UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
(Mark One)
/X/ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1998
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________
Commission file number 0-20843
POINTE COMMUNICATION CORPORATION
(Name of Small Business Issuer in Its Charter)
NEVADA 84-1097751
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2839 PACES FERRY ROAD
ATLANTA, GEORGIA 30339
(Address of Principal Executive Offices) (Zip Code)
770-468-6800
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK, $.00001 PAR VALUE
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No .
----- -----
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB ____.
State issuer's revenues for its most recent fiscal year: $27,620,202
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.
The aggregate market value of such stock on April 13, 1999, based on the
average of the bid and asked prices on that date was $37,653,114.
The number of shares of the issuer's common stock outstanding on April 13,
1999 was 45,339,839
<PAGE>
This Form 10-KSB/A amends the Form 10-KSB filed with the Commission on
April 15, 1999, pursuant to the filing requirements under Rule 12b-15
promulgated under the Securities Exchange Act, as amended to add the information
required in Items 9-12 of Part III thereof.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The following table lists the name and age of each director and executive
officer of the Company, as well as those persons expected to make a significant
contribution to the Company during 1999. Each director has been elected to
serve until the next annual meeting of stockholders.
<TABLE>
<CAPTION>
<S> <C> <C>
Name Age Position
- ---- ----- ---------
Stephen E. Raville 51 Chairman of the Board, Chief Executive Officer
Gary D. Morgan 42 President and Chief Operating Officer
Patrick E. Delaney 45 Director, Chief Financial Officer
Stephen L. Schilling 35 President of Telecommute Solutions, Inc.
John F. Nort 50 Vice President and GM of Prepaid Solutions division
William C. Comee 59 Vice President, Business Dev. and Former Director
William P. O'Reilly 53 Director
F. Scott Yeager 47 Director
Gerald F. Schmidt 58 Director
James H. Dorsey 39 Director
</TABLE>
STEPHEN E. RAVILLE. Mr. Raville has been a director of the Company since
December 14, 1995, Chairman since January 28, 1997 and Chief Executive Officer
since September 12, 1997. Mr. Raville has been President of First Southeastern
Corp., a private investment company, since it was formed shortly after
Mr. Raville's departure from Advanced Telecommunications Corporation ("ATC")
where he served as Chairman of the Board and Chief Executive Officer. Prior to
the merger of ATC and Atlanta based TA Communications, Mr. Raville served as a
President of TA Communications. Additionally, he was a partner in the Atlanta
law firm of Hurt, Richardson, Garner, Todd & Cadenhead. Mr. Raville currently
serves on the Board of numerous private concerns.
GARY D. MORGAN. Mr. Morgan joined the Company in July 1998 as President and
Chief Operating Officer. Mr. Morgan has 22 years of experience in the
telecommunications industry. For the past 19 years he has held various senior
level positions with Lucent Technologies, Siemens and Nortel. He has a broad
background in marketing and operating large public communications networks, with
such companies as Bell Atlantic, SBC, US West and BellSouth. Mr. Morgan has
served as a trustee for many cultural and non-profit organizations. He holds a
Bachelor of Science in Business Administration from Western Carolina University.
PATRICK E. DELANEY. Mr. Delaney has been a Director since September 12,
1996. Mr. Delaney has over twenty years of diverse business management
experience in such industries as chemical engineering, insurance and
telecommunications. As Chief Financial Officer of Advanced Telecommunications
Corporation ("ATC"), Mr. Delaney was instrumental in growing ATC's annual
revenues from $50,000,000 to $500,000,000 in less than six years. Mr. Delaney's
other key responsibilities at ATC included directing mergers and acquisitions
activities, which resulted in over fifteen transactions, as well as placing
financing in excess of $250,000,000 in debt and equity. During 1993-1994, Mr.
Delaney served as a board member and Chief Financial Officer for RealCom, Inc.,
the second largest shared tenant services company in the country until its
acquisition by MFS Communications.
STEPHEN L. SCHILLING. Mr. Schilling joined the Company as Chief Operating
Officer on December 1, 1996. On March 1, 1998, Mr. Schilling became President of
Telecommute Solutions, Inc., the Company's subsidiary that provides
telecommuting services to corporate customers. Mr. Schilling has over 12 years
of experience in the telecommunications industry. Most recently, Mr. Schilling
was Senior Vice President of Business Development and Operations for GE
Capital-ResCom (GECR) where, in addition to general operating responsibilities,
he oversaw strategic development in the areas of product development, technology
direction, and internal process engineering. While at GECR, Mr. Schilling also
established several strategic business relationships with various Bell
organizations. Previously, Mr. Schilling had been with MFS/RealCom, where he
held several positions, most recently as Division Vice President/General
Manager. In that position, he was responsible for overall growth and direction
of MFS/RealCom's South Division including sales, marketing, operations and
business development. Prior to MFS/RealCom, Mr. Schilling held various positions
at National Data Corporation and US Sprint Communications, Inc.
JOHN F. NORT. Mr. Nort is currently Vice President and General Manager of
the Prepaid Communications Solutions division of the Company. The founder of
WorldLink Communications in 1992, Mr. Nort sold his company to Pointe in 1996
and is responsible for the worldwide sales and marketing of Pre-Paid Telephone
Cards and Services. Mr. Nort founded National Telephone Company, which was sold
during 1998 and was a director/owner of Rent-A-Line Telephone Company, until it
was acquired by the Company.
WILLIAM C. COMEE. Mr. Comee served as a director from September 21, 1995,
until his resignation on February 28, 1997. Prior to his election as Vice
President of Business Development in June 1998, Mr. Comee served the Company as
Vice President in charge of International Operations and in a consulting
capacity prior to that. Mr. Comee was primarily responsible for obtaining the
Company's agreement with INTEL, the Panamanian telephone company. Additionally,
Mr. Comee is the founder and President of Charter Trading Corporation ("CTC"),
which has extensive experience in operating U.S. Government and commercial
communication systems overseas. Mr. Comee retired from the U.S. Army as a
Colonel in May 1987. He was Director of Operations, U.S. SouthCom, and
responsible for all U.S. Military activities in Latin America. He also served as
Commander of all U.S. Operational Forces in Central America. CTC currently
provides operation and maintenance services for the U.S. Government Central
American Regional Communications Systems. Additionally, CTC is employed by the
U.S. Government in several classified contracts.
WILLIAM P. O'REILLY. Mr. O'Reilly has been a director since December 14,
1995. Mr. O'Reilly has over 20 years experience in the telecommunication
industry and has initiated several successful business ventures. In 1981, he was
the founder and Chief Executive Officer of Lexitel Corporation, which is
currently part of ALC Communications, Inc. Mr. O'Reilly was also a founder and
Chief Executive Officer of Digital Signal, a leading provider of low-cost fiber
optic capacity to long distance carriers. In 1989, he acquired Military
Communications Corporation ("MCC"). MCC provides international public switched
network services via phone centers to the U.S. military worldwide. Mr. O'Reilly
sold MCC to LDDS in 1997. Mr. O'Reilly is currently Chairman and Chief Executive
Officer of ELTRAX Systems, Inc., a public company.
F. SCOTT YEAGER. Mr. Yeager has been a director since February 26, 1996.
Mr. Yeager has extensive experience in the communications industry and has
founded both Network Communications Inc., a company created to install, own and
operate a fiber optic network in Houston, Texas to compete with Southwestern
Bell Telephone Company, and YSA Inc., a systems integrator of fiber optic
components, including cable connectors, test equipment and multiplexers. In
1989, following the purchase of Network Communications Inc., by MFS, Mr. Yeager
became City Director of MFS of Houston, Inc. In 1991, he developed the concept
of high speed data-networking over the MFS fiber infrastructure. In 1992, he
became Vice President of Sales and Distribution of MFS Datanet, Inc., where he
developed the sales organization and marketing approach of MFS Datanet. Mr.
Yeager most recently served as Vice President of Business Development of MFS
Global Services, Inc. Currently, Mr. Yeager is independently employed as a
telecommunications industry consultant.
GERALD F. SCHMIDT. Mr. Schmidt joined the Company as a director on February
28, 1997. Mr. Schmidt is Chairman, a director and a shareholder of Cordova
Technologies, Inc. As Chairman, he is responsible for the major policy decisions
of the General Partner and the Partnership. Mr. Schmidt is a co-founder of
Cordova Capital and also President of Cordova Capital Inc. and Cordova Capital
II, Inc., and is a shareholder and member of the Board of Directors of each. A
major portion of his career was spent with Jostens, Inc., a publicly-traded NYSE
company on the Standard & Poor's 500, based in Minneapolis and involved in the
manufacturing and sale of motivation and recognition products to educational
institutions and companies. While there, he was responsible for $170 million in
sales through more than 500 independent sales representatives and led a sales
and design team that won the opportunity to produce the gold, silver and bronze
medals for the games of the XXIII Olympiad held in Los Angeles. Upon leaving
Jostens in 1984, he spent five years as senior vice president of O'Neill
Developments, Inc., a privately-held merchant developer of real estate
properties headquartered in Atlanta. Mr. Schmidt left in 1988 to join Manderson
& Associates, where Cordova Capital was founded. Mr. Schmidt serves on the Board
of Directors of USBA Holdings, Ltd., a financial services company providing
products and services to banks, Investors Financial Group, Inc., a full service
broker-dealer, and Premis Corporation, a publicly traded NASDAQ company that
designs, develops and markets software systems for point of sale.
JAMES H. DORSEY. Mr. Dorsey is currently the founder and CEO of Boom, Inc.,
with offices in New York City and Florida. This new venture, aimed at the Baby
Boomer Generation, is a discount membership club set up as a multimedia company,
comprised of a TV show, a Web Site and a magazine. In addition, Mr. Dorsey is
the founder and President of three Florida based companies: Landmark Design
Custom Builders, LLC, Dorsey Realty Investments, LLC, and Dorsey Investments
Properties, LLC, all headquartered in Delray Beach, Florida. The three companies
buy and develop properties in Miami Beach, Colorado and Jackson Hole, Wyoming,
concentrating in new construction as well as renovation. In 1989, Mr. Dorsey
founded American Hydro-Surgical Instruments, Inc., also in Delray Beach, and
served as President, CEO and Chairman of the Board for the next six years. Begun
with the design for a single product for the growing field of laparoscopic
surgery, the company recorded sales of 20 million dollars in 1995 and had 175
employees including a national sales force and approximately 200 products. Mr.
Dorsey was awarded 14 patents for surgical products issued in his name. In 1995,
the company was merged with CR Bard, a leader in the pharmaceutical industry.
Mr. Dorsey served as a full time medical consultant for CR Bard for a year, and
since then has been retained as a patent and product consultant. From 1989 to
1992, Mr. Dorsey also served as President and CEO of Sigmatec Medical Inc., in
Delray Beach, a com pany he founded to serve South Florida as a sales
organization for American Hydro Surgical Instruments, Inc. With sales of 3.5
million, Sigmatec was merged with American Hydro Surgical Instruments in 1992.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
The Company filed to register its Common Stock under Section 12(g) of the
Exchange Act of June 11, 1996 which registration became effective 60 days after
such filing. To the knowledge of the Company, the following persons have filed
late reports pursuant to Section 16 relating to their beneficial ownership of
securities of the Company:
In the Company's Proxy Statement issued in August 1998, the Company
reported the following transactions as having been reported late but in fact
they were not filed. In August of 1997, William P. O'Reilly and Gerald F.
Schmidt were issued 83,333 and 41,667 shares of convertible debentures. In
December 1996, Mr. Schilling was issued an option to purchase 250,000 shares of
common stock, vesting 25% on each one year anniversary date of issuance and in
May 1997 10,000 shares were received from an affiliate of the Company. In June
1998, James H. Dorsey III was issued warrants to purchase 545,455 shares of the
Company's common stock. To the Company's knowledge Forms 4 have not yet been
filed reporting such transitions.
In March 1998, Mr. Nort received options to purchase 150,000 shares of
common stock, which options vested immediately upon grant. In July 1998, Mr.
Nort purchased 100,000 shares of common stock and warrants to purchase 100,000
shares of common stock in a private offering. To the Company's knowledge, Forms
4 reporting these issuances have not been filed.
In July 1998, Mr. Morgan received warrants to purchase 590,000 shares of
Common Stock in conjunction with the Company's acquisition of Pointe
Communications Corp., a Delaware company. To the Company's knowledge, a Form 4
reporting this issuance has not been filed.
In December 1998, Cordova Capital Partners, L.P. - Enhanced Appreciation
received warrants to purchase 380,000 shares of Common Stock in conjunction with
a promissory note. To the Company's knowledge, a Form 4 reporting this issuance
has not
ITEM 10. EXECUTIVE COMPENSATION.
The following table summarizes the compensation paid by the Company to its
Chief Executive Officer and all the executive officers of the Company whose
salary and bonus from the Company for services rendered during 1998 exceeded
$100,000. Information is not included for any persons not serving as an
executive officer of the Company as of December 31, 1998.
[/R]
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
---------------------- -----------------------------------
Awards Payouts
---------------------- -----------
Restricted Securities
Name and Principal Other Annual Stock Underlying LTIP
Position Year Salary Bonus Compensation Awards Options/SARs Payouts
- ------------------ ---- ----------- ----- ------------ --------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Stephen E. Raville
Chief Executive Officer 1998 $ 10,000
1997 $ 0
Gary D. Morgan 1998 $ 5,000
President and Chief
Operating Officer
Patrick E. Delaney 1998 $ 81,995(4)
Chief Financial Officer 1997 $100,000
John F. Nort 1998 $100,000 150,000(3)
General Manager - Prepaid 1997 $100,000
Calling Card Division
Stephen L. Schilling 1998 $117,538 150,000(2)
President 1997 $100,000 250,000(2)
Telecommute Solutions
William C. Comee 1998 $ 0
Vice President 1997 $100,000(1)
International Division 1996 $100,000(1)
<FN>
(1) Charter Trading Corporation, a company of which Mr. Comee is President and
principal stockholder, entered into a consulting agreement with the Company
under which the Company was obligated to pay $100,000 per annum. The
agreement expired on December 31, 1997.
(2) During 1998, Mr. Schilling was granted 150,000 options to purchase common
stock in Telecommute Solutions, Inc. ("TCS"). Such option represents 25% of
the options granted to employees to purchase TCS common stock during 1998.
As of December 31, 1998, none of the options had vested and the value of
the unvested options was estimated at $172,500. During 1997, Mr. Schilling
was granted 250,000 options to purchase the Company's common stock at a
price of $1.00 per share, which option expires December 1 , 2003 and vests
in four equal annual installments. Such option grant represents 12% of the
options granted to all employees during 1997. At December 31, 1998, such
option had vested as to 125,000 shares with a value of $64,434 and 125,000
shares with a value of $64,434 were not yet vested.
(3) During 1998, Mr. Nort was granted 150,000 options to purchase the Company's
common stock at a price of $1.25 per share, which option expires May 21,
2006 and vested immediately upon issuance. Such option grant represents 20%
of the options granted to all employees during 1998. At December 31, 1998,
the value of such options was $85,500.
(4) In addition to the salary listed, Mr. Delaney received $19,336 for
royalties and $12,500 for personally pledging 1 million shares of common
stock as collateral for a $1 million bridge loan entered into by the
Company during December 1998.
</TABLE>
No options were granted to the named executives as compensation other than
the 150,000 granted to Mr. Nort and 150,000 TCS options granted to Mr.
Schilling. The only employment agreement the Company has with executive offices
is with Mr. Schilling for a base pay of $140,000 per year and options in TCS
earned according to a formula in the agreement which was attached as an exhibit
to the Company's 10-KSB filed April 15, 1999.
The Company has adopted a Nonemployee Director Stock Option Plan pursuant
to which 2,000,000 shares of the Company's Common Stock have been reserved for
issuance to Nonemployee directors of the Company. Options are granted with an
exercise price at fair market value on the date of grant, are exercisable upon
the one year anniversary of the date of grant and expire upon the earliest to
occur of (i) ten years after the date of grant, (ii) one year after the
recipient ceases to be a director of the Company by reason of death or
disability, or (iii) three months after the recipient ceases to be a director of
the Company for any reason other than death or disability. To date, the Company
has granted options to purchase 100,000 shares under the plan to each of the
following persons: Stephen E. Raville, William P. O'Reilly, F. Scott Yeager,
Jerry Schmidt and James H. Dorsey. The options vest in 25,000 share increments
on each one year anniversary date of election to the board of directors. As of
December 31, 1998, Messrs. Raville and O'Reilly were vested in 75,000 options,
Mr. Yeager was vested in 50,000 options, and Messrs. Schmidt and Dorsey were
vested in 25,000 options.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of March 31, 1999, information regarding the
ownership of Common Stock of the company owned by (i) each person (or "group"
within the meaning of Section 13(d)(3) of the Security Exchange Act of 1934)
known by the Company to own beneficially more than 5% of the Common Stock; (ii)
each director of the Company, (iii) each of the named executive officers and
(iv) all officers and directors of the Company as a group.
<TABLE>
<CAPTION>
March 31, 1999
---------------------------
Beneficial Owners Number % of Total
- ----------------- -------------- -----------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS
William C. Comee 1,038,991(1) 1.6%
Patrick E. Delaney 2,786,423(2) 4.4%
Gary D. Morgan 590,000(3) *
William P. O'Reilly 574,846(4) *
F. Scott Yeager 255,000(5) *
Stephen E. Raville 7,618,965(6) 11.9%
Gerald F. Schmidt 3,471,667(7) 5.4%
John F. Nort 812,387(8) 1.3%
Stephen L. Schilling 235,000(9) *
James H. Dorsey 1,267,955(10) 2.0%
EXECUTIVE OFFICERS AND DIRECTORS
AS A GROUP: 18,651,234 29.2%
BENEFICIAL OWNER OF 5% OF THE
COMMON STOCK
Zephyr International Limited 6,490,719 10.1%
<FN>
The business address for each of the above persons is 2839 Paces Ferry Road,
Suite 500, Atlanta, Georgia 30339.
(1) Includes 400,000 shares owned by spouse and 25,000 owned by child, the
ownership of which is disclaimed, and warrants to purchase 32,000 shares at
$2.25 per share.
(2) Includes 72,423 shares owned by family members, the ownership of which is
disclaimed; and warrants to purchase 30,000 shares at $1.00 per share.
(3) Includes warrants to purchase 590,000 shares at $1.50 per share.
(4) Includes the vested portion of Nonemployee Director option 75,000 shares at
$0.70, and 83,333 shares subject to a convertible debenture at a conversion
price of $1.20 per share.
(5) Includes 9,000 shares owned by minor children, the ownership of
which is disclaimed, and the vested portion of Nonemployee Director option
of 75,000 shares at $0.70 per share.
(6) Includes 6,489,798 shares of the Company which are owned by the Star
Insurance Company ("Star"). On May 12, 1998, the shares were sold to Star
by the Raville 1994 Family Limited Partnership of which Mr. Raville is the
Managing General Partner. Mr. Raville disclaims ownership of these shares
but retains full power to vote these shares. Also includes the vested
portion Nonemployee Director option of 75,000 shares at $0.70 per share;
warrants to purchase 30,000 shares at $1.00 per share; warrants to purchase
97,500 shares at $3.00 per share; warrants to purchase 760,000 shares at
$1.00 per share; and 166,667 shares subject to a convertible debenture at a
conversion price of $1.20 per share.
(7) Includes 3,000,000 shares owned by Cordova Capital Partners LP Enhanced
Appreciation, an investment Limited Partnership of which Cordova Capital is
general partner, the ownership of shares is disclaimed; warrants held
by Cordova Capital Partners LP Enhanced Appreciation to purchase 380,000
shares at $1.00 per share, the ownership of shares is disclaimed; the
vested portion of Nonemployee Director option of 50,000 shares at $1.00 per
share; and 41,667 shares subject to a convertible debenture at a conversion
price of $1.20 per share.
(8) Includes Employee Incentive Stock options to purchase 150,000 shares at
$1.25 per share; warrants to purchase 100,000 shares at $3.00 per share;
and 77,243 shares subject to the right to convert a promissory note at
$0.49 per share.
(9) Includes vested portion of Employee Incentive Stock options to purchase
125,000 shares at $1.00 per share.
(10) Includes the vested portion of Nonemployee Director option to purchase
25,000 shares at $1.00 per share; warrants to purchase 97,500 shares
at $3.00 per share; and warrants to purchase 545,455 shares at 1.375 per
share.
</TABLE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During 1998, the Company entered into various equity and debt private
placements with officers and directors. During the first quarter, the Chairman
of the Board of Directors and another Director, purchased 3,400,000 and 600,000
shares of stock for $1,700,000 and $300,000, respectively. During the second
quarter, the Company issued a promissory note to a Director for $750,000, which
is non-interest bearing and matures June 1, 1999. In conjunction with the
promissory note, the Company issued 545,455 warrants to purchase common stock
at $1.375 for a period of one year from issuance.
During the third quarter, the Company issued a promissory note to Peachtree
Capital Corporation, a company affiliated with the Chairman, and a Director, for
$150,000 payable on demand. The note was repaid on March 15, 1999. Also during
the third quarter, an executive officer purchased 100,000 shares of common stock
and warrants to purchase 100,000 shares of common stock at $3.00 per share for
gross proceeds of $100,000. During the fourth quarter, the Company issued a $1
million promissory note to Cordova Capital Partners LP - Enhanced Appreciation,
which is an entity affiliated with a Director. In conjunction with the notes,
the Company issued 380,000 warrants to purchase common stock at $1.00 per share.
Also, during the forth quarter, the Company acquired Rent-A-Line Telephone
Company LLC ("Rent"), a portion of which was owned by an executive officer at
the time of acquisition. The executive officer received the right to convert a
$38,150 promissory note, owed by Rent, into 77,243 shares of Common Sto ck as
consideration of his ownership of Rent.
During 1998, the Chairman of the Company's Board of Directors and its Chief
Financial Officer pledged shares of their Company common stock as collateral for
the $2.0 million bridge loans entered into during the fourth quarter. Also
during the year, the Company provided loans to certain of its officers and key
employees in the amount of $215,337.
The Company had a consulting agreement with Charter Trading Corporation
("CTC"), an unaffiliated company whose president and principal stockholder is an
executive officer of the Company and a former director. The Company compensated
CTC $100,000 per annum for consulting services through December 31, 1997.
The Company's lines of credit and certain notes payable have been
guaranteed by a stockholder, the Chairman of the Company's Board of Directors
and its Chief Financial Officer. 100,000, 30,000, and 30,000 warrants to
purchase shares of Common Stock at $1 per share have been granted to this group
and individuals, respectively in 1997.
During 1997, the Company entered into a five year operating lease of earth
station equipment located in Panama, Costa Rica and Nicaragua. There are two
lessors, one of which is a company whose principal shareholder is the Chairman
of the Company's Board of Directors, and the other is a director. The lease
obligations total approximately $70,000 per annum payable quarterly in arrears.
In conjunction with the lease, the Company issued 195,000 warrants, which grant
the holders the right to purchase sh ares of the Company's common stock at a
price of $3.00 per share. The Company has reflected the fair value of these
warrants (computed using the Black-Scholes model) in the accompanying financial
statements.
At December 31, 1998, the Company owed $68,000 to its President for the
unpaid portion of the Pointe Communications Corporation acquisition price.
<PAGE>
SIGNATURES
IN ACCORDANCE WITH SECTION 13 OR 15(d) OF THE EXCHANGE ACT, THE REGISTRANT
CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED.
POINTE COMMUNICATIONS CORPORATION
/s/ STEPHEN E. RAVILLE
By: --------------------------------------- Date: April 30, 1999
STEPHEN E. RAVILLE, CHIEF EXECUTIVE OFFICER
