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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
MULTIMOD INVESTMENTS, LTD.
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(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
NEVADA N/A
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
16 JULIA STREET
THORNHILL, ONTARIO CANADA L3T 4R9
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP/POSTAL CODE)
ISSUER'S TELEPHONE NUMBER: (905) 731-0189
SECURITIES TO BE REGISTERED UNDER SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS TO BE REGISTERED
NONE NONE
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SECURITIES TO BE REGISTERED UNDER SECTION 12(g) OF THE ACT:
COMMON STOCK, $.001 PAR VALUE PER SHARE
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(TITLE OF CLASS)
COPIES OF COMMUNICATIONS SENT TO:
MARVIN N. WINICK
16 JULIA STREET
THORNHILL, ONTARIO L3T 4R9
TEL: (905) 731-0189 - FAX: (905) 764-3049
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INDEX
<TABLE>
<S> <C>
PART I
ITEM 1. DESCRIPTION OF BUSINESS 3.
ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION 9.
ITEM 3. DESCRIPTION OF PROPERTY 10.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS & MANAGEMENT 10.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS & CONTROL PERSONS 11.
ITEM 6. EXECUTIVE COMPENSATION 13.
ITEM 7. CERTAIN RELATIONSHIPS & RELATED
TRANSACTIONS 13.
ITEM 8. DESCRIPTION OF SECURITIES 13.
PART II
ITEM 1. MARKET FOR COMMON EQUITY &
OTHER SHAREHOLDER MATTERS 14.
ITEM 2. LEGAL PROCEEDINGS 15.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS 16.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES 16.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS 16.
PART F/S 18.
PART III 18.
SIGNATURES 18.
</TABLE>
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
BUSINESS DEVELOPMENT
Multimod Investments, Ltd. (the "Company") was organized on May 12, 2000,
under the laws of the State of Nevada, having the stated purpose of engaging in
any lawful activities. The Company was formed with the contemplated purpose to
engage in internet related businesses in the United States and elsewhere. The
Company is searching for a viable entity upon which to merge and/or acquire.
The Company never engaged in an active trade or business throughout the
period from May 12, 2000 until the filing of this form. On May 12, 2000 the
Company issued stock a total of 400,000 shares of common stock. Marvin N. Winick
was issued 188,000 shares of common stock, Sterling Klein was issued 188,000
shares of common stock and 24 other shareholders received a total of 24,000
shares of common stock. Mr. Winick and Mr. Klein are shareholders and directors
of the Company.
The Company has now begun to consider and investigate potential business
opportunities. The Company is considered a development stage company and, due to
its status as a "shell" corporation, its principal business purpose is to locate
and consummate a merger or acquisition with a private entity. Because of the
Company's current status of having limited assets and no recent operating
history, in the event the Company does successfully acquire or merge with an
operating business opportunity, it is likely that the Company's present
shareholders will experience substantial dilution and there will be a probable
change in control of the Company.
On June 1, 2000, the Company also determined it should become active in
seeking potential operating businesses and business opportunities with the
intent to acquire or merge with such businesses.
The Company is voluntarily filing its registration statement on Form 10-SB
in order to make information concerning itself more readily available to the
public. Management believes that being a reporting company under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), could provide a
prospective merger or acquisition candidate with additional information
concerning the Company. In addition, management believes that this might make
the Company more attractive to an operating business as a potential business
combination candidate. As a result of filing its registration statement, the
Company is obligated to file with the Commission certain interim and periodic
reports including an annual report containing audited financial statements. The
Company intends to continue to voluntarily file these periodic reports under the
Exchange Act even if its obligation to file such reports is suspended under
applicable provisions of the Exchange Act.
Any target acquisition or merger candidate of the Company will become
subject to the same reporting requirements as the Company upon consummation of
any such business combination.
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Thus, in the event that the Company successfully completes an acquisition or
merger with another operating business, the resulting combined business must
provide audited financial statements for at least the two most recent fiscal
years, or in the event that the combined operating business has been in business
less than two years, audited financial statements will be required from the
period of inception of the target acquisition or merger candidate.
The Company's principal executive offices are located at 16 Julia Street,
Thornhill, Ontario Canada L3T 4R9 and its telephone number is (905) 731-0189.
BUSINESS OF ISSUER
The Company has no recent operating history and no representation is made,
nor is any intended, that the Company will be able to carry on future business
activities successfully. There can be no assurance that the Company will have
the ability to acquire or merge with an operating business, business opportunity
or property that will be of material value to the Company.
Management plans to investigate, research and, if justified, potentially
acquire or merge with one or more businesses or business opportunities. The
Company currently has no commitment or arrangement, written or oral, to
participate in any business opportunity and management cannot predict the nature
of any potential business opportunity it may ultimately consider. Management
will have broad discretion in its search for and negotiations with any potential
business or business opportunity.
SOURCES OF BUSINESS OPPORTUNITIES
The Company intends to use various sources in its search for potential
business opportunities including its officer and director, consultants, special
advisors, securities broker-dealers, venture capitalists, member of the
financial community and others who may present management with unsolicited
proposals. Because of the Company's limited capital, it may not be able to
retain on a fee basis professional firms specializing in business acquisitions
and reorganizations. The Company will most likely have to rely on outside
sources, not otherwise associated with the Company, that will accept their
compensation only after the Company has finalized a successful acquisition or
merger. The Company will rely upon the expertise and contacts of such persons,
will use notices in written publications and personal contacts to find merger
and acquisition candidates, the exact number of such contacts dependent upon the
skill and industriousness of the participants and the conditions of the
marketplace. None of the participants in the process will have any past business
relationship with management. To date the Company has not engaged nor entered
into any definitive agreements nor understandings regarding retention of any
consultant to assist the Company in its search for business opportunities, nor
is management presently in a position to actively seek or retain any prospective
consultants for these purposes.
The Company does not intend to restrict its search to any specific kind of
industry or business. The Company may investigate and ultimately acquire a
venture that is in its preliminary or development stage, is already in
operation, or in various stages of its corporate existence and development.
Management cannot predict at this time the status or nature of any venture in
which
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the Company may participate. A potential venture might need additional capital
or merely desire to have its shares publicly traded. The most likely scenario
for a possible business arrangement would involve the acquisition of, or merger
with, an operating business that does not need additional capital, but which
merely desires to establish a public trading market for its shares. Management
believes that the Company could provide a potential public vehicle for a private
entity interested in becoming a publicly held corporation without the time and
expense typically associated with an initial public offering.
EVALUATION
Once the Company has identified a particular entity as a potential
acquisition or merger candidate, management will seek to determine whether
acquisition or merger is warranted or whether further investigation is
necessary. Such determination will generally be based on management's knowledge
and experience, (limited solely to working history - See "Item 5. Directors,
Executive Officers, etc.") or with the assistance of outside advisors and
consultants evaluating the preliminary information available to them. Management
may elect to engage outside independent consultants to perform preliminary
analysis of potential business opportunities. However, because of the Company's
limited capital it may not have the necessary funds for a complete and
exhaustive investigation of any particular opportunity. Management will not
devote full time to finding a merger candidate, will continue to engage in
outside unrelated activities, and anticipates devoting no more than an average
of five (5) hours weekly to such undertaking.
In evaluating such potential business opportunities, the Company will
consider, to the extent relevant to the specific opportunity, several factors
including potential benefits to the Company and its shareholders; working
capital, financial requirements and availability of additional financing;
history of operation, if any; nature of present and expected competition;
quality and experience of management; need for further research, development or
exploration; potential for growth and expansion; potential for profits; and
other factors deemed relevant to the specific opportunity.
Because the Company has not located or identified any specific business
opportunity as of the date hereof, there are certain unidentified risks that
cannot be adequately expressed prior to the identification of a specific
business opportunity. There can be no assurance following consummation of any
acquisition or merger that the business venture will develop into a going
concern or, if the business is already operating, that it will continue to
operate successfully. Many of the potential business opportunities available to
the Company may involve new and untested products, processes or market
strategies which may not ultimately prove successful.
FORM OF POTENTIAL ACQUISITION OR MERGER
Presently the Company cannot predict the manner in which it might
participate in a prospective business opportunity. Each separate potential
opportunity will be reviewed and, upon the basis of that review, a suitable
legal structure or method of participation will be chosen. The particular manner
in which the Company participates in a specific business opportunity will depend
upon the nature of that opportunity, the respective needs and desires of the
Company and management of the opportunity, and the relative negotiating strength
of the parties involved. Actual
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participation in a business venture may take the form of an asset purchase,
lease, joint venture, license, partnership, stock purchase, reorganization,
merger or consolidation. The Company may act directly or indirectly through an
interest in a partnership, corporation, or other form of organization, however,
the Company does not intend to participate in opportunities through the purchase
of minority stock positions.
Because of the Company's current status of inactivity since inception May
12, 2000, and its concomitant lack of assets and relevant operating history, it
is likely that any potential merger or acquisition with another operating
business will require substantial dilution to the Company's existing
shareholders' interests. There will probably be a change in control of the
Company, with the incoming owners of the targeted merger or acquisition
candidate taking over control of the Company. Management has not established any
guidelines as to the amount of control it will offer to prospective business
opportunity candidates, since this issue will depend to a large degree on the
economic strength and desirability of each candidate, and the corresponding
relative bargaining power of the parties. However, management will endeavor to
negotiate the best possible terms for the benefit of the Company's shareholders
as the case arises. Management may actively negotiate or otherwise consent to
the purchase of any portion of their common stock as a condition to, or in
connection with, a proposed merger or acquisition. In such an event, existing
shareholders may not be afforded an opportunity to approve or consent to any
particular stock buy-out transaction. However the terms of the sale of shares
held by present management of the Company will be extended equally to all other
current shareholders.
Management does not have any plans to borrow funds to compensate any
persons, consultants, or promoters in conjunction with its efforts to find and
acquire or merge with another business opportunity. Management does not have any
plans to borrow funds to pay compensation to any prospective business
opportunity, or shareholders, management, creditors, or other potential parties
to the acquisition or merger. In either case, it is unlikely that the Company
would be able to borrow significant funds for such purposes from any
conventional lending sources. In all probability, a public sale of the Company's
securities would also be unfeasible, and management does not contemplate any
form of new public offering at this time. In the event that the Company does
need to raise capital, it would most likely have to rely on the private sale of
its securities. Such a private sale would be limited to persons exempt under the
Commissions's Regulation D or other rule, or provision for exemption, if any
applies. However, no private sales are contemplated by the Company's management
at this time. If a private sale of the Company's securities is deemed
appropriate in the future, management will endeavor to acquire funds on the best
terms available to the Company. However, there can be no assurance that the
Company will be able to obtain funding when and if needed, or that such funding,
if available, can be obtained on terms reasonable or acceptable to the Company.
The Company does not anticipate using Regulation S promulgated under the
Securities Act of 1933 to raise any funds any time within the next year, subject
only to its potential applicability after consummation of a merger or
acquisition.
In the event of a successful acquisition or merger, a finder's fee, in the
form of cash or securities of the Company, may be paid to persons instrumental
in facilitating the transaction. The Company has not established any criteria or
limits for the determination of a finder's fee, although most likely an
appropriate finder's fee will be negotiated between the parties, including the
potential
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business opportunity candidate, based upon economic considerations and
reasonable value as estimated and mutually agreed upon at that time. A finder's
fee would only be payable upon completion of the proposed acquisition or merger
in the normal case, and management does not contemplate any other arrangement at
this time. Current management has not in the past used any particular
consultants, advisors or finders. Management has not actively undertaken a
search for, nor retention of, any finder's fee arrangement with any person. It
is possible that a potential merger or acquisition candidate would have its own
finder's fee arrangement, or other similar business brokerage or investment
banking arrangement, whereupon the terms may be governed by a pre-existing
contract; in such case, the Company may be limited in its ability to affect the
terms of compensation, but most likely the terms would be disclosed and subject
to approval pursuant to submission of the proposed transaction to a vote of the
Company's shareholders. Management cannot predict any other terms of a finder's
fee arrangement at this time. If such a fee arrangement was proposed,
independent management and directors would negotiate the best terms available to
the Company so as not to compromise the fiduciary duties of the representative
in the proposed transaction, and the Company would require that the proposed
arrangement would be submitted to the shareholders for prior ratification in an
appropriate manner.
Management does not contemplate that the Company would acquire or merge
with a business entity in which any officer or director of the Company has an
interest. Any such related party transaction, however remote, would be submitted
for approval by an independent quorum of the Board of Directors and the proposed
transaction would be submitted to the shareholders for prior ratification in an
appropriate manner. The Company's management has not had any contact,
discussions, or other understandings regarding any particular business
opportunity at this time, regardless of any potential conflict of interest
issues. Accordingly, the potential conflict of interest is merely a remote
theoretical possibility at this time.
Possible Blank Check Company Status
While the Company may be deemed a "shell" company at this time, it does not
constitute a "blank check" company under pertinent securities law standards.
Accordingly, the Company is not subject to securities regulations imposed upon
companies deemed to be "blank check companies." If the Company were to file a
registration statement under Securities Act of 1933 and, at such time, priced
its shares at less than $5.00 per share and continued to have no specific
business plan, it would then be classified as a blank check company.
If in the future the Company were to become a blank check company, adverse
consequences could attach to the Company. Such consequences can include, but are
not limited to, time delays of the registration process, significant expenses to
be incurred in such an offering, loss of voting control to public shareholders
and the additional steps required to comply with various federal and state laws
enacted for the protection of investors, including so-called "lock-up"
agreements pending consummation of a merger or acquisition that would take it
out of blank check company status.
Many states have statutes, rules and regulations limiting the sale of
securities of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a market to develop
in the companies securities or to undertake any offering of the
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Company's securities, either debt or equity, until such time as the Company has
successfully implemented its business plan described herein. In the event the
Company undertakes the filing of a registration statement under circumstances
that classifies it as a blank check company the provisions of Rule 419 and other
applicable provisions will be complied with.
RIGHTS OF SHAREHOLDERS
The Company does intend to provide its shareholders with complete
disclosure documentation including audited finance statements concerning a
target company and its business prior to any mergers or acquisitions.
COMPETITION
Because the Company has not identified any potential acquisition or merger
candidate, it is unable to evaluate the type and extent of its likely
competition. The Company is aware that there are several other public companies
with only nominal assets that are also searching for operating businesses and
other business opportunities as potential acquisition or merger candidates. The
Company will be in direct competition with these other public companies in its
search for business opportunities and, due to the Company's limited funds, it
may be difficult to successfully compete with these other companies.
EMPLOYEES
As of the date hereof, the Company does not have any employees and has no
plans for retaining employees until such time as the Company's business warrants
the expense, or until the Company successfully acquires or merges with an
operating business. The Company may find it necessary to periodically hire
part-time clerical help on an as-needed basis. The funds needed in this case
will be advanced by Mr. Winick.
FACILITIES
The Company is currently using at no cost to the Company, as its principal
place of business offices of one of its directors and officer (provided at no
cost), located in Thornhill, Ontario Canada. Although the Company has no written
agreement and pays no rent for the use of this facility, it is contemplated that
at such future time as an acquisition or merger transaction may be completed,
the Company will secure commercial office space from which it will conduct its
business. Until such an acquisition or merger, the Company lacks any basis for
determining the kinds of office space or other facilities necessary for its
future business. The Company has no current plans to secure such commercial
office space. It is also possible that a merger or acquisition candidate would
have adequate existing facilities upon completion of such a transaction, and the
Company's principal offices may be transferred to such existing facilities.
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INDUSTRY SEGMENTS
No information is presented regarding industry segments. The Company is
presently a development stage company seeking a potential acquisition of or
merger with a yet to be identified business opportunity. Reference is made to
the statements of income included herein in response to part F/S of this Form
10-SB for a report of the Company's operating history from May 12, 2000
(inception) to June 30, 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company is considered a development stage company with limited assets
or capital, and with no operations or income since inception May 12, 2000. The
costs and expenses associated with the preparation and filing of this
registration statement and other operations of the Company have been paid for by
a shareholder, specifically Mr. Marvin N. Winick (see Item 4, Security Ownership
of Certain Beneficial Owners and Management Marvin N. Winick is one of the
controlling shareholders). Mr. Winick has agreed to pay future costs associated
with filing future reports under Exchange Act of 1934 if the Company is unable
to do so. It is anticipated that the Company will require only nominal capital
to maintain the corporate viability of the Company and any additional needed
funds will most likely be provided by the Company's existing shareholders or its
sole officer and director in the immediate future. Current shareholders have not
agreed upon the terms and conditions of future financing and such undertaking
will be subject to future negotiations, except for the express commitment of Mr.
Winick to fund required 34 Act filings. Repayment of any such funding will also
be subject to such negotiations. However, unless the Company is able to
facilitate an acquisition of or merger with an operating business or is able to
obtain significant outside financing, there is substantial doubt about its
ability to continue as a going concern.
In the opinion of management, inflation has not and will not have a
material effect on the operations of the Company until such time as the Company
successfully completes an acquisition or merger. At that time, management will
evaluate the possible effects of inflation on the Company as it relates to its
business and operations following a successful acquisition or merger.
Management plans may but do not currently provide for experts to secure a
successful acquisition or merger partner so that it will be able to continue as
a going concern. In the event such efforts are unsuccessful, contingent plans
have been arranged to provide that the current Director of the Company is to
fund required future filings under the 34 Act, and existing shareholders have
expressed an interest in additional funding if necessary to continue the Company
as a going concern.
PLAN OF OPERATION
During the next twelve months, the Company will actively seek out and
investigate possible business opportunities with the intent to acquire or merge
with one or more business ventures. In its search for business opportunities,
management will follow the procedures outlined in Item 1 above. Because the
Company has limited funds, it may be necessary for the officers and directors to
either advance funds to the Company or to accrue expenses until such time as a
successful business consolidation can be made. The Company will not require that
the funds advanced by the officers and directors be repaid immediately by the
the target company. These funds will show as an accounts payable on the records
of the Company to be repaid at such time as there are funds available to repay
such advances. Management intends to hold expenses to a minimum and to obtain
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services on a contingency basis when possible. Further, the Company's directors
will defer any compensation until such time as an acquisition or merger can be
accomplished and will strive to have the business opportunity provide their
remuneration. However, if the Company engages outside advisors or consultants in
its search for business opportunities, it may be necessary for the Company to
attempt to raise additional funds. As of the date hereof, the Company has not
made any arrangements or definitive agreements to use outside advisors or
consultants or to raise any capital. In the event the Company does need to raise
capital most likely the only method available to the Company would be the
private sale of its securities. Because of the nature of the Company as a
development stage company, it is unlikely that it could make a public sale of
securities or be able to borrow any significant sum from either a commercial or
private lender. There can be no assurance that the Company will able to obtain
additional funding when and if needed, or that such funding, if available, can
be obtained on terms acceptable to the Company.
The Company does not intend to use any employees, with the possible
exception of part-time clerical assistance on an as-needed basis. Outside
advisors or consultants will be used only if they can be obtained for minimal
cost or on a deferred payment basis. Management is convinced that it will be
able to operate in this manner and to continue its search for business
opportunities during the next twelve months.
ITEM 3. DESCRIPTION OF PROPERTY
The information required by this Item 3 is not applicable to this Form
10-SB due to the fact that the Company does not own or control any material
property. There are no preliminary agreements or understandings with respect to
office facilities in the future.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, to the best knowledge of the
Company as of June 30, 2000, with respect to each person known by the Company to
own beneficially more than 5% of the Company's outstanding common stock, each
director of the Company and all directors and officers of the Company as a
group.
<TABLE>
<CAPTION>
Name of Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of Class
------------------ -------------------- ----------------
<S> <C> <C>
Marvin N. Winick 188,000 47.0%
16 Julia Street
Thornhill, Ontario L3T 4R9
Sterling Klein 188,000 47.0%
1111 Burnaby
Burnaby, British Columbia
V6C 1G4
Sak Narwal 0 0.0%
All Executive Officers and Directors
as a Group (one person) 376,000 94.0%
</TABLE>
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ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT.
The director and executive officer of the Company and his respective age is
as follows:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Marvin N. Winick 51 Director, President,
Sterling Klein 30 Director, Secretary Treasurer
Sak Narwal 35 Director
</TABLE>
All directors hold office until the next annual meeting of stockholders and
until their successors have been duly elected and qualified. There are no
agreements with respect to the election of directors. The Company has not
compensated its directors for service on the Board of Directors or any committee
thereof. As of the date hereof, no director has accrued any expenses or
compensation. Officers are appointed annually by the Board of Directors and each
executive officer serves at the discretion of the Board of Directors. The
Company does not have any standing committees at this time.
No director, or officer, or promoter of the Company has, within the past
five years, filed any bankruptcy petition, been convicted in or been the subject
of any pending criminal proceedings, or is any such person the subject or any
order, judgment or decree involving the violation of any state or federal
securities laws.
The business experience of the person listed above during the past five
years is as follows:
Mr. Marvin N. Winick, 51 years old, has been a Director of the Company
since inception May 12, 2000. Mr. Winick is a self employed Canadian accountant
who has done consulting and accounting for several U.S. companies including
Omicron Technologies, Inc., Dyncom , Inc. Nature Treat Products Inc. and
Auto.com Inc. He has been a director of a public company Tokn, Inc. since 1989.
Mr. Winick has had several years of computer, accounting and experience in US
securities laws which has helped him to assist other companies as mentioned
above.
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Sterling Klein, 30 years, is a self-employed corporate consultant
specializing in securities, administration and public relations since 1993. For
two years he has done consulting work for Omicron Technologies, Inc. a publicly
traded company. From 1996 to 1998 he also served as a director and officer of
Winchester Mining Corporation a company trading OTC on the Nasdq Stock Exchange.
SAK NARWAL after studying Commerce (Marketing & Finance) and Law at the
University of British Columbia, completed a UBC Professional Program in mortgage
brokering and real estate finance within the Urban Land Economics Faculty. His
diverse business experience has extended from entrepreneurial ventures to
corporate management. Subsequent to several entrepreneurial ventures, Mr. Narwal
founded Pentagon Mortgage Investment Corporation and Pentagon Management
Corporation. Through these companies he raised and managed investment capital
and facilitated lending in a variety of commercial and residential mortgages.
For the past 10 years and most recently, Mr. Narwal has focused his business
activities on the financial markets and raising equity capital for both private
and public companies specializing in technology. He has played a key role in
many negotiations leading to strategic business partnerships and alliances. He
is presently for the last 2 years been a director and officer of Omicron
Technologies, Inc a company trading on the pink sheets of the NASDQ stock
exchange.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors and persons who own more than 10%
of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission (hereinafter referred to as the "Commission")
initial statements of beneficial ownership, reports of changes in ownership and
annual reports concerning their ownership, of Common Stock and other equity
securities of the Company on Forms 3, 4, and 5, respectively. Executive
officers, directors and greater than 10% shareholders are required by Commission
regulations to furnish the Company with copies of all Section 16(a) reports they
file. To the Company's knowledge, Mr. Winick and Mr. Klein comprising all of the
Company's executive officers, directors and greater than 10% beneficial owners
of its common Stock, will comply with Section 16(a) filing requirements
applicable to them before the end of the Company's current fiscal year.
ITEM 6. EXECUTIVE COMPENSATION
The Company has not had a bonus, profit sharing, or deferred compensation
plan for the benefit of its employees, officers or directors. The Company has
not paid any salaries or other compensation to its officers, directors or
employees since inception. Further, the Company has not entered into an
employment agreement with any of its officers, directors or any other persons
and no such agreements are anticipated in the immediate future. It is intended
that the Company's director will defer any compensation until such time as an
acquisition or merger can be accomplished and will strive to have the business
opportunity provide their remuneration. As of the date hereof, no person has
accrued any compensation from the Company.
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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On May 12, 2000 Marvin N. Winick and Sterling Klein received 188,000 shares
of common stock each as the founding officers and directors of the in exchange
for a commitment to arrange to pay the costs of the continued operations and to
seek out a merger or acquisition on behalf of the Company.
In addition Mr. Winick has paid for the cost and expenses associated with
the filing of this Form 10-SB and other operations of the Company.
At the current time, the Company has no provision to issue any additional
securities to management, promoters or their respective affiliates or
associates. At such time as the Board of Directors adopts an employee stock
option or pension plan, any issuance would be in accordance with the terms
thereof and proper approval. Although the Company has a very large amount of
authorized but unissued Common Stock and Preferred Stock which may be issued
without further shareholder approval or notice, the Company intends to reserve
such stock for the Rule 504, 505 and 506 offerings for acquisitions.
From inception (May 12, 2000), there have not been any other transactions
between the Company and any officer, director, nominee for election as director,
or any shareholder owning greater than five percent (5%) of the Company's
outstanding shares, nor any member of the above referenced individuals'
immediate family.
Sterling Klein may be deemed to be a "promoter" of the Company as that term
is defined under the Rules and Regulations promulgated under the Act.
ITEM 8. DESCRIPTION OF SECURITIES
COMMON STOCK
The Company is authorized to issue 50,000,000 shares of common stock, par
value $.001, of which 400,000 shares are issued and outstanding as of the date
hereof. All shares of common stock have equal rights and privileges with respect
to voting, liquidation and dividend rights. Each share of Common Stock entitles
the holder thereof to (i) one non-cumulative vote for each share held of record
on all matters submitted to a vote of the stockholders; (ii) to participate
equally and to receive any and all such dividends as may be declared by the
Board of Directors out of funds legally available therefor; and (iii) to
participate pro rata in any distribution of assets available for distribution
upon liquidation of the Company. Stockholders of the Company have no pre-emptive
rights to acquire additional shares of Common Stock or any other securities. The
Common Stock is not subject to redemption and carries no subscription or
conversion rights. All outstanding shares of common stock are fully paid and
non-assessable.
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<PAGE> 14
PREFERRED STOCK
Shares of Preferred Stock may be issued from time to time in one or more
series as may be determined by the Board of Directors. The Company is authorized
to issue 5,000,000 shares of preferred stock, par value $.001. The voting
powers and preferences, the relative rights of each such series and the
qualifications, limitations and restrictions thereof shall be established by the
Board of Directors, except that no holder of Preferred Stock shall have
preemptive rights. At the present time no terms, conditions, limitations or
preferences have been established. The Company has no shares of Preferred Stock
outstanding, and the Board of Directors has no plan to issue any shares of
preferred Stock for the foreseeable future unless the issuance thereof shall be
in the best interests of the Company.
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND OTHER SHAREHOLDER MATTERS.
No shares of the Company's common stock have previously been registered
with the Securities and Exchange Commission (the "Commission") or any state
securities agency or authority. The Company intends to make application to the
NASD for the Company's shares to be quoted on the OTC Bulletin Board. The
application to the NASD will be made during the Commission comment period for
this Form 10-SB or immediately thereafter. The Company's application to the NASD
will consist of current corporate information, financial statements and other
documents as required by Rule 15c211 of the Securities Exchange Act of 1934, as
amended. Inclusion on the OTC Bulletin Board 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 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
issuer'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.
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<PAGE> 15
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.
As of June 30, 2000, there were 26 holders of record of the Company's
common stock.
As of the date hereof, the Company has issued and outstanding 400,000
shares of common stock. Of this total, 24,000 shares may be sold or otherwise
transferred without restriction pursuant to the terms of Rule 144 ("Rule 144")
of the Securities Act of 1933, as amended (the "Act") since such shares have
been issued to non control shareholders. 376,000 such shares remain restricted
under Rule 144 since such shares are held by officers and directors.
DIVIDEND POLICY
The Company has not declared or paid cash dividends or made distributions
in the past, and the Company does not anticipate that it will pay cash dividends
or make distributions in the foreseeable future. The Company currently intends
to retain and reinvest future earnings, if any, to finance its operations.
PUBLIC QUOTATION OF STOCK
The Company has not as of this date, but intends to request in the
immediate future a broker-dealer who has not been identified at this time, to
act as a market maker for the Company's securities. Thus far the Company has not
requested a market maker to submit the Company's Form 10-SB to the National
Association of Securities Dealers and to serve as a market maker for the
Company's Common Stock. The Company anticipates that other market makers may be
requested to participate at a later date. The Company will not use consultants
to obtain market makers. There have been no preliminary discussions between the
Company, or anyone acting on its behalf, and any market maker regarding the
future trading market for the Company. It is anticipated that the market maker
will be contacted prior to an acquisition or merger and only by management of
the Company.
ITEM 2. LEGAL PROCEEDINGS
The Company is currently not a party to any pending legal proceedings and
no such action by, or to the best of its knowledge, against the Company has been
threatened. The Company is newly incorporated (May 12, 2000) and has been
inactive since that date and through the date of this Form 10-SB.
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<PAGE> 16
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 3 is not applicable to this Form 10-SB.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
There have been no sales of unregistered securities to date.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article XI of the Company's Amended Articles of Incorporation contains
provisions providing for the indemnification of directors and officers of the
Company as follows:
(a) The corporation shall indemnify any person who was or is a party, or is
threatened to be made a party, of any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation), by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is otherwise serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, actually and reasonably
incurred by him in connection with such action, suit or proceeding, if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, has no reasonable cause to believe his conduct is unlawful. The
termination of any action, suit or proceeding, by judgment, order, settlement,
conviction upon a plea of nolo contendere or its equivalent, shall not of itself
create a presumption that the person did not act in good faith in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had
reasonable cause to believe the action was unlawful.
(b) The corporation shall indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending or completed action or
suit by or in the right of the corporation, to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit, if he acted in good faith and in a manner he
reasonably believed to be in, or not, opposed to, the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation, unless, and only to the extent that, the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability, but in view of all circumstances of the case, such
person is fairly and reasonably entitled to indemnification for such expenses
which such court deems proper.
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<PAGE> 17
(c) To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections (a) and (b) of this Article,
or in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorney's fees) actually and reasonably incurred by
him in connection therewith.
(d) Any indemnification under Section (a) or (b) of this Article (unless
ordered by a court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the officer, director
and employee or agent is proper in the circumstances, because he has met the
applicable standard of conduct set forth in Section (a) or (b) of this Article.
Such determination shall be made (i) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (ii) if such quorum is not obtainable or, even if
obtainable, a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (iii) by the affirmative vote of the holders of
a majority of the shares of stock entitled to vote and represented at a meeting
called for purpose.
(e) Expenses (including attorneys' fees) incurred in defending a civil or
criminal action, suit or proceeding may be paid by the corporation in advance of
the final disposition or such action, suit or proceeding, as authorized in
Section (d) of this Article, upon receipt of an understanding by or on behalf of
the director, officer, employee or agent to repay such amount, unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this Article.
(f) The Board of Directors may exercise the corporation's power to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would have the
power to indemnify him against such liability under this Article.
(g) The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under these Amended Articles of Incorporation, the Bylaws, agreements,
vote of the shareholders or disinterested directors, or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office and shall continue as to person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the heirs
and personal representative of such a person.
TRANSFER AGENT
The Company is serving as its own transfer agent until it becomes eligible
for quotation with NASD.
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<PAGE> 18
PART F/S
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's financial statements from inception May 12, 2000 to June 30,
2000 have been examined to the extent indicated in their reports by Michael
Johnson & Company, independent certified 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-SB.
PART III
Item 1. Index to Exhibits
The following exhibits are filed with this Registration Statement:
Exhibit No. Exhibit Name
3(i).1 Articles of Incorporation filed May 9, 2000
3(ii).1 By-laws
3(iii).1 Amendment to by-laws
3(iv) Corporate Charter
3(v) Certificate of Good Standing
27 Financial Data Schedule
Item 2. Description of Exhibits
See Item 1 above.
Signatures
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, there unto
duly authorized.
Multimod Investments, Ltd.
(Registrant)
Date: August 11, 2000 BY: /s/ MARVIN WINICK
-----------------------------------
Marvin Winick, President
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<PAGE> 19
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
Date Signature Title
<S> <C> <C>
August 11, 2000 BY: /s/ MARVIN WINICK Director, President
-------------------------------
Marvin Winick
</TABLE>
-19-
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT NAME
----------- ------------
<S> <C>
3(i).1 Articles of Incorporation filed May 9, 2000
3(ii).1 By-laws
3(iii).1 Amendment to by-laws
3(iv) Corporate Charter
3(v) Certificate of Good Standing
27 Financial Data Schedule
</TABLE>
