SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
DEFAULT PROOF CREDIT CARD SYSTEMS, INC.
(Name of Issuer)
Common Stock
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(Title of Class of Securities)
244626 40 4
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(CUSIP Number)
Walter M. Epstein, Esq.
Davis & Gilbert LLP
1740 Broadway
New York, New York 10019
(212) 468-4800
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(Name, Address and Telephone Number of Persons
Authorized to Receive Notices and Communications)
February 5, 1999
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-l(b)(3) or (4), check the following box.
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Page 1 of 12 Pages.
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CUSIP No. 244626 40 4 13D
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
DR. ERIC H. SPELLMAN
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS:
00
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION:
United States
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7 SOLE VOTING POWER:
NUMBER OF 83,500
SHARES ----------------------------------------------------------------
BENEFICALLY 8 SHARED VOTING POWER:
OWNED BY -0-
EACH ----------------------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER:
REPORTING 83,500
PERSON WITH ----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER:
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
83,500
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES: |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
6.2%
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14 TYPE OF REPORTING PERSON:
IN
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Item 1. Security and Issuer.
This Schedule 13D relates to shares of common stock, $.01 par value
per share ("Common Stock"), of Default Proof Credit Card Systems, Inc., a
Florida corporation (the "Company"), whose principal executive offices are
located at 1545 Miller Road, Coral Gables, FL 33416.
Item 2. Identity and Background.
This Schedule 13D is being filed on behalf of Dr. Eric H.
Spellman. Dr. Spellman is a dentist whose address is 16 North Chatsworth
Avenue, Larchmont, NY 10538. Dr. Spellman is a United States citizen.
Dr. Spellman has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) during the last five
years.
Dr. Spellman has not been, during the last five years, a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of any such proceeding was or is subject to a judgment, decree
or final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
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Item 3. Source and Amount of Funds or Other Consideration.
On February 5, 1999, Dr. Spellman was issued 40,000 shares of Common
Stock of the Company in consideration of marketing and consulting services
rendered by Dr. Spellman and pursuant to an agreement between Dr. Spellman and
the Company, dated January 28, 1999 (the "Agreement").
Item 4. Purpose of Transaction.
Dr. Spellman acquired the shares for investment purposes.
Dr. Spellman intends to review his holdings in the Company on a
continuing basis. Depending upon various factors, including, but not limited to,
the Company's business, prospects and financial condition and other developments
concerning the Company, available opportunities for Dr. Spellman to acquire or
dispose of the Common Stock, other business opportunities available to Dr.
Spellman, and other relevant factors, Dr. Spellman may in the future take such
actions with respect to his holdings in the Company as he deems appropriate in
light of the circumstances and conditions existing from time to time. Such
actions may include the purchase of additional Common Stock in the open market,
the purchase of additional Common Stock in privately negotiated transactions or
otherwise, the disposition, from time to time or at any time, of all or a
portion of the Common Stock now owned or hereafter acquired, either in a sale(s)
of Common Stock in the open market or the sale(s) of Common Stock in privately
negotiated transactions to one or more purchasers.
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Dr. Spellman has not formulated any plans or proposals which
relate to or would result in any of the following:
(a) the acquisition by any person of additional securities of
the Company, or the disposition of securities of the Company;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Company
or any of its subsidiaries;
(d) any change in the present board of directors or management of
the Company, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) any material change in the present capitalization or dividend
policy of the Company;
(f) any other material change in the Company's business or corporate
structure;
(g) changes in the Company's charter, by-laws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Company by any person;
(h) causing a class of securities of the Company to be delisted from
a national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
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(i) a class of equity securities of the Company becoming eligible
for termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended (the "Securities Exchange Act"); or
(j) Any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) (b) On the date hereof, Dr. Spellman beneficially owns directly
and indirectly 83,500 shares of Common Stock or approximately 6.2% of the issued
and outstanding shares of Common Stock.
Dr. Spellman has (a) sole power to vote or to direct the vote of
83,500 shares of Common Stock and (b) sole power to dispose or to direct the
disposition of 83,500 shares of Common Stock.
Dr. Spellman does not have (a) shared power to vote or to direct the
vote of any shares of Common Stock or (b) shared power to dispose or direct the
disposition of any shares of Common Stock.
(c) Except for the transactions described in Item 3 above, Dr.
Spellman was not involved in any transactions in shares of Common Stock during
the past sixty days.
(d) Not applicable.
(e) Not applicable.
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Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Under the terms of the Agreement, Dr. Spellman received 40,000
shares of Common Stock of the Company for certain services rendered, with the
possible issuance of an additional 60,000 of such shares upon the terms and
subject to the conditions set forth in the Agreement. Except as described
herein, there are no contracts, arrangements, understandings or relationships
(legal or otherwise) between Dr. Spellman and the Company with respect to any
securities of the Company, including, but not limited to, transfer or voting of
any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
(a) Conformed copy of the Agreement dated January 28, 1999.
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After reasonable inquiry and to the best of the undersigned's
knowledge and belief, the undersigned hereby certifies that the information set
forth in this statement is true, complete and correct.
Dated: February 24, 1999
By: /s/ Dr. Eric H. Spellman
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Dr. Eric H. Spellman
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EXHIBIT A
AGREEMENT between Default Proof Credit Card System, Inc. (the "Company"), a
Florida Corporation, with offices in Miami, Florida, and Dr. Eric H. Spellman
as Investment & Marketing Associate (the "IMA") with office in 16 North
Chatsworth Ave., Larchmont, N.Y. 10538.
WHEREAS, the Company is the exclusive worldwide licensee of U-S. Patent numbers
4,718,009 and 5,025,138, and of the Canada Patent number 1,280,213, the
Company's Patent Pending ATMs' LINE OF CREDIT SYSTEM (LOC), and the Company's
Patent Pending Internet Web Site Debit Card better known under the Internet
Domain Name UBUYDEBITCARDS.COM or the other Domain Name UBUYCREDITCARDS.COM.
WHEREAS, since 1990 EWA had been involved with the management of the Company,
and very active since 1994 with its marketing, with the seeking of funds through
the arrangements of numerous meetings and telephone conferences between
investors, brokerage houses, investment bankers and others with the Company's
officers and Directors, IMA has full knowledge of the business of the Company
and has received, and read a copy of the Summary page of each of these referred
patents, and the highlights summary of the patents pending (LOC and
UBUYDEBITCARDS.COM), and had seen the Web Site of the ones related to the
Internet, under confidentiality. See (a) enclosed.
WHEREAS, IMA has received, and read, a copy of the Company's Business Profile
Memorandum and is very familiar with the Business of the Company, See (b)
enclosed.
WHEREAS, the Company have always desired to obtain the services of a National
Bank that issues credit and debit cards or a national or international financial
institution that, through its facilities, will do the marketing, the offering,
the soliciting, and the issuing of credit and debit cards under the Company's
Default Proof Credit Card System (the "DPCCS"). And/or to secure the necessary
investment funds for the company development including the purchase of a small
Florida commercial or savings and loans bank.
WHEREAS, IMA since 1994 has devoted his time and efforts to help the Company in
developing its business plan, and IMA has expressed and demonstrated that he has
the knowledge, the experience and the business and social relations, and has
always offered to the Company the services of his professional expertise in the
arranging of meetings and the association of individuals, corporations, banks'
officers, investment bankers, investors. etc., with the Company officers, for
the purpose of consequently obtaining a valid and agreeable contract, between a
National and/or Bank(s) or financial institution(s) that issues VISA(R),
MASTERCARD(R), OPTIMA(R), AMERICAN EXPRESS(R), or DISCOVER(R) credit and/or
debit cards, and the Company, or needed funds or financing.
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NOW, THEREFORE, in consideration of all the premises herein above stated the
Company and the IMA agree as follows:
1. The Company warrants and represents that the foregoing statements are
true and correct.
2. This Agreement voids, cancels and replaces any existing previous
agreement, in writing or verbal, between the Company and Eric H. Spellman in his
name, IMA's name, or under any other D.B.A. name. This Agreement is not
exclusive and it is subject to IMA: personally or through the efforts of one of
any the acquaintances of IMA presented and referred by IMA to the Company,
generates a valid contract (the "Bank's Contract") with a National or
International Bank(s) or financial institution(s) for the contracted Bank(s) or
financial institution(s) to issue credit/debit cards under the DPCCS and is
executed between the Company and IMA's contact.
3. The duration of this Agreement is of four (2) years (the "Duration
Period") from the date of this Agreement (the "Effective Date"), and may be only
extended or renewed by the written approval of both parties.
4. IWA, since 1994 had presented to the Company's officers, and the
Company's officers attended meetings in New York City, Cleveland, Ohio,
Columbus, Ohio, Boca Raton, Florida, etc., or maintained telephone conferences
with dozens of investment bankers, investors, lawyers, stock brokers and others
introduced to the Company by IWA, to mention just a few - Richard Zipes, Albany,
N,Y.; Mr. Rosenberg, Cincinnati, OH; Mr. Hyman, N,Y.; Mr. Demon, Smith Barney
Corp; Mr. Zices, Investment Banker in Manhattan, N.Y.; Key Bank officers,
Cleveland, OH; BancOne, Columbus, OH; Mr., Paul Luftig, Investment Banker; First
Card Corp. officers, Uniondale, NY; Mr. Michael Rosenbaum; Judith Levine, Esq.,
Columbus, OH; Hal D. Reiff ; Ruvan Cohen and John Hillman, both with CitiBank,
now CitiGroup, and others.
5. The Company in consideration of the above (#4) detailed work done by
IMA and for his continuos efforts on behalf of the Company is issuing effective
February 5, 1999 forty thousand shares(40,000) of the post-split Common Stock
$0.01 par value per share. This is in consideration of all IMA has contributed
with his efforts, talent and work to the Company since early 1994 to this date
and for valuable future contributions, this consideration is not related to the
offer related in number nine(9) ahead in this agreement.
6. The bank(s) or financial institution(s) must be ranked worldwide, among
the top credit/ debit card issuer banks, and/or among the top owners of
operative Automatic Teller Machines, or the UBLIYDEBITCARDS.COM patent pending
potential developers.
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7. The contracted bank(s) and/or financial institution(s) will agree to
the following:
a) The Contract will be for not less than one year (1).
b) The Company will receive fees per each credit or debit card
issued. The Company will consider other business consideration or financial
agreements.
c) The contracted bank(s) may be also licensed to do marketing
testings.
d) All the expenses related, but not limited, to marketing,
advertising, issuing, and processing of the credit/debit cards, will be the
bank(s) or financial institution's responsibility.
e) The Company will have the right to reject any offered contract.
8. The Company will provide the contracted issuing bank(s) with
information, support and knowledge regarding it's secured credit/debit card
systems, including the LOC SYSTEM(SM) and the UBUYDEBITCARDS.COM.
9. On the completion and execution of the Contract, by IMA or by the
contact(s) presented by IMA to the Company, and with no relation to other fees
paid or to be pay to that contact, and in consideration to IMA labor and efforts
in obtaining the signed Contract between the Company and a bank(s) and/or a
financial institution(s), and within five (5) business days from the effective
date of such contract, the Company will issue sixty thousand (60,000) shares of
the Company's post-split Common Stock $0.01 par value per share, in the name of
the IMA.
10. The rights created by this Agreement shall inure to the benefit of,
and the obligations created thereby be binding upon the successors of the
parties hereto.
11. This Agreement shall be governed by the laws of the State of Florida.
12. If any covenant, condition or other provisions of this Agreement is
held to be invalid, void or illegal by any court of competent jurisdiction, it
will be deemed severable from the remainder of this Agreement and will in no way
affect or invalidate any other covenant, condition or provision.
13. The addresses of the respective parties to this Agreement for any
purposes shall be.
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As to the Company: As to the Investment &Marketing
Associate:
Pedro P. Llaguno, Secretary & Vice
President, Dr. Eric H. Spellman
2050 Coral Way, Suite 404, 16 North Chatsworth Ave.,
Miami, Florida 33145 Larchmont, N.Y. 10538
14. This Agreement is the entire agreement among the parties regarding its
subject matter. The recitables are incorporated herein as part of this
Agreement. No other agreements, covenants, representations or warranties have
been made by the parties on the subject of this Agreement.
This is an integrated Agreement.
15. This Agreement can be executed in one or more counterparts, which
counterparts will constitute a single integrated agreement.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement, by
DPCCS at Miami, Florida on the 28 day of January, 1999.
DEFAULT PROOF CREDIT CARD SYSTEM, INC.
By: /s/ Vincent Cuervo
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Dr. Vincent Cuervo, President & CEO
INVESTMENT & MARKETING ASSOCIATE
By: /s/ Eric H. Spellman
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Eric H. Spellman
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