SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: November 12, 1998
Commission file number 33-11795
RECOM MANAGED SYSTEMS, INC.
(Formerly Mt. Olympus Enterprises, Inc.)
Delaware 87-0441351
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2412 Professional Drive
Roseville, CA 95661
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code:
(916) 789-2022
Send copy of any responses to:
Attorney for Registrant - Julian D. Jensen: (801) 531-6600
Law Offices
Jensen, Duffin, Carman, Dibb & Jackson
311 South State Street, Ste. 380
Salt Lake City, UT 84111<PAGE>
Item 1. Changes in Control of the Registrant.
The Company has recently completed a "Reverse Acquisition" which was
closed, pursuant to Majority Sharholder Consent, on October 30, 1998, and
through which control of the Company was transferred from its existing
shareholders to a group of private owners of an acquired California limited
liability company who owned all interest in the fully acquired subsidiary, J2
Technologies, LLC. The details of this Reverse Acquisition are more fully
set-out in the Reverse Acquisition Agreement denominated as the "Stock-For-
Interest Membership Exchange Agreement" which is being filed as an Exhibit to
this 8-K Report, Exhibit A. The terms of Reorganization are also set-out in
a concurrently filed 10-QSB Report for the Company. For the purposes of this
8-K filing, the essential terms of the Reverse Acquisition are outlined as
follows:
1. As of the closing date on October 30, 1998, the previous Mt. Olympus
Enterprises, Inc. ("MOE"), an inactive public Delaware corporation,
acquired all of the issued and outstanding Membership Interest of a
California limited liability company known as J2 Technologies, LLC
("J2"), with the Company (MOE) agreeing to change its name to
RECOM Managed Systems, Inc., ("RECOM"). In exchange for the
acquisition of all issued and outstanding Membership Interest of
J2 from its members. MOE then issued out 2,200,000 shares to the
J2 members, constituting approximately 84.4% of its reverse split
issued and outstanding shares. Thereby, the prior J2 owners became
the controlling shareholders of MOE. Noother consideration was
involved in the acquisition.
2. Prior to and as a condition to the Reverse Acquisition, MOE
reversed split its issued and outstanding shares on a forty-three
to-one ratio (43:1).
3. On or about November 5, 1998, and pursuant to the Reverse
Acquisition, MOE changed its name of record with the Delaware
Secretary of State to RECOM Managed Systems, Inc. as part of the
reverse acquisition.
4. A new Board of Directors, as nominated by J2, was appointed by
Majority Shareholder Consent to become the new Board of Directors
of RECOM. The biographical information of each of the following
listed directors is more fully and completely set-out in the
Shareholder Notice sent to all shareholders of MOE and a copy of
which has been incorporated by this reference as Exhibit B:
A. Mr. John Epperson, Jr.
B. Mr. G.K. (Jack) Lee
C. Dr. Syed Shariq
D. Mr. Robert Iger
The shareholders, by the Majority Shareholder Consent Resolution,
also granted a proxy to the new Board to appoint a fifth member.
5. The Reverse Acquisition also provided that all debts and
obligations of MOE were paid and discharged as of the closing date
of the reorganization.
6. New management will assume the responsibility for filing the within
report under the Securities and Exchange Act of 1934, a
contemporaneous 10-QSB Report for the quarter ending September 30,
1998, as well as all subsequent 1934 Act Filings.
7. The place of business of the company will be changed to the
principal business address in Roseville, California of its sole
operating subsidiary, J2.
The prior J2 owners acquiring control of the registrant are identified
in the Exhibit "A" Agreement as attached and incorporated by this reference.
Item 2. Acquisition or Disposition of Assets.
As outlined in Item 1, Mt. Olympus Enterprises, Inc. (now known as RECOM
Managed Systems, Inc.) acquired all of the issued and outstanding Membership
Interest of the privately held J2 Technologies, LLC as part of the reverse
acquisition. These assets of J2 are more fully set-out in the
contemporaneously filed 10-QSB which is incorporated by this reference,
together with the Financial Statements appended thereto. In summary, but not
in limitation of that information, it is disclosed that J2 assets are
primarily intangible assets consisting of proprietary computer based
technologies and programs for the business client, together with miscellaneous
minor personal property. This proprietary technology was not valued for
accounting purposes. The assets were deemed acquired as of the date of the
closing of the Reverse Acquisition on October 30, 1998 through the Majority
Shareholder Consent. Based upon the consolidated pro forma unaudited
Financial Statements, there are currently $174,348 combined assets in the
Company, almost all of which has been contributed by J2.
Item 3. Changes in Registrant's Certifying Accountant.
The historical independent auditors and accountants for MOE, now known
as RECOM Managed Systems, Inc., was a Salt Lake City Firm of Hansen,
Barnett and Maxwell. This firm will continue as the independent auditors for
the foreseeable future for the consolidated company
based upon the Reverse Acquisition. Please note the attached and
incorporated September 30, 1998 unaudited financials prepared by that firm
for MOE and the unaudited pro forma consolidated financials as required by
Item 7. The August 31, 1998 financials for J2 are also
attached and incorporated.
Item 4. Other Events.
The registrant believes that the outline of the significant items and
events incident to the Reverse Acquisition as set-out and outlined in item 1
constitute all other significant events to bereported. Consequently, the
matters discussed in Item 1 are incorporated by this reference,
together with the more detailed information in the contemporaneously filed
10-QSB and attached accounting. The registrant knows of no other significant
events, other than those outlined in Item 1.
Item 5. Resignation of Registrant's Directors.
As part of and as a condition to the closing of the reverse acquisition
on October 30, 1998, the prior Board of Directors, who also constitute the
principal officers of the corporation, resigned. These officers were Mr.
Andrew Limpert, President/Director, (who will continue in office through
November 30, 1998); Mr. Gregory H. Stringhorn, Vice President/Director; and Mr.
Dave Winters, Secretary-Treasurer/Director.
As part of the reverse acquisition and pursuant to a Majority
Shareholder Consent Resolution, as attached hereto, certain nominees of the
acquired entity were appointed and elected as directors and subsequently
appointed officers of the registrant as more particularly set-out in
the following table:
Name Position
John Epperson, Jr. Director/President
G.K. (Jack) Lee Director/Secretary/Treasurer/CFO
Dr. Syed Shariq Director
Mr. Robert S. Iger, Esq. Director
James (Jim) Joyce Vice President
Jim Collins Controller, Internal Auditor
Various biographical information concerning each of the foregoing
directors and officers, as well as their sharehold interest, are more fully
set-out in the concurrently filed Notice to Shareholders attached to the
10-QSB Report which is incorporated by this reference. No
compensation for these officers has currently been set.
Item 7. Financial Statements and Exhibits.
Attached to this 8-K Report and incorporated by this reference as
Exhibits are the following:
1. Audited financial statements for J2 dated August 31, 1998;
2. Unaudited financials of September 30, 1998 for the Registrant;
3. Unaudited pro forma consolidated financials prepared incident to
this report reflecting the reverse acquisition accounting as of September 30,
1998;
...................................................................
A. Stock-For-Interest Agreement and sometimes designated as the
Reverse Acquistion Agreement;
B. Shareholder Statement.
(Registrant has omitted inapplicable items)
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned President duly authorized.
RECOM MANAGED SYSTEMS, INC.
(Formerly Mt. Olympus Enterprises, Inc.)
11/12/98
_________________________________ ________________________________
By: Mr. Andrew Limpert Date
President
MOE4/RECOM8-K.11
NON-FINANCIAL EXHIBIT A
STOCK-FOR-MEMBERSHIP INTEREST EXCHANGE AGREEMENT
THIS STOCK-FOR-MEMBERSHIP INTEREST EXCHANGE AGREEMENT (this
"Agreement") is entered into as of August , 1998, by and among
Mt. Olympus Enterprises,Inc., a Delaware corporation ("MOE"), Dennis Madsen,
an individual ("Madsen") and AndrewLimpert, an individual ("Limpert"), J2
Technologies, a California limited liability company ("J2"), Jack Lee, and
individual ("Lee"), John Epperson, Jr., an individual ("Epperson"),
Mackenzie Shea, Inc., a California corporation ("MSI"), Kayne International
Corporation, a Cayman Islands corporation ("Kayne"),Intervest, LLC, an Oregon
limited liability company ("Intervest"), SOMA 2000, a California limited
liability company ("SOMA") and Recom Technologies, Inc., a California
corporation ("Recom"), Margaret Toth, an individual ("Toth"), James Joyce,
an individual ("Joyce"), David Lawrence, an individual ("Lawrence"), Daniel
Ostermiller, an individual ("Ostermiller"), Cal Lai, an individual ("Lai")
and Syed Shariq, an individual ("Shariq") (all parties except MOE are
collectively referred to as "J2 Owners" and whenever all of the above are
collectively referenced they shall sometimes be designated as the
"Parties"), with reference to the following.
RECITALS
A. MOE is an inactive publicly traded corporation desirous of
acquiring operating businesses and technologies in exchange for stock.
B. Dennis Madsen is a promoter of MOE and the reorganization agent
designated by MOE to effect the acquisition of J2, Andrew Limpert is an
officer, director and prior to the closing will be a substantial shareholder
of MOE.
C. J2 is a technology company owned by the J2 Owners, which is in the
business of development, distribution and consulting of computer hardware and
software.
D. MOE and the J2 Owners desire to exchange all of the membership
interests in J2 for the majority of the outstanding common stock of MOE,
in accordance with the terms of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises, the
provisions set forth below and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties
agree as follows:
1. Exchange of Shares. In consideration of and in exchange for all of
the outstanding membership interests in J2, MOE shall exchange for and
deliver to the J2 Owners, the number of shares of common stock of MOE as
set forth below (the "Exchange Shares"). At the conclusion of the exchange,
MOE will own all or substantially all of the outstanding membership interests
of J2 and the J2 Owners will own the majority of the outstanding shares
of common stock of MOE, in the amounts set forth below:
Number of Number of
J2 Owners J2 Membership Units Exchange Shares Received
Lee 300,000 units 300,000 shares
Epperson 300,000 units 300,000 shares
Recom 660,500 units 660,500 shares
MSI 420,000 units 420,000 shares
Kayne 420,000 units 420,000 shares
Joyce 57,000 units 57,000 shares
Toth 7,500 units 7,500 shares
Lawrence 7,500 units 7,500 shares
Ostermiller 7,500 units 7,500 shares
Lai 15,000 units 15,000 shares
Shariq 5,000 units 5,000 shares
2. Reorganization. Immediately prior to (a) the closing of the within
stock exchange, and (b) the issuance of the Exchange Shares set forth above,
and as a contingency to the closing of the stock exchange as contemplated by
this Agreement (the "Closing"), MOE's shareholders shall have approved, at a
duly noticed and held shareholder meeting, a reverse split of its common
stock resulting in each 43 outstanding shares of its commons stock being
reduced to one (1) share (the "43:1 Reverse Split"); the change of the name
of MOE to J2 Technologies, Inc.; and the terms of this Agreement.
Notwithstanding the foregoing, prior to the issuance of the Exchange Shares
to the J2 Owners, there shall be not more than 430,000 shares of MOE's
equity securities outstanding, including securities convertible into common
or preferred shares.
3. Capital Structure After Exchange. Effective at the Closing, there
shall be a total of 2,630,000 shares of reverse split common stock issued as
follows:
Issuee No. Of Shares
Recom 660,500
Lee 300,000
Epperson 300,000
MSI 420,000
Kayne 420,000
Joyce 57,000
Toth 7,500
Lawrence 7,500
Ostermiller 7,500
Lai 15,000
Shariq 5,000
*Existing MOE Affiliates 330,000
MOE Public Shareholders 100,000
*The shares issued to the existing MOE affiliates include 25,000 shares
issued to prior directors and counsel for MOE after the reverse split for
services provided; 100,000 reverse split shares to Dennis Madsen for services
and advances; 105,000 reverse-split shares to Andrew Limpert for services and
advances; 100,000 to the Benchmark Group Ltd. for consulting/referral
services. Upon the issuance of the foregoing shares to prior management and
affiliates, MOE affirms that there are no other outstanding stock, stock
rights charges or claims owing to any affiliate, officer, director or
shareholder of MOE by MOE.
4. Assumption of Debt. MOE shall assume the obligation to repay that
certain promissory note from J2 to Kayne, MSI, Epperson and Lee, in the
outstanding principal amount of $150,000 (the "Note"). The Note shall be
paid from the first funds raised in any financing after the date of this
Agreement.
5. Due Diligence Period. J2 shall have until October 30, 1998 (the
"Review Date") to complete its due diligence of MOE. MOE and Madsen shall
provide all information required under this Agreement and all information on
MOE and its shareholders reasonably requested by the J2 Owners. After the
Review Date, provided J2 or the J2 Owners have not canceled this
Agreement for reasonable cause, there shall be no contingencies to the
Closing, except as set forth in Section 13 of this Agreement.
6. Expenses. At the Closing, J2 shall pay the costs of the exchange
which are:
(i) the legal costs for the preparation and filing of the most current 10-Q
and 10-K reports as filed, in the amount of $4,000, and the accounting costs
in the amount of $4,115; (ii) $4,500 in legal fees to complete the proxy and
prepare and file the second quarter 1998 10-Q and 8-K reports; and (iii)
accounting and transfer agent fees of approximately $2,000.
7. Resignation of Board of Directors. At the Closing, each of the
current members of MOE's Board of Directors shall tender their resignation,
effective as of the Closing.
8. Shareholder Meeting and Approval. The MOE shareholder meeting to
ratify this Agreement, elect new Board Members as set out below, change the
name to J2 Technologies, Inc. and to approve the 43:1 reverse split will be
noticed within ten (10) days of the Review Date and held within 30 days of
such date, provided that no recission notice is given by any of the J2
parties. The Closing will be deemed to occur concurrently upon the adoption
of the foregoing matters by the MOE shareholders. The following will
constitute the J2 nominees for election at the shareholder meeting:
Jack Lee
Jack Epperson
Tom Schultz
Cal Lai
Robert Iger
9. Closing.
a. The Closing contemplated by this Agreement shall be held at
the offices of Boyd & Chang, LLP, 19900 MacArthur Boulevard, Suite 660,
Irvine, California 92612, upon the conclusion of the shareholder meeting.
b. After the Closing Date, and from time to time thereafter,
the parties to this Agreement shall execute such additional instruments and
take such other action as either party may reasonably request in order to
effectuate the transactions contemplated by this Agreement.
10. Resignation of Officers. At the Closing, MOE shall deliver the
resignation of each of the existing officers of MOE and prior to the
resignation of MOE's existing Board of Directors, such Board shall have
appointed the following individuals to the offices set forth across
from their name:
Name Office
Jack Epperson President, Chief Executive Officer
Jack Lee Secretary
Tom Schultz Chief Financial Officer & Treasurer
James Joyce Vice President of Operations
11. Representations and Warranties of MOE. MOE hereby represents and
warrants to J2 and the J2 Owners as follows:
a. Organization and Standing: Articles and Bylaws. MOE is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its businesses as now conducted and as proposed to be
conducted in the future. MOE is not presently qualified to do business as
a foreign corporation in any jurisdiction, except Utah, and the failure to be
so qualified will not have a material adverse effect on its business as now
conducted and as proposed to be conducted in the future.
b. Corporate Power. MOE has now, and will have at the Closing
Date, all requisite corporate power to enter into this Agreement and to sell
and issue the Exchange Shares. This Agreement constitutes a valid and binding
obligations of MOE enforceable in accordance with its respective terms,
except as the same may be limited by bankruptcy, insolvency,
moratorium, and other laws of general application affecting the enforcement
of creditors' rights.
c. Subsidiaries. MOE does not control, directly or indirectly,
any other corporation, association, or business entity.
d. Capitalization. The authorized capital stock of MOE is
50,000,000 shares of Common Stock, $.001 par value, of which 4,300,000 shares
are issued and outstanding. Immediately prior to the Closing there shall not
be more than 430,000 shares
of MOE's common stock outstanding. All such issued and outstanding shares
have been or will be duly authorized and validly issued, are or will be fully
paid and nonassessable, and were or will be issued in compliance with all
applicable state and federal laws concerning the issuance of securities.
There are no outstanding rights (including conversion or preemptive rights),
warrants, conversion rights, options or agreement (oral or in writing) for
the purchase or acquisition from MOE of any shares of its capital stock,
except as identified in paragraph 3 of this Agreement, i.e. the "affiliate
shares.".
e. Authorization.
(1) Corporate Action. All corporate action on the part of
MOE, its officers, directors, and shareholders necessary for the
authorization, execution and delivery of this Agreement, the sale and
issuance of the Exchange Shares and the issuance of the Common Stock issuable
upon conversion of the Exchange Shares and the performance of MOE's obligations
hereunder has been taken or will be taken prior to the Closing.
(2) Valid Issuance. The Exchange Shares, when issued in
compliance with the provisions of this Agreement, will be duly authorized,
validly issued, fully paid and nonassessable, and will be free of any liens
or encumbrances caused or created by MOE; provided, however, that all such
shares will be issued and labeled as restricted securities and may be subject
to standard and customary restrictions on the transfer of restricted
securities under state and federal securities laws as set forth herein, and
as may be required by future changes in such laws.
(3) No Preemptive Rights. No person has any right of first
refusal or any preemptive rights in connection with the issuance of the
Exchange Shares or any future issuances of securities by MOE.
f. Compliance with Other Instruments, None Burdensome, etc.
MOE is not in violation of any term of its Certificate of Incorporation or
Bylaws, nor is MOE in violation of or in default in any material respect
under the terms of any mortgage, indenture, contract, agreement, instrument,
judgment, or decree, the violation of which would have a material adverse
effect on MOE as a whole, and to the knowledge of MOE, is not in violation of
any order, statute, rule, or regulation applicable to MOE, the violation of
which would have a material adverse effect on MOE. The execution, delivery
and performance of and compliance with this Agreement and the issuance and
sale of the Exchange Shares will not (a) result in any such violation, or (b)
be in conflict with or constitute a default under any such term, or (c)
result in the creation of any mortgage, pledge, lien, encumbrance, or charge
upon any of the properties or assets of MOE pursuant to any such term. To
the knowledge of MOE, there is no such term which materially adversely
affects, or, so far as MOE may now foresee, in the future may materially
adversely affect, the business, condition, affairs, or operations of MOE or
any of its properties or assets.
g. Litigation, etc. There is no known action, proceeding, or
investigation of any kind or nature, civil, criminal or administrative,
pending or currently threatened against MOE or, to knowledge, its officers,
directors, shareholders, employees or consultants of MOE (or, to
knowledge, any basis therefore or threat thereof). MOE is not a party to or
subject to the provisions of any order, writ, injunction, judgment, or decree
of any court or government agency or instrumentality. There is no action,
suit, proceeding, or investigation by MOE currently pending, or which MOE
currently intends to initiate.
h. Government Consent, etc. Based in part upon the
representations and warranties of J2 and the J2 Owners in Section 12 herein,
no consent, approval or authorization of or designation, declaration, or
filing with any governmental authority on the par of MOE is required in
connection with: (a) the valid execution and delivery or this Agreement; or
(b) the offer, sale, or issuance of the Exchange Shares, or (c) the obtaining
of the consents, permits, and waivers specified in subsection 11(a)(2)
hereof, except the requirement to file Articles of Amendment to evidence the
agreed upon reorganization matters.
i. Taxes. MOE has filed or will file by the Review Date all tax
returns that are required to have been filed with the appropriate federal,
state, county, and local governmental agencies or instrumentalities, except
where the failure to do so would not have a material adverse effect upon MOE,
taken as a whole. MOE has paid or established reserves for all material
income, franchise, and other taxes, assessments, governmental charges,
penalties, interest, and fines due and payable by them on or before the
Closing. There is no pending dispute with any
taxing authority relating to any of such returns and MOE has not knowledge of
any proposed liability for any tax to be imposed upon the properties or assets
of MOE.
j. Title. MOE owns its properties and assets, including the
properties and assets reflected in the Financial Statement, if any, free and
clear of all liens, mortgages, loans, or encumbrances, except liens for
current taxes not yet due and payable and for such minor encumbrances and liens
which arise in the ordinary course of ownership or use of such properties
and assets and which do not materially impair MOE's operation. With respect
to the property and assets leased by MOE, if any, MOE is in compliance with
such leases and holds valid leasehold interests free and clear of any liens,
claims, or encumbrances.
k. Financial Statements. MOE has delivered to J2 and the J2 Owners
its audited financial statements for the years of 1996, 1997 and unaudited
1998 First Quarter financial statements (hereinafter referred to as the
"Financial Statements"). The Financial Statements are complete and correct
in all material respects and have been prepared on a consistent basis
throughout the relevant periods. The Financial Statements accurately set out
and describe the financial condition and operating results of MOE as of the
dates, and during the periods, indicated therein. Except as set forth in the
Financial Statements, as of the Closing Date MOE has no liabilities of any
nature (matured or unmatured, fixed or contingent). MOE maintains and will
continue to maintain a standard system of accounting established and
administered in accordance with generally accepted accounting principles.
l. Absence of Changes. Except as contemplated by this Agreement
since the date of the balance sheet provided: (a) MOE has not entered into
any transaction which was not in the ordinary course of business, (b) there
has been no material adverse change in the condition (financial or otherwise)
of the business, property, assets, or liabilities of MOE other than changes
in the ordinary course of business, none of which, individually or in the
aggregate, has been materially adverse, (c) there has been no damage to,
destruction or, or loss of physical property (whether or not covered by
insurance) materially adversely affecting the assets, financial condition,
operation results, business, or operations of MOE, (d) MOE has not declared
or paid any dividend or made any distribution on its stock, or redeemed,
purchased, or otherwise acquired any of its stock, (e) MOE has not materially
changed any compensation arrangement or agreement with any of its key
employees or executive officers, or materially change the rate of pay of its
employees as a group, (f) MOE has not received notice that there has been a
cancellation of an order of MOE's products or a loss of a customer of MOE, the
cancellation or loss of which would materially adversely affect the business
of MOE, (g) MOE has not changed or amended any material contract by which MOE
or any or its assets are bound or subject, (h) there has been no resignation
or termination or employment of any key officer or employee or MOE and MOE
does not know of any impending resignation or termination of employment of
any such officer or employee that if consummated would have a material
adverse effect on the business or MOE, (i) there has been no labor dispute
involving MOE or its employees and none is pending or, to the best of MOE's
knowledge, threatened, (j) there has been no change, except in the ordinary
course of business, in the material contingent obligations of MOE (nor in any
contingent obligation of MOE regarding any director, shareholder, key
employee, or officer of MOE) by way of guaranty, endorsement, indemnity,
warranty, or otherwise, (k) there have been no loans made by MOE to any of
its employees, officers, or directors other than travel advances and other
advances made in the ordinary course of business, (l) there has been no
waiver by MOE of a valuable right or of a material debt owing to it,
(m) there has not been any satisfaction or discharge of any lien, claims,
encumbrance, or any payment of any obligation by MOE, except in the ordinary
course of business and which is not material to the assets, properties,
financial condition, operation results, or business of MOE, and (n) to the
best of the knowledge of MOE, there has been no other event or condition of
any character pertaining to and materially adversely affecting the assets or
business of MOE. MOE HAS REPRESENTED TO THE J2 PARTIES THAT IT HAS NO
BUSINESS, ASSETS OR FACILITIES.
m. Outstanding Indebtedness. MOE has no indebtedness for
borrowed money which it has directly or indirectly created, incurred, assumed,
or guaranteed, or with respect to which it has otherwise become liable,
directly or indirectly, other than obligation discharged through the issuance
of stock described in paragraph 3 to MOE affiliates. MOE has no liability
or obligation, absolute or contingent, which is not shown or provided for in
the Financial Statements.
n. Certain Transactions. MOE is not indebted, directly or
indirectly, to any of its officers, directors, or shareholders or to their
spouses or children, in any amount whatsoever other than to be discharged
pursuant to the terms described in this Agreement; and none of said
officers, directors or, to the best of MOE's knowledge, shareholders, or any
member of their immediate families, are indebted to MOE or have any direct or
indirect ownership interest in any firm or corporation with which MOE is
affiliated or with which MOE has a business relationship
(except as a holder of securities of a corporation whose securities are
publicly traded and which is subject to the reporting requirements of the
Securities Exchange Act of 1934, to the extent of owning not more than two
percent (2%) of the issued and outstanding securities of such corporation).
No such officer, directors, or shareholder, or any member of their immediate
families, is, directly or indirectly, interested in any material contract
with MOE. MOE is not a guarantor or indemnitor of any indebtedness of any
person, firm or corporation.
o. Corporate Documents: Minute Books. The Certificate of
Incorporation and Bylaws of MOE are in the form previously provided to J2 and
J2 Owners. The minute books of MOE previously made available to J2 and J2
Owners contain a complete summary of all meetings of directors and
shareholders during the tenure of the current management, and reflect all
transactions referred to is such minutes accurately in all material respects.
p. Disclosure. No representation or warranty by MOE in this
Agreement, or in any document or certificate furnished or to be furnished to J2
and the J2 Owners pursuant hereto or in connection with the transactions
contemplated hereby, when taken together, contains or will contain any untrue
statement of a material fact or omits or will omit a material fact necessary
to make the statements made herein and therein, not misleading.
q. Shareholder Agreements. There are no agreements or arrangements
between MOE and any of MOE's shareholders or to MOE's knowledge, between any
of MOE's shareholders, which materially and adversely affect any shareholder's
ability or right to freely alienate or vote such shares, and to MOE's
knowledge, none of MOE's shareholders is affiliated with or has any
agreements or arrangements with any customer of or supplier to MOE.
r. Registration Rights. MOE has not granted or agreed to grant any
registration rights, including piggyback rights, to any person or entity.
s. Contracts. MOE is not a party to or bound by any contract,
agreement, instrument, lease, license, arrangement, or understanding, or
subject to any charter or other restriction.
t. SEC Filings. MOE has represented, and J2 understands and
agrees, that MOE has filed all reports required by the Securities and
Exchange of 1934 (" 34' Net Filings") from December 1996 through the present,
though sometimes on a delinquent basis. Prior to 1996 there was a
substantial period where no 34 Act Filings were made. MOE believes, in good
faith, that its 34 Act Filings since 1996 have been accepted by the
Securities and Exchange Commission ("SEC") and have cured or obviated the
need to file reports prior to such date. However, MOE & J2 mutually agree and
understand the MOE cannot and does not make any warranty or representation as
to any future position of the SEC with regards to prior delinquent filings.
12. Representations and Warranties of J2 and the J2 Owners and
Restrictions on Transfer Imposed by the Securities Act.
J2 and the J2 Owners represent and warrant MOE as follows:
a. Investment Intent. This Agreement is made with J2 and the J2
Owners in reliance upon their representations to MOE, evidenced by their
execution of this Agreement, that J2 and the J2 Owners are acquiring the
Exchange Shares for investment for their own account, not as a nominee or
agent, and not with a view to or for resale in connection with, any
distribution or public offering thereof within the meaning of the Securities
Act and applicable law. J2 and the J2 Owners have the full right, power, and
authority to enter into and perform this Agreement.
b. Exchange Shares Not Registered. J2 and the J2 Owners
understand and acknowledge that the offering of the Exchange Shares pursuant
to this Agreement will not be registered under the Securities Act or
qualified under the applicable law on the grounds that the offering and sale
of securities contemplated by this Agreement are exempt from registration under
the Securities Act pursuant to Section 4(2) thereof and exempt from registration
pursuant to applicable state law and other applicable state Exchange Shares
or blue sky laws, and that MOE's reliance upon such exemptions is predicated
upon such Purchaser's representations set forth in this Agreement. J2 and
the J2 Owners acknowledge and understand that the Exchange Shares must be
held indefinitely unless the Exchange Shares are subsequently registered
under the Securities Act and qualified under the state law or an exemption from
such registration and such qualification is available.
c. Knowledge and Experience. J2 and the J2 Owners (i) have such
knowledge and experience in financial and business matters as to be capable
of evaluation the merits and risks of their prospective investment in the
Exchange Shares; (ii) have been furnished with and had access to such
information as J2 and the J2 Owners have considered necessary to make a
determination as to the purchase of the Exchange Shares together with such
additional information as is necessary to verify the accuracy of the
information supplied; (iii) have had all questions which have been asked by
J2 and the J2 Owners satisfactorily answered by MOE; and (iv) have not been
offered the Exchange Shares by any form of advertisement, article, notice, or
other communication published in any newspaper, magazine, or similar medium;
or broadcast over television or radio; or any seminar or meeting whose
attendees have been invited by any such medium.
d. Not Organized to Purchase. J2 has not been organized for the
purpose of purchasing the Exchange Shares.
e. Audited Financials. J2 will supply to MOE on or prior to the
Review Date audited financial statements through not earlier than the First
Quarter of 1998 and extending back for a period of not less than two years or
inception as a condition to closing.
13. Conditions to Closing.
a. Conditions to J2 and the J2 Owner's Obligations. The obligations
of J2 and the J2 Owners to purchase and exchange the Exchange Shares at the
Closing are subject to the fulfillment to its satisfaction, on or prior to the
Closing Date, of the following conditions:
(1) Representations and Warranties Correct; Performance of
Obligations. The representations and warranties made by MOE in Section 11
hereof shall be true and correct when made, and on the Closing Date. MOE's
business and assets shall not have been adversely affected in any material
way prior to the Closing Date. MOE shall have performed in all material
respects all obligations and conditions herein required to be performed or
observed by it on or prior to the Closing Date.
(2) Consents and Waivers. MOE shall have in a timely fashion
any and all consents, permits, and waivers, including without limitation,
Board of Directors' approval and shareholder's approval, necessary or
appropriate for consummation of the transactions contemplated by this Agreement.
(3) Reverse Split. The 43:1 Reverse Split shall have been
conducted and closed.
(4) Resignation of Directors and Officers. MOE's directors and
officers shall have resigned.
(5) Shareholder Approval. The Shareholder Approval shall have
been effected.
(6) Election of Officers. MOE's Board of Directors shall have
elected new officers as contemplated in section 9 of this Agreement.
b. Conditions to Obligations of MOE. MOE's obligation to sell and issue
the Exchange Shares at the Closing is subject to the condition that the
representations and warranties made by J2 and the J2 Owners in Section 12
hereof shall be true and correct when made, and on the Closing Date.
14. Notices. Any and all notices or other communications or deliveries
required or permitted to be given or made pursuant to any of the provisions
of this Agreement shall be deemed to have been duly given or made for all
purposes if sent by certified or registered mail, return receipt requested,
and postage prepaid, Federal Express, Express Mail, hand delivered or
sent by telegraph, telex or facsimile with confirmation as follows:
If to MOE: Mt. Olympus Enterprises, Inc.
c/o Jensen, Duffin, Carmen, Dibb & Jackson
311 South State Street, Suite 380
Salt Lake City, CA 84111
Telephone: (801) 531--6600
Facsimile: (801) 521-3731
If to J2 Owners Tom Schultz
833 Orchid Place
Los Altos, CA 94024
Telephone: (650) 941-8424
Facsimile: (650) 941-7370
or at such other address as any Party may specify by notice given to other
Party in accordance with this Article. The date of giving of any such notice
shall be the date of the actual receipt thereof.
15. Waivers and Amendments. With the written consent of the record
holder of at least a majority of the Exchange Shares, the obligations of MOE and
the rights of the holders of the Exchange Shares under this Agreement may be
modified, waived or amended (either generally or in a particular instance);
provided, however, that no such modification, waiver or amendment shall
reduce the aforesaid proportion of Exchange Shares. Upon the effectuation of
each such waiver or amendment, MOE shall promptly give written notice thereof
to the record holders of the Exchange Shares who have not previously
consented thereto in writing. Except to the extent provided in this
subsection (a), this Agreement or any provision hereof may be amended, waived,
discharged, or terminated only by a statement in writing signed by the party
against which enforcement of the amendment, waiver, discharge, or termination
is sought.
16. Survival. The representations, warranties, covenants and agreements
made herein shall survive the Closing of the transactions contemplated hereby,
notwithstanding any investigation made by J2 and the J2 Owners. All
statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of MOE pursuant hereto or in connection
with the transactions contemplated hereby shall be deemed to be representations
and warranties by MOE hereunder as of the date of such certificate amount.
17. Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto.
18. Entire Agreement. This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof and they
supersede, merge, and render void every other prior written and/or oral
understanding or agreement among or between the parties hereto.
19. Finder's Fees and Other Fees
a. MOE (i) represents and warrants that it has not retained
any finder or broker in connection with the transactions contemplated by this
Agreement, and (ii) hereby agrees to indemnify and to hold J2 and the J2
Owners harmless from and against any liability for commission or compensation
in the nature of a finder's fee to any broker or other person or firm (and
the costs and expenses of defending against such liability or asserted
liability) for which MOE, or any of its employees or representatives,
is responsible.
b. J2 and the J2 Owners (i) represent and warrant that they
have not retained any finder or broker in connection with the transactions
contemplated by this Agreement, and (ii) hereby agree to indemnify and to
hold MOE harmless from and against any liability for any commission or
compensation in the nature of a finder's fee to any broker or other person or
firm (and the costs and expenses of defending against such liability or
asserted liability) for which J2 or the J2 Owner's are responsible.
20. Governing Law: Disputes. This Agreement will be in accordance with
California law, including all matters of construction, validity, performance
and enforcement, without giving effect to any principles of conflict of laws.
Any dispute or proceeding concerning this Agreement will be resolved by
binding arbitration to be held in San Francisco County, California. Any party
may demand arbitration through written notice sent by certified mail to the
other (an "Arbitration Demand"). Within fifteen (15) days after the date
that the Arbitration Demand is first mailed, each of the parties will confer
to select a mutually acceptable arbitrator or arbitrators from the Judicial
Arbitration and Mediation Service ("JAMS"). There shall be a panel of three
arbitrators, unless objected to by one or both parties. If multiple
arbitrators, the parties shall agree upon any odd number. If the arbitrator
or arbitrators so selected is unavailable, the parties will confer to select
another arbitrator or arbitrators. If the parties cannot mutually agree to the
number or selection of an arbitrator, or if one party refuses to participate
in the selection process, JAMS will appoint an arbitrator. The arbitrator
will be governed by the provisions of this Agreement rather
than the rules of JAMS.
If JAMS is unable or unwilling to select an arbitrator, the Presiding
Judge of the San Francisco County Superior court will select an arbitrator
upon the request of either party, and such selection will be binding on the
parties. The arbitrator or arbitrators so selected will schedule the
arbitration hearing within sixty (60) days after he, she, or they are is
first selected. The parties will be permitted written discovery and one
deposition each. The arbitrator or arbitrators will have authority to enter
a binding judgment even if the parties do not appear at the arbitration and
may also grant any remedy or relief that the arbitrator reasonably believes
to be just or appropriate, provided that such remedy or relief is within the
scope of this Agreement.
If there be more than one arbitrator, all decisions shall be made by
majority vote.
All fees and expenses of the arbitration will be paid equally by the
parties participating in the arbitration. At the conclusion of the
arbitration, the arbitrator or arbitrators will award the prevailing party
reasonable costs and Attorney's Fees, including all arbitration costs. If
the arbitration award is made, the prevailing party may convert the award into a
judgment and execute upon that judgment.
21. Attorney's Fees. If any arbitration, litigation, action, suit or
other proceeding is instituted to remedy, prevent or obtain relief from a
breach of this Agreement, in relation to a breach of this Agreement or
pertaining to a declaration of rights under this Agreement, the prevailing
party will recover all such party's reasonable attorney's fees incurred in
each and every such action, suit or other proceeding, including any and all
appeals or petitioner therefrom.
22. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
23. Severability. Each provision of this Agreement is intended to be
severable and if any term or provision herein is determined invalid or
unenforceable for any reason, such illegality or invalidity shall not affect the
validity of the remainder of this Agreement and, wherever possible, intent shall
be given to the invalid or unenforceable provision.
24. Entire Agreement. This Agreement contains the entire and complete
understanding between the parties concerning its subject matter and all
representations, agreements, arrangements and understandings between or
among the parties, whether oral or written, have been fully merged herein and
are superseded hereby.
25. Remedies. All rights, remedies, undertakings, obligations, options,
covenants, conditions and agreements contained in this Agreement shall be
cumulative and no one of them shall be exclusive of any other.
26. Successors. Subject to the foregoing paragraph, this Agreement shall
be binding upon and inure to the benefit of the parties and their respective
heirs, legatees, legal representatives, successors and permitted assigns.
27. Interpretation. The language in all parts of this Agreement shall be
in all cases construed simply according to its fair meaning and not strictly
for or against any party. Whenever the context requires, all words used in the
singular will be construed to have been used in the plural, and vice versa,
and each gender will include any other gender. Any error in syntax, grammar,
spelling or usage shall be given reasonable interpretation and application.
The captions of the paragraphs of this Agreement ar for convenience only and
shall not affect the construction or interpretation of any of the provisions
herein.
28. Benefit of Agreement. This Agreement is for the sole and exclusive
benefit of the signatories hereto and nothing in this Agreement shall be
construed to give any person or entity other than the parties hereto any legal
orequitable right, claim or remedy.
29. Limitation on Actions. Any claim, dispute, controversy or action for
breach relative to this Agreement ar fully incorporated into this Agreement by
reference. Unless expressly set forth otherwise herein, all references herein
to a "day," "month," or "year" shall be deemed to be a reference to a
calendar day, month or year, as the case may be. All cross-references herein
shall refer to provisions within this Agreement, and shall not be deemed to
be references to the overall transaction or to any other agreement or document.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
"MOE" MT. OLYMPUS ENTERPRISE, INC., a
Delaware corporation
By:______________________________
Its:______________________________
"J2 OWNERS" J2 TECHNOLOGIES, a California limited
liability company
By:______________________________
Jack Epperson, Manager
__________________________________
JACK LEE, an individual
___________________________________
JACK EPPERSON, an individual
MACKENZIE SHEA, INC., a California
corporation
By:_________________________________
Its:___________________________________
REMCOM TECHNOLOGIES, INC., a
California corporation
By:_________________________________
Its:___________________________________
___________________________________
JAMES JOYCE, an individual
_____________________________________
MARGARET TOTH, an individual
____________________________________
DAVID LAWRENCE, an individual
_____________________________________
DANIEL OSTERMILLER, an individual
_____________________________________
CAL LAI, an individual
____________________________________
SYED SHARIQ, an individual
NON-FINANCIAL EXHIBIT B
SHAREHOLDER STATEMENT
MT. OLYMPUS ENTERPRISES, INC.
NOW KNOWN AS RECOM MANAGED SYSTEMS, INC.
2412 Professional Drive
Roseville, CA 95661
(916) 789-2022
NOVEMBER 11, 1998
This Information Statement is being provided to all shareholders of record
of Mt. Olympus Enterprises, Inc. ("MOE" or "the Company") to inform them of
certain actions approved and recommended by the Board of Directors and
subsequently approved by Majority Shareholder Consent without meeting.
As you may be aware, MOE is a Delaware Corporation; and, under Delaware law,
a meeting is not necessary when a majority of the shareholders of record approve
certain corporate actions that would otherwise require notice of a shareholder
meeting and voting by shareholders. However, Delaware law, as well as the
By-Laws of your Company, require that all shareholders of record should be
given disclosure and notice of the action taken by Majority Shareholder
Consent. Your management also believes that such notice is a fair and equitable
requirement.
Attached to this Shareholder Notice is a copy of the Majority Shareholder
Consent Resolution signed by the shareholders holding the majority of the
issued and outstanding shares. This consent should serve as a brief summary of
the matters recommended by the Board of Directors and approved by a majority
of the shareholders. As many of you may know, the Company is presently
implementing a reorganization with a privately held California limited liability
company engaged in computer software and hardware applications and processing of
unique proprietary programs which are related to various business applications.
The Company acquired all of the ownership interest in that limited liability
company known as J2 Technologies, LLC ("J2") as its wholly owned operating
subsidiary. The Company is in the process, contemporaneously with the
sending of this notice, of changing its name of record in Delaware
to RECOM Managed Systems, Inc. to reflect the new direction and business of
the Company. Further, various parties, as indicated in the attached Majority
Shareholder Consent, and as nominated by the prior J2 management, have become
the majority shareholders of the Company, the new directors of the Company
and have replaced the existing officers, as more particularly described and
set out below. This type of reorganization is typically characterized and
described as a "reverse acquisition".
The purpose of the following Shareholder Information Statement is to supply
to you substantially the same information as you would have received
concerning this Reorganization if it were required to be submitted pursuant
to a Proxy Solicitation for your vote. The information package being
supplied to you consists primarily of this basic Shareholder
Information Statement which, as indicated above, is similar to a Proxy
Statement; secondly, the Company has enclosed the current financial statements
which presently exist for MOE, along with the current audited financial
statements of J2, and an unaudited pro forma consolidated financial statement
for the two entities. Thirdly, there is enclosed in this package a short
business description of the J2 Technologies, LLC, and its intended business
activities as RECOM Managed Systems, Inc.
The new management of the Company will also be available to discuss any
aspects of the business and answer your questions at any time should you wish
to contact them directly.
Finally, should any shareholders wish a copy of the most recently filed
10-KSB and 10-Q SB statements for MOE, they will be made available to any
shareholder or interested party upon request. However, you should be advised
that this material has been largely superseded by the subsequent agreement
for "reverse acquisition," which the Company believes is fairly and fully
disclosed in the enclosed Shareholder Information Statement, and is otherwise
more briefly reported in a filed 8-K report with the SEC, a copy of which may
also be made available to shareholders or interested parties upon request.
BRIEF DESCRIPTION OF J2
J2 is a start-up California limited liability company, having its principal
place of business at 2412 Professional Dr., Roseville, California 95661.
Roseville is located approximately 20 miles from Sacramento, California. J2
was organized in July 1998 by various principals of a related technology
company known as Recom Technologies, Inc. ("Recom Tech.") for the purposes of
receiving an assignment of certain intellectual assets from Recom Tech. in
exchange for membership interest in the new J2 entity. J2 is intended as a
commercial developer and user of these assets. As noted above, the new name
of your company will be RECOM Managed Systems, Inc. ("RECOM").
J2 had thirteen (13) members consisting of individuals and business
entities, all of which have contributed either technology, services or
entreupeneurship to the start-up entity in exchange for their or its
membership interest. These members have now transferred all of their ownership
interest to MOE/RECOM in exchange for the controlling shareholder interest
described below.
J2 intends to engage primarily in the development and servicing of
commercial computer networks, including local area, wide area, internet and
intranet. It is envisioned that J2 will provide unique processes and
procedures obtained from the Recom Tech. assignments for setting up and
servicing various computer networks on an on-site and off-site basis. It
is further envisioned J2 will provide unique hardware and software
configurations for these networks, both in their implementation, operation
and servicing. The Company also intends to provide both hardware and software
servicing and maintenance as part of a complete service package for the
commercial and business computer client. It is intended that the initial
sites of its operations will be primarily the Northern California area.
Recom Tech. has an extensive historical experience in the development and
marketing of world class information technical services related to basic
business utilities with particular emphasis upon network systems. It has
been successful in developing and marketing these technical services to both
governmental and industry sector clients, but with a special emphasis upon
governmental programs such as NASA and the Department of Defense. It
is believed that this proven experience will provide a unique competitive
advantage to J2 to engage in its intended business activities.
It should be understood that, to date, J2 has not engaged in any commercial
activities and has only received the assignment of the intellectual assets
from Recom Tech. as part of its initial organization efforts. It should be
further understood these assets, while believed to have value, cannot be valued
by the Company on its formal accounting statements as attached.
GENERAL DESCRIPTION OF REORGANIZATION
On or about August 24, 1998, Mt. Olympus entered into the referenced
Stock-for-Membership Interest Agreement with the J2 Limited Liability
Company and its members. The essential terms of this reorganization
agreement provided that Mt. Olympus acquired all of the outstanding
membership interest in J2 which has become its wholly owned operating
subsidiary. There is not presently contemplated an actual merger between the
two entities for the foreseeable future, though the companies will retain
such merger option. Presently, it is intended that J2 will operate as the
sole commercial business operating subsidiary of the Company. To accommodate
this reorganization, the Company will change its name to "RECOM Managed Systems,
Inc." to reflect the actual business operations of the Company and will be
managed and guided by a new board of director nominees and officers from the
current J2 management as described below.
Since the Company is, for practical purposes, going to be reorganized to
operate like the J2 subsidiary, this type of reorganization is often
generically called as a "reverse acquisition." In the reverse acquisition the
public company formally continues as an entity, but the management, name and
business purpose become those of the newly acquired entity, in this case J2.
The terms of the reorganization agreement also required MOE to go through
a 43:1 reverse split of its shares, so that the predominant ownership and
control of the new entity will be held by the prior members in J2, see below.
As a majority of the present shareholders of Mt. Olympus have approved this
reorganization, there will be, after this reorganization, certain new reverse
split shares issued to the prior J2 Members, as well as a limited number of
reverse split shares which would be issued to prior management and affiliates
of Mt. Olympus for prior services rendered. In the case of Mr. Madsen and
Benchmark the reverse split shares would be issued, in part, as a finder's
fee for the proposed reorganization.
<PAGE>
There would be a total of 2,605,000 reverse split shares issued and
outstanding upon approval of the reorganization as outlined below:
Issuee No. of Shares %
of Reverse Split
Share
Recom, Inc. 660,500 25.4 %
Lee 300,000 11.5
Epperson 300,000 11.5
Kayne 340,000 13.1
Intervest, Inc. 150,000 5.8
SOMA, Inc. 340,000 13.1
Joyce 57,000 2.2
Toth 7,500 .3
Lawrence 7,500 .3
Ostermiller 7,500 .3
Lai 25,000 1.0
Shariq 5,000 .2
Existing MOE Shareholders 100,000 * 3.8
Andrew Limpert 105,000 * 4.0
Dennis Madsen 87,500 * 3.4
Benchmark Group 87,500 * 3.4
Julian Jensen 5,000 * .2
L. Kent Mackey 5,000 * .2
Gregory Stringham 5,000 * .2
Dave Winters 5,000 * .2
Donald Baird 5,000 * .2
2,605,000 100 %1
* Asterisk denotes existing MOE stockholders, management or affiliates.
1 Rounded
The new management group selected and nominated from the prior J2
management is set-out subsequently and described in this material. The present
shareholders of Mt. Olympus, after the reverse split, now only constitute a
remaining block of approximately 100,000 shares. Of this 100,000 shares,
approximately 32.5% are held by Mr. Madsen, another 17.4% by Alpine
Securities and the remaining 50% by the public shareholders of Mt. Olympus.
Management of Mt. Olympus has determined that the reverse organization,
as generally described above, and as approved by majority shareholder consent,
was in the best interest of all shareholders, since the Company had no
alternative business purposes.
While management is aware that approval of this reverse organization
constitutes a substantial dilution and reduction of sharehold ownership in
the Company to existing shareholders, management supported this acquisition,
since the Company had no other business activities or expectations. Moreover,
management believes that the terms and provisions of the reorganization are
generally fair since the sole assets and future business activities of the
Company are being contributed by the J2 members and the Company would not
otherwise have any expectation of any future business activity.
ANY SHAREHOLDER WISHING TO REVIEW A COPY OF THE
STOCK-FOR-INTEREST AGREEMENT MAY OBTAIN A COPY AT THE
ADDRESS INDICATED
ABOVE FOR THE MANAGEMENT.
The Company knows of no person or group, except the following, which, as
of the date of this Shareholder Statement, beneficially owns and has the
right to vote more than five percent (5%) of the Company's Common Stock:
NAMES OF
BENEFICIAL OWNERS SHARES BENEFICIALLY OWNED PERCENT
OF CLASS
RECOM, Inc. 660,500 25.4
SOMA, LLC 240,000 13.1
Kayne International LLC 340,000 13.1
Jack Lee 300,000 11.5
John Epperson 300,000 11.5
Intervest, LLC 150,000 5.8
NEWLY APPOINTED DIRECTORS
Management of Mt. Olympus indicates that the following individuals
constitutes J2's
nominees elected to the Board of Directors. The Board also received a proxy to
appoint the fifth member from the Majority Shareholder Resolution:
1. MR. JOHN (JACK) C. EPPERSON, JR.; Age 50. Mr. Epperson resides
with his wife and family in Auburn, California. Mr. Epperson is a 1980
graduate of University of Northern Colorado with an MA degree in public
administration and a BA degree in Marketing Science from Chaminade University
in 1970.
Mr. Epperson currently serves as the Executive Vice President of Recom
Technologies, Inc. a related corporation, and has more than 27 years of
experience in the field of corporate management, information technology and
facility support services.
Mr. Epperson has also acted as an entrepreneur on the founding of three
successful information service companies and currently serves on the Board of
Directors of Miranet, Inc., Recom International and Recom Applied Solutions.
He has experience in both corporate management and in project management with
these entities.
Prior to his affiliation with Recom Technologies, Mr. Epperson was
employed by Computer Sciences Corporation, Control Data Corporation, VanGuard
Technologies, and earlier served in the U.S. Army as an ADP Plans and
Operations Officer.
Mr. Epperson will continue as an Executive Vice President of Recom
Technologies and will serve the Company as a Board Member on an as needed
basis. It is also presently intended that Mr. Epperson will be appointed by
the Board as the President and Chief Executive Officer in the reorganized J2
Technologies Company.
2. MR. G.K. (JACK) LEE; Age 62. Mr. Lee resides with his wife and
family in San Jose California. Mr. Lee was an awarded an MS Degree in Applied
Mathematics from San Jose University in 1964 and a BS in Mathematics and
Physics from University of British Columbia in 1962.
Mr. Lee is a founder of Recom Technologies and has more than 25 years
experience in the information technologies services, including 20 years of
management. He also has extensive experience in systems analysis and
programming. Mr. Lee currently serves as President of Recom and as a member
of its Board of Directors.
Prior to his affiliation with Recom, Mr. Lee was employed by Sterling
Softwares and was an independent consultant to NASA. He has also served as
President of the Asian American Manufacturing Association and is a Board
Member for Goodwill Industries and Attention Control Systems, Inc.
It is intended that Mr. Lee will continue as an Officer and Director of
Recom and will devote such time as necessary as a Director to the reorganized
J2 and as its Secretary.
3. SYED Z. SHARIQ. Age. 49. Dr. Shariq resides with his wife and family
in Palo Alto, California. Dr. Shariq is a graduate of Virginia Polytechnic
Institute with a Ph.D. in Operations Research, an MS in Applied and Mathematical
Statistics from Rutgers University, and BE in Mechanical Engineering from
University of Jabalpur, India.
Mr. Shariq is Assistant to the Center Director for Strategic Alliances at
NASA Ames Research Center. He has served as Director of Ames Commercial
Technology Office with responsibilities to develop collaborative programs
between NASA, industry, universities, states and regions. He was the founder
of the agency's commercialization initiatives that successfully raised over
$90 million in private sector capital. He has received extensive national
recognition for his successes in the commercialization of technology.
Prior to joining NASA, Dr. Shariq served as a Senior Associate with
Montgomery Securities, a West Cost investment banking firm specializing in
corporate finance, venture capital, and institutional trading services for
emerging growth and technology companies. He has also served as Director of
research and development and advisor of strategic business and policy for
several organizations.
He has served on the faculties of several universities, including Duke and
John Hopkins, and is a visiting faculty fellow at Stanford University and
University of Texas at Austin. He is an active community volunteer in the
Silicon Valley, serving as founding member of the board of directors for four
non-profit regional business initiatives. He is a member of numerous advisory
groups, including the Governor's California Information Technology Commission.
4. MR. ROBERT S. IGER, ESQ.; Age 57. Mr. Iger resides in Irvine,
California with his wife and family. Mr. Iger is a member of the California
Bar and obtained his JD Degree in 1993 from Western State University. Mr.
Iger also holds a Masters Degree in Economics from the State University of
New York at Buffalo in 1969.
Mr. Iger, in addition to practicing law since 1994, has served on various
boards and in executive positions with LAR Holding, Ltd., Oxford First
Corporation and Xerox Corporation. Mr. Iger's practice concentrates currently
in corporate and securities law. He would intend on serving the company on an
as needed basis as a Director and legal advisor.
MANAGEMENT & COMPENSATION
The following chart sets out the essential information regarding the number
of reverse split shares held by each director and officer. No present
decision on compensation to officers has been made. Only Mr. Joyce, the Vice
President of Operations, will initially serve on a full-time basis. It
should also be noted that Mt. Olympus does not have any salaried or compensated
positions at the present time and any compensation to be paid will be paid
solely through the J2 subsidiary. Further, Directors do not receive
compensation at the present time for their services, but receive a per diem
payment for each meeting attended to be set by the Board, presently $500
per meeting. At present it is intended that only the Vice-President will be
employed full-time as an officer, with the other officers serving part-time
on an as-needed basis. Mr. Limpert will act as an interim President through
November 30, 1998, at which time Mr. Epperson will assume that office.
<PAGE>
Name of Director/Officer
Number of J2
shares to be
held2,3
% of
Outstanding
Shares
John Epperson, Jr., 1
Director & President
300,000
11.5%
G.K. (Jack) Lee,
Director, CFO & Treasurer/Secretary
300,000
11.5%
Syed Shariq,
Director
5,000
.2%
Robert S. Iger, Esq.,
Director
0
0%
James (Jim) Joyce,
Vice President Operations
57,000
2.2%
1 Appointment effective December 1, 1998. Mr. Limpert is continuing to serve
as interim President through November 30, 1998.
2 Includes all shares legally or beneficially owned.
3 There are presently no outstanding options, warrants or other share
acquisition rights.
APPOINTMENT OF INDEPENDENT AUDITORS
Management had determined pursuant to majority shareholder consent to
continue the appointment of the accounting firm of Hansen, Barnett & Maxwell
of Salt Lake City, Utah as the continuing auditors for the Company for an
interim term.
Management believes that it is important to retain the historical auditors
of the Company during this transitional period and until consolidated
financial statements can be prepared reflecting the integration of the J2
subsidiary.
BY AUTHORITY OF THE BOARD OF DIRECTORS:
___________________________________
Mr. Andrew Limpert
President
Leveraging Proven Performance in a Growth Market
Recom Managed Systems, Inc (RMSI) is a spin-off of Recom Technologies, an
18 year old company with extensive experience supporting the information
technology requirements of large federal customers, primarily NASA and
Department of Energy. RMSI was formed to leverage Recom Technologies'
expertise in desktop and network systems. RMSI' s primary goal is to become
the primary systems support partner for mid-size and small commercial customers
by offering predictable 'NASA' level reliability and quality. ey strengths of
this business opportunity are: a determined focus on a very fertile
market, a roll-up growth strategy applicable to acquisitions, and a strong
management team armed with proven Recom processes and technologies.
Recom Technologies is assigning intellectual property assets to RMSI
independently appraised at $4,750,000. These assets provide a significant
competitive advantage in providing world class systems support.
RMSI will become a national service provider with Sacramento as the first
regional site. The Sacramento Valley is forecast to be the fastest growing
business region in the country in the next ten years and is already
experiencing rapid growth from technology companies. Over the last three
years, the top national and Sacramento based companies offering desktop and
networking products and services have experienced over 50% annual growth.
RMSI plans to capture a significant market share by implementing a remote
support center, a user support web site and by extending Recom's brand name
recognition for quality and reliability. The remote center and web site will
allow RMSI to offer a level of technical support not affordable by any one
mid-size company.
Opportunity to Manage Total Cost of Ownership
Companies have more desktop assets than ever before, but exactly how many
assets, their location, their configuration or their total cost are often
unknown. Supporting these systems often depletes the companies' ability to
take advantage of important new technologies. Many organizations react by
hiring temporary staff, yet real expertise and reliable results are hard
to find. Increasingly companies are solving this problem by outsourcing basic
desktop and network support services while refocusing their internal Information
Technology staff on implementing technologies that provide unique strategic
business advantages.
Besides managing total cost of ownership, other key outsourcing drivers are:
the ability to retain, recruit and train the necessary systems engineers and
technicians, the ability to make major capital reinvestments in systems every
three years, sufficient IT staff to complete needed business growth projects
RMSI answers the total cost of ownership problem and other related IT issues
by providing the ability to selectively out-task' specific desktop and
network support responsibilities.
RMSI's services include:
Technology and Support Planning. RMSI offers technology planning to
help our clients assess how their business is currently deploying and supporting
distributed computing systems. Our assessments identify opportunities for
improving desktop and network support functions.
Help Desk Services and User Training. RMSI's proactive approach to user
support for desktop and network applications focuses on continuous improvement
to maximize productivity. Using industry best practices and tools, we'll
help eliminate user problems before they occur. RMSI's training courses
increase user productivity while decreasing support levels of effort.
Maintenance and Asset Management Services. RMSI's goal is to minimize
user downtime and reduce the cost of on-site technical support through our
umbrella maintenance services. RMSI provides responsive, single-source
maintenance for desktop and network equipment. Our clients regain control of
their technology investment and manage cost through our careful tracking of
PC andnetworking assets.
Network Services. RMSI offers a single source for network reengineering,
architecture planning, integration, operations, network management,
administration and support. RMSI provides these services for local and wide
area network and internet/intranet systems.
Full-Service Leasing. RMSI offers a full-service leasing program for
desktop, laptop and server computing. Our leasing, rental, and financing
services are contoured to our clients' business needs. Our Full-Service
Leasing program will combine management services with flexible financing that
lets our clients upgrade or trade in assets at virtually any point during the
lease term.
IT Staffing. RMSI provides insource (client managed) or outsource (RMSI
managed) technical staff with a wide range of capabilities including
PowerBuilder, Oracle and SilverStream.
Services Strategy
RMSI will provide the same high quality technical support provided at
computing intensive government organizations like NASA, by using proven best
business practices and support technologies based on proprietary and
intellectual assets assigned by Recom Technologies.
RMSI provides specialized "out-tasking" service level agreements designed to
meet our clients' prioritized operational needs. Our service agreements are
assured by measuring and reporting critical performance indicators such as
system availability, system performance, customer satisfaction, call and
ticket volume, mean response time and mean time-for-repair RMSI's remote
support center will have the capability to predict failures and solve problems
before they become apparent to the customer. Real-time asset management will
be used to determine the status of all network components at any given time
and this information will be available for customer review through secure
access on the user support website. Knowledge bases will be used by the
remote support staff for problem resolution and also made available to users
for self help' on the web site.
The remote support center, user support web site, and knowledge base will
better leverage our senior technical staff by reducing the time needed for
on-site visits. With remote control capabilities like remote boot and
software distribution, many systems problems will be resolved without sending
a technician on-site.
To further streamline our service, the RMSI team will provide a knowledge base
directly to our customers through our web site. This web site allows customers
to:
resolve many common problems themselves
obtain real time operational status of computing resources
submit trouble calls and track their resolution
receive training on standard desktop/network software
Support services will concentrate on desktop (Windows NT/95/98), client/server
network architectures (Microsoft NT and Novell Netware) and internet/intranet
systems.
System maintenance and management functions will include:
software installations, metering and updates
remote systems monitoring, optimization and tuning
system/data back-up and recovery
data security and virus protection
asset management
preventative maintenance
RMSI will provide a complete range of desktop support services that
eventually will include the lease of systems/services. Moreover, utilizing
Recom's proprietary processes and the latest remote agent software, RMSI will
provide superior services that are not currently available to the mid-level
market. All services will be "institutionalized" using Recom's already-
developed procedures.
Recom will provide expertise gained through its participation on two
recently awarded Seat Management contracts with the federal government.
These contracts will provide services similar to the above for government
agencies. Government customers will pay a set monthly fee per desktop
workstation for all hardware, software, diagnostic, repair, call
center, asset management and upgrade support. That is, complete network
outsourcing. During the first year of operation, RMSI intends to establish a
similar model with its Sacramento customer base.
Market Analysis
The growth potential of this market is significant on a regional, national
and international level. International Data Corporation (IDC) 1998 study
predicts that the support outsourcing market will grow from $7.9 billion in
1997 to $17.4 billion in 2002 with AGR of 17.2%.
A survey of Northern California companies that offer network services reveals
that the competent companies are growing 100% per year. Three companies are
currently dominant and offer only time and materials support. Also, the
largest companies are hardware vendors first and services suppliers second.
No one offers mid-size and small companies the services anticipated by RMSI.
RMSI is uniquely positioned to rapidly become a large player in this market.
Through its Recom connections it has a cadre of well-qualified technical
staff, in-place procedures, local support infrastructure and knowledge of
local businesses. In addition, it has the ability to support the
State of California through Recom's current California Master Agreement for
Services, thereby enabling state agencies to buy services through a pre-
negotiated contract vehicle.
Initially services will be provided in the Northern California region.
This market niche was selected for several reasons:
Corporate networks (including local area, wide area, Internet and Intranet
connections) are a rapidly growing market
It has a rapidly growing customer base (The Sacramento region is
forecasted to be the fastest growing region in the country and is already
experiencing a large migration of companies from the Silicon Valley)
Companies know that technical talent is expensive and difficult to find
In-house expertise and small consulting firms seldom offer a full range
of capabilities to completely satisfy enterprise networking requirements
Large companies already have sufficient in house expertise or
outsource to large service providers; moderate size companies rarely enjoy a
consistent and reliable level of support
Often customers must deal with several vendors for complete network
services.
This inevitably leads to delays, "finger pointing" and an unreliable level of
support
Industry leaders providing similar service at the Fortune 500 / 1000 level are
Hewlett Packard, IBM, EDS, Entex, and Vanstar. Each of these companies have
been acquiring mid-size, local service companies in order to expand their
national and global position.
Business Development
Initial market growth will be accomplished by acquiring several high potential
technology companies, as well as hiring and integrating several established
consultants. These additions will provide access to technical staff and the
needed infrastructure to provide remote systems management.
The plan for company acquisitions is:
Desktop / Network Systems Integrators and VARs [several]
Training Center
Recruiting/Staffing Agency
Internet Service Provider
The Sacramento Valley is forecast to be the fastest growing business region in
the country in the next ten years and is already experiencing growth from
technology companies like Intel, Packard Bell, Hewlett Packard and Oracle.
In addition, Sacramento is receiving a large migration of high tech companies
from Silicon Valley. Over the last three years, the top five Sacramento
companies offering desktop and networking products and services have
experienced 100% annual growth. Yet, the majority of the existing outsourcing
market is supported by small (1-5 person) consulting firms.
After RMSI is established in the Sacramento Valley, the regional service
concept will be expanded to other growing west coast business regions such as:
South Bay, San Francisco, Portland, Seattle, and Vancouver.
Marketing Plan
The RMSI marketing plan consists of demonstrating the benefits of the quality
service that will be provided through the RMSI team at the remote support
center, web site as well as the field technicians.
Marketing and sales will be targeted through these main initiatives:
Acquiring and expanding a customer base through acquisitions
Obtaining customers through a marketing alliances with Capital
Communications
Pursuing companies having difficulty recruiting senior technical staff
Direct marketing outsourcing opportunities
Establishing service alliances with hardware providers, Telcom companies
and software vendors
Management
RMSI fields a strong, experienced management team and board of directors.
John (Jack) C. Epperson, Chief Executive Officer
Mr. Epperson has more than 27 years of experience in the field of corporate
management, information technology and facility support services. As Executive
Vice President of Recom Technologies, he currently supports Recom in an
executive capacity with responsibilities including strategic planning,
business development, and executive management.
Mr. Epperson is a founding principal in three successful information
services companies and serves as a board member for Miranet, Incorporated,
Recom International and Recom Applied Solutions. His experience includes
corporate management, project management,consulting, operating systems
analysis and programming, hardware configuration and installation
specifications, and applications analysis.
Previous to his leadership of Recom Technologies and Epsilon Automation,
Mr. Epperson was employed by Computer Sciences Corporation (CSC), Control Data
Corporation (CDC), Vanguard Technologies and served in the US Army as a ADP
Plans and Operations Officer. He holds an MAin Public Administration and a
BA in Marketing Science.
James P. Joyce, Vice President Operations
Mr. Joyce has more than 21 years of experience in providing information
systems services. As Director of the IT Consulting Division within Recom
Technologies, he is responsible for establishing consulting services for
commercial businesses in the Sacramento region.
As Project Manager of a $10 million support services contract, Mr Joyce
managed more than 65 full-time and part-time team members.
Previous to his responsibilities with Recom Technologies, Mr. Joyce had a
distinguished career in Information Systems with the US Air Force. His
varied technical experience included teaching computer science at the US Air
Force Academy and managing a $25 million automation effort in support of the
F-117 Stealth Fighter.
Mr. Joyce holds a BS in Computer Science from Oregon State University and
an MS in Information Systems from the Air Force Institute of Technology.
Mr. Joyce and Mr. Epperson have worked together in Recom Technologies
since 1993.
Staffing
During the first quarter of operations, these key management positions will
be filled: VP of Technology, VP of Finance and VP of Sales and Marketing.
These positions may be filled by the principals of acquired companies.
Board of Directors
RMSI will be lead by the following Directors:
Jack Epperson is CEO of Recom Managed Systems and VP of Recom
Technologies.
Jack Lee is CEO of Recom Technologies. Mr. Lee, the founding principal of
Recom Technologies, has more than 25 years of experience in Information
Technology services, including 20 years of management, five years of system
analysis, and four years of programming. As President of Recom, Mr. Lee
grew the company from a one-person operation to a $31 million company with 430
employees.
His performance record includes positions in supervision, project
management, technical group management, and contract management. He is past
president of Asian American Manufacturing Association and is a serves as a
board member for Goodwill Industries and Attention Control Systems, Inc.
Previous to his career with Recom, Mr. Lee was employed by Sterling Software
and as an independent consultant to NASA. Mr. Lee has an MS degree in
Applied Mathematics and BS in Mathematics and Physics.
Dr. Syed Shariq is a graduate of Virginia Polytechnic Institute with a Ph.D in
Operations Research,an MS in Applied and Mathematical Statistics from Rutgers
University, and BE in Mechanical Engineering from University of Jabalpur,
India.
Dr. Shariq is Assistant to the Center Director for Strategic Alliances at
NASA Ames Research Center. He has served as Director of Ames Commercial
Technology Office with responsibilities to develop collaborative programs
between NASA, industry,universities, states and regions. He was the founder
of the agency's commercialization initiatives that successfully raised over
$90 million in private sector capital. He has received extensive national
recognition for his successes in the commercialization of technology.
Prior to joining NASA, Dr. Shariq served as a Senior Associate with
Montgomery Securities, a West Coast investment banking firm specializing in
corporate finance, venture capital,and institutional trading services for
emerging growth and technology companies. He has also served as Director of
research and development and advisor of strategic business and policy for
several organizations.
He has served on the faculties of several universities, including Duke and John
Hopkins, and is avisiting faculty fellow at Stanford University and University
of Texas at Austin. He is an active community volunteer in the Silicon Valley,
serving as founding member of the board of directors for four non-profit
regional business initiatives. He is a member of numerous advisory groups,
including the Governor's California Information Technology Commission.
Robert Iger is a member of the California ar and obtained his JD Degree
from Western State University. Mr. Iger also holds a Masters Degree in
Economics from the State University of New York at Buffalo. Mr. Iger has
served on various boards and inexecutive positions with LAR Holding Ltd.,
Oxford First Corporation, and Xerox Corporation. Mr.Iger's practice
concentrates in corporate and securities law. He would intend on serving the
company as a director and legal adviser.
Advisers
Tom Schultz has been the President and Chief Executive Officer of Vista
Technologies, Inc., a public surgical center firm form February 1996 to March
1997. Prior to joining Vista Tecnologies, Inc., Mr. Schultz served as
Chairman/Chief Executive Officer of Crystallume, a NASDAQ-listed corporation,
from February 1986 to January 1996.
Robert Kendrick founded Mackenzie Shea, Inc in 1995. Mr. Kendrick has
15 years of experience including founding and operating a multinational
securities broker/dealer, advising on investment banking, mergers and
acquisitions advisory activities. His expertise is in the area if inovative
corporate financial structuring and guiding companies throught the ever changing
regulatory environment. Mr. Kendrick has developed vital relationships that
provide access to capital and has an astute comprehension of the essential
broker/dealer network throughout the U.S., Europe, Canada and South America.
Leveraging Assets from Recom Technologies
On August 15, 1998, Houlihan Valuation Advisors provided a report that
assessed the value of the proprietary and intellectual assets being assigned
by Recom Technologies to RMSI at $4,750,000.
Financial Analysis
Recom Managed Systems is a start-up company with proven business processes
and technologies. Based on first level and second level funding, we project
meaningful earnings for 1999. Revenues for 1999 are projected to be over
$10,000,000.
RECOM MANAGED SYSTEMS, INC.
INDEX TO FINANCIAL STATEMENTS
Page
MT. OLYMPUS ENTERPRISES, INC.
Condensed Balance Sheet - September 30, 1998 . . . . . . . . . . F-2
Condensed Statements of Operations for the Three Months and
the Nine Months Ended September 30, 1998 and 1997 and for the
Cumulative Period from January 19, 1987 (Date of Inception)
through September 30, 1998. . . . . . . . . . . . . . . . . . . F-3
Condensed Statements of Cash Flows for the Nine Months Ended
September 30, 1998 and 1997 and for the Cumulative Period
from January 19, 1987 (Date of Inception) through
September 30, 1998. . . . . . . . . . . . . . . . . . . . . . . F-4
Notes to Condensed Financial Statements. . . . . . . . . . . . . F-5
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
. F-6
Unaudited Pro Forma Condensed Consolidated Balance Sheet
- August 31, 1998. . . . . . . . . . . . . . . . . . . . . . . . F-7
Unaudited Pro Forma Condensed Consolidated Statements of
Operations from July 31, 1998 (Date of Inception) through
August 31, 1998 . . . . . . . . . . . . . . . . . . . . . . . . F-8
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements. . . . . . . . . . . . . . . . . . . . . . F-9
J2 TECHNOLOGIES, LLC
Independent Auditor's Report . . . . . . . . . . . . . . . . . . F-10
Balance Sheet - August 31, 1998. . . . . . . . . . . . . . . . . F-11
Statement of Operations and Changes in Members' Equity
(Deficiency) July 31,1998 (Inception) to August 31, 1998. . . . F-12
Statement of Cash Flows July 31, 1998 (Inception) to
August 31, 1998 . . . . . . . . . . . . . . . . . . . . . . . . F-13
Notes to Financial Statements. . . . . . . . . . . . . . . . . . F-14
F-1
<PAGE>
MT. OLYMPUS ENTERPRISES, INC.
(A Development Stage Enterprise)
CONDENSED BALANCE SHEET
SEPTEMBER 30, 1998
(Unaudited)
ASSETS
Current Assets
Prepaid expenses $ 140
----------
Total Current Assets 140
----------
Total Assets $ 140
==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accrued expenses $ 145,322
Convertible debt 60,000
----------
Total Current Liabilities 205,322
----------
Stockholders' Deficit
Common stock - $0.001 par value; 50,000,000
shares authorized; 100,000 shares issued
and outstanding 100
Additional paid-in capital 93,779
Deficit accumulated during the development stage (299,061)
----------
Total Stockholders' Deficit (205,182)
----------
Total Liabilities And Stockholders' Deficit $ 140
==========
See the accompanying notes to condensed financial statements.
F-2
<PAGE>
MT. OLYMPUS ENTERPRISES, INC.
(A Development Stage Enterprise)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Cumulative
Period From
January 19, 1987
Date of
For the Three Months For the Nine Months Ended Inception)
Ended September 30, September 30, Through
---------------------- ---------------------- September 30,
1998 1997 1998 1997 1998
--------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Income $ - $ - $ - $ - $ -
Option Expenses - - - - 55,349
Merger and Reorganization Expenses
112,750 17,922 113,577 32,475 200,282
General and Administrative Expenses
11,450 366 18,988 496 55,087
Interest Expense
7,500 - 7,500 1,054 14,213
---------- ---------- ---------- ---------- ----------
Net Loss Before Extraordinary
Item
(131,700) (18,288) (140,065) (34,025) (324,931)
---------- ---------- ---------- ---------- ----------
Extraordinary Gain from Debt
Forgiveness, net of Tax of $0
- - - 22,566 25,870
---------- ---------- ---------- ---------- ----------
Net Loss
$ (131,700) $ (18,288) $ (140,065) $ (11,459) $ (299,061)
========== ========== ========== ========== ==========
Basic and Diluted Loss Per Common
Share Before Extraordinary Item
$ - $ - $ - $ - $ (3.66)
========== ========== ========== ========== ==========
Basic and Diluted Loss Per
Common Share
$ - $ - $ - $ - $ (3.66)
========== ========== ========== ========== ==========
Weighted Average Common Shares
Outstanding
100,000 100,000 100,000 100,000 81,698
========== ========== ========== ========== ==========
<FN>
See the accompanying notes to condensed financial statements.
</FN>
</TABLE>
F-3
<PAGE>
MT. OLYMPUS ENTERPRISES, INC.
(A Development Stage Enterprise)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Cumulative
Period From
January 19, 1987
For the Nine Months (Date of Inception)
Ended September 30, Through
----------------------- September 30,
1998 1997 1998
---------- ---------- -----------
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net loss $ (140,065) $ (11,459) $ (299,061)
Adjustments to reconcile net loss to
net cash used by operating activities:
Amortization - - 5,164
Extraordinary gain of debt forgivene - (22,566) (25,870)
Services for convertible debt - 15,613 15,613
Expenses paid by stockholder - 1,592 15,247
Expenses paid from deposit with legal counsel
- 6,900 10,000
(Decrease) in prepaid expenses (140) (78) (140)
Increase in accrued interest payable 7,500 8,945 14,213
Increase in accrued liabilities 132,705 1,053 193,866
--------- ---------- -----------
Net Cash Used In Operating Activities - - (70,968)
---------- ---------- -----------
Cash Flows From Investing Activities
Payment for organization costs - - (5,164)
---------- ---------- -----------
Net Cash Used In Investing Activities - - (5,164)
---------- ---------- -----------
Cash Flows From Financing Activities
Proceeds from notes payable to related party - - 37,000
Repayment of note from related party - - (25,000)
Proceeds from issuance of common stock,
net of offering costs - - 64,132
---------- ---------- -----------
Net Cash Provided By Financing Activities - - 76,132
---------- ---------- -----------
Net Decrease In Cash - - -
Cash at Beginning of Period - - -
---------- ---------- -----------
Cast at End of Period $ - $ - $ -
========== ========== ===========
<FN>
See the accompanying notes to condensed financial statements.
</FN>
</TABLE>
F-4
<PAGE>
MT. OLYMPUS ENTERPRISES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1--CONDENSED FINANCIAL STATEMENTS
The accompanying condensed financial statements have been prepared by the
Company, and are not audited. All adjustments necessary for fair
presentation have been included and consist only of normal recurring
adjustments except as disclosed herein. These financial statements are
condensed and, therefore, do not include all disclosures normally required
by generally accepted accounting principles. These statements should be read
in conjunction with the Company's annual financial statements included in
the Company's Annual Report on Form 10-KSB dated December 31, 1997. The
financial position and results of operations presented in the accompanying
financial statements are not necessarily indicative of the results to be
generated for the remainder of 1998.
NOTE 2--CONVERTIBLE DEBT
In September 1997, a shareholder assumed $44,387 of liabilities of the
Company. The shareholder made arrangements with a third party to borrow
$60,000 at 10% per annum to pay for these obligations. The Company granted
the third party the right to convert the debt into shares of common stock
which was subsequently done as described in Note 4.
NOTE 3--EXTRAORDINARY GAIN FROM DEBT FORGIVENESS
In 1997 and 1996 the Company negotiated reductions in the amounts owed to
creditors. As a result, the creditors forgave a total of $25,870 in
liabilities. The gain from the debt forgiveness has been recognized as an
extraordinary gain in the accompanying statements of operations.
NOTE 4- SUBSEQUENT EVENTS - REORGANIZATION
Reverse Stock Split - On October 30, 1998, the Company entered into a
reorganization agreement with J2 Technologies, LLC, a California limited
liability company, ("J2"). Immediately prior to the reorganization the
Company completed a 43-for-1 reverse stock split of the common stock
outstanding. The amounts herein have been restated for the effects of the
split for all periods presented.
Reorganization - At the time of the reorganization, the Company had 100,000
common shares (post-split) outstanding. J2 had outstanding membership
interests of 2,200,000. As part of the agreement, Mt. Olympus Enterprises,
Inc. exchanged 2,200,000 shares of its common stock for all of the
outstanding membership interests of J2 and changed the Company's name to
Recom Managed Systems, Inc. Also, as part of reorganization, $60,000 of
convertible debt and $132,632 of accrued interest and other accrued
liabilities were converted into 305,000 shares of common stock. As a result
of the agreement, Recom Managed Systems, Inc. had 2,605,000 shares of common
stock outstanding. The agreement will be accounted for as the reorganization
of J2 and the acquisition of Mt. Olympus enterprises, Inc. using the
purchase method of accounting. Since Mt. Olympus Enterprises, Inc. did not
have any operations and had only nominal assets at the date of the
agreement, the acquisition of the net liabilities of Mt. Olympus
Enterprises, Inc. will be recorded at their historical cost.
F-5
<PAGE>
RECOM MANAGED SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
On August 24, 1998, the members of J2 Technologies, LLC, a California limited
liability company, ("J2") entered into an agreement with Mt. Olympus
Enterprises, Inc. ("Mt. Olympus") pursuant to which Mt. Olympus issued
2,200,000 shares of its common stock on October 30, 1998 in exchange for
100% of the membership interests of J2. In addition, Mt. Olympus changed its
name to Recom Managed Systems, Inc. The agreement has been accounted for as
the reorganization of J2 and the issuance of common stock for the net
liabilities of Mt. Olympus. The following unaudited pro forma condensed
consolidated balance sheet has been prepared to present the consolidated
financial position of the combined companies as though the agreement had
been consummated on August 31, 1998. The following unaudited pro forma
condensed consolidated statement of operations has been prepared to present
the operations of the consolidated companies for the month ended August 31,
1998 assuming the agreement had been completed on July 31, 1998.
The following financial information was derived from, and should be read in
conjunction with the separate historical financial statements of Mt. Olympus
for the nine months ended September 30, 1998, included elsewhere herein, and
in conjunction with the separate financial statements of J2 from July 31,
1998, (date of inception) through August 31, 1998, which are included
elsewhere herein. The unaudited pro forma condensed consolidated balance
sheet and statement of operations have been included herein for comparative
purposes only and do not purport to be indicative of the results of
operations which actually would have been obtained had the agreement been
completed on August 31, 1998 or July 31, 1998, or the results of operations
which may be obtained in the future. In addition, further results may vary
significantly from the results presented in these pro forma financial
statements.
F-6
<PAGE>
RECOM MANAGED SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AUGUST 31, 1998
<TABLE>
<CAPTION>
J2 Mt.
Technologies, Olympus Pro Forma
LLC Enterprises Adjustments Pro Forma
---------- ---------- ------------ -----------
<S> <C> <C> <C><C> <C>
ASSETS
Current Assets
Cash $ 150,000 $ - $ 150,000
Prepaid expenses - 140 140
---------- --------- ----------
Total Current Assets 150,000 140 150,140
---------- --------- ----------
Property and Equipment 57,324 - 57,324
Less accumulated depreciatio (37,276) - (37,276)
---------- --------- ----------
Net Property and Equipment 20,048 - 20,048
---------- --------- ----------
Intangible Assets 4,160 - 4,160
---------- --------- ----------
Total Assets $ 174,208 $ 140 $ 174,348
========== ========= ==========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' DEFICIT
<S> <C> <C> <C><C> <C>
Current Liabilities
Accounts payable $ 174,138 $ - (C)$ 14,615 $ 188,753
Accrued expenses - 145,322 (A) (132,632) 12,690
Note payable, Members 150,000 - - 150,000
Due to Member 13,266 - - 13,266
Convertible debt - 60,000 (A) (60,000) -
---------- --------- --------- ----------
Total Current Liabilities 337,404 205,322 (178,017) 364,709
---------- --------- --------- ----------
Stockholders' Equity
Common stock - 100 (A) 305
(B) 2,200 2,605
Additional paid-in-capital - 93,779 (A) 192,327
(B) 17,848
(D) (299,061) 4,893
Members' deficiency (163,196) - (B) 163,196 -
Accumulated deficit - (299,061) (B) (183,244)
(C) (14,615)
(D) 299,061 (197,859)
---------- ---------- ---------- ---------
Total Stockholders' Deficit
(163,196) (205,182) 178,017 (190,361)
---------- ---------- ---------- ---------
Total Liabilities and Stockholders'
Deficit $ 174,208 $ 140 $ - $ 174,348
========== ========== ========== =========
<FN>
Notes to the Unaudited Condensed Pro Forma Consolidated Statements are
presented on page F-9.
</FN>
</TABLE>
F-7
<PAGE>
RECOM MANAGED SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
FROM JULY 31, 1998 (DATE OF INCEPTION) THROUGH AUGUST 31, 1998
<TABLE>
<CAPTION>
J2 Mt.
Technologies Olympus Pro Forma Pro Forma
LLC Enterprises Adjustments Results
---------- ---------- ------------- ----------
<S> <C> <C> <C><C> <C>
Revenue $ - $ - $ - $ -
---------- ---------- ---------- ----------
General and administrative expenses
Reorganization expense 150,000 112,750 (C) 14,615 277,365
Appraisal Fee 13,266 - - 13,266
Other 19,978 11,450 - 31,428
Interest - 7,500 7,500
---------- ---------- ---------- ----------
Net Loss $ (183,244) $ (131,700) $ (14,615) $ (329,559)
========== ========== ========== ==========
Basic and Diluted Loss Per
Common Share $ (0.13)
==========
Weighted average number of common
shares used in per share calculation 2,605,000
==========
<FN>
Notes to the Unaudited Condensed Pro Forma Consolidated Statements are
presented on page F-9.
</FN>
</TABLE>
F-8
<PAGE>
RECOM MANAGED SYSTEMS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
A - To record the issuance of 305,000 shares of common stock upon
the conversion of $192,632 of liabilities of Mt. Olympus.
B - To record the issuance of 2,200,000 shares of common stock
in exchange for all of the membership interests of J2 at
historical cost. As a result of the reorganization, there
were 2,605,000 common shares outstanding. The agreement has
been accounted for as the reorganization of J2 and the
acquisition of Mt. Olympus using the purchase method of
accounting. Since Mt. Olympus did not have any operations
and had only nominal assets at the date of the agreement,
the acquisition of the net liabilities of Mt. Olympus were
recorded at historical cost.
C - To record $14,615 of costs incurred in connection with the
reorganization.
D - To eliminate the accumulated deficit of Mt. Olympus at the
date of the reorganization.
F-9
<PAGE>
Drucker, Math & Whitman, P.C.
Certified Public Accountants 2865 U.S. Highway #1
Route 1 & Finnegans Lane
North Brusnswick, NJ 08902
Telephone 732-821-5200
Fax 732-821-7711
Independent Auditors' Report
Members
J2 Technologies, LLC
Roseville, California
We have audited the accompanying balance sheet of J2 Technologies, LLC (a
development stage company) ("Company") as of August 31, 1998, and the
related statements of operations and changes in members' equity
(deficiency), and cash flows for the period from July 31, 1998 (inception)
to August 31, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of J2 Technologies, LLC (a
development stage company) as of August 31, 1998, and the results of its
operations and its cash flows for the period from July 31, 1998 (inception)
to August 31, 1998 in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will be able to commence operations and continue as a going
concern. As discussed in Note 2, the Company has no operating history, is
in the development stage, and, at August 31, 1998, has an equity
deficiency. These matters raise substantial doubt as to the Company's
ability to commence operations and continue as a going concern. Management
plans to generate funds through a merger with a public company followed by
a private placement offering. There is no assurance that such plans will
be completed or, if completed, that such actions will generate sufficient
funds to enable the Company to commence and continue its operations for the
next twelve months. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
DURCKER, MATH & WHITMAN, P.C.
October 26 , 1998
F-10
<PAGE>
J2 TECHNOLOGIES, LLC
(A Development Stage Company)
BALANCE SHEET
AUGUST 31, 1998
ASSETS
Current assets:
Cash, held in attorney's trust account $ 150,000
Computer equipment 20,048
Organization costs 4,160
----------
$ 174,208
==========
LIABILITIES AND MEMBERS' EQUITY (DEFICIENCY)
Current liabilities:
Notes payable, Members $ 150,000
Due to Member 13,266
Accounts payable 174,138
----------
337,404
Members' equity (deficiency), 2,200,000
membership share interests outstanding (163,196)
----------
$ 174,208
==========
See notes to financial statements.
F-11
<PAGE>
J2 TECHNOLOGIES, LLC
(A Development Stage Company)
STATEMENT OF OPERATIONS AND
CHANGES IN MEMBERS' EQUITY (DEFICIENCY)
JULY 31, 1998 (inception) TO AUGUST 31, 1998
Revenue $ -
General and administrative expenses:
Consulting fee regarding merger 150,000
Appraisal fee 13,266
Legal and accounting 19,978
----------
183,244
----------
Net loss (183,244)
Members' capital contribution,
computer equipment 20,048
----------
Members' equity (deficiency), August 31, 1998 $ (163,196)
==========
See notes to financial statements.
F-12
<PAGE>
J2 TECHNOLOGIES, LLC
(A Development Stage Company)
STATEMENT OF CASH FLOWS
JULY 31, 1998 (inception) TO AUGUST 31, 1998
Cash flows from operating activities:
Net loss $ (183,244)
Adjustments to reconcile net loss to net
cash used in operating activities:
Increase in:
Organization costs (4,160)
Due to Member 13,266
Accounts payable 174,138
----------
Net cash used in operating activities -
----------
Cash flow from financing activities,
notes payable, Members 150,000
----------
Increase in cash 150,000
Cash, beginning -
----------
Cash, ending $ 150,000
==========
For non-cash transactions, see Note 6.
See notes to financial statements.
F-13
<PAGE>
J2 TECHNOLOGIES, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1998
1. Summary of significant accounting policies and business activity:
Business activity:
J2 Technologies, LLC ("Company"), a California limited liability
company, was organized to provide information technology support
services, including systems consulting, design, implementation and
maintenance. The Company is considered to be in the development stage
as no revenues have been derived from operations and the Company is
primarily involved in raising capital. The Company's operating
agreement provides for a termination date of 2050. The owners of the
Company are referred to as "Members". The Company's fiscal year will
end December 31.
Use of estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
Cash and cash equivalents:
The Company considers highly liquid deposits with maturities of three
months or less, including deposits held in attorney's trust accounts, to
be cash equivalents.
Computer equipment:
Computer equipment is stated at cost. See Note 6. Depreciation is
provided on the straight-line method over a three year useful life.
Organization costs:
Organization costs represent costs incurred in connection with
organizing the Company. These costs are being amortized on a
straight-line basis over five years.
Income taxes:
The Company is not a taxpaying entity for federal and state income tax
purposes. No income tax expense or benefit is recorded in the financial
statements. Income or loss of the Company is taxed to (or benefits) the
Members in their respective returns.
F-14
<PAGE>
J2 TECHNOLOGIES, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1998
2. Going concern:
The accompanying financial statements have been prepared on a going
concern basis which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The
Company has no operating history, is in the development stage, and, at
August 31, 1998, has an equity deficiency. These factors raise
substantial doubt about the Company's ability to commence operations and
continue as a going concern. The financial statements do not include
any adjustments relating to the recoverability and classification of
recorded asset amounts or the amount of liabilities that might be
necessary should the Company be unable to continue in existence.
Continuation of the Company as a going concern is dependent on obtaining
funds to commence its operations. Management plans to generate these
funds through a merger with a public company followed by a private
placement offering. There is no assurance, however, that such plans
will be completed or, if completed, will generate sufficient funds to
enable the Company to commence and continue operations for the next
twelve months.
3. Transfer of assets from related party:
In connection with the issuance of membership shares to a Member, the
Member assigned to the Company on a non-exclusive basis certain
intellectual property. The intellectual property consists of technology
management plans and corporate documents, technical proposals and
management plans, technical operating procedures, corporate management
plans and management resources, and software and data, collectively, the
"Assets". The Assets were initially used or developed as part of
noncommercial projects and contracts by the Member and are currently
used in governmental applications. The assignment does not include
rights for the Company to use the Assets in governmental applications,
which rights are retained by the Member. The Company had the Assets
appraised by an independent valuation firm. In an appraisal dated
August 15, 1998, the appraisal firm estimated the fair market value of
the Assets to be $4,750,000. Under generally accepted accounting
principles, no value for the Assets may be recorded on the Company's
books, although the Company is able to use such Assets, subject to an
assignment agreement, without fees or royalties.
4. Notes payable, Members:
The Company issued four promissory notes for $37,500 each (aggregate
$150,000) to certain members in exchange for cash. The notes bear
interest at 10 percent per annum and are due on or before the earlier of
August 1, 1999 or the closing date of the Company's private placement
offering. As of October 23, 1998, no definitive plans for the offering
had been made.
5. Due to Member:
A Member of the Company advanced to the Company $13,266 which was used
to pay for the valuation of the assigned Assets (see Note 3). The
advance accrues interest at prime plus two percent and is due February
3, 1999. The prime rate at August 31, 1998 was 8 1/2 percent.
F-15
<PAGE>
J2 TECHNOLOGIES, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1998
6. Computer equipment:
The computer equipment reflected on the balance sheet was used by a
Member and transferred from that Member to the Company. The original
cost to the Member was $57,324 and $37,276 of accumulated depreciation
had been recorded by the Member. The Company recorded the computer
equipment at its net book value of $20,048.
7. Proposed merger:
The Company is in the process of completing a merger with an inactive
publicly traded corporation, Mt. Olympus Enterprises, Inc. ("MTOP").
Pursuant to a "Stock-for-Membership Interest Exchange Agreement"
("Exchange Agreement"), all of the outstanding membership interests of
the Company would be exchanged for shares of common stock of MTOP. The
Exchange Agreement provides for, among other things, MTOP to assume the
obligation to repay the promissory notes payable of the Company and all
other obligations of the Company. The promissory notes payable are to
be paid from funds raised, if any, in any financing by MTOP. At the
closing, the Company shall pay legal, accounting and other fees
approximating $15,000. Such fees will be recorded on the Company's
books if and when the closing takes place.
F-16
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
Balance Sheet, Statement of Income and Exhibit 11 (Statement Re
computation of per share earnings) and is qualified in its entirety by
reference to such Financial Statements.
</LEGEND>
<RESTATED>
<CIK> 0000810365
<NAME> RECOM MANAGED SYSTEMS, INC
<MULTIPLIER> 1
<CURRENCY>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUL-1-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 150000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 140
<INVENTORY> 0
<CURRENT-ASSETS> 150140
<PP&E> 61484
<DEPRECIATION> (37276)
<TOTAL-ASSETS> 174348
<CURRENT-LIABILITIES> 364709
<BONDS> 0
0
0
<COMMON> (197,859)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 174348
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (329559)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (329559)
<EPS-PRIMARY> ($0.13)
<EPS-DILUTED> ($0.13)
</TABLE>
