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SECURITIES AND EXCHANGE COMMISSIO
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act
December 29, 2000
(Date of Earliest Event Reported)
MSC GROUP, INC.
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(Exact Name of Registrant as Specified in its Charter)
29/31 Gul Avenue
Singapore City
Singapore 629699
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(Address of principal executive offices)
011 65 863 6626
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(Registrant's telephone number)
Delaware 0-29693 52-2217569
(State or other Commission file (IRS Employer
jurisdiction of Number Identification No.)
incorporation)
EASTWARD ACQUISITION CORPORATION
1504 R Street, N.W.
Washington, D.C. 20009
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(Former name and former address)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) On December 29, 2000,
pursuant to an Agreement and Plan of
Reorganization between Eastward Acquisition
Corporation ("Eastward"), a Delaware
corporation, Milling Systems & Concepts
Private Limited ("Milling Systems"), a
Singapore corporation, and the owners of the
outstanding shares of Milling Systems,
Eastward acquired all the outstanding shares
of common stock of Milling Systems from the
shareholders thereof in an exchange for an
aggregate of 20,000,000 shares of common
stock of Eastward (the "Acquisition"). By
virtue of the Acquisition, Milling Systems
became a wholly-owned subsidiary of Eastward.
The Acquisition is intended to
qualify as a reorganization within the
meaning of Section 368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended.
In connection with the
Acquisition, Eastward repurchased at par
value, 4,500,000 shares of its outstanding
common stock, the prior officer and
director of Eastward resigned, new officers
and directors of the Company were appointed
and elected, and Eastward changed its name
to MSC Group, Inc. ("MSC Group" or "the Company"
or the "Registrant").
A copy of the Acquisition
Agreement is filed as an exhibit to this
report and is incorporated in its entirety
herein. The foregoing description is
modified by such reference.
(b) The following table
contains information regarding the
shareholdings of MSC Group's current
directors and executive officers and those
persons or entities who beneficially own
more than 5% of its common stock (giving
effect to the exercise of any warrants held
by each such person or entity which are
exercisable within 60 days hereof):
Number of
Shares of Percent of
Common Stock Common
Beneficially Stock
Name Owned (1) Beneficially Owned (2)
Wee Yue Chew 1,000,000 4.9%
Chairman, Director
Mok Siong Cheak (3) 6,745,000 32.9%
President, Chief
Executive Officer,
Director
Dr. Lee Keng Ho (4) 1,000,000 4.9%
Vice President,
Software, Director
Chan Tow Boon (4) 500,000 2.4%
Secretary, Treasurer,
Vice President-Legal
Lee Sui Kum 50,000 *
Chief Financial Officer
Lee Lay Sire 1,000,000 4.9%
Milling Sytems &
Concepts (Malaysia)
Sdn. Bhd. (4) 1,000,000 4.9%
Wong Kum Ying 1,000,000 4.9%
All Success
Enterprises Ltd. 1,000,000 4.9%
Hung Lea Ping (5) 3,000,000 14.6%
MSC Power (S) Pte. 3,000,000 14.6%
Ltd. (3)
Global E-Trade Group 4,500,000 21.9%
Limited (3)
All executive officers
and directors of the
company as a group
(6 persons) 9,000,000 43.9%
* Less than 1%
(1) Includes options and warrants which
are exercisable within 60 days of
the date of this report.
(2) Based upon 20,500,000 shares
outstanding as of the date of this
report.
(3) Includes 745,000 shares owned
directly by Mr. Mok, 3,000,000
shares owned by MSC Power (S) Pte.
Ltd. of which Mr. Mok is a 50%
owner and of which he may be deemed
the beneficial holder and 4,500,000
shares owned by Global E-Trade Group
Limited of which Mr. Mok is 100%
owner and may be deemed the
beneficial holder.
(4) Dr. Lee Keng Ho, a director of
the Company, and Chan Tow Boon,
a director of the Company each
own 33.33% of Milling Systems &
Concepts (Malaysia) Sdn. Bhd.
(5) Hung Lea Ping is the wife of
Mok Siong Cheak, the president
and a director of the Company,
and is also a 50% owner of MSC
Power (S) Pte. Ltd.
ITEM 2. ACQUISITION OR DISPOSITION OF
ASSETS
(a) The consideration exchanged
pursuant to the Acquisition Agreement was
negotiated between Eastward and Milling
Systems. In evaluating the Acquisition,
Eastward used criteria such as Milling
Systems' ability to compete in the market
place, its current and anticipated business
operations, its management experience and
business plan. Eastward had no assets or
liabilities and in evaluating Eastward,
Milling Systems placed a primary emphasis on
Eastward's status as a reporting company
under Section 12(g) of the Securities
Exchange Act of 1934, as amended, and the
facilitation of Milling Systems becoming a
reporting company under the 1934 Act.
(b) The Company intends to
actively develop the business strategies,
operations and management teams of acquired
or founded entities.
THE COMPANY
Milling Systems, the
wholly-owned subsidiary of MSC Group,
was established to develop manufacturing
solutions and concepts for use by the
machine manufacturing industry, design and
service centers, mold and die industry, jigs
and tooling manufacturers. (All references
to "the Company" include MSC Group and its
subsidiary, Milling Systems). The Company
has developed and is currently beginning
manufacturing and distributing the MSC RP
2000 and MSC Molding 2000 machines, used by
the manufacturing industry for the
production of prototypes. The MSC RP 2000
and the Molding 2000 consist of proprietary
software, hardware, universal card
interfaces, high-speed spindles, linear
guides and related services.
Milling Systems is a new
company without material sales, customers,
or orders. The Company has recently
finished the beta testing of its products
and is only beginning marketing these
products. The Company's development and
operations are subject to the risks and
competition inherent in the establishment of
a new business enterprise.
There can be no assurance that
the Company will be able to implement its
business plan successfully and make a profit
selling its products. There can be no
assurance that the Company will be able to
continue to manufacture the MSC System or
that it will be able to produce and sell its
products economically or in sufficient
quantities to enable the Company to continue
as a going concern.
THE MSC RP AND MOLDING 2000 MACHINES
The Company's principal product
is the MSC System. The MSC System is a high
speed milling machine capable of producing a
prototype, sample or specimen of any object
from a 3-dimensional (3D) drawing within
hours. These objects can be made of wood,
wax, plastic, light allow or aluminum. The
MSC System is comprised of a machine in
which a high-speed machining spindle is
housed on a moving arm and a revolving table
mounted with a rotary guide, universal
electronic interfaces, proprietary software
and services. All components operate
together to provide a system for producing a
product by machining directly from vector,
computer-assisted design (CAD) and
postscript image files. The universal
electronic interface is hosted on personal
computers and functions to interface the
machine with the operator and user system.
Interface software can be adapted to
accommodate most user CAD files or
manufacturing machines.
The MSC System is intended to
eliminate the problems of conventional
manufacturing by producing direct machining
codes to rapid prototyping or milling
machines. Control cards and software
produced with the MSC System can be used
with conventional and older manufacturing
equipment. The MSC System cards have an
estimated life expectancy of over 20 years
and are manufactured by Direct Motion Inc.,
a California corporation.
The Company believes that the
MSC System is a user friendly prototype
production system providing a reliable,
accurate and user friendly alternative to
competitive products. By using the MSC
System, the customer can eliminate much of
the equipment, floor space, operators and
maintenance required for conventional
prototyping production.
A basic MSC System, including a
universal Interface card, control systems
and a high speed-milling spindle retails for
approximately $150,000. Other options like
laser infer meters, dynamometers and
encoders can be added for an additional cost
of $10,000 to $30,000 each.
The MSC Molding 2000 machine is
also a high speed milling machine that
produces a mold or jig from plastic, light
alloy or aluminum. Due to special features,
the Molding 2000 can cut or mill and produce
very small features that the traditional CNC
(computerized numeric control) machines
cannot execute. The traditional CNC
machines can only produce a single product
during manufacturing per each individual run
and the machines have to be reprogrammed to
run for each productive cycle. This leads
to increased labor and possibility of error.
MANUFACTURING
The Company intends to use a
Taiwan manufacturing company to manufacture
the MSC RP and Molding units, internal
modules, and spare parts at their factory
located in Taichung, Taiwan on a ''as
required" basis. The Company has at least
one vendor for all components and multiple
vendors for most components it utilizes. The
loss of a supplier for any item manufactured
by or purchased only from such vendor could
have an adverse effect on the Company's
operations. The universal interface card is
based on the standard personal computer
platform and consists of a combination of
standardized and customized hardware and
software modules. With the exception of the
universal interface board (which links a
computer to the machine), the Company has
several sources for all purchased components
within the MSC interface configuration.
The Company currently has one reliable vendor
for the control and interface board, and
plans to eliminate this board in the near
future by developing a new feature to allow
the interface cards to be plugged into the
printer connector of a standard personal
computer. Until the development of this
technology, the loss of the supplier of the
interface board could have a materially
adverse effect on the Company's operations.
A continued supply of control
cards is crucial to the success of the
Company's business. Without control or
interface cards, customers will not able to
use the equipment, services and software
supplied by the Company. The loss of the
supply of control cards and other electronic
parts would have a material adverse effect
on the Company's operations.
MARKETING
Companies which use computer
based engineering drawings, documents, or
records for design, function testing and
visualization purposes for new products are
considered prime prospects for the MSC
System, regardless of the type of system
used for creating or accessing the
information. The Company believes the
market for the MSC System is sizeable as
manufacturing companies generate engineering
drawings and have requirements for quick
roll out of prototypes before manufacturing.
The Company also believes the
need for a quick implementation from ideas
to products will continue to grow as
advances in technology progress with
consumer demands for newer and more
sophisticated products. The Company
anticipates its customers to be generally
large manufacturers or utility companies
that produce complex mechanical and
electrical products in industries, including
the automobile, aerospace, shipbuilding, gas
and oil, railroad, defense, and road
construction industries. Many of these
companies use CAD drawings for design and
prototyping function of their products.
SUBSIDIARIES
Milling Systems is the
Company's sole subsidiary.
CUSTOMERS
The Company has completed the
final phase of beta testing of the MSC
machines and software. Presently it has one
user of its products, a design and rapid
prototyping center in Taiwan, which uses the
machines for functional tests of their
capability and software friendliness.
The Company anticipates that it
will expand its customer base to include
newer customers. However, there can be no
assurance that the Company will attract
customers, or that existing customer
relationships will continue.
WARRANTY AND SERVICE
The Company intends to provide
a 360-day warranty on all of its products.
Thereafter extended maintenance contracts
will be offered at typical rate of 7% of
retail price per year. Maintenance service
typically includes phone support,
preventative maintenance, spare parts,
software upgrades, and on-site service
calls.
In most cases, the Company will
provide spare parts, phone support, software
upgrades and technical support and rely on a
third party technical representative to
provide on-site service. The Company has in
discussions with a Singapore company
to provide local and international
service through their nationwide network of
service centers.
COMPETITION
The Company faces both indirect
and direct competition. Indirect competition
presents itself in the form of paper
plotters, laser equipment and other products
which can be used as part of the
conventional prototyping production process.
Direct competitors are
manufacturers of equipment which produce
similar process machines. These include 3D
Systems, Stratasys or Soligen (produced in
USA), Toshiba, Hitachi (produced in Japan),
and EOS sinter station (produced in
Germany). The rapid prototyping manufactured
by these companies use other methodology and
development process and the Company believes
that their products are more complex,
larger, heavier, less accurate, and more
expensive than the MSC System.
The Company believes that users
of rapid prototyping machines must plan on
evolution of new methods of making
prototypes, which will need to be supported
by new technology, hardware controllers,
standards, specifications, and software
modules. Further, the Company believes that
neither the rapid prototyping industry nor
the technology will become obsolete easily
because there is a pressing need for large
manufacturers to utilize advancement in new
technology. However, there can be no
assurance that newer technology will not be
developed that will supplant the Company's
products and reduce or eliminate their
market.
REGULATION
The Company's business is not
subject to any special regulatory regime,
other than general laws and regulations,
such as employment and safety regulations
that apply generally to manufacturers and
distributors of industrial equipment. United
States and Taiwan laws and regulations
regarding importation, exportation, and
customs will apply to any units imported
from Taiwan or elsewhere.
EMPLOYEES
As of November 1,2000, the
Company had 8 full time employees and 6
part-time employees.
PATENTS, TRADEMARKS AND LICENSES
The Company intends to apply to
the United States Patent Office for four
patents. There can be no assurance that
efforts to perfect the patents will be
successful. Failure to perfect the patents
may have a material adverse effect on the
Company's business.
The Company intends to arrange
to license other necessary technologies if
so required. There is no assurance
that third party licensing will be
successful and the failure to do so may have
an adverse effect on the Company's business.
OFFICES
The Company leases 10,000
square feet for its executive offices at
29/31 Gul Avenue, Singapore City, Singapore
629699. Its telephone number is 011 65 863
6626 and its telecopy number is 011 65 863
6606. The lease expires May 31, 2001, with
an option to extend for three years. The
lease rate, as of September 1, 2000, was
$10,000 per month.
The Company intends to lease
another 10,000 square feet of office and
warehouse space at 29/31 Gul Avenue to store
parts, conduct engineering operations, and
perform small-scale assembly and
administrative tasks in support of the MSC
System. The lease rate, as of January 1,
2001, was $15,000 per month. The Company
maintains an Internet Web site at
www.msc.com.sg and at www.mscgroup-usa.com.
The Company is currently testing its
business-to-business portal at www.i-msc.com.
LEGAL PROCEEDINGS
The Company is not involved in
any lawsuits other than routine litigation
incidental to ongoing business.
DESCRIPTION OF SECURITIES
The Company's certificate of
incorporation, by-laws and corporate
governance are subject to the provisions of
the Delaware General Corporation Law, as
amended and interpreted from time to time.
COMMON STOCK
The Company is authorized to
issue 100,000,000 shares of common stock,
$.0001 par value per share, of which
20,500,000 shares were outstanding as of the
date of this report.
Holders of shares of common
stock are entitled to one vote for each
share on all matters to be voted on by the
stockholders. Holders of common stock do
not have cumulative voting rights. Holders
of common stock are entitled to share
ratably in dividends, if any, as may be
declared from time to time by the Board of
Directors in its discretion from funds
legally available therefore. In the event
of a liquidation, dissolution or winding up
of the Company, the holders of common stock
are entitled to share pro rata all assets
remaining after payment in full of all
liabilities.
Holders of common stock have no
preemptive rights to purchase the Company's
common stock. There are no conversion or
redemption rights or sinking fund provisions
with respect to the Common Stock.
PREFERRED STOCK
The Company is authorized to
issue 20,000,000 shares of preferred stock,
$.0001 par value per share. As of the date
of this report, there were no shares of
preferred stock outstanding. The Board of
Directors is authorized to provide for the
issuance of shares of preferred stock in
series and, by filing a certificate pursuant
to the applicable law of the State of
Delaware, to establish from time to time the
number of shares to be included in each such
series, and to fix the designation, powers,
preferences and rights of the shares of each
such series and the qualifications,
limitations or restrictions thereof without
any further vote or action by the
shareholders. Any shares of preferred stock
so issued would have priority over the
common stock with respect to dividend or
liquidation rights. Any future issuance of
preferred stock may have the effect of
delaying, deferring or preventing a change
in control of the Company without
further action by the shareholders and may
adversely affect the voting and other rights
of the holders of common stock.
MARKET FOR THE COMPANY'S SECURITIES
There is currently no trading
market for the Company's securities. The
Company intends to file a registration
statement on Form SB-2, or such other form
as may be required, to register certain of
the securities held by its shareholders and
such other securities as it may deem
advisable.
After effectiveness of its
registration statement, the Company intends
to apply for quotation of its securities on
the NASD OTC Bulletin Board. If the
Company's securities are not quoted on the
NASD OTC Bulletin Board, a security holder
may find it more difficult to dispose of, or
to obtain accurate quotations as to the
market value of, the Company's securities.
The over-the-counter market ("OTC") differs
from national and regional stock exchanges
in that it (1) is not cited in a single
location but operates through communication
of bids, offers and confirmations between
broker-dealers and (2) securities admitted
to quotation are offered by one or more
broker-dealers rather than the "specialist"
common to stock exchanges.
The market for OTC common stock
is often characterized by low volume and
broad price and volume volatility. The
Company cannot give any assurance that a
stable trading market will develop for its
stock or that an active trading market will
be sustained. Moreover, the trading price
of the Company's common stock could be
subject to wide fluctuations due to such
factors as quarterly variations in operating
results, competition, announcements of new
products by the Company or its competitors,
product enhancements by the Company or its
competitors, regulatory changes, differences
in actual results from those expected by
investors and analysts, changes in financial
estimates by securities analysts, and other
events or factors.
In order to qualify for
quotation on the NASD OTC Bulletin Board, an
equity security must have one registered
broker-dealer, known as the market maker,
willing to list bid or sale quotations and
to sponsor such a Company listing. If it
meets the qualifications for trading
securities on the NASD OTC Bulletin Board
the Company's securities will trade on the
NASD OTC Bulletin Board until such future
time, if at all, that it applies and
qualifies for admission for listing on the
Nasdaq SmallCap Market. The Company may
never qualify for trading on the NASD OTC
Bulletin Board or listing on the NASD
SmallCap Market.
When qualified, if ever (of
which there can be no assurance), the
Company intends to apply for quotation of
its securities on the Nasdaq SmallCap
Market.
In order to qualify for
admission for listing on the Nasdaq SmallCap
Market, an equity security must, in relevant
summary, (1) be registered under the
Securities Exchange Act of 1934; (2) have at
least three registered and active market
makers, one of which may be a market maker
entering a stabilizing bid; (3) for initial
inclusion, be issued by a company with
$4,000,000 in net tangible assets, or
$50,000,000 in market capitalization, or
$750,000 in net income in two of the last
three years (if operating history is less
than one year then market capitalization
must be at least $50,000,000); (4) have a
public float of at least 1,000,000 shares
with a value of at least $5,000,000; (5)
have a minimum bid price of $5.00 per share;
and (6) have at least 300 beneficial
shareholders.
TRANSFER AGENT
The Company's transfer agent is
StockTrans, Inc., 7 East Lancaster Avenue,
Ardmore, Pennsylvania 19003, 800/733-1121.
MANAGEMENT
The following table sets forth
certain information regarding the members of
the Company's Board of Directors and its
executive officers:
Name Age Position
Dr. Wee Yue Chew 54 Chairman, Director
Mok Siong Cheak 42 President, Chief
Executive Officer,
Director
Dr. Lee Keng Ho 56 Vice President,
Software, Director
Chan Tow Boon 33 Vice President, Legal,
Director
Miss Lee Sui Kum 39 Chief Financial Officer
All officers and directors of
MSC Group, began their positions at the
time of the Acquisition on December 29, 2000.
All directors hold
office until the next annual meeting of
shareholders or until their successors are
duly elected and qualified. Officers serve
at the pleasure of the Board of Directors.
Set forth below is a summary description of
the business experience of each director and
executive officer of the Company.
DR. WEE YUE CHEW serves as
Chairman of the Board of the Company. Dr.
Wee has served as a director of Milling
Systems and Chairman of its board of
directors since September, 2000. From
December, 1999, to September, 2000, Dr. Wee
was the founder and managing partner of WYC
Business Consultants, an engineering and
business consultancy located in Singapore.
From July, 1992 to December, 1999, he was
the Executive Vice President (Corporate
Planning and General Affairs) of Excel Machine
Tools Ltd ("Excel"), a company listed on the
Singapore Exchange Securities Trading
Limited ("SGX") where he served for more
than 7 years. Dr. Wee was responsible for
the listing of Excel on the main board of
SGX in April, 1997 and the listing of
Excel's Hungary operations on the Budapest
and Munich Stock Exchanges in June, 1999.
Dr. Wee currently serves as a member on
various committees in the Institute of
Technical Education, the Productivity and
Standards Board, Singapore Precision
Engineering & Tooling Association and
Singapore Productivity Association. Dr. Wee
serves as an independent director of Excel
and a member of its audit committee. Prior
to joining Excel, Dr. Wee was the Group
Deputy Managing Director of Material
Handling Engineering Ltd. from August 1989
to June, 1992, a company he helped to list
on the SGX in 1989.
From August, 1969 to July,
1989, Dr. Wee was a deputy director of the
Singapore Productivity and Standards Board
where he served for 20 years as a principal
trainer and consultant. He was involved in
promoting and implementing productivity
practices to the Singapore government,
government linked companies, NTUC linked
companies and private sector companies such
as SIA, OCBC, Singapore Telecom.
Dr. Wee received his Master of
Business Administration (General Management)
from the University of Bradford, United
Kingdom in 1978.
MOK SIONG CHEAK serves
as President, Chief Executive Officer and a
director of the Company. Mr. Mok has served
Chief Executive Officer and a director of
Milling Systems since December, 1999. He is
also currently the director and a
shareholder in Milling Systems & Concepts
Sdn Bhd, MSC Power (S) Pte Ltd, MSC
Ventures and Global E-Trade Group Limited
(in which he is the sole shareholder), which
are involved in seeking new business
ventures and performing venture capital
funding activities. Prior to 1998, he
served as the personal assistant to the
Consul General of Vanuatu for Kuala Lumpur,
Malaysia, in charge of consular activities
in the South East Asia region. Mr. Mok has
experience in the general management and
business development for a number of
companies in Malaysia.
DR LEE KENG HO serves as a
director and Vice President - Software for
the Company. Dr. Lee has served as a
director of Milling Systems since December
1999. Dr. Lee is presently the managing
partner of his own consultancy firm, which
has performed various consultancy projects
in Asia, Africa and India. Prior to 1993, he
served on the Board of Directors in the
various companies of Magnum Corporation
Berhad ("Magnum"), a company listed on the
Main Board of the Kuala Lumpur Stock
Exchange, Malaysia. He joined Magnum in 1987
as its Computer Systems Manager. Prior to
that, Dr. Lee was involved in information
technology activities in various capacities
for government institutions and private
organizations. Dr. Lee holds a Bachelor of
Science (Honors) in Mathematics from
University Malaya and obtained his Doctor of
Philosophy in Computer Science from
University of Glasgow, Scotland.
CHAN TOW BOON serves as a
director, Secretary and Vice President -
Legal. Mr. Chan has served as a director of
Milling Systems since December, 1999. He is
presently the Managing Director of a number
of private limited companies incorporated in
Malaysia, which are involved in property
investment, insurance and gaming agency
businesses. Mr. Chan holds a law degree
from University of Woolverhampton in United
Kingdom.
MS. LEE SUI KUM has been
appointed to serve as Chief Financial
Officer for the Company. Ms. Lee has more
than 18 years of experience in the finance
and accounting field. Ms. Lee is presently
the Corporate Planning and Finance Director
of JSD Construction Pte Ltd, a company
involved in construction activities in
Singapore and she is also a partner in NPB
Consultants which provides independent
consultancy advisory services to small and
medium sized companies. From 1983 to 1998,
she was the Group Finance and Administration
Director of Pacific Vinitex Pte Ltd where
she was in charge of finance,
administration, human resource, and
strategic planning of the Pacific Vinitex
Group. Ms. Lee holds a Bachelor of Science
(Business Administration) from Oklahoma City
University, Oklahoma, USA.
The Company has no audit,
compensation or executive committees. There
is a key man life insurance policy on Mok
Siong Cheak in the amount of US $1,000,000
payable to the Company as beneficiary. No
other policies of this nature are in effect
at this time with respect to any other
directors, officers or control persons.
RELATED TRANSACTIONS
Milling Systems & Concepts Sdn.
Bhd. was registered in Malaysia to set up a
design and rapid prototyping center. Its
directors are Dr. Lee Keng Ho, Mr. Chan Tow
Boon and Mr. Wong Kum Wah. Milling Systems
& Concepts Sdn. Bhd. is a shareholder of the
Company.
EXECUTIVE COMPENSATION
No officer or employee of the
Company earned in excess of $100,000 in the
year ended December 31, 2000.
RISK FACTORS
THE COMPANY IS CURRENTLY OPERATING AT A LOSS
The Company currently operates
at a loss. If losses continue, the Company
may need to raise additional capital through
the sale of its securities or from debt or
equity financing. If the Company is not
able to raise such financing or obtain
alternative sources of funding, management
will be required to curtail operations. The
Company's operations are subject to the
risks and competition inherent in the
establishment of a new business enterprise.
There can be no assurance that future
operations will be profitable. The Company
may not achieve its business objectives and
the failure to achieve such goals would have
an adverse impact on it.
THE COMPANY MAY NEED TO RAISE ADDITIONAL
FUNDS IN THE FUTURE FOR ITS OPERATIONS AND
IF IT IS UNABLE TO SECURE SUCH FINANCING
THE COMPANY MAY NOT BE ABLE TO SUPPORT ITS
OPERATIONS
Future events, including the
problems, delays, expenses and difficulties
frequently encountered by new companies, may
lead to cost increases that could make the
Company's funds insufficient to support its
operations. The Company may seek additional
capital, including an offering of its equity
securities, an offering of debt securities
or obtaining financing through a bank or
other entity. The Company has not
established a limit as to the amount of debt
it may incur nor has the Company adopted a
ratio of its equity to debt allowance. If
the Company needs to obtain additional
financing, such financing may not be
available from any source, nor available on
terms acceptable to the Company. Any future
offering of securities may not be
successful. If additional funds are raised
through the issuance of equity securities,
there may be a significant dilution in the
value of the Company's outstanding common
stock. The Company could suffer adverse
consequences if it is unable to obtain
additional capital when needed.
LIMITED OPERATING HISTORY ON WHICH TO MAKE
AN INVESTMENT DECISION
The Company has a limited
operating history upon which an investor may
evaluate making an investment in the
Company. Accordingly, in reviewing the
actual operating results of the Company, an
investor will only be able to examine the
start-up operations of the Company's
wholly-owned subsidiary in making an
investment decision.
THERE IS NO CURRENT TRADING MARKET FOR THE
COMPANY'S SECURITIES
There is currently no
established public trading market for the
Company's securities. The Company can give
no assurance that an active trading market
in the Company's securities will develop or,
if developed, that it will be sustained. The
Company intends to apply for admission to
quotation of its securities on the NASD OTC
Bulletin Board and, if and when qualified,
it intends to apply for admission to
quotation on the Nasdaq SmallCap Market. If
for any reason the Company's common stock is
not listed on the NASD OTC Bulletin Board or
a public trading market does not otherwise
develop, shareholders may have difficulty
selling their common stock should they
desire to do so. Various factors, such as
the Company's operating results, changes in
laws, rules or regulations, general market
fluctuations, changes in financial estimates
by securities analysts and other factors may
have a significant impact on the market
price of the Company's securities.
ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES
The Company's officers and
directors reside outside the United States.
All of the assets of these persons are, and
the Company anticipates that a substantial
portion of the assets that may developed or
acquired by the Company will be, located
outside the United States. As a result, it
may not be possible for investors to effect
service of process within the United States
upon such persons, or to enforce against the
Company's assets or against such persons
judgments obtained in United States courts
predicated upon the liability provisions,
and most particularly the civil liability
provisions, of the United States securities
laws or state corporation or other law.
DEPENDENCE ON KEY PERSONNEL
The Company's success in
achieving its growth objectives is dependant
to a substantial extent upon the continuing
efforts and abilities of certain key
management personnel, including the efforts
of Dr. Wee Yue Chew, Mok Siong Cheak and
other management members. The Company does
not have employment agreements with any of
its executive officers. The loss of the
services of any of the executive officers
may have a material adverse effect on the
Company's business, financial condition,
results of operations and liquidity. The
Company can give no assurance that it will
be able to maintain and achieve its growth
objectives should the Company lose any or
all of these individuals' services.
FAILURE TO ATTRACT OR RETAIN QUALIFIED
PERSONNEL
A change in labor market
conditions that either further reduces the
availability of employees or increases
significantly the cost of labor could have a
material adverse effect on the Company's
business, financial condition and results of
operations. The Company's business is
dependent upon its ability to attract and
retain highly sophisticated research and
development personnel, sales personnel,
business administrators and corporate
management. There is no assurance that it
will be able to employ a sufficient number
of such personnel in order to accomplish its
growth objectives.
THE COMPANY'S PRODUCTS ARE MANUFACTURED BY
OUTSIDE VENDORS.
The Company's manufacturing
operations are conducted by companies not
affiliated with the Company. The Company has
no direct control over the quality of work,
suppliers, labor relations, or financial
condition of these companies. In addition,
two manufacturers are each located in Taiwan
and Switzerland, and the Company may
encounter problems arising from
international currency exchange, laws,
regulations, treaties or internal conditions
in Taiwan and Switzerland.
THE COMPANY IS DEPENDENT ON ITS SUPPLIERS
The Company is dependent on a
steady supply of hardware components and
stock materials. There are only a limited
number of quality suppliers of these
products, and there can be no assurance that
suppliers will timely meet the Company's
requirements. Furthermore, there can be no
assurance that the Company' s suppliers will
remain in the business of manufacturing
these products, or maintain their
relationship with the Company.
THE COMPANY'S TECHNOLOGY MAY BECOME OBSOLETE
The Company is in the business
of software development as one of its core
business. New technology could be developed
or a more preferable method of producing
prototypes machines could be developed,
which could lead to an erosion in the
Company's market for its products.
ADVERSE ECONOMIC CONDITIONS OR A CHANGE IN
GENERAL MARKET PATTERNS
A weak economic environment
could adversely affect the Company sales
efforts. Many factors beyond the Company's
control may decrease overall demand for the
Company's products including, among other
things, decrease in the entry costs by other
similarly situated companies, increase in
the overall unemployment rate, additional
government regulation or a downturn in
engineering projects by civilian,
governmental or military entities. There can
be no assurance that the general market
demand for the Company's products or
services will remain the same or will not
decrease in the future.
ISSUANCE OF FUTURE SHARES MAY DILUTE
INVESTORS SHARE VALUE
The Company is authorized to
issue 100,000,000 shares of common stock and
20,000,000 shares of preferred stock. The
future issuance of all or part of the
remaining authorized common stock may result
in substantial dilution in the percentage of
the Company's common stock held by the its
then existing shareholders. Moreover, any
common or preferred stock issued in the
future may be valued on an arbitrary basis
by the Company. The issuance of the
Company's shares for future services or
acquisitions or other corporate actions may
have the effect of diluting the value of the
shares held by investors, and might have an
adverse effect on a trading market for the
Company's common stock.
ADDITIONAL SHARES ENTERING THE MARKET, IF
ONE SHOULD DEVELOP, PURSUANT TO RULE 144
WITHOUT ADDITIONAL CAPITAL CONTRIBUTION
The outstanding restricted
shares of the Company will become eligible
for sale in the public market pursuant to
Rule 144 without additional capital
contribution to the Company. The addition of
such shares to the shares already available
to the public market, if any, may reduce the
then current market price of the Company's
shares without any increase to the Company's
capital which may result in a dilution in
the value of the outstanding shares.
THE APPLICATION OF THE "PENNY STOCK
REGULATION" COULD ADVERSELY AFFECT THE
MARKET PRICE OF THE COMPANY'S COMMON STOCK
Upon commencement of trading in
the Company's common stock, if such occurs
(of which there can be no assurance) the
Company's common stock may be deemed a penny
stock. Penny stocks generally are equity
securities with a price of less than $5.00
per share other than securities registered
on certain national securities exchanges or
quoted on the Nasdaq Stock Market, provided
that current price and volume information
with respect to transactions in such
securities is provided by the exchange or
system. The Company's securities may be
subject to "penny stock rules" that impose
additional sales practice requirements on
broker-dealers who sell such securities to
persons other than established customers and
accredited investors (generally those with
assets in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000
together with their spouse). For
transactions covered by these rules, the
broker-dealer must make a special
suitability determination for the purchase
of such securities and have received the
purchaser's written consent to the
transaction prior to the purchase.
Additionally, for any transaction involving
a penny stock, unless exempt, the "penny
stock rules" require the delivery, prior to
the transaction, of a disclosure schedule
prescribed by the Commission relating to the
penny stock market. The broker-dealer also
must disclose the commissions payable to
both the broker-dealer and the registered
representative and current quotations for
the securities. Finally, monthly statements
must be sent disclosing recent price
information on the limited market in penny
stocks. Consequently, the "penny stock
rules" may restrict the ability of
broker-dealers to sell the Company's
securities and may have the effect of
reducing the level of trading activity of
the Company's common stock in the secondary
market. The foregoing required penny stock
restrictions will not apply to the Company's
securities if such securities maintain a
market price of $5.00 or greater. There can
be no assurance that the price of the
Company's common stock will reach or
maintain such a level.
FUTURE AUTHORIZATION OF THE COMPANY'S
PREFERRED STOCK MAY HAVE AN ADVERSE EFFECT
ON THE RIGHTS OF HOLDERS OF THE COMMON
STOCK.
The Company may, without
further action or vote by its shareholders,
designate and issue additional shares of its
preferred stock. The terms of any series of
preferred stock, which may include priority
claims to assets and dividends and special
voting rights, could adversely affect the
rights of holders of the common stock and
thereby reduce the value of the Company's
common stock. The designation and issuance
of preferred stock favorable to current
management or shareholders could make a
possible takeover of the Company or the
removal of its management more difficult and
discharge hostile bids for control of the
Company which bids might have provided
shareholders with premiums for their shares.
THE COMPANY HAS NOT BEEN AUDITED BY
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Although the Company is
required to file audited financial
statements no later than 60 days from the
due date of this report, no such audited
financial statements have been prepared or
are available for inspection as of the date
hereof. Consequently, there can be no
assurance that any representations as to the
financial condition or assets of the Company
are as stated herein.
THE COMPANY MAY NOT BE ABLE TO PROTECT OR
PERFECT ITS PATENTS, TRADE OR SERVICE MARKS
The Company cannot be certain
that it will be able to prevent the
misappropriation of any patents, trade or
service marks it may possess. The Company
intends to apply to the United States Patent
Office for four patents. There can be no
assurance that these patents will be
granted, or that failure to be granted these
patents will not have a material adverse
effect on the Company's business.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Not applicable.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The sole officer and director of
Eastward resigned effective upon completion
of the Acquisition.
ITEM 7. FINANCIAL STATEMENTS
SUMMARY OF UNAUDITED FINANCIAL INFORMATION
Milling Concepts, the operating
subsidiary of the Company, incurred
unaudited net losses of $508,794 for the
year ended October, 2000, and $310,053
during the months ended September 30, 2000.
As of September 30, 2000, it had current
assets of $94,437 and current liabilities of
$17,990. If losses continue, the Company
may need to raise additional capital through
the placement of its securities or from debt
or equity financing. If the Company is not
able to raise such financing or obtain
alternative sources of funding, management
may be required to curtail operations. The
figures given in this paragraph have not
been audited.
REQUIREMENT TO FILE AUDITED FINANCIAL
STATEMENTS
No financial statements are
filed herewith. The Registrant is required
to file audited financial statements no
later than 60 days after the date that this
report must be filed and reference should be
made to those financial statements when filed.
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
EXHIBITS
2.0 Form of Agreement and Plan of Reorganization
SIGNATURES
Pursuant to the requirements of
the Securities Exchange Act of 1934, the
Registrant has duly caused this Current
Report to be signed on its behalf by the
undersigned hereunto duly authorized.
MSC GROUP, INC.
By /s/ Steven Mok
President
Date: January 16, 2001
