e-Net Financial Corporation
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed Proxy is solicited on behalf of e-Net Financial Corporation
("e-Net" or the "Company") for use at the 1999 Annual Meeting of Stockholders
("Annual Meeting") to be held Thursday, December 16, 1999, at 2:30 p.m., local
time, and at any adjournment(s) or postponement(s) thereof, for the purposes set
forth herein and in the accompanying Notice of Annual Meeting of Stockholders.
The Annual Meeting will be held at the Corporate Offices located at 1061 E.
Flamingo Rd., Suite 3, Las Vegas, Nevada. The Company's principal executive
offices are located at 2102 Business Center Dr., Suite 115E Irvine, California
92612 and its main telephone number is (949) 253-4633. These proxy solicitation
materials were mailed on or about November 26, 1999, to all stockholders
entitled to vote at the Annual Meeting.
Record Date and Outstanding Shares
Stockholders of record at the close of business on November 15, 1999 (the
"Record Date"), are entitled to notice of and to vote at the Annual Meeting. At
the Record Date, 4,500,000 shares of the Company's $0.001 par value Common Stock
("Common Stock"), were outstanding. The closing price on OTB-BB for the Common
Stock on the Record Date, as reported by Yahoo on the Internet, was $1.125 per
share. The Company was aware of the following beneficial owners of more than 5%
of its Common Stock as of the Record Date:
Number of Percentage
Name and Address Shares of Class(2)
- ---------------- ------ -----------
H-Group LLC (1) 2,000,000 44.4%
3601 Empire Avenue
Burbank, CA 91505
Michael Roth (1) 2,000,000 44.4%(1)
2102 Business Center Dr.,
Suite 115E
Irvine, CA 92612
E. G. Marchi 402,500 8.9%
2102 Business Center Dr.,
Suite 115E
Irvine, CA 92612
Jim Thuney 600,000 13.3%
11017 NE Sherwood Dr
Vancouver, WA 98636
- --------------------------------------------------------------------------------
(1) Michael Roth is the beneficial owner of 100% of the stock of H-Group LLC.
(2) Based upon 4,500,000 shares outstanding.
<PAGE>
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company before the
Annual Meeting a written notice of revocation or a duly executed proxy bearing a
later date, or by attending the Annual Meeting and voting in person.
Voting and Solicitation
On all matters other than the election of directors, each share has one
vote.
The cost of soliciting proxies will be borne by the Company. Proxies may be
solicited by certain of the Company's directors, officers and regular employees,
without additional compensation, personally or by telephone or telegram.
Deadline for Receipt of Stockholder Proposals
Proposals of stockholders of the Company that are intended to be presented
by such stockholders at the Company's 2000 Annual Meeting of Stockholders must
be received by the Company no later than September 15, 2000, in order to be
considered for possible inclusion in the proxy statement and form of proxy
relating to that meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
General
A board of three directors is to be elected at the Annual Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the Company's nominees named below, who are currently directors of the
Company. In the event that any of the nominees are unable or decline to serve as
a director at the time of the Annual Meeting (neither of which events is
expected), the proxies will be voted for such nominees as shall be designated by
the current Board of Directors to fill the vacancy.
Vote Required
A quorum comprising the holders of the majority of the outstanding shares
of Common Stock on the Record Date must be present or represented by proxy for
the transaction of business at the Annual Meeting. If a quorum is present, the
nominees receiving the highest number of votes will be elected to the Board of
Directors, if they receive a majority of the votes cast. Votes withheld and
broker non-votes will be counted for purposes of determining the presence or
absence of a quorum but have no other effect under Nevada law in the election of
directors.
The term of the persons elected as directors will continue until the next
Annual Meeting or until their successors have been elected and qualified.
2
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED BELOW.
Nominees
The names of the nominees, and their current positions with the Company are
set forth below.
Name of Nominee Principal Position Director Since
- --------------- ------------------ --------------
Michael Roth President and Director 1999
Theodore Bohrer Vice President and Director 1999
Jean Oliver Secretary/Treasurer and Director 1999
There is no family relationship between any director and any executive officer
of the Company.
Board Meetings and Committees
The Board of Directors held nineteen meetings during the 12 month period
ended November 15, 1999 and also conducted business by written consent. The
Board of Directors has no committees.
Director Compensation
The Company, at the present time, pays no fee (other than ordinary payroll
to Directors who are also employees of the Company) to Directors.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock as
of the Record Date, by each director, by each of the executive officers named in
the Summary Compensation Table, and by all directors and executive officers as a
group.
Number of
Shares Approximate
Beneficially Percentage
Name Owned Owned
- ---- ----- -----
H-Group LLC 2,000,000 44.4%(1)
Michael Roth 2,000,000 44.4%(1)
E. G. Marchi 402,500 8.9%
- --------------------------------------------------------------------------------
(1) Michael Roth is the beneficial owner of H-Group LLC
3
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table shows, as to the President, each of the other two
executive officers, and the President of City Pacific International USA Inc., a
wholly owned subsidiary ("CPI"), during the last fiscal year, information
concerning all compensation paid for services to the Company in all capacities
during the last fiscal year.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Compensation Awards
------------------- -------------------
Employment Agreement
Name and Principal Position Salary($)(1) Signing Bonus (Options @ $1.50)
- --------------------------- ------------ -------------------------------
<S> <C> <C>
Michael Roth, President $13,500 100,000
E. G. Marchi, President CPI (a subsidiary) $13,500 100,000
Theodore Bohrer, Vice President $13,500 75,000
Jean Oliver, Secretary/Treasurer $5,500 50,000
- ----------
(1) This represents salary accrued from March 1, 1999 to April 30, 1999.
</TABLE>
PROPOSAL 2
2:1 STOCK SPLIT
To ratify the following transaction:
A two for one forward split of the Company's Common Stock, effective
November 30, 1999, authorizing an increase in the total shares outstanding
to 9 million.
Vote Required
A quorum comprising the holders of the majority of the outstanding shares
of Common Stock on the Record Date must be present or represented by proxy for
the transaction of business at the Annual Meeting. Each share may vote once
either yes or no. Votes withheld and broker non-votes will be counted for
purposes of determining the presence or absence of a quorum but have no other
effect under Nevada law in the election of officers/directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
OPTIONS OR WARRANTS GRANTED IN LAST FISCAL YEAR
None to Officers and Directors, except as detailed above in the Summary
Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
No options were exercised by any of the executive officers during the year
ended April 30, 1999 or in the period through October 31, 1999. The value of the
options held as of October 31, 1999 are set forth in the following table:
4
<PAGE>
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED STOCK OPTIONS AT END OF YEAR
Number of Securities
Underlying Unexercised Value of Value of Expiration
Options at Unexercised Options Unexercised Options of
Fiscal Year End at Fiscal Year End at October 31, 1999 ($) Option
--------------- ------------------ ----------------------- ------
<S> <C> <C> <C> <C>
Name
Michael Roth 100,000 $450,000 $0 July 6, 2004
E. G. Marchi 100,000 $450,000 $0 July 6, 2004
Theodore Bohrer 75,000 $337,500 $0 July 6, 2004
Jean Oliver 50,000 $225,000 $0 July 6, 2004
Notes:
None of these Options are exercisable as of Fiscal Year End 1999.
The last stock trade made as of Fiscal Year End was at $6.00.
The last stock trade made as of October 31, 1999 was at $1.375.
The strike price on all options is $1.50.
</TABLE>
Employment Contracts and Change of Control Arrangements
The Company has employment contracts with all Officers and Directors:
Michael Roth, President and Director; Theodore Bohrer, Vice President; Jean
Oliver, Secretary/Treasurer. These contracts have a one year term and are
renewable. In addition to the compensation specified above each contract
specifies a payment of $5,000 in the event of involuntary termination. The full
and complete contract is published as part of the Company's current 10K filing
on the Security and Exchange Commission's EDGAR database.
As detailed above, the Company has granted stock options to several key
employees. Each option represents the right to purchase one share of common
stock. All options vest one year from date of employment.
There is no change of control provision affecting these options. In the
event of a sale of all or substantially all of our assets or a merger with or
into another corporation there is no impact on these options.
In addition to the options granted on signing of the employment contract,
each contract gives the employee the right to defer up to one third of their
salary. Deferred salary can be converted to stock at the rate of $1 per share.
Deferred salary can be converted to stock based on written notice within seven
days of the end of each quarter.
No specific amount of stock has been reserved for employee options.
Certain Transactions with Management
None
5
<PAGE>
OTHER MATTERS
The Company knows of no other matters to be submitted to the Annual
Meeting. If any other matters properly come before the Annual Meeting, it is the
intention of the persons named in the enclosed form of Proxy to vote the shares
they represent as the Board of Directors may recommend.
Only stockholders of record at the close of business on November 15, 1999
are entitled to notice of and to vote at the Annual Meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, you are urged to mark,
sign and return the enclosed Proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person, even though he or she has returned a Proxy.
Jean Oliver
Secretary
Irvine, California
November 16, 1999
6
