000,
regarding the ownership of the Company's Common Stock by each shareholder known
by the Company to be the beneficial owner of more than five percent (5%) of its
outstanding shares of Common Stock, each director and all executive officers and
directors as a group. Except as otherwise indicated, each of the shareholders
has sole voting and investment power with respect to the share of Common Stock
beneficially owned.
<TABLE>
<CAPTION>
Name and Address of Title of Amount and Nature of Percent of
Beneficial Owner Class Beneficial Owner Class
------------------------- -------- -------------------- -----------
<S> <C> <C> <C>
John Harkola(1)(2)(6) Common 800,000 11.7%
Anthony Cella(1)(3)(6)(8) Common 80,000 1.2%
Clifford Tager(1)(4)(5)(7) Common 30,000 0.4%
Donald Mintmire(1) Common 0 0%
Alan Reiter(1)(6) Common 40,000 0.6%
Brad Vossler(1)(6) Common 600,000 8.8%
All Executive Officers and Common 1,550,000 22.7%
Directors as a Group
(Six (6) persons)
Peter Voghel(1) Common 1,480,000 21.6%
-------------------
</TABLE>
<PAGE>
(1) The address for each of the above is c/o RDC International, Inc. 1819 Main
Street, Suite 702, Sarasota, FL 34236.
(2) In September 1999, prior to its acquisition by the Company, Retrieval
entered into an employment agreement with John Harkola, the Company's
current Chairman and Chief Executive Officer. Mr. Harkola received a
monthly installment based upon an annual salary in the amount of $110,000
until November 2000. At that time, his annual salary (and his monthly
installment) was increased to $160,000. He receives an automobile allowance
of $1,000 per month and cellular phone service at the expense of Retrieval.
He is also entitled to other benefits including life insurance, health
insurance, participation in Retrieval's bonus incentive program and
participation in a stock option plan as they become available. The term is
for a period of two (2) years. See Part III, Item 12. "Certain
Relationships and Related Transactions".
(3) In March 2000, prior to its acquisition by the Company, Retrieval entered
into an employment agreement with Anthony Cella, the Company's current
Chief Financial Officer and Vice-Chairman. Mr. Cella received a monthly
installment based upon an annual salary in the amount of $120,000 until
November 2000. At that time, his annual salary (and his monthly
installment) was increased to $160,000. He receives an automobile allowance
of $1,000 per month and cellular phone service at the expense of Retrieval.
He is also entitled to other benefits including life insurance, health
insurance, participation in Retrieval's bonus incentive program and
participation in a stock option plan as they become available. The term is
for a period of two (2) years. See Part III, Item 12. "Certain
Relationships and Related Transactions".
(4) In March 2000, prior to its acquisition by the Company, Retrieval executed
a convertible note in favor of Clifford L. Tager, the Company's current
Secretary and Director, in the principal amount of $15,000. The note bears
interest at a rate of nine percent (9%) per annum. The note matures thirty
(30) days following the earlier of (i) an initial public offering of the
Company's Common Stock, through a 1933 Act Registration, (ii) a merger or a
reverse merger, or (iii) a buyout of the corporation. At maturity, the
holder has the option to: (i) request repayment of all principal and
interest, (ii) convert all or part of the principal and/or the interest
into shares of the Company's Common Stock at a price equal to fifty percent
(50%) of the market price, or (iii) request that the Company convert the
note into shares of the Company's Preferred Stock if available. In November
2000, the holder elected to convert all of said principal but none of the
interest to 30,000 shares of the Company's restricted Common Stock The
interest is still outstanding. For such offering, the Company relied upon
the 506 Exemption and Section 36b-31-21b-9b of the Connecticut Code. See
Part III, Item 12. "Certain Relationships and Related Transactions".
(5) In April 2000, prior to its acquisition by the Company, Retrieval executed
a convertible note in favor of Clifford L. Tager, the Company's current
Secretary and Director, in the principal amount of $6,000. The note bears
interest at a rate of nine percent (9%) per annum. The note matures thirty
(30) days following the earlier of (i) an initial public offering of the
Company's Common Stock, through a 1933 Act Registration, (ii) a merger or a
reverse merger, or (iii) a buyout of the corporation. At maturity, the
holder has the option to: (i) request repayment of all principal and
interest, (ii) convert all or part of the principal and/or
54
<PAGE>
the interest into shares of the Company's Common Stock at a price equal to
fifty percent (50%) of the market price, or (iii) request that the Company
convert the note into shares of the Company's Preferred Stock if available.
The note is still outstanding. For such offering, the Company relied upon
the 506 Exemption and Section 36b-31-21b-9b of the Connecticut Code. See
Part III, Item 12. "Certain Relationships and Related Transactions".
(6) In June 2000, the Company conducted a share exchange with Retrieval and the
shareholders of Retrieval, whereby the Company issued 4,000,000 shares of
its Common Stock in exchange for shares representing one hundred percent
(100%) of the issued and outstanding Common Stock of Retrieval. Retrieval
became a wholly owned subsidiary of the Company as part of this
transaction. In connection with the exchange, Peter Voghel, the Company's
past Chairman and Chief Executive Officer received 1,480,000 shares, John
Harkola, the Company's current Chairman and Chief Executive Officer
received 800,000 shares, Brad Vossler, a current Director of the Company
received 600,000 shares, Anthony Cella, the Company's current Chief
Financial Officer and Vice-Chairman received 80,000 shares and Alan Reiter
a current Director received 40,000 shares. For such offering, the Company
relied upon the 506 Exemption, Section 517.061(11) of the Florida Code,
Section 11.602 of the Maryland Code and Section 8-1111(14) of the Nebraska
Code. See Part III, Item 12. "Certain Relationships and Related
Transactions".
(7) In August 2000, Retrieval executed a convertible note in favor of Clifford
L. Tager, the Company's current Secretary and Director, in the principal
amount of $30,750. The note bears interest at a rate of nine percent (9%)
per annum. The note matures thirty (30) days following the earlier of (i)
an initial public offering of the Company's Common Stock, through a 1933
Act Registration, (ii) a merger or a reverse merger, or (iii) a buyout of
the corporation. At maturity, the holder has the option to: (i) request
repayment of all principal and interest, (ii) convert all or part of the
principal and/or the interest into shares of the Company's Common Stock at
a price equal to fifty percent (50%) of the market price, or (iii) request
that the Company convert the note into shares of the Company's Preferred
Stock if available. The note is still outstanding. For such offering, the
Company relied upon the 506 Exemption and Section 36b-31-21b-9b of the
Connecticut Code. See Part III, Item 12. "Certain Relationships and Related
Transactions".
(8) In July 2000, the Company authorized issuance of 120,000 shares to Anthony
Cella, the Company's current Chief Financial Officer and Vice-Chairman for
services rendered to the Company, although the shares were not issued until
November 2000. For such offering, the Company relied upon the 506 Exemption
and Section 517.061(11) of the Florida Code. See Part III, Item 12.
"Certain Relationships and Related Transactions".
There are no arrangements which may result in the change of control of
the Company.
Item 12. Certain Relationships and Related Transactions
In September 1999, prior to its acquisition by the Company, Retrieval
entered into an employment agreement with John Harkola, the Company's current
Chairman and Chief Executive Officer. Mr. Harkola received a monthly installment
based upon an annual salary in the amount of $110,000 until November 2000. At
that time, his annual salary (and his monthly installment) was increased to
$160,000. He receives an automobile allowance of $1,000 per month and cellular
phone service at the expense of Retrieval. He is also entitled to other benefits
including life insurance, health insurance, participation in Retrieval's bonus
incentive program and participation in a stock option plan as they become
available. The term is for a period of two (2) years.
54
<PAGE>
In March 2000, prior to its acquisition by the Company, Retrieval
entered into an employment agreement with Anthony Cella, the Company's current
Chief Financial Officer and Vice-Chairman. Mr. Cella received a monthly
installment based upon an annual salary in the amount of $120,000 until November
2000. At that time, his annual salary (and his monthly installment) was
increased to $160,000. He receives an automobile allowance of $1,000 per month
and cellular phone service at the expense of Retrieval. He is also entitled to
other benefits including life insurance, health insurance, participation in
Retrieval's bonus incentive program and participation in a stock option plan as
they become available. The term is for a period of two (2) years.
In March 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Clifford L. Tager, the Company's current
Secretary and Director, in the principal amount of $15,000. The note bears
interest at a rate of nine percent (9%) per annum. The note matures thirty (30)
days following the earlier of (i) an initial public offering of the Company's
Common Stock, through a 1933 Act Registration, (ii) a merger or a reverse
merger, or (iii) a buyout of the corporation. At maturity, the holder has the
option to: (i) request repayment of all principal and interest, (ii) convert all
or part of the principal and/or the interest into shares of the Company's Common
Stock at a price equal to fifty percent (50%) of the market price, or (iii)
request that the Company convert the note into shares of the Company's Preferred
Stock if available. In November 2000, the holder elected to convert all of said
principal but none of the interest to 30,000 shares of the Company's restricted
Common Stock The interest is still outstanding. For such offering, the Company
relied upon the 506 Exemption and Section 36b-31-21b-9b of the Connecticut Code.
In April 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Clifford L. Tager, the Company's current
Secretary and Director, in the principal amount of $6,000. The note bears
interest at a rate of nine percent (9%) per annum. The note matures thirty (30)
days following the earlier of (i) an initial public offering of the Company's
Common Stock, through a 1933 Act Registration, (ii) a merger or a reverse
merger, or (iii) a buyout of the corporation. At maturity, the holder has the
option to: (i) request repayment of all principal and interest, (ii) convert all
or part of the principal and/or the interest into shares of the Company's Common
Stock at a price equal to fifty percent (50%) of the market price, or (iii)
request that the Company convert the note into shares of the Company's Preferred
Stock if available. The note is still outstanding. For such offering, the
Company relied upon the 506 Exemption and Section 36b- 31-21b-9b of the
Connecticut Code.
In April 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Ned W. Shawkey and Helen Shawkey,
Trustees in the principal amount of $10,000. The note bears interest at a rate
of nine percent (9%) per annum. The note matures thirty (30) days following the
earlier of (i) an initial public offering of the Company's Common Stock, through
a 1933 Act Registration, (ii) a merger or a reverse merger, or (iii) a buyout of
the corporation. At maturity, the holder has the option to: (i) request
repayment of all principal and interest, (ii) convert all or part of the
principal and/or the interest into shares of the Company's Common Stock at a
price equal to fifty percent (50%) of the market price, or (iii) request that
the Company convert the note into shares of the Company's Preferred Stock if
available. In November 2000, the holder elected to convert $1,000 of said
principal to 2,000 shares of the Company's restricted Common Stock The remaining
principal and interest is still outstanding. For such offering, the Company
relied upon the 506 Exemption and Section 517.061(11) of the Florida Code.
55
<PAGE>
In April 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Charles H. Fridley and Teresa S. Fridley
in the principal amount of $50,000. The note bears interest at a rate of nine
percent (9%) per annum. The note matures thirty (30) days following the earlier
of (i) an initial public offering of the Company's Common Stock, through a 1933
Act Registration, (ii) a merger or a reverse merger, or (iii) a buyout of the
corporation. At maturity, the holder has the option to: (i) request repayment of
all principal and interest, (ii) convert all or part of the principal and/or the
interest into shares of the Company's Common Stock at a price equal to fifty
percent (50%) of the market price, or (iii) request that the Company convert the
note into shares of the Company's Preferred Stock if available. In November
2000, the holder elected to convert $25,000 of said principal plus $2493.49 of
interest to 54,987 shares of the Company's restricted Common Stock The remaining
principal and interest is still outstanding. For such offering, the Company
relied upon the 506 Exemption and Section 517.061(11) of the Florida Code.
In April 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Janet Molino-Bem in the principal amount
of $25,000. The note bore interest at a rate of nine percent (9%) per annum. The
note matured thirty (30) days following the earlier of (i) an initial public
offering of the Company's Common Stock, through a 1933 Act Registration, (ii) a
merger or a reverse merger, or (iii) a buyout of the corporation. At maturity,
the holder has the option to: (i) request repayment of all principal and
interest, (ii) convert all or part of the principal and/or the interest into
shares of the Company's Common Stock at a price equal to fifty percent (50%) of
the market price, or (iii) request that the Company convert the note into shares
of the Company's Preferred Stock if available. The note has since been repaid in
full. For such offering, the Company relied upon the 506 Exemption and Section
517.061(11) of the Florida Code.
In June 2000, prior to its acquisition by the Company, Retrieval
executed a convertible note in favor of Kirk Groome and Alma Groome JT in the
principal amount of $3,000. The note bore interest at a rate of nine percent
(9%) per annum. The note matured thirty (30) days following the earlier of (i)
an initial public offering of the Company's Common Stock, through a 1933 Act
Registration, (ii) a merger or a reverse merger, or (iii) a buyout of the
corporation. At maturity, the holder had the option to: (i) request repayment of
all principal and interest, (ii) convert all or part of the principal and/or the
interest into shares of the Company's Common Stock at a price equal to fifty
percent (50%) of the market price, or (iii) request that the Company convert the
note into shares of the Company's Preferred Stock if available. In November
2000, the holder elected to convert all principal and interest to 6,206 shares
of the Company's restricted Common Stock. For such offering, the Company relied
upon the 506 Exemption and Section 517.061(11) of the Florida Code.
In June 2000, the Company conducted a share exchange with Retrieval and
the shareholders of Retrieval, whereby the Company issued 4,000,000 shares of
its Common Stock in exchange for shares representing one hundred percent (100%)
of the issued and outstanding Common Stock of Retrieval. Retrieval became a
wholly owned subsidiary of the Company as part of this transaction. In
connection with the exchange, Peter Voghel, the Company's past Chairman and
Chief Executive Officer received 1,480,000 shares, John Harkola, the Company's
current Chairman and Chief Executive Officer received 800,000 shares, Brad
Vossler, a current Director of the Company received 600,000 shares, Anthony
Cella, the Company's current Chief Financial Officer and Vice- Chairman received
80,000 shares and Alan Reiter a current Director received 40,000 shares. For
such offering, the Company relied upon the 506 Exemption, Section 517.061(11) of
the Florida Code, Section 11.602 of the Maryland Code and Section 8-1111(14) of
the Nebraska Code.
In July 2000, the Company authorized issuance of 120,000 shares to
Anthony Cella, the Company's current Chief Financial Officer and Vice-Chairman
for services rendered to the
56
<PAGE>
Company, although the shares were not issued until November 2000. For such
offering, the Company relied upon the 506 Exemption and Section 517.061(11) of
the Florida Code.
In July 2000, the Company issued Quantam an option to purchase 100,000
shares of the Company's restricted Common Stock at a an exercise price of $0.001
per share. Such option was exercisable for a period of one (1) year. Until the
option was exercised, the option carried certain anti-dilution rights. In July
2000, Quantam exercised such option, but was not issued 100,000 shares until
November 2000. The shares carry piggy-back registration rights. For such
offering, the Company relied upon the 506 Exemption and Section 517.061(11) of
the Florida Code.
In November 2000, Retrieval entered into a lease with Osprey, S.A.,
Ltd. for the premises located at 1819 Main Street, Suites 702 and 703, Sarasota,
FL 34236. The lease is for a period of five (5) years. Rent for the first year
is $8,008 per month, for the second year is $13,156 per month, for the third
year is $13,728 per month, for the fourth year is $14,300 per month and for the
fifth year is $14,872 per month. The property serves as both Retrieval's and the
Company's main headquarters and consists of approximately six thousand eight
hundred sixty four (6,864) square feet of office space.
From the date of the Agreement in June 2000, to the end of the fiscal
year (September 30, 2000), the Company sold 120,000 shares to three (3)
investors for a total of $120,000. For such offering, the Company relied upon
the 506 Exemption, Section 517.061(11) of the Florida Code and Section
460-44A-506 of the Washington Code.
In August 2000, Retrieval executed a convertible note in favor of
Clifford L. Tager, the Company's current Secretary and Director, in the
principal amount of $30,750. The note bears interest at a rate of nine percent
(9%) per annum. The note matures thirty (30) days following the earlier of (i)
an initial public offering of the Company's Common Stock, through a 1933 Act
Registration, (ii) a merger or a reverse merger, or (iii) a buyout of the
corporation. At maturity, the holder has the option to: (i) request repayment of
all principal and interest, (ii) convert all or part of the principal and/or the
interest into shares of the Company's Common Stock at a price equal to fifty
percent (50%) of the market price, or (iii) request that the Company convert the
note into shares of the Company's Preferred Stock if available. The note is
still outstanding. For such offering, the Company relied upon the 506 Exemption
and Section 36b-31-21b-9b of the Connecticut Code.
Item 13. Exhibits and Reports on Form 8-K.
(a) The exhibits required to be filed herewith by Item 601 of Regulation S-B, as
described in the following index of exhibits, are incorporated herein by
reference, as follows:
<TABLE>
<CAPTION>
Exhibit No. Exhibit Name
----------- ---------------------
<S> <C> <C>
3.(i).1 [1] Articles of Incorporation of Lautrec, Inc. filed September 18, 1995.
3.(i).2 [1] Articles of Amendment to Articles of Incorporation filed December 6, 1999.
3.(i).3 [3] Articles of Amendment to Articles of Incorporation changing the name to RDC
International, Inc. filed July 11, 2000.
3.(ii).1 [1] Bylaws of the Company.
</TABLE>
57
<PAGE>
<TABLE>
<S> <C> <C>
4.1 [2] Share Exchange Agreement between the Company, Retrieval Dynamics Corporation
and the shareholders of Retrieval Dynamics Corporation dated June 30, 2000.
4.2 * Convertible Note by Retrieval Dynamics Corporation in favor of Clifford Tager
dated March 1, 2000.
4.3 * Convertible Note by Retrieval Dynamics Corporation in favor of Clifford Tager
dated April 1, 2000.
4.4 * Convertible Note by Retrieval Dynamics Corporation in favor of Ned W. Shawkey
and Helen Shawkey Trustees dated April 11, 2000.
4.5 * Convertible Note by Retrieval Dynamics Corporation in favor of Charles H. Fridley
and Teresa S. Fridley JT dated April 11, 2000.
4.6 * Convertible Note by Retrieval Dynamics Corporation in favor of Janet Molino-Bem
dated April 11, 2000.
4.7 * Convertible Note by Retrieval Dynamics Corporation in favor
of Kirk Groome and Alma Groome JT dated June 15, 2000.
4.8 * Offering Memorandum dated September 30, 2000.
4.9 * Form of Subscription Agreement pursuant to September 30, 2000 Offering
Memorandum.
4.10 * Convertible Note by Retrieval Dynamics Corporation in favor of Clifford Tager
dated August 1, 2000.
10.1 * Employment Agreement between Retrieval Dynamics Corporation and John Harkola
dated September 1, 1999.
10.2 * Employment Agreement between Retrieval Dynamics Corporation and Anthony
Cella dated March 1, 2000.
10.3 * Cooperation Agreement between Retrieval Dynamics Corporation and Phone Online,
Inc. dated September 2000.
10.4 * Web Development Agreement between Retrieval Dynamics Corporation and
MethodFactory, Inc. dated September 13, 2000.
10.5 * Contact Import and Customer Service Scope Agreement between Retrieval
Dynamics Corporation and MethodFactory, Inc. dated October 25, 2000.
10.6 * Master Service Agreement between Retrieval Dynamics Corporation and Phone
Online, Inc. dated October 2000.
10.7 * Lease Agreement between Retrieval Dynamics Corporation and Osprey, S.A., Ltd.
dated November 2000.
10.8 * Option Agreement between the Company and Quantam Financial Management
Company.
</TABLE>
---------------
(* Filed herewith)
58
<PAGE>
[1] Previously filed with the Company's Registration Statement on Form 10SB
filed February 22, 2000.
[2] Previously filed with the Company's Current Report on Form 8-K filed July
14, 2000.
[3] Previously filed with the Company's Quarterly Report on Form 10QSB filed
August 21, 2000.
(b) A report on Form 8-K was filed on July 14, 2000 reporting the Share Exchange
conducted between the Company, Retrieval Dynamics Corporation and the
shareholders of Retrieval Dynamics Corporation on June 30, 2000. An amended
report on Form 8-KA was filed on September 29, 2000 which included the required
financial statements of Retrieval Dynamics Corporation.
[Balance of this page intentionally left blank]
59
<PAGE>
SIGNATURES
In accordance with Section 13 and 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
RDC International, Inc.
(Registrant)
Date: January 16, 2001 By: /s John Harkola
--------------------------------------------
John Harkola, Chairman and CEO
By: /s/ Anthony Cella
--------------------------------------------
Anthony Cella, CFO and Vice-Chairman
By: /s/ Clifford Tager
--------------------------------------------
Clifford Tager, Secretary and Director
By: /s/ Donald F. Mintmire
--------------------------------------------
Donald F. Mintmire, Director
By: /s/ Alan Reiter
--------------------------------------------
Alan Reiter, Director
By: /s/ Brad Vossler
--------------------------------------------
Brad Vossler, Director
Pursuant to the requirements of the Exchange Act, this report has been
signed by the following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ John Harkola Chairman and CEO January 16, 2001
------------------------
John Harkola
/s/ Anthony Cella CFO and Vice-Chairman January 16, 2001
------------------------
Anthony Cella
/s/ Clifford Tager Secretary and Director January 16, 2001
------------------------
Clifford Tager
/s/ Donald F. Mintmire Director January 16, 2001
------------------------
Donald F. Mintmire
/s/Alan Reiter Director January 16, 2001
------------------------
Alan Reiter
/s/ Brad Vossler Director January 16, 2001
------------------------
Brad Vossler
