-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S7YF7RkXBFVEem1T6XGZ7hc7mZ12uD3Vj3MTLXP8mZqDHL6qRLi/Y1QpitaRuCQo 3tWCpHUZ54LPWzGsGxKOeQ== 0000891554-99-002369.txt : 19991223 0000891554-99-002369.hdr.sgml : 19991223 ACCESSION NUMBER: 0000891554-99-002369 CONFORMED SUBMISSION TYPE: SB-2 PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19991222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADRIATIC HOLDINGS LTD CENTRAL INDEX KEY: 0001075636 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 911918326 FILING VALUES: FORM TYPE: SB-2 SEC ACT: SEC FILE NUMBER: 333-93383 FILM NUMBER: 99778986 BUSINESS ADDRESS: STREET 1: 114 MAGNOLIA ST STREET 2: STE 446 CITY: BELLINGHAM STATE: WA ZIP: 98225 BUSINESS PHONE: 8006617830 MAIL ADDRESS: STREET 1: 114 MAGNOLIA ST STREET 2: STE 446 CITY: BELLINGHAM STATE: WA ZIP: 98225 SB-2 1 REGISTRATION STATEMENT AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON December 22, 1999 REGISTRATION STATEMENT NO. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------- ADRIATIC HOLDINGS LIMITED (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER) NEVADA 3644 91-1918326 (STATE OR JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
---------- 114 W. MAGNOLIA STREET, SUITE 446 BELLINGHAM, WASHINGTON 98225 (360) 715-3396 (ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES) ROBERT W. KNIGHT ADRIATIC HOLDINGS LIMITED 114 W. MAGNOLIA STREET, SUITE 446 BELLINGHAM, WASHINGTON 98225 (360) 715-3396 (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE) ---------- COPIES TO: STEVEN SANDERS, ESQ. BECKMAN, MILLMAN & SANDERS LLP 116 JOHN STREET, SUITE 1313 NEW YORK, NEW YORK 10038 (212) 406-4700 ---------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box: [ ] CALCULATION OF REGISTRATION FEE
==================================================================================================================== Title of Each Class of Amount to be Proposed Maximum Proposed Maximum Amount of Securities to be Registered Registered (1) Offering Price Per Aggregate Offering Registration Fee Security Price (1) - -------------------------------------------------------------------------------------------------------------------- Common Stock, $0.001 par value 5,000,000 $0.10 $500,000 $132 - --------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for purposes of calculating the registration fee pursuant to Rule 457 under the Securities Act of 1933, as amended. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any State. SUBJECT TO COMPLETION, DATED ___________________ PRELIMINARY PROSPECTUS 5,000,000 Shares ADRIATIC HOLDINGS LIMITED Common Stock This is a public offering of 5,000,000 shares of common stock of Adriatic Holdings Limited. There is currently no public market for the common stock. We will list the common stock on the OTC Bulletin Board under the proposed symbol "____". THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 5 TO READ ABOUT FACTORS YOU SHOULD CONSIDER BEFORE BUYING SHARES OF THE COMMON STOCK. ---------- NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATIONS MADE TO THE CONTRARY IS A CRIMINAL OFFENSE ---------- Per Share Total Public offering price ..................................... $0.10 $500,000 Total Proceeds, before expenses, to us .................... $0.10 $500,000 THE DATE OF THIS PROSPECTUS IS __________________, 2000 PROSPECTUS SUMMARY This summary highlights selected information from elsewhere in this prospectus. It is not complete and may not contain all of the information that is important to you. To understand this offering fully, you should read the entire prospectus carefully, including the risk factors and financial statements and the related notes to those statements included in this prospectus. THE COMPANY Adriatic Holdings Limited was incorporated in the State of Nevada on July 9, 1998 (hereinafter, "Adriatic," "the Company," "we," "us," and "our," will each refer to Adriatic Holdings Limited). The business of Adriatic is to become a provider of electrical junction boxes and other quality electrical products for use in both the public and private sector. Junction boxes are used for housing underground wiring connections. They are commonly installed at street intersections, in sidewalks, and anywhere else electrical connections are required. Pursuant to a licensing agreement (hereinafter, the "Licensing Agreement"), dated August 15, 1998, we acquired the rights from J.A. Industries (Canada) Inc. (hereinafter, "J.A. Canada"), to manufacture and distribute J.A. Canada's patented underground electrical junction box (hereinafter, the "J.A. Junction Box"). Under the terms of the Licensing Agreement, we agreed to pay to J.A. Canada $5.00 per J.A. Junction Box sold by Adriatic with a minimum fee of $2,000 in 1998 and a minimum fee of $10,000 per annum for the life of the license. The fee of $2,000 for 1998 has been paid. Sales for the J.A. Junction Box by J.A. Canada were approximately $CD 500,000 (approximately $US 350,000) in 1993 and $CD 500,000 (approximately $US 350,000) in 1994. Adriatic has not yet undertaken the sale of any J.A. Junction Boxes or any other product. Our offices are located at 114 W. Magnolia Street, Suite 446, Bellingham, Washington 98225. Our telephone number is (360) 715-3396. 1 THE OFFERING Common stock offered by the Company ................ 5,000,000 shares Price per share of common stock..................... $0.10 Common stock to be outstanding after the offering(1) ........................... 7,090,000 shares Use of proceeds .................................... Adriatic intends to use its portion of the proceeds for license fee payments, marketing, general and administrative expenditures, development of the business, working capital and other general corporate purposes. See "Use of Proceeds." Proposed OTC Bulletin Board symbol ................. _______ Risk factors For a discussion of the risks, you should consider before investing in the common stock of Adriatic, see "Risk Factors." - ------------------ (1) See "Dilution." 2 SUMMARY FINANCIAL INFORMATION The following summary of financial information has been derived from the financial statements included elsewhere in this prospectus and should be read in conjunction with such financial statements and the related notes. Statement of Operations Data (audited): From July 9, 1998 to December 31, 1998 Revenues ................................................ 0 Cost of revenues ........................................ 0 Operating expenses: ..................................... 0 Research and development ....................... 0 Loss from operations of Joint Venture .......... 0 General and administrative ..................... 11,964 Selling and marketing .......................... 0 Total operating expenses ................................ 11,964 (Loss) from operations .................................. (11,964) Net (loss) .............................................. (11,964) Net (loss) per share .................................... (.01) Weighted average number of shares outstanding ........... 1,623,429 Balance Sheet Data: Cash .................................................... 46 Working capital ......................................... (914) Total assets ............................................ 46 Current Liabilities ..................................... 960 Total stockholders' deficit ............................. (914) Statement of Operations Data (unaudited): From January 1, 1999 to September 30, 1999 Revenues ................................................ 0 Cost of revenues ........................................ 0 Operating expenses ...................................... 0 General and administrative .............................. 1,932 Total operating expenses ................................ 1,932 Loss from operations .................................... (1,932) Net Loss ................................................ (1,932) Net (loss) per share .................................... (.01) Weighted number of common shares outstanding ............ 2,085,458 Balance Sheet Data: Cash .................................................... $114 Working capital deficit ................................. $(846) Total assets ............................................ $114 Current Liabilities ..................................... $960 Total stockholders' deficit ............................. $(846) 3 FORWARD-LOOKING STATEMENTS This prospectus contains forward-looking statements within the meaning of the United States federal securities laws that involve risks and uncertainties. When included in this prospectus, the words "expects," "intends," "anticipates," "plans," "projects" and "estimates," and analogous or similar expressions are intended to identify forward-looking statements. A potential investor in the common stock offered hereby should use caution before relying on forward-looking statements because actual results could differ materially from those anticipated by such forward-looking statements in this prospectus. Factors which could cause actual results to differ from those anticipated by forward-looking statements can be found in "Risk Factors," "Management's Discussion and Analysis of Financial Condition or Results of Operations" and "Business." Any forward-looking statements contained in this prospectus speak only as of the date of this prospectus. The Company expressly disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein. 4 RISK FACTORS Investing in Adriatic shares is very risky. You should be able to bear a complete loss of your investment. Before making an investment, you should carefully read this prospectus and consider, along with other matters discussed in this prospectus, the following risk factors: Adriatic has a limited operating history. Adriatic was incorporated in July 1998 and thus has a limited operating history. Adriatic is subject to all the general risks, problems, expenses, difficulties, complications and delays frequently encountered in connection with establishing any new business and operations. Adriatic will cease doing business without the proceeds of this offering. We currently have insufficient capital to commence operations and are dependent on the proceeds of this offering to begin such operations. Our success is contingent, in part, on our ability to develop our strategy and to raise the funds which are necessary to purchase equipment and raw material in order to produce the J.A. Junction Box. We believe that revenues from the J.A. Junction Box will constitute a significant portion of our revenue for the foreseeable future. Accordingly, any factor adversely affecting the development, promotion and revenues from the J.A. Junction Box would have an adverse effect on our business and on the results of our operations. There is still no assurance that Adriatic, even with the funds from this offering, will successfully maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Adriatic lacks multiple directors and officers. Mr. Robert W. Knight serves as Adriatic's sole director and officer. As an officer of Adriatic, he serves as President, Treasurer and Secretary. In this manner, all decisions made by the Company's Board of Directors are not made as a result of a compromise or vote between multiple members of a board, but rather, are made as a result of decisions made at the discretion of Mr. Knight alone. Adriatic is dependent on key personnel. Our business plans are significantly dependent upon the abilities and continued participation of Mr. Knight. Mr. Knight has not entered into an employment agreement with us and there can be no assurance that he will continue to provide services to us. Mr. Knight will devote only a portion of his time to Adriatic activities. The loss by or unavailability to the Company of Mr. Knight's services would have an adverse effect on our business, operations and prospects. There can be no assurance that Adriatic would be able to locate or employ qualified personnel to replace Mr. Knight, should his services be discontinued. Adriatic requires additional financing in order to stay in business. We believe that the proceeds of this offering will enable us to maintain our operations and working capital requirements approximately for the next 12 months, without taking into account any internally generated funds from operations. Thereafter, we will require additional funds to maintain and expand our operations. Adequate funds for this purpose on terms favorable to Adriatic, whether through equity financing, debt financing, or other sources, may not be available when needed. Our inability to obtain adequate financing could have an adverse effect on the Company. Furthermore, if we do find additional financing, such financing may result in the further dilution in the equity ownership of the shares being offered in this prospectus. See "Use of Proceeds." Adriatic may continue to be unprofitable. We have had no revenue since our incorporation in July 1998. We have yet to undertake the sale of any J.A. Junction Boxes or any other products. Even after we commence selling the J.A. Junction Box, there is no guarantee that we will become profitable. The junction box industry is highly competitive and there is no guarantee that we will be able to secure the business of our target buyers. 5 The business and operations of Adriatic is controlled by certain stockholders. Upon completion of this offering, Mr. Knight and other present stockholders will beneficially own approximately 29.4% of Adriatic's outstanding common stock, assuming the sale of all 5,000,000 shares in this offering. As a result, these stockholders will be able to exercise significant control over all matters including the control of our management, policies and operations and those matters requiring stockholder approval, including the election of all of Adriatic's directors and approval of significant corporate transactions. See "Management" and "Principal Stockholders." An unfavorable resolution of current litigation against J.A. Canada could have an adverse effect on Adriatic's business. J.A. Canada is currently the defendant in a lawsuit concerning the J.A. Junction Box, Canadian patent #2,030,251. The Plaintiffs, Westcoast Engineering Ltd. and Nonad Plastic Ltd., both British Columbia companies, allege among other things, that the Canadian patent issued on the J.A. Junction Box is invalid. J.A. Canada feels that the suit lacks merit. Although J.A. Canada does not have the necessary funds to adequately defend itself in this action, it has entered a statement of defense. A judgment in favor of the plaintiffs would render the patent on the J.A. Junction Box invalid. As a result, Adriatic would not be able to prevent other competitors from using the technology and concept behind the patented J.A. Junction Box for profit. If the patent is declared invalid, then we have the option to cancel the Licensing Agreement with J.A. Canada. However, in this event, even if we do cancel the Licensing Agreement, we would be entitled to manufacture the product without paying any fees to J.A. Canada, since J.A Canada would no longer hold an absolute interest in the J.A. Junction Box. We believe that the lawsuit will be resolved within the next 24 months, although no assurance can be given. See "Business - Legal Matters." Adriatic's success is dependent on intellectual property rights. Our exclusive ability to manufacture and successfully market the J.A. Junction Box depends on whether J.A. Canada has a valid patent. If the patent is valid, then, under the Licensing Agreement, we will retain the exclusive right to use the J.A. Junction Box technology for profit. If this patent is invalid, this may seriously diminish our ability to compete with other manufactures of junction boxes. Although we would save the fee paid to J.A. Canada under the Licensing Agreement, we would no longer have the exclusive rights to manufacture the J.A. Junction Box. There are uncertainties regarding marketing of Adriatic's product. We intend to market the J.A. Junction Box within the United States. However, our product has had only limited use in the field and is not approved for use in the United States. Furthermore, our product has had limited marketing success in the past due to the lack of funds on the part of J.A. Canada to promote and develop the product. Even if the J.A. Junction Box is accepted by end users, there is no assurance that the United States market will provide sufficient revenue and earnings to permit on-going operations. In the event that we are not able to successfully market our products, we may seek to develop other new opportunities, although no assurances can be made. Failure to attain approval for the use of the J.A. Junction Box in the United States would adversely affect the business of Adriatic. Failure to attain approval of the J.A. Junction Box for use in the United States would have a material adverse effect on our financial condition, results of operations and cash flows. In order to sell the J.A. Junction Box in a particular state, we must first obtain approval from such state. Each state has its own requirements for approving use of junction boxes and typically require that applicants submit blueprints of the junction box and other documentation demonstrating how the junction box complies with the state's specifications. States also typically require that the junction boxes be tested in several test locations. Adriatic intends to submit the junction box for testing in the State of Washington as soon as practicable. 6 Future regulation of the use or sale of polyurethane may have a negative effect on our business. We will use a product called polyurethane in the production of the J.A. Junction Box. Polyurethane is a synthetic, oil-based substance, widely varying in flexibility. Polyurethane can be any of various kinds of thermoplastic or thermosetting resins often used in tough chemical-resistant coatings and in adhesives, foams and electrical insulation. Although we do not foresee any adverse effect on our operations as a result of any environmental laws in the United States which may regulate the use and manufacture of polyurethane, there can be no assurance that some future law would not have an adverse effect on our business, financial condition and results of operations. We believe that our activities conform to all present environmental regulations, if any, in all material aspects. The production of the J.A. Junction Box is dependent on raw materials. The primary raw material used to manufacture the J.A. Junction Box is polyurethane. Although we enjoy a long-term relationship with BASF Corporation and Imperial Chemical Industries PLC, our suppliers of polyurethane, there can be no assurance that polyurethane will be obtainable from such sources in the future. Although Management believes that the current price of polyurethane is stable, no assurance can be given that the price for polyurethane will not increase or fluctuate in the foreseeable future. The supply and price of polyurethane may be subject to significant influences and conditions beyond our control. If the price of polyurethane should increase or if our supply of polyurethane should become inadequate, our business operations and financial condition could be adversely affected. Potential acquisitions of other companies could have an adverse effect on our business. Although we have not engaged in any negotiations or agreements with respect to any acquisition as of the date of this prospectus, we may decide to acquire businesses, products or technologies in the future. However, a future acquisition may adversely affect our operating results and/or the market price of our common stock since we may do any one of the following in order to complete the acquisition: (1) issue new equity securities, whereby the issuance could potentially cause the new shares to be significantly diluted; (2) incur significant debt; and (3) incur other liabilities and/or amortization expenses related to goodwill and other intangible assets. Acquisitions by Adriatic may also entail other risks which include the following: (1) the difficulty in assimilating the operations of the acquired entity into those of Adriatic; (2) the diversion of the attention of Management to business concerns other than those directly pertaining to the Company; (3) the risk with which Adriatic may be faced for entering markets in which Adriatic has no or limited experience; and (4) the risk that key personnel from the acquired organization will leave after such acquisition. No assurance can be given as to our ability to successfully integrate any businesses, products, technologies or personnel that might be acquired in the future, and the failure of the Company to do so could have a material adverse effect on our business, financial condition and operating results. Management will use its discretion in the application of proceeds. We intend to use the funds raised in this offering for the payment of the promotion of our J.A. Junction Box and for working capital and general corporate purposes. Although we do not contemplate a change in the allocation of the proceeds earned from this offering, management reserves the right to determine a new purpose for which such proceeds may be applied if we determine that such a reallocation of proceeds is necessary. As a result of the foregoing, the success of Adriatic may be substantially dependent upon the discretion and judgment of the management of Adriatic with respect to the application and allocation of the net proceeds hereof. For a further discussion of the proceeds earned from this offering, see "Use of Proceeds" and "Business - Possible Joint Venture Opportunities." 7 The electronic junction box industry is highly competitive. There are a number of companies that compete directly and indirectly with the J.A. Junction Box. Our competitors consist of both domestic and international companies. Many of these companies have financial, technical, marketing, sales, manufacturing, distribution, and other resources that are significantly greater than those of Adriatic. In addition, some of these companies have name recognition, established positions in the market, and long-standing relationships with customers who purchase electrical junction boxes. Such competitors include Brooks Box, Inc., Westcoast Engineering, Ltd., Fogtite Inc., and Quazite Corp. These competitors may be developing junction boxes that we are unaware of that may be similar to our junction box. Accordingly, there is no assurance that we will be able to compete successfully or that our competitors or future competitors will not develop junction boxes that render our junction boxes less marketable. There is no public market for the common equity of Adriatic. As of the date of this prospectus, there is no public market for Adriatic's common stock. Although we plan to apply for listing our common stock on the OTC Bulletin Board, there can be no assurance that our attempts to do so will be successful. Furthermore, if we do become listed with respect to our common stock on the OTC Bulletin Board or elsewhere, there can be no assurance that a market will develop for the common stock or that a market in the common stock will be maintained. As a result of the foregoing, investors may be unable to liquidate their investment for any reason. For a discussion of Adriatic's common stock, see "Description of Securities." The proceeds derived from this offering may be limited. This offering is being conducted on a "best efforts only" basis. This means that we are under no obligation, for purposes of this offering, to sell a specified minimum amount of shares of our common stock. Furthermore, whatever net proceeds we have realized, as a result of this offering, will not be returned to any subscriber and such proceeds will be utilized by our management in a manner it deems necessary in order to meet its proposed objectives. Under these circumstances, if we only sell a small amount of shares of common stock, the proceeds earned from the sale may not be adequate to meet all of our proposed objectives. Furthermore, in the event that the investor cannot dispose of his shares of Adriatic common stock, and since we decided not to return the proceeds to any investor under any condition, the investor will be placed in the position of having to hold stock of potentially lesser value. Additionally, the investor would be placed in the position of necessarily having to rely on the decisions of our management regarding the allocation of the proceeds from this offering. Purchasers of common stock in this offering will incur substantial dilution of their shares. Purchasers of the common stock in this offering will incur immediate substantial dilution in the net tangible book value of approximately $0.04 per share. The present stockholders of Adriatic have acquired their respective equity interests at a cost substantially below the offering price. Accordingly, the public investors will bear a disproportionate risk of loss per share. See "Dilution." Future sales of our common stock may negatively affect our stock price. The future sale of shares by our existing stockholders may adversely affect our stock price. After completion of this offering, our existing stockholders will own an aggregate of 7,090,000 shares of common stock. All the shares of common stock will be available for sale in the public market, subject in some cases to compliance with the holding period and volume and manner of sale limitations contained in Rule 144 under the Securities Act of 1933, as amended (the "Securities Act"). See the information set forth under the caption "Shares Eligible for Future Sale" for a more detailed description of the restrictions on selling shares after this offering. 8 Adriatic stock could continue to be a "Penny Stock" which would make it more difficult to trade. The Securities and Exchange Commission (the "Commission") has adopted rules that regulate broker-dealer practices in connection with transactions in "penny stocks." Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver to the prospective purchaser a standardized risk disclosure document prepared by the Commission that provides information about penny stocks and the nature and level of risks in the penny stock market. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the prospective purchaser and receive the purchaser's written agreement to the transaction. Furthermore, subsequent to a transaction in a penny stock, the broker-dealer will be required to deliver monthly or quarterly statements containing specific information about the penny stock. It is anticipated that Adriatic's common stock will be traded on the OTC Bulletin Board at a price of less than $5.00. In this event, broker-dealers would be required to comply with the disclosure requirements mandated by the penny stock rules. These disclosure requirements will likely make it more difficult for investors in this offering to sell their common stock in the secondary market. The failure of Adriatic or third party vendors to be Year 2000 compliant could adversely impact our operations. We may realize exposure and risk if systems on which we are dependent to conduct our operations are not Year 2000 compliant. The Year 2000 issue arises as the result of computer programs having been written, and systems having been designed, using two digits rather than four to define the applicable year ("Year 2000"). Consequently, such software has the potential to recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculation causing disruptions of operations, including, among other things, a temporary inability to process transactions, send invoices, or engage in similar normal business activities. The Company does not expect to be affected by Year 2000 as it does not rely on date-sensitive software or affected hardware. The Company's current accounting and other systems were purchased "off-the-shelf". The Company intends to timely update its accounting and other systems which are determined to be affected by Year 2000 by purchasing Year 2000 compliant software and hardware available from retail vendors at reasonable cost. To date, the Company has not devised a contingency plan for a worst case scenario resulting from Year 2000. The Company does not intend to create a contingency plan at this time since Management has determined that such a contingency plan would not be cost beneficial to the Company where it only relies on software and systems for internal accounting purposes. Management has not yet contacted other companies on whose services the Company depends to determine whether such companies' systems are Year 2000 compliant. If the systems of the companies or other companies on whose services we depend, including the Company's customers, are not Year 2000 compliant, there could be a material adverse effect on the Company's financial condition or result of operations. 9 USE OF PROCEEDS The net proceeds to Adriatic from the sale of the common stock offered in this offering is estimated to be $460,000, after deducting estimated offering expenses of $40,000 and assuming that no commissions are to be paid for any of the shares to be sold. These proceeds are intended to be utilized substantially as follows: Approximate Application of Proceeds Amount - ----------------------- ----------- Equipment purchase $150,000 Facility Set Up $ 50,000 Raw Materials $100,000 Marketing $ 50,000 Working Capital $110,000 -------- Total $460,000 The amounts apportioned above are only estimates. As of the date of this prospectus, Management anticipates expending the above total of $460,000 within 12 months of its receipt by Adriatic. See "Risk Factors." The actual amount expended to finance any category of expenses may be increased or decreased by our Board of Directors, in its discretion, if required by the operating expense of Adriatic or if a reapportionment or redirection of funds, including acquisitions consistent with the business strategy of Adriatic, is deemed to be in the best interest of Adriatic. However, as of the date of this prospectus, we have no specific plans, arrangements, understandings or commitments with respect to any such acquisition. See "Risk Factors," "Business" and "Management's discussion and analysis of financial condition or Plan of Operation." In addition, pending the use of the proceeds from this offering as set forth above, we may invest all or a portion of such proceeds in short-term, interest-bearing securities, United States Government securities, money market investments and short-term, interest-bearing deposits in major banks. 10 DILUTION The net negative tangible book value (total assets less total liabilities and intangible assets) of Adriatic's common stock as of September 30, 1999 was approximately $(846), or a nominal amount per share of common stock. Net tangible book value per share represents the amount by which the liabilities exceed the amount of total tangible assets, divided by 2,090,000 shares of common stock currently outstanding. Net tangible book value dilution per share represents the difference between the amount per share paid by purchasers of the 5,000,000 shares of common stock in this offering and the pro forma net tangible book value per share of common stock immediately after this offering. After giving effect to the sale by Adriatic of 5,000,000 shares of common stock offered hereby at an assumed offering price of $0.10 per share, the pro forma net tangible book value of Adriatic as of September 30, 1999 would have been approximately $459,154 or $0.06 per share. This represents an immediate increase in pro forma net tangible book value of $0.06 per share to existing stockholders and an immediate dilution in pro forma net tangible book value of $0.04 per share to purchasers of common stock in this offering. Offering price per share of common stock offered hereby ............. $0.10 Net tangible book value per share before offering ................... $0.00 Increase per share attributable to new investors .................... $0.06 Pro forma net tangible book value per share after offering .......... $0.06 Net tangible book value dilution per share to new investors ......... $0.04 ===== The following table summarizes the relative investments of investors pursuant to this offering and the current stockholders of Adriatic.
Investors Pursuant Current to this Stockholders Offering Total ------------ -------- ----- Number of Shares of Common Stock Purchased 2,090,000 5,000,000 7,090,000 Percentage of Outstanding Common Stock After Offering 29.5% 70.5% 100% Gross Consideration Paid, Less Offering Costs $13,050 $460,000 $473,050 Percentage of Consideration Paid 2.7% 97.3% 100% Average Consideration Per Share of Common Stock $0.006 $0.09 $0.07
11 DIVIDEND POLICY Adriatic has never declared or paid any cash dividends. Adriatic currently does not intend to pay cash dividends in the foreseeable future on the shares of common stock. Management intends to reinvest any earnings in the development and expansion of Adriatic business. Any cash dividends in the future to common stockholders will be payable when, as and if declared by the Board of Directors of Adriatic, based upon the Board's assessment of: o the financial conditions of Adriatic; o earnings; o need for funds; o capital requirements; o prior claims of preferred stock to the extent issued and outstanding; and o other factors, including any applicable laws. Therefore, there can be no assurance that any dividends on the common stock will ever be paid. 12 CAPITALIZATION The following table sets forth the actual cash and capitalization of Adriatic as of September 30, 1999 and the adjusted capitalization, which gives effect to the consummation of this offering as if it occurred on September 30, 1999. This table should be read in conjunction with the financial statements and related notes included elsewhere in this prospectus.
September 30, 1999 --------------------------- (unaudited) Actual As Adjusted ------ ----------- Cash and cash equivalents ....................................... 114 460,114 Short-term debt ................................................. 0.00 0.00 Long-term debt .................................................. 0.00 0.00 Stockholders' deficit: Common Stock, $.001 par value; 25,000,000 shares authorized, 2,090,000 shares (actual) and 7,090,000 shares (as adjusted) .............................. 2,090 7,090 Additional paid-in Capital ...................................... 10,960 465,960 Accumulated deficit ............................................. (13,896) (13,896) Total stockholders' equity (deficit) ............................ (846) 459,154 Total capitalization .......................... (846) 459,154
13 SELECTED FINANCIAL DATA The following selected financial information concerning Adriatic has been derived from the financial statements included elsewhere in this prospectus and should be read in conjunction with such financial statements and the related notes. The financial information as of December 31, 1998 has been derived from the audited financial statements of Adriatic prepared by Spicer, Jeffries & Co. Balance Sheet Data:
Nine Months Ended Period from Inception September 30, 1999 (July 9, 1998) to (unaudited) December 31, 1998 (audited) Total assets ........................... $114 46 Current liabilities .................... 960 960 Long-term debt ......................... 0 0 Total stockholders' equity (deficit) ... (846) (914) Statement of Operations Data: Revenue ................................ 0 0 Expenses: Cost of Operations ................... 0 0 Selling, general and administrative .. 1,932 11,964 Other ................................ 0 0 Total Operating Expenses ...... 1,932 11,964 Income from Operations ................. 0 0 Interest Expenses ...................... 0 0 Interest and Other Income .............. 0 0 Loss before income taxes ............... (1,932) (11,964) Provision for income taxes ............. 0 0 Net loss ............................... (1,932) (11,964)
14 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION The information contained below includes statements of Adriatic management's beliefs, expectations, hopes, goals and plans that are forward-looking statements subject to certain risks and uncertainties that could cause actual results to differ materially form those anticipated in the forward-looking statements. For a description of such risks and uncertainties, see the information set forth under the caption "Forward-Looking Statements," which information is incorporated herein by reference. The following discussion and analysis should be read in conjunction with the information set forth under the caption "Selected Financial Data" and the financial statements and notes thereto included elsewhere in this prospectus. Plan of Operation Since our inception on July 9, 1998, we have not been engaged in any significant operations nor have we had any revenues, as we are in the development stage. Our only recent activities through November 30, 1999 include organization of the Company and the raising of equity capital. Until an infusion of capital from this offering, we will not be able to commence operations. We currently have insufficient capital to commence operations and are dependent on the proceeds of this offering to begin such operations. We have suffered recurring losses from operations and have a working capital deficiency of $846 which raise substantial concern regarding our ability to continue as a going concern. We believe that the proceeds of this offering will enable us to maintain our operations and working capital requirements approximately for the next 12 months, without taking into account any internally generated funds from operations. We will need to raise $500,000 to continue operations for the next 12 months based on our capital expenditure requirements. Capital will be raised pursuant to this filing. We have the authority to issue 25,000,000 shares of common stock, $0.001 par value. Prior to this filing, we have raised all funds through private placements. In July 1998, we issued 1,000,000 shares of common stock to one of our founders for $1,000 and 50,000 shares of common stock to another founder for $50. In September 1998, we issued 1,000,000 shares of common stock in connection with an additional private offering for $10,000. In February 1999, we issued 40,000 shares of common stock in connection with an additional private placement offering for $2,000. After this current offering, we will require additional funds to maintain and expand our operations. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of the shares being offered in this prospectus. There is still no assurance that, even with the funds from this offering, we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable. At the current time, we have not begun manufacturing any junction boxes, but expect to do so when the additional funds have been made available. We do not have any debt and our financial statements report a loss of $11,964 for the fiscal period ended December 31, 1998. For this period, we paid $4,950 in office expenses and $1,050 in management fees to the original founding shareholders. For the period ended September 30, 1999, we paid $288 in office expenses. After we raise additional funds through this current offering, we anticipate an increase in the number of employees to five. 15 Management believes that the J.A. Junction Box has a competitive advantage over the traditional steel and concrete junction boxes. The J.A. Junction Box is manufactured with high impact polyurethane. Polyurethane is an oil-bases product which is readily available in the market place. Its price and supply are stable now, and is expected, in management's opinion, to remain so in the foreseeable future, although there can be no assurance. The design of the Junction box is cylindrical so that the lid, which provides access to the wiring connections, cannot fall into the box while installation or repairs are being made. Polyurethane construction allows for a much lighter product in comparison with steel or concrete, allowing for easier production, installation and transportation of the junction boxes. Further, the polyurethane J.A. Junction Box is earthquake proof, impact resistant, and does not corrode or deteriorate. The equipment needed to manufacture J.A. Junction Boxes include RIM cell machinery, presses and moulds. The RIM cell machinery is used to compress certain materials into polyurethane. The polyurethane is then poured into moulds where it solidifies into the shape of the junction box. Upon receipt of the funds from this offering, we plan to use $150,000 to purchase the mentioned plant equipment. It is evident that the production process will use an above normal amount of electricity and will require facility upgrades and improvements to electrical sources. We anticipate spending a further $50,000 on such facility upgrades. There is a patent on the junction box and we do not anticipate any further need for Research and Development at this time. It is our goal to penetrate the junction box market in the first year of operation with an estimated goal to capture 10% of the Pacific Northwest market in underground junction boxes. Also, we plan to expand into the Eastern Canadian and United States market, which management believes, and according to International Municipal Signal Association publications, is a $350 million per annum market. Our functional currency is the United States Dollar and our consolidated financial statements are reported in United States Dollars unless otherwise stated. Year 2000 Compliance The Year 2000 issue arises as the result of computer programs having been written, and systems having been designed, using two digits rather than four to define the applicable year ("Year 2000"). Consequently, such software has the potential to recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculation causing disruptions of operations, including, among other things, a temporary inability to process transactions, send invoices, or engage in similar normal business activities. The Company does not expect to be affected by Year 2000 as it does not rely on date-sensitive software or affected hardware. The Company's current accounting and other systems were purchased "off-the-shelf". The Company intends to timely update its accounting and other systems which are determined to be affected by Year 2000 by purchasing Year 2000 compliant software and hardware available from retail vendors at reasonable cost. To date, the Company has not devised a contingency plan for a worst case scenario resulting from Year 2000. The Company does not intend to create a contingency plan at this time since Management has determined that such a contingency plan would not be cost beneficial to the Company where it only relies on software and systems for internal accounting purposes. Management has not yet contacted other companies on whose services the Company depends to determine whether such companies' systems are Year 2000 compliant. If the systems of the companies or other companies on whose services we depend, including the Company's customers, are not Year 2000 compliant, there could be a material adverse effect on the Company's financial condition or result of operations. 16 BUSINESS General Adriatic was incorporated in the State of Nevada on July 9, 1998. Our business is to become a provider of quality electrical products to users in both the public and private sectors. Pursuant to the Licensing Agreement dated August 15, 1998, we acquired the rights from J.A. Canada to manufacture and distribute J.A. Canada's patented J.A. Junction Box. This patent expires in 2021. Underground electrical junction boxes are used for housing underground wiring connections for electrical companies at street intersections, in sidewalks, on highways and anywhere else electrical connections are required. The J.A. Junction Box has the United States patent number 5,142,102, filed on August 25, 1992. Under the terms of the Licensing Agreement, we agreed to pay to J.A. Canada $5.00 per J.A. Junction Box sold with a minimum fee of $2,000 in 1998 and a minimum fee of $10,000 per annum for the life of the license. The fee of $2,000 for 1998 has been paid. The Licensing Agreement, assuming Adriatic maintains it in good standing, expires when the patent expires. Sales for the J.A. Junction Box by J.A. Canada were approximately $CD 500,000 (approximately $US 350,000) in 1993 and $CD 500,000 (approximately $US 350,000) in 1994. We have not yet undertaken the sale of any J.A. Junction Boxes or any other product. Historically, junction boxes have been constructed out of steel and concrete weighing between 100 and 200 pounds. Manufacturers of concrete junction boxes are typically located in concrete manufacturing regions that are often located long distances from the area of final installation. Thus, transportation costs of these concrete boxes are often prohibitively expensive, causing most concrete companies to produce only enough concrete junction boxes to service their local markets. Unlike conventional junction boxes, the J.A. Junction Box is manufactured with a lightweight and high-impact polyurethane. As a result, the J.A. Junction Box is light and durable. Because the J.A. Junction Box only weighs approximately 15 pounds, it can be easily installed by one person. Management believes that our products will be able to successfully compete with standard concrete junction boxes which are heavier and cannot be installed without the use of heavy machinery. In addition, unlike conventional junction boxes, the design of the Junction box is cylindrical so that the lid, which provides access to the wiring connections, cannot fall into the box while installation or repairs are being made. While different in design and material, the J.A. Junction Box retains all the advantages of concrete junction boxes. It is resistant to high impacts, including those generated by earthquakes. Similarly, the J.A. Junction Box does not corrode or deteriorate when put into contact with gasoline, diesel fuel and other corrosive elements. We have not incurred any expenses for research and development of our product in the past two years. Plans for Expansion It is our goal to capture 10% of the Pacific Northwest market in underground junction boxes over the next two years, although no assurances can be made. In addition, we plan to expand into the Eastern Canadian and United States market, which is estimated by Management, based on reports in International Municipal Signal Association publications, to be a $350 million per annum market. 17 There would be some risk of currency fluctuation, when selling the product in Canada for Canadian Dollars and paying United States suppliers in United States Dollars. Our target customers in Canada would be municipalities, provincial highways, Transport Canada (airports), armed forces, and real estate developers. In the United States, our target customers would be the Federal Transport (military), states, counties and cities. With the proceeds of this offering, we plan to lease a manufacturing facility in Bellingham, Washington. Once a property is secured, management estimates that it will cost approximately $50,000 to make the plant operational. The cost would be funded from the proposed financing contemplated by this filing. Our Management estimates that if the plant achieves certain production and distribution goals, it will be able to supply the Pacific Northwest and western Canada with J.A. Junction Boxes. We anticipate that similar plants will be established in the eastern United States and Canada after the existing markets in the Pacific Northwest and Western Canada are penetrated. Possible Joint Venture Opportunities We are aware of the existence of certain companies who are in the business of developing and conducting joint venture enterprises with other corporate entities. Although we will conduct our business as planned and scheduled, we may explore the prospect of engaging in a joint venture if such a venture would increase stockholder value. See "Risk Factors." Marketing and Distribution We plan to market our product using manufacturers' representatives. Typically, these representatives work strictly on a commission basis whereby we would negotiate a percentage payable as commission to the representatives for all sales they generate. It is anticipated that for every customer the representative brings to Adriatic, the representative would be entitled to a 10% commission on all future sales to the customer. Additionally, we plan to attend trade shows in target market areas to market our products. Either our management or the manufacturers' representatives in that area would attend the shows. We plan to print brochures on our product and mail them to major electrical companies and wholesale distributors. The product will be distributed directly by Adriatic. We plan to have inventory on hand. This way, when orders are received from the manufacturers' representatives or directly from customers, the orders will be packaged for shipping and sent via trucking companies. We will sell our product Free On Board ("FOB") with the customer being charged for the freight costs. Competition There are a number of companies that compete directly and indirectly with our product, including both domestic and international companies. Many of these companies have financial, technical, marketing, sales, manufacturing, distribution, and other resources, which are significantly greater than those of Adriatic. In addition, some of these companies have name recognition, established positions in the market, and long-standing relationships with customers who purchase electrical junction boxes. Some of our competitors include Brooks Box, Inc., Westcoast Engineering, Ltd., Fogtite Inc. and Quazite Corp. Such competitors may be developing junction boxes of which we are unaware, which may be similar to our junction boxes. Accordingly, there is no assurance that we will be able to compete successfully or that our competitors or future competitors will not develop junction boxes that render our junction boxes less marketable. 18 Intellectual Property Rights We do not own the intellectual property rights to the J.A. Junction Box. However, under the Licensing Agreement, we acquired the right from J.A. Canada to manufacture and distribute its patented underground electrical J.A. Junction Box. Under the terms of the Licensing Agreement, we are to pay J.A. Canada $5.00 for each J.A. Junction Box sold by us with a minimum fee of $2,000 in 1998 and a minimum fee of $10,000 per annum for the life of the license. Sales for the products by J.A. Canada were approximately $CD 500,000 (approximately $US 350,000) in 1993 and $CD 500,000 (approximately $US 350,000) in 1994. Employees We currently have one employee. There is no specified time period for employment. However, with the anticipated manufacturing of the J.A. Junction Box, we plan to hire five individuals to fill positions in operations; one individual to perform clerical functions and two to serve in executive, financial and/or administrative positions. Our sole employee is not represented by a labor union. We will pay our current employee and any future employee/s a salary on a bi-monthly basis. Furthermore, Management plans to implement an employee incentive program in fiscal year 2000. See "Management - Board of Directors and Executive Officers." Seasonality Our management does not believe that the change in season will have a material affect on our financial condition or our operations with respect to the manufacture and sale of the J.A. Junction Box. Legal Matters We are not currently involved in any material litigation or proceeding and we are not aware of any material litigation or proceeding threatened against us. There have been no suits involving Adriatic, its officer or director. However, J.A. Canada is currently the defendant in a lawsuit involving the J.A. Junction Box, Canadian patent #2,030,251. The Plaintiff, Westcoast Engineering Ltd. and Nonad Plastic Ltd., both British Columbia companies, allege, among other things, that the Canadian patent issued on the J.A. Junction Box is invalid. J.A. Canada believes that the suit lacks merit. Although J.A. Canada does not have the necessary funds to adequately defend itself, it has entered a statement of defense. A judgment in favor of the plaintiffs would render the patent on the J.A. Junction Box invalid. As a result, we would not be able to prevent other competitors from utilizing this technology. If the patent is declared invalid, we have the option to cancel the Licensing Agreement with J.A. Canada. However, in this event, even if we do cancel the Licensing Agreement, we would still be entitled to manufacture the product without paying any fees to J.A. Canada since J.A Canada would no longer hold an absolute interest in the J.A. Junction Box. We believe that the lawsuit will be resolved within the next 24 months, although no assurance can be given. See "Risk Factors." Facilities Adriatic currently operates out of office space located at 114 W. Magnolia Street, Suite 446, Bellingham Washington 98225. The President of Adriatic provides this space free of charge. The office space aggregates approximately 1,000 square feet. We have not leased any manufacturing space at this time. Upon completion of the proposed financing, we will move our operations to a manufacturing facility once such a facility has been located and leased. The President of Adriatic carries $2,000,000 in liability insurance on the current office space. Management has been actively searching for a site to build a manufacturing facility in Bellingham, Washington, the present location of Adriatic's corporate headquarters. It is expected that the facility will aggregate approximately 5,000 square feet of warehouse and manufacturing space and 1,200 square feet of office space. Approximately 10,000 square feet of open yard space adjacent to the facility should be utilized for outside storage of the junction boxes. At this time, we have not determined the location or specifications of the manufacturing facility. To date, we have no investment or interest in any real estate, nor do any of our principal officers. 19 MANAGEMENT Directors and Executive Officers Robert Knight, age 42, is the Director, President, Secretary and Treasurer of Adriatic. Robert Knight has served as the Company's President, Secretary, Treasurer and Director since July 9, 1998. Since September 1, 1998, Mr. Knight served as President and Director of Coretech Industries, Inc., a development stage company, formed to consolidate the yacht brokerage industry; Centaur BioResearch Inc., which specializes in licensing its genetic research services and databases to pharmaceutical and biotechnology companies by the Internet; and Torik Corporation, a technology consulting firm specializing in Y2K impact analysis. Since November 1997, Mr. Knight served as President and Director of Peregrine Mineral Resources Group, Inc., a mineral exploration company. From June 24, 1997 to February 1, 1999, Mr. Knight served as President and Director of ANM Holdings Corporation, a development stage company formed to provide quality clinical research facilities. From March 24, 1997 to July 1, 1998, Mr. Knight served as President and Director of AFD Capital Group, Inc., a development stage company formed to develop quality electrical products. From November 12, 1996 to February 1, 1999, Mr. Knight served as President and director of Biologistics, Inc., a development stage company formed to engage in the business of clinical consulting, contract packaging and labelling services for clinical studies. From November 1995 to September 1996, Mr. Knight served as President and Director of BioQuest, Inc., a development stage company formed to develop therapeutics and vaccines for the effective treatment of the Human Immunodeficiency Virus (HIV), formerly Victoria Enterprises, Inc. (after the merger between Victoria Enterprises, Inc. and BioQuest, Inc. became effective, Mr. Knight resigned as President, Secretary and Treasurer but remained a director until May 1998). From December 1992 to June 1995, Mr. Knight served as President and Director of J.A. Industries (Canada) Inc., a private British Columbia corporation formed to become a provider of quality electrical products to the commercial and industrial electrical industry. From June 1994 to August 1996, Mr. Knight served as a Director of Everest Security Systems Corporation, a development stage company formed to become a home alarm service and installation company. From 1991 to September 1996, Mr. Knight served as an independent financial consultant involved in the administration of public companies. Mr. Knight has 15 years of experience in corporate management and finance. Board of Directors and Executive Officers To date, Mr. Knight is the only executive officer and director of Adriatic. Directors of Adriatic serve until the annual meetings of stockholders and until their respective successors are duly elected and qualified. The executive officers of the Company are elected annually by the Board of Directors and serve terms of one year or until their death, resignation or removal by the Board of Directors. See "Business - Employees." Board Committees In August 1998, the Board of Directors established an Audit Committee. To date, Mr. Knight serves as the only member of the Audit Committee. The function of the Audit Committee is to select and engage, on behalf of the Company, independent public accountants to audit Adriatic's annual financial statements and to review and approve the planned scope of the annual audit. 20 Board of Advisors To date, a formal Board of Advisors has not been selected; however, certain persons have been solicited to serve on such board. Advisory board members will provide the Company with general consulting services on matters that may or may not be outside the scope of their specific industry expertise. Members will serve at will and may resign at any time. At the time of selection of specific individuals to serve as members on such board, the members will not be required to investigate Adriatic or to verify its business plan, nor will they be requested to do so. A member's agreement to serve on the Board of Advisors will not constitute a recommendation or endorsement of them by Adriatic. Adriatic plans to issue stock options to members of the Board of Advisors as compensation. Compensation of Directors To date, Mr. Knight has not collected any compensation for his services as Director of Adriatic. Executive Compensation The following summary sets forth the cash and other compensation paid or accrued by Adriatic from July 9, 1998, the date of the Company's inception, until November 30, 1999 with respect to services performed by Robert Knight for services as Chief Executive Officer and President. To date, Mr. Knight has not received compensation in salary and bonus in excess of $100,000.
Long-term Compensation ---------------------- Annual Compensation Awards Payouts ------------------- ------ ------- Name and Other Annual Restricted Securities LTIP All Other Principal Salary Bonus Compensation Stock Underlying Payouts Compensation Position Year ($) ($) ($) Awards ($) Options (#) ($) ($) - -------- ---- ------ ----- ------------ ---------- ----------- ------- ------------ Robert Knight 1998 1,050 0 0 0 0 0 0 President/CEO 1999 0 0 0 0 0 0 0
Employment and Consulting Agreements To date, Adriatic has not entered into any employment or consulting agreements with its employee or with any other entity. Stock Option Plan Although we have not implemented a Stock Option Plan, we intend to implement such a plan in 2000. As of present date, we have decided to make the plan eligible to our officers. Limitation of Liability and Indemnification Adriatic's Certificate of Incorporation and By-laws contain provisions which reduce the potential personal liability of directors for certain monetary damages and provide for indemnity of directors and other persons. We are unaware of any pending or threatened litigation against Adriatic or its directors that would result in any liability for which such director would seek indemnification or similar protection. 21 Such indemnification provisions are intended to increase the protection provided to directors and, thus, increase our ability to attract and retain qualified persons to serve as directors. With directors liability insurance only available at considerable cost and with low dollar limits of coverage and broad policy exclusions, we do not currently maintain a liability insurance policy for the benefit of our directors, although we may attempt to acquire such insurance in the future. We believe that the substantial increase in the number of lawsuits being threatened or filed against corporations and their directors and the general unavailability of directors liability insurance to provide protection against the increased risk of personal liability resulting from such lawsuits have combined to result in a growing reluctance on the part of capable persons to serve as members of boards of directors of companies, particularly of companies which intend to become public companies. We also believe that the increased risk of personal liability without adequate insurance or other indemnity protection for our directors could result in overcautious and less effective direction and management of Adriatic. Although no directors have resigned or have threatened to resign as a result of our failure to provide insurance or other indemnity protection from liability, it is uncertain whether Adriatic's directors would continue to serve in such capacities if improved protection from liability were not provided. The provisions affecting personal liability do not abrogate a director's fiduciary duty to Adriatic and its stockholders, but eliminate personal liability for monetary damages for breach of that duty. The provisions do not eliminate or limit the liability of a director for failing to act in good faith, for engaging in intentional misconduct or knowingly violating a law, for authorizing the illegal payment of a dividend or repurchase of stock, for obtaining an improper personal benefit, for breaching a director's duty of loyalty to Adriatic or its stockholders, or for violations of the federal securities laws. The provisions also limit or indemnify against liability resulting from grossly negligent decisions including grossly negligent business decisions relating to attempts to change control of Adriatic. The provisions regarding indemnification provide that we will indemnify our directors against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any action, suit or proceeding arising out of the director's status as a director of Adriatic, including actions brought by or on behalf of Adriatic (stockholder derivative actions). The provisions do not require a showing of good faith. Moreover, they do not provide indemnification for liability arising out of willful misconduct, fraud, or dishonesty, for "short-swing" profits violations under the federal securities laws, or for the receipt of illegal remuneration. The provisions also do not provide indemnification for any liability to the extent such liability is covered by insurance. One purpose of the provisions is to supplement the coverage provided by such insurance. However, we do not currently provide such insurance to our directors, and there is no guarantee that we will provide such insurance to our directors in the near future, although Adriatic may attempt to obtain such insurance. The above mentioned limitations of liability do not affect the availability of equitable remedies such as injunctive relief or rescission. To date, we have not entered into any indemnification agreements with our officer and director. Indemnification agreements may require a company, among other things, to indemnify its officers and directors against certain liabilities (other than liabilities arising from willful misconduct of a culpable nature) that may arise by reason of their status or service as directors or officers. Such agreements may require a company to advance the expenses of its directors or officers incurred as a result of any proceeding against them as to which they could be indemnified. In addition, such agreements may require a company to obtain directors' and officers' insurance if available on reasonable terms. We reserve the right to enter into indemnification agreements in the future with our directors and officers. See "Risk Factors." 22 CERTAIN TRANSACTIONS During the past two years, we have not entered into a transaction with a value in excess of $60,000 with a director, officer or beneficial owner of 5% or more of the Company's capital stock. PRINCIPAL STOCKHOLDERS The following table sets forth the beneficial ownership of the shares of voting stock of Adriatic, as of November 30, 1999 by: (i) each person who is known by Adriatic to beneficially own more than 5% of common stock; (ii) Adriatic's Chief Executive Officer, (iii) each director, and (iv) all directors and executive officers of Adriatic as a group.
Shares Beneficially Shares to be Beneficially Name and Owned Prior to Offering Owned After Offering Address of -------------------------- --------------------- Beneficial Owner(s) Number Percent(1) Number Percent(2) - ------------------- ------ ------- ------ ------- 5% Stockholder: G.M. Capital Partners, Ltd.(3) 1,000,000 47.8% 1,000,000 14.1% Finneran Investments, Ltd.(4) 175,000 8.4% 175,000 2.5% Noble Holdings Corporation(5) 175,000 8.4% 175,000 2.5% Tiger-Eye Investments (Cayman) Ltd.(6) 175,000 8.4% 175,000 2.5% Huda Limited(7) 175,000 8.4% 175,000 2.5% Tamarin Investment Group, Inc.(8) 175,000 8.4% 175,000 2.5% Kallur Enterprises Limited(9) 125,000 6.0% 125,000 1.8% Executive Officers and Directors: Robert Knight(10) 50,000 2.4% 50,000 <1% Director/President/Secretary All executive officers and directors as a group 50,000 2.4% 50,000 <1%
- ---------- (1) These percentage calculations are based on 2,090,000 shares, which are outstanding prior to this offering (including shares that have been paid for in full, but not issued) as of November 30, 1999. (2) These percentage calculations are based on 7,090,000 shares outstanding after this offering as of November 30, 1999. (3) The address for G.M. Capital Partners, Ltd. is Suite 1A, Hirzel Street, St. Peter Port, Guernsey, GY1 2NN Channel Islands. (4) The address for Finneran Investments Ltd. is Columbus Centre Building, First Floor, Road Town, Tortola, BVI. (5) The address for Noble Holdings Corporation is P.O. Box 268, Bank of Nova Scotia Building, George Town, Grand Cayman, Cayman Islands BWI. (6) The address for Tiger-Eye Investments (Cayman) Ltd. is P.O. Box 884, Bank of Nova Scotia Building, George Town, Grand Cayman, Cayman Islands, BWI. (7) The address for Huda Limited is Herald House, 22 Hill Street, St. Helier, Jersey JE4 9XB Channel Islands. (8) The address for Tamarin Investments Group, Inc. is 22 Hill Street, St. Helier, Jersey, JE4 9XB Channel Islands. (9) The address for Kallur Enterprises Limited is Austrasse 39, FL-9490 Vaduz, Principality of Liechtenstein. (10) The shares issued to Mr. Knight are registered in the name of Knight Financial Ltd., a private Delaware corporation controlled by Mr. Knight. The address for Mr. Robert Knight is 114 W. Magnolia Street, Suite 446, Bellingham, WA 98225. 23 DESCRIPTION OF SECURITIES. Common Stock General. Adriatic's authorized capital stock consists of 25,000,000 shares of common stock, $.001 par value per share. As of November 30, 1999, there were 2,090,000 shares issued and outstanding held by 46 holders of record. All shares of common stock currently outstanding are validly issued, fully paid and non-assessable. Furthermore, all shares which are the subject of this prospectus, when issued and paid for pursuant to this offering, will be validly issued, fully paid and non-assessable. At the completion of this offering, the present stockholders of Adriatic as of November 30, 1999 will own beneficially 29.4% of shares outstanding if all of the shares offered in this respect are sold. Voting Rights. Each share of common stock entitles the holder thereof to one non-cumulative vote, either in person or by proxy, at meetings of stockholders. Since holders of common stock do not have cumulative voting rights, holders of more than fifty percent (50%) of the issued and outstanding shares of common stock can elect all of the directors of Adriatic. Dividend Policy. All shares of common stock are entitled to participate ratably in dividends when and as declared by Adriatic's Board of Directors out of the funds legally available therefor. Any such dividends may be paid in cash, property or additional shares of common stock. Adriatic has not paid any dividends since its inception and presently anticipates that all earnings, if any, will be retained for development of Adriatic's business and that no dividends on the shares of common stock will be declared in the foreseeable future. Payment of future dividends will be subject to the discretion of the Company's Board of Directors and will depend upon, among other things, future earnings, the operating and financial condition of the Company, its capital requirements, general business conditions and other pertinent facts. Therefore, there can be no assurance that any dividends on the common stock will be paid in the future. See "Dividend Policy." Miscellaneous Rights and Provisions. Stockholders of common stock have no preemptive or other subscription rights, conversion rights, redemption or sinking fund provisions. In the event of liquidation or dissolution of Adriatic, whether voluntary or involuntary, each share of common stock is entitled to share ratably in any assets available for distribution to holders of the equity of the Company after satisfaction of all liabilities, subject to the rights of holders of preferred stock, if any such preferred stockholders should exist at the time of such liquidation or dissolution. Private Placement. In September 1998, Adriatic offered 1,000,000 shares of common stock, $0.001 par value, at $0.05 per share. This offering expired without the sale of any shares. In February of 1999, the Company sold a total of 40,000 shares of common stock, $0.001 par value, at $0.05 per share pursuant to Rule 504 of Regulation D of the Securities Act, to 40 investors for a total consideration of $2,000 net of commission and offering costs. In September 1998, Adriatic sold 1,000,000 shares of common stock, $0.001 par value, at $0.01 per share pursuant to Rule 504 of Regulation D of the Securities Act, to 6 investors for a total consideration of $10,000 net of commission and offering costs. In July 1998, Adriatic sold 1,000,000 restricted shares of common stock, $0.001 par value, at $0.001 per share to one investor pursuant to Rule 144 of the Securities Act, for a total consideration of $1,000 net of commission and offering costs. 24 In July 1998, Adriatic sold 50,000 restricted shares of common stock, $0.001 par value, at $0.001 per share to one investor pursuant to Rule 144 of the Securities Act, for a total consideration of $50 net of commission and offering costs. Transfer Agent and Registrar The transfer agent and registrar for Adriatic's common stock is Liberty Transfer Co., 191 New York Avenue, Huntington, NY 11743-2711. Plan of Distribution This offering is a "best efforts" offering, and will not be underwritten nor will any underwriter be engaged for the marketing, distribution or sale of any shares registered in this prospectus. To the extent required at the time a particular offer of the shares is made, a supplement to this prospectus will be distributed which will set forth the number of shares being offered and the terms of the offering, including the name or names of any underwriters, or dealers, the purchase price paid by any underwriter for the shares purchased, and any discounts, commissions or concessions allotted or re-allotted to dealers including the proposed selling price to the public. To comply with the securities laws of certain jurisdictions, as applicable, the common stock may be offered and sold only through registered or licensed brokers or dealers. In addition, the common stock may not be offered or sold in certain jurisdictions unless they are registered or otherwise comply with the applicable securities laws of such jurisdictions by exemption, qualification or otherwise. 25 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS To date, there is no public market for Adriatic's common stock and no assurance can be given that a market for the shares will develop, or if a market does develop, that it will be sustained following the completion of this offering. Therefore, investors of the Company may be unable to liquidate their investment for any reason. See "Risk Factors." If such a market did develop, sales of substantial amounts of the common stock in the public market, or the perception that such sales may occur, could adversely affect the market price of the common stock from time to time in the public market and could impair our ability to raise additional capital through the sale of equity securities in the future. SHARES ELIGIBLE FOR FUTURE SALE To date, Adriatic has 2,090,000 shares of common stock outstanding. Upon completion of this offering, Adriatic will have an additional 5,000,000 shares of common stock outstanding for a total of 7,090,000 shares of common stock outstanding. The 5,000,000 shares of common stock offered hereunder will be freely tradable without restriction or the need for further registration under the Securities Act, unless such shares are held by "affiliates" of Adriatic, as that term is defined in Rule 144 of the Securities Act. Of the 2,090,000 shares of common stock currently outstanding, 1,040,000 shares are freely tradable without restriction or the need for further registration under the Securities Act. The remaining 1,050,000 shares are held by affiliates of Adriatic and are "restricted securities," as that term is defined under Rule 144, promulgated under the Securities Act and will continue to be restricted after this offering. The restricted securities will become freely tradable if they are subsequently registered under the Securities Act or to the extent permitted by Rule 144 or some other exemption from registration under the Securities Act. However, other than the shares being registered hereunder, we have not granted any registration rights with regard to any additional shares of common stock. Furthermore, none of the restricted shares are currently eligible for resale under Rule 144 without regard to volume limitations. Nonetheless, all 1,050,000 restricted shares will become eligible for sale pursuant to Rule 144 (subject to volume limitations) upon the expiration of the two-year holding period beginning July 10, 1998, for such restricted shares held by Adriatic's affiliates. No prediction can be made as to the effect, if any, that sales of shares in the public market of Adriatic's common stock, or even the availability of such shares for sale, may have on the market prices of the common stock prevailing at any point in time in the future. Sales of shares of common stock by existing stockholders in the public market, or the availability of such shares for sale, could adversely affect the market price of the common stock. Such an adverse effect on the common stock could impair the Company's ability to raise capital through the sale of its equity securities. See "Risk Factors." LEGAL MATTERS The validity of the issuance of the common stock offered hereby will be passed upon for Adriatic by the law firm of Beckman, Millman & Sanders, LLP, 116 John Street, Suite 1313, New York, New York 10038. 26 EXPERTS Spicer, Jeffries & Co., independent certified public accountants, have audited our financial statements from July 9, 1998 (inception) to December 31, 1998, as set forth in their report, included in this prospectus and registration statement. Our financial statements are included in this prospectus and registration statement in reliance on their report, given on their authority as experts in accounting and auditing. AVAILABLE INFORMATION Prior to filing this prospectus, we have not been required to deliver annual reports. However, once we become a reporting company, we shall deliver annual reports to securities holders as required by the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Also, we shall deliver annual reports to securities holders as required by the rules or regulations of any exchange upon which our shares may be traded. If we are not required to deliver annual reports, it is not likely that we will go to the expense of producing and delivering such reports. If we are required to deliver annual reports, such reports will contain audited financial statements as required. Prior to the filing of this prospectus, we have not filed reports with the Commission. Once we become a reporting company, management anticipates that Forms 3, 4, 5, 10-KSB, 10-QSB, 8-K and Schedules 13D along with appropriate proxy materials will have to be filed as they come due. If we issue additional shares, then we may file additional registration statements for those shares. The public may read and copy any materials Adriatic files with the Commission at the Commission's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission. The Internet address of the Commission's Web site is http://www.sec.gov. 27 INDEX TO FINANCIAL STATEMENTS Audited Financial Statements for period from Inception (July 9, 1998) through December 31, 1998 Independent Auditor's Report........................................................F-1 Balance Sheet....................................................................F-2 Statement of Operations..........................................................F-3 Statement of Cash Flows..........................................................F-4 Statement of Changes in Shareholders' Deficit....................................F-5 Notes to Financial Statements....................................................F-6 to F-7 Unaudited Financial Statements for the nine month period ended September 30, 1999 Internal Preparer's Letter.......................................................F-8 Balance Sheet ...................................................................F-9 Statement of Operations for the nine month period ended September 30, 1999 and the period from inception (July 9, 1998) through September 30, 1999......F-10 Statements of Cash Flows for the nine month period ended September 30, 1999 and the period from inception (July 9, 1998) through September 30, 1999......F-11 Statements of Shareholder's Equity for the nine month period ended September 30, 1999 and the period from inception (July 9, 1998) through September 30, 1999...................................................F-12 Notes to Financial Statements....................................................F-13 to F-14
28 SPICER, JEFFRIES & CO. CERTIFIED PUBLIC ACCOUNTANTS 4155 E. JEWELL AVENUE SUITE 307 DENVER, COLORADO 80222 TELEPHONE: (303) 753-1959 FAX: (303) 753-0338 INDEPENDENT AUDITORS' REPORT To the Shareholders Adriatic Holdings Limited (A Company in the Development Stage) We have audited the accompanying balance sheet of Adriatic Holdings Limited (a Company in the Development Stage) as of December 31, 1998, and the related statements of operations, changes in shareholders' deficit, and cash flows for the period from inception (July 9, 1998) through December 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 upon 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 whehter 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 Adriatic Holdings Limited (a Company in the Development Stage) as of December 31, 1998, and the results of its operations and its cash flows for the period from inception (July 9, 1998) through December 31, 1998, in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going convern. As discussed in Note 5 to the financial statements, the Company has suffered losses from operations and has a working capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are described in Note 5. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Spicer, Jeffries & Co. ------------------------------- Spicer, Jeffries & Co. Denver, Colorado May 5, 1999 F-1 ADRIATIC HOLDINGS LIMITED (A Company in the Development Stage) BALANCE SHEET DECEMBER 31, 1998 ASSETS CURRENT ASSET -Cash $ 46 ======= LIABILITIES & SHAREHOLDERS' DEFICIT CURRENT LIABILITIES $ 960 ------- COMMITMENTS AND CONTINGENCIES (Notes 4 and 5) SHAREHOLDERS' DEFICIT (Note 2): Common stock, $.001 par value, 25,000,000 shares authorized; 2,050,000 shares issued and outstanding 2,050 Additional paid in capital 9,000 Deficit accumulated during the development stage (11,964) ------- Total Shareholders' Deficit (914) ------- $ 46 ======= The accompanying notes are an integral part of this statement. F-2 ADRIATIC HOLDINGS LIMITED (A Company in the Development Stage) STATEMENT OF OPERATIONS PERIOD FROM INCEPTION (JULY 9, 1998) THROUGH DECEMBER 31, 1998 REVENUE $ -- EXPENSES : (Note 3) General and Administrative 11,964 --------- NET LOSS $ (11,964) ========= BASIC AND FULLY DILUTED LOSS PER COMMON SHARE $ (.01) ========= WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 1,623,429 ========= The accompanying notes are an integral part of this statement. F-3 ADRIATIC HOLDINGS LIMITED (A Company in the Development Stage) STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT PERIOD FROM INCEPTION (JULY 9, 1998) THROUGH DECEMBER 31, 1998
Deficit Accumulated Additional during the Total Common Stock Paid - in Development Shareholders' Shares Amount Capital Stage Deficit INCEPTION, July 9, 1998 -- $ -- $ -- $ -- $ -- Issuance of common stock, July 22, 1998 50,000 50 -- -- 50 Issuance of common stock, July 22, 1998 1,000,000 1,000 -- -- 1,000 Issuance of common stock, September 8, 1998 1,000,000 1,000 9,000 -- 10,000 Net loss -- -- -- (11,964) (11,964) --------- --------- --------- --------- --------- BALANCES, December 31, 1998 2,050,000 $ 2,050 $ 9,000 $ (11,964) $ (914) ========= ========= ========= ========= =========
The accompanying notes are an integral part of this statement. F-4 ADRIATIC HOLDINGS LIMITED (A Company in the Development Stage) STATEMENT OF CASH FLOWS PERIOD FROM INCEPTION (JULY 9, 1998) THROUGH DECEMBER 31, 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(11,964) -------- Adjustment to reconcile net loss to net cash used in operating activities: Increase in current liabilities 960 -------- Net cash used in operating activities (11,004) -------- CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common stock 11,050 -------- NET INCREASE IN CASH 46 CASH, at beginning of period -- -------- CASH, at end of period $ 46 ======== The accompanying notes are an integral part of this statement. F-5 ADRIATIC HOLDINGS LIMITED (A Company in the Development Stage) NOTES TO FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and business Adriatic Holdings Limited (the "Company") was incorporated in the state of Nevada on July 9, 1998 and is in the development stage. Activities through December 31, 1998 include organization of the Company and the raising of equity capital. The Company plans to become a provider of quality electrical products to the commercial and industrial electrical industry. Cash flows For purposes of reporting cash flows, cash includes those investments which are short-term in nature (three months or less to original maturity), are readily convertible to cash, and represent insignificant risk of changes in value. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Fair value of financial instruments The carrying amount of cash and accounts payable approximates fair value. Net loss per share of common stock Net loss per share of common stock is based on the weighted average number of shares of common stock outstanding during the period. NOTE 2 - SHAREHOLDERS' EQUITY The Company has the authority to issue 25,000,000 shares of common stock $0.001 par value. The Company issued 1,000,000 shares of common stock to one of its founders for $1,000 and 50,000 shares of common stock to another of its founders for services rendered valued at $50 in July, 1998. The Company issued 1,000,000 shares of common stock in connection with a private offering for $10,000 in September, 1998. F-6 ADRIATIC HOLDINGS LIMITED (A Company in the Development Stage) NOTES TO FINANCIAL STATEMENTS NOTE 3 - RELATED PARTY TRANSACTIONS For the period ended December 31, 1998, the Company paid $4,950 in office expenses and $1,050 in management fees to its original founding shareholders. NOTE 4 - LICENSING AGREEMENT On August 15, 1998, the Company acquired the right to manufacture and distribute an underground electrical junction box. The box patent is owned by J.A. Industries (Canada) Inc. ("J.A. Canada"). Pursuant to the license agreement the Company must pay $5.00 per junction box sold or a minimum fee of $10,000 per year for the life of the license. The Company has not yet begun the manufacturing or selling of the junction boxes. NOTE 5 - CONTINGENCIES As discussed in Note 4, the Company has the right to manufacture and distribute an underground electrical junction box patented by J.A. Canada. J.A. Canada is currently the defendant in a lawsuit with regards to its product. The statement of claims, among other things, alleges that the Canadian patent issued on the electrical box is invalid. If the plaintiffs are successful in this action, the patent would be declared invalid and would not provide the Company with protection from competition. If the patent is declared invalid, the Company has the option to cancel the licensing agreement without affecting the manufacturing of the product. The Company has suffered recurring losses from operations and has a working capital deficiency of $914 that raise substantial doubt about its ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the Company attaining and maintaining profitable operations and raising additional capital. Management's plans in this regard is to raise additional capital through an equity offering. The financial statements do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should the Company discontinue operations. F-7 Adriatic Holdings Limited INTERNAL PREPARER'S LETTER The Board of Directors Adriatic Holdings Limited The attached balance sheet of Adriatic Holdings Limited (the "Company") as of September 30, 1999 and 1998 and the related statements of operations, shareholders' equity and cash flows for the periods then ended were prepared internally, in accordance with generally accepted accounting principles, from the Company's accounting records by Company personnel and have not been audited. The most recent audit was conducted as of December 31, 1998. I am aware of no material errors of misrepresentations in the statements as to the financial position of Adriatic Holdings Limited. December 21, 1999 /s/ Robert W. Knight -------------------------------------- Robert W. Knight Chief Financial Officer F-8 ADRIATIC HOLDINGS LIMITED (A Development Stage Company) Balance Sheet (unaudited) As at September 30, 1999 Notes September 30, 1999 ---------- --------------- ASSETS Current Assets - Cash $ 114 -------- TOTAL ASSETS $ 114 -------- LIABILITIES Current Liabilities $ 960 TOTAL LIABILITIES $ 960 ======== SHAREHOLDER'S EQUITY 1,2 Common Stock, $0.001 Par Value Authorized 25,000,000 Shares Issued and Outstanding September 30, 1999 - 2,090,000 $ 2,090 Additional Paid in Capital 10,960 Retained Earnings (11,964) Current Earnings (1,932) TOTAL SHAREHOLDERS' EQUITY $ (846) -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 114 ======== The Accompanying Notes Are An Integral Part of These Financial Statements F-9 Adriatic Holdings Ltd. (A Development Stage Company) Statement of Operations (unaudited) For the 9 Month Period Ended September 30, 1999 and the Period from Inception (July 9, 1998) through September 30, 1999
For the 9 Month Period For the Period from Ended Inception (July 9, 1998) Notes September 30, 1999 through September 30, 1999 ----- --------------------- -------------------------- Revenue $ -- $ -- ----------- ----------- General & Administrative Expenses 1,932 13,896 ----------- ----------- Total Expenses 1,932 13,896 ----------- ----------- Net (Loss) $ (1,932) $ (13,896) ----------- ----------- Net (Loss) per Common Share 1 $ (0) $ (.01) ----------- ----------- Weighted Average Number of Common Shares Outstanding 2 2,085,458 1,922,339 ----------- -----------
The Accompanying Notes Are An Integral Part of These Financial Statements F-10 ADRIATIC HOLDINGS LIMITED (A Development Stage Company) Statement of Cash Flow (unaudited) For the 9 Month Period Ended September 30, 1999 and the Period from Inception (July 9, 1998) through September 30, 1999
For the 9 Month Period For the Period from Ended Inception (July 9, 1998) Notes September 30, 1999 through September 30, 1999 ---------------------- -------------------------- Net (Loss) $(1,932) $(13,896) Adjustment to Reconcile Net Loss to Net Cash Used in Operating Activities: Increase in Current Liabilities -- 960 -------- -------- Net Cash Used in Operating Activities (1,932) (12,936) Cash Flows From Financing Activities Common Stock Issued For Cash 2 2,000 13,050 -------- -------- Net Increase (Decrease) in Cash $ 68 $ 114 Cash at Beginning of Period 46 -- -------- -------- Cash at End of Period $ 114 $ 114 ======== ========
The Accompanying Notes Are An Integral Part of These Financial Statements F-11 ADRIATIC HOLDINGS LIMITED (A Development Stage Company) Consolidated Balance Sheet (unaudited) For the Period from Inception (July 9, 1998) through September 30, 1999
Number of Capital Paid Shares Common In excess of Accumulated Notes Common Stock Par Value Deficits Total =========================================================================================== Balance at July 9, 1998 2 -- $ -- $ -- $ -- $ -- July 10, 1998 issue 1,000,000 shares of $0.001 par value common stock for for cash at $0.001 per share 3 1,000,000 $ 1,000 $ -- $ -- $ 1,000 July 10, 1998 issue 50,000 shares of $0.001 par value common stock for services rendered at $0.001 per share 50,000 $ 50 $ -- $ -- $ 50 September 14, 1998 issue 1,000,000 shares of $0.001 par value common stock for cash at $0.01 per share 1,000,000 $ 1,000 $ 9,000 $ -- $ 10,000 Net (Loss) -- $ -- $ -- $ -- $ (11,964) ----------------------------------------------------------------------------- Balance at December 31, 1998 2,050,000 $ 2,050 $ 9,000 $ -- $ (914) February 1, 1999 issue 40,000 shares of $0.001 par value common stock for cash at $0.05 per share 40,000 $ 40 $ 1,960 $ 2,000 Net (Loss) -- $ -- $ -- $ -- $ (1,932) ----------------------------------------------------------------------------- Balance at September 30, 1999 2,090,000 2,090 10,960 -- $ (846) =============================================================================
The Accompanying Notes Are An Integral Part of These Financial Statements F-12 ADRIATIC HOLDINGS LIMITED (A Development Stage Company) Notes to Financial Statements At September 30, 1999 (unaudited) NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and business Adriatic Holdings Limited (the "Company") was incorporated in the state of Nevada on July 9, 1998 and is in the development stage. Activities through September 30, 1999 include organization of the Company and the raising of equity capital. The Company plans to become a provider of quality electrical products to the commercial and industrial electrical industry. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present the financial position, results of operations, cash flows and changes in shareholders' equity at September 30, 1999 have been made. Cash flows For purposes of reporting cash flows, cash includes those investments which are short-term in nature (three months or less to original maturity), are readily convertible to cash, and represent insignificant risk of changes in value. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Fair value of financial instruments The carrying amount of cash and accounts payable approximates fair value. Net loss per share of common stock Net loss per share of common stock is based on the weighted average number of shares of common stock outstanding during the period. NOTE 2 - SHAREHOLDERS' EQUITY The Company has the authority to issue 25,000,000 shares of common stock $0.001 par value. The Company issued 1,000,000 shares of common stock to one of its founders for $1,000 and 50,000 shares of common stock to another of its founders for $50 in July, 1998. The Company issued 1,000,000 shares of common stock in connection with an additional private offering for $10,000 in November, 1998. In February 1999 the Company issued 40,000 of common stock in connection with an additional private placement offering for $2,000. NOTE 3 - RELATED PARTY TRANSACTIONS For the period ended December 31, 1998, the Company paid $4,950 in office expenses and $1,050 in management fees to its original founding shareholders. For the period ended September 30, 1999, the Company paid $288 in office expenses. F-13 ADRIATIC HOLDINGS LIMITED (A Company in the Development Stage) NOTES TO FINANCIAL STATEMENTS NOTE 4 - LICENSING AGREEMENT On August 15, 1998, the Company acquired the right to manufacture and distribute an underground electrical junction box. The box patent is owned by J.A. Industries (Canada) Inc. ("J.A. Canada"). NOTE 5 - CONTINGENCIES As discussed in Note 4, the Company has the right to manufacture and distribute an underground electrical junction box patented by J.A. Canada. J.A. Canada is currently the defendant in a lawsuit with regards to its product. The statement of claims, among other things, alleges that the Canadian patent issued on the electrical box is invalid. If the plaintiffs are successful in this action, the patent would be declared invalid and would not provide the Company with protection from competition. If the patent is declared invalid, the Company has the option to cancel the licensing agreement without affecting the manufacturing of the product. The Company has suffered recurring losses from operations and has a working capital deficiency of $846 that raise substantial doubt about its ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the Company attaining and maintaining profitable operations and raising additional capital. Management's plans in this regard is to raise additional capital through an equity offering. The financial statements do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should the Company discontinue operations. F-14 No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell or to buy only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date. ---------- TABLE OF CONTENTS Page ---- Prospectus Summary .................................................... 1 Risk Factors .......................................................... 5 Use of Proceeds ....................................................... 10 Dilution .............................................................. 11 Dividend Policy ....................................................... 12 Capitalization ........................................................ 13 Selected Financial Data ............................................... 14 Management's Discussion and Analysis of Financial Condition or Plan of Operation ......................................... 15 Business .............................................................. 17 Management ............................................................ 20 Certain Transactions .................................................. 23 Principal Stockholders ................................................ 23 Description of Securities ............................................. 24 Market for Common Equity and Related Stockholder Matters .......................................... 26 Shares Eligible for Future Sale Legal Matters ......................................................... 26 Experts ............................................................... 27 Available Information ................................................. 27 Index to Financial Statements ......................................... 28 5,000,000 Shares ADRIATIC HOLDINGS LIMITED Common Stock ----------------- PROSPECTUS ----------------- DATED _________, 2000 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item. 24 Indemnification of Directors and Officers See "Management - Limitation of Liability and Indemnification." Item 25. Other Expenses of Issuance and Distribution The estimated expenses in connection with the distribution of the shares registered hereby, are set forth in the following table: SEC registration fee .................................... $ 132 Legal fees and expenses ................................. $5,000 Accounting fees and expenses ............................ $1,500 Blue Sky fees and expenses .............................. $ 500 Transfer agent fees and expenses ........................ $ 400 Total .............................................. $7,532 Item 26. Recent Sales of Unregistered Securities In September 1998, Adriatic offered 1,000,000 shares of common stock, $0.001 par value, at $0.05 per share. This offering expired without the sale of any shares. In February of 1999, the Company sold a total of 40,000 shares of common stock, $0.001 par value, at $0.05 per share pursuant to Rule 504 of Regulation D of the Securities Act, to 40 investors for a total consideration of $2,000 net of commission and offering costs. The shares were issued as follows: PURCHASER DATE NUMBER OF COMMON SHARES Melanie Lewis 2/1/99 1,000 Frank Perrozzo 2/1/99 1,000 Sherrye Sailes 2/1/99 1,000 Sheyne Almond 2/1/99 1,000 Sheyanne Almond 2/1/99 1,000 Rheece Metcalfe 2/1/99 1,000 Raelyn Metcalfe 2/1/99 1,000 Cathryn Newman 2/1/99 1,000 Gary Newman 2/1/99 1,000 Mitchell Newman 2/1/99 1,000 Nicholas Newman 2/1/99 1,000 Alexander J. Michie 2/1/99 1,000 Nichole P. Michie 2/1/99 1,000 Mathew R.K. Michie 2/1/99 1,000 Carey Linde 2/1/99 1,000 Hans Drunkenmolle 2/1/99 1,000 Pat Michie 2/1/99 1,000 Sandy Michie 2/1/99 1,000 Dene Knight 2/1/99 1,000 Lorraine Knight 2/1/99 1,000 Doug Knight 2/1/99 1,000 Kathy Knight 2/1/99 1,000 Darcy Knight 2/1/99 1,000 Tyler Knight 2/1/99 1,000 Barb McKnight 2/1/99 1,000 Kara McKnight 2/1/99 1,000 Lauren McKnight 2/1/99 1,000 Mike McKnight 2/1/99 1,000 Li Dong 2/1/99 1,000 Sean Dickenson 2/1/99 1,000 Kirsten DeWolfe 2/1/99 1,000 Paul Stark 2/1/99 1,000 Bridgitte Longshore 2/1/99 1,000 Knight Family Trust 2/1/99 3,000 Michael Steele 2/1/99 1,000 Laura Steele 2/1/99 1,000 Jennifer Steele 2/1/99 1,000 Amanda Steele 2/1/99 1,000 In September 1998, Adriatic sold 1,000,000 shares of common stock, $0.001 par value, at $0.01 per share pursuant to Rule 504 of Regulation D of the Securities Act, to 6 investors for a total consideration of $10,000 net of commission and offering costs. The shares were issued as follows: PURCHASER DATE NUMBER OF COMMON SHARES Finneran Investments, Ltd. 9/8/98 175,000 Noble Holdings Corporation 9/8/98 175,000 Tiger-Eye Investments(Cayman) Ltd. 9/8/98 175,000 Huda Limited 9/8/98 175,000 Tamarin Investment Group, Inc. 9/8/98 175,000 Kallur Enterprises Limited 9/8/98 125,000 In July 1998, Adriatic sold 1,000,000 restricted shares of common stock, $0.001 par value, at $0.001 per share to one investor pursuant to Rule 144 of the Securities Act, for a total consideration of $1,000 net of commission and offering costs. The shares were issued as follows: PURCHASER DATE NUMBER OF COMMON SHARES G.M. Capital Partners Ltd. 7/22/98 1,000,000 In July 1998, Adriatic sold 50,000 restricted shares of common stock, $0.001 par value, at $0.001 per share to one investor pursuant to Rule 144 of the Securities Act, for a total consideration of $50 net of commission and offering costs. The shares were issued as follows: PURCHASER DATE NUMBER OF COMMON SHARES Knight Financial Ltd. 7/22/98 50,000 INDEX TO EXHIBITS Item 27. Exhibits Exhibit Number Description of Exhibit - ------ ---------------------- 3.1 Articles of Incorporation 3.2 By-laws 5.1 Opinion of Beckman, Millman & Sanders, L.L.P.* 10.0 Licensing Agreement between Adriatic and J.A. Canada, dated August 15, 1998 21.1 Subsidiaries of the Company (Adriatic has no subsidiaries) 23.1 Consent of Spicer, Jeffries & Co. 24.1 Consent of Beckman, Millman & Sanders, L.L.P. (Included in Exhibit 5.1)* 27.1 Financial Data Schedule for the nine months ended September 30, 1999 27.2 Financial Data Schedule for the period from inception (July 9, 1998) to December 31, 1998 99.1 United States Registration of trademark for J.A. Junction Box 99.2 Canada Registration of trademark for J.A. Junction Box - ---------- * To be filed by amendment. Item 28. Undertakings Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions or otherwise, the small business issuer has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the small business issuer will, precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The undersigned small business issuer hereby undertakes that it will: (1) File, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to (i) include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement; and (iii) include any additional or changed material information on the plan of distribution. (2) For determining any liability under the Securities Act, treat information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the small business issuer under Rule 424(b)(1) or (4) or Rule 497(h) under the Securities Act as part of this registration statement as of the time the Commission declared it effective. (3) For determining any liability under the Securities Act, treat each post-effective amendment that contains a form of prospectus as a new registration statement for the securities offered in the registration statement; and that offering of the securities at that time as the initial bona fide offering of those securities. SIGNATURES In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing on Form SB-2 and authorized this Registration Statement to be signed on its behalf by the undersigned, in the City of Bellingham, State of Washington on December 22, 1999. ADRIATIC HOLDINGS LIMITED By: /s/ Robert W. Knight ----------------------------------- Robert W. Knight, President In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated. (Signature) /s/ Robert W. Knight ------------------------------- (Title) President, Secretary and Treasurer ---------------------------------- (Date) December 22, 1999 ---------------------------------- EX-3.(I) 2 ARTICLES OF INCORPORATION ARTICLES OF INCORPORATION OF ADRIATIC HOLDINGS LIMITED Know all men by these presents; That we the undersigned, have this day voluntarily associated ourselves together for the purpose of forming a corporation under and pursuant to the provisions of Nevada Revised Statutes 78.010 To Nevada Revised Statutes 78.090 inclusive, as amended, and certify that; ARTICLE I The name of this corporation is Adriatic Holdings Limited The name and post office address of the incorporator signing the Articles of Incorporation is: Richard D. Fritzler, 1800 E. Sahara Avenue, Suite 107, Las Vegas, Nevada 89104. The name and address of the initial member of the First Board of Directors is: Richard D. Fritzler 1800 E. Sahara Avenue, Suite 107, Las Vegas, Nevada 89104. ARTICLE II The Resident Agent of this corporation in Nevada shall be Nevada Corporate Services located at 1800 E. Sahara Avenue, Suite 107, Las Vegas, Clark County, Nevada, 89104. Offices for the transaction of any business of the Corporation, and where meetings of the Board of Directors and of Stockholders may be held, may be established and maintained in any other part of the State of Nevada, or in any other state, territory or possession of the United States of America, or in any foreign country as the Board of Directors may, from time to time determine. F-18 ARTICLE III The nature of the business and the objects and purpose proposed to be transacted, promoted or carried on by the Corporation is to conduct any lawful activity in accordance with the Laws of the State of Nevada and the United States of America, including but not limited to the following; 1) Shall have the rights privileges and powers as may be conferred upon a corporation by any existing law. 2) May at any time exercise such rights, privileges and powers, when not inconsistent with the purposes and objects for which this corporation is organized. 3) This corporation shall have perpetual existence. 4) To sue or be sued in any Court of Law. 5) To make contracts. 6) To hold, purchase and convey real and personal estate and to mortgage or lease any such real and personal estate with its franchises. The power to hold real and personal estate shall include the power to take the same by device or bequest in this state, or in any other state, territory or country. 7) To appoint such officers and agents as the affairs of the Corporation shall require, and to allow them suitable compensation. 8) To make By-Laws not inconsistent with the Constitution or Laws of the United States, or of the State of Nevada, for the management, regulation and government of its affairs and property, the transfer of its stock, the transaction of its business, and the calling and holding of meetings of its Stockholders. F-19 9) To wind up and dissolve itself, or be wound up and dissolved, according to existing law. 10) To adopt or use a common seal or stamp, and alter the same at pleasure. The use of a seal or stamp by the Corporation on any corporate document is not necessary. The Corporation may use a seal or stamp if it desires, but such use or nonuse shall not in any way affect the legality of the document. 11) To borrow money and contract debts when necessary for the transaction of its business, or for the exercise of its corporate rights, privileges or franchises, or for any other lawful purpose of its incorporation; to issue bonds, promissory notes, bills of exchange, debentures, and other obligations and evidences of indebtedness, payable at a specific time or times, or payable upon the happening of a specified event or events, whether secured by mortgage, pledge or other security, or unsecured, for money borrowed, or in payment for property purchased, or acquired, or for any other lawful object. 12) To guarantee, purchase, hold, take, obtain receive, subscribe for, own, use, dispose of, sell, exchange, lease, lend, assign, mortgage, pledge, or otherwise acquire, transfer or deal in or with bonds or obligations of, or shares, securities or interests in or issued by, any person, government, governmental agency or political subdivision of government, and to exercise all the rights, powers and privileges of ownership of such an interest, including the right to vote, if any. 13) To purchase, hold, sell and transfer shares of its own capital stock, and use therefor its capital, capital surplus, surplus, or other property or funds. 14) To conduct business, have one or more offices, and hold purchase, mortgage and convey real and personal property in this state, and in any of the several states, territories, possessions and dependencies of the United States, the District of Columbia, and any foreign countries. 15) To do everything necessary and proper for the accomplishment of the objects enumerated in its Articles of Incorporation, or in any amendment thereof or necessary or incidental to the protection and benefit of the Corporation, and, in general, to carry on any lawful business necessary, or incidental to the attainment of the objects of the Corporation, whether or not the business is similar in nature to the objects set forth in the Articles of Incorporation, or in any amendment thereof. 16) To make donations for public welfare or for charitable, scientific or educational purposes. 17) To enter into partnerships, general or limited, or joint ventures, in collection with any lawful activities. ARTICLE IV The capital stock of this corporation shall consist of twenty-five million shares of common stock (25,000,000), with a par value of $0.001 per share, all of which stock shall be entitled to voting power, the Corporation may issue the shares of stock for such consideration as may be fixed by the Board of Directors. ARTICLE V The members of the governing board of this corporation shall be styled directors. The Board of Directors shall consist of one (l)person. The number of directors of this corporation may, from time to time, be increased or decreased by an amendment to the By-Laws in that regard and without the necessity of amending the Articles of Incorporation. A majority of the Directors in office, present at any meeting of the Board of Directors, duly called, whether regular or special, shall always constitute a quorum for the transaction of business, unless the By-Laws otherwise provide. ARTICLE VI This corporation shall have a president, a secretary, a treasurer, and a resident agent to be chosen by the Board of Directors, any person may hold two or more offices. ARTICLE VII The capital stock of the Corporation, after the fixed consideration thereof has been paid or performed, shall not be subject to assessment, and the individual Stockholders of this corporation shall not be individually liable for the debts and liabilities of the Corporation, and the Articles of Incorporation shall never be amended as to the aforesaid provisions ARTICLE VIII The Board of Directors is expressly authorized: (subject to the By-Laws, if any, adopted by the Stockholders) 1) To make, alter or amend the By-Laws of the Corporation. 2) To fix the amount in cash or otherwise, to be reserved as working capital. 3) To authorize and cause to be executed mortgages and liens upon the property and franchises of the Corporation. 4) To by resolution or resolutions passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the Directors of the Corporation, which, to the extent provided in the resolution or resolutions or in the By-Laws of the Corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation, and may have power to authorize the seal of the Corporation to be affixed to all payers on which the Corporation desires to place a seal. Such committee or committees shall have such name or names as may be stated in the By-Laws of the Corporation or as may be determined from time to time by resolution adopted by the Board of Directors. 5) To sell, lease or exchange all of its property and assets, including its goodwill and its corporate franchises, upon such terms and, conditions as the board deems expedient and for the best interests of the Corporation when and as authorized by the affirmative vote of the Stockholders holding stock in the Corporation entitling them to exercise at least a majority of the voting power given at a Stockholders meeting called for that purpose. ARTICLE IX The Directors of this corporation need not be Stockholders. ARTICLE X In the absence of fraud, no contract or other transaction of the Corporation shall be affected by the fact that any of the Directors are in any way interested in, or connected with, any other party to such contract or transaction or are themselves, parties to such contract or transaction, provided that this interest in any such contract or transaction of any such director shall at any time be fully disclosed or otherwise known to the Board of Directors, and each and every person who may become a director of the Corporation is hereby relieved of any liability that might otherwise exist from contracting with the Corporation for the benefit of himself or any firm, association or corporation in which he may be in any way interested. ARTICLE XI No director or officer of the Corporation shall be personally liable to the Corporation or any of its Stockholders for damages for breach of fiduciary duty as a director or officer involving any act or omission of any such director or officer provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer for acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of this Article by the Stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the Corporation for acts or omissions prior to such repeal or modification. ARTICLE XII Except to the extent limited or denied by Nevada Revised Statutes 78.265 Shareholders shall have no preemptive right to acquire unissued shares, treasury shares or securities convertible into such shares, of this corporation. I, the undersigned, being the incorporator herein before named for the purpose of forming a corporation pursuant to the general corporation law of the State of Nevada, do make and file these Articles of Incorporation, hereby declaring and certifying that the facts herein stared are true, and accordingly have hereunto set my hand. /s/Robert W. Knight ------------------- State of Nevada ) )ss Clark County ) On July 1, 1998 personally appeared before me, the undersigned, a Notary Public, Richard Fritzler, known to me the person whose name is subscribed to the foregoing document and acknowledged to me that he executed the same. /s/Kristi Richardson -------------------- [SEAL] Title: Notary Public EX-3.(II) 3 BY LAWS BY LAWS OF Adriatic Holdings Limited A NEVADA CORPORATION ARTICLE I STOCKHOLDER'S MEETINGS A) ANNUAL MEETINGS shall be held on or before the anniversary of the corporation each year, or at such other time as may be determined by the board of directors or the president, for the purposes of electing directors, and transacting such other business as may properly come before the meeting. B) SPECIAL MEETINGS may he called at any time by the Board of Directors or by the President, and shall be called by the President or the Secretary at the written request of the holders of a majority of the shares then outstanding and entitled to vote. C) WRITTEN NOTICE stating the time and place of the meeting, signed by the President or the Secretary, shall be served either personally or by mail, not less than ten (10) nor more than sixty (60) days before the meeting upon each Stockholder entitled to vote. Said notice shall state the purpose for which the meeting is called, no other business may be transacted at said meeting, unless by unanimous consent of all Stockholders present, either in person or by proxy D) PLACE of all meetings shall be at the principal office of the Corporation, or at such other place as the Board of Directors or the President may designate. E) A QUORUM necessary for the transaction of business at a Stockholder's meeting shall he a majority of the stock issued and outstanding, either in person or by proxy. If a quorum is not present, the Stockholders present may adjourn to a future time, and notice of the future time must be served as provided in Article I, C), if a quorum is present they may adjourn from day to day, without notice. F) VOTING: Each stockholder shall have one vote for each share of stock registered in his name on the books of the Corporation, a majority vote shall authorize any Corporate action, except the election of the Directors, who shall be elected by a plurality of the votes cast. G) PROXY: At any meeting of the stockholders any stockholder may be represented and vote by a proxy, appointed in writing and signed. No proxy shall be valid after the expiration of six (6) months from date of its execution, unless the person executing it specifies the length of time it is to continue in force, which in no case shall exceed seven (7) years from its execution. H) CONSENT: Any action, except election of Directors, which may be taken by a vote of stockholders at a meeting, may be taken without a meeting if authorized by a written consent of shareholders holding at least a majority of the voting Fewer. ARTICLE II BOARD OF DIRECTORS A)OFFICE: At least one person chosen annually by the stockholders shall constitute the Board of Directors. Additional Directors may be appointed by the Board of Directors. The Director s term shall be for one year, and Directors may he re-elected for successive annual terms. B) DUTIES: The Board of Directors shall he responsible for the control and management of the affairs, property and interests o~ the Corporation and may exercise all powers of the Corporation, except as are in the Articles of Incorporation or by statute expressly conferred upon or reserved to the stockholders. C) MEETINGS: Regular meetings of the Board of Directors shall be held immediately following the annual meeting of the stockholders, at the place of the annual meeting of the stockholders, or at such other time and place as the Board of Directors shall by resolution establish. Notice of any regular meeting shall not be required, unless the Board of Directors shall change the time or place of the regular meeting, notice must be given to each Director who was not present at the meeting at which change was made. Special meetings may be called by the President or by one of the Directors at such time and place specified in the notice or waiver of notice thereof. The notice of special meeting shall he mailed to each Director at least five (5) days before the meeting day, or if the notice is delivered personally, by telegram or telephone then the notice must be delivered the day before the meeting. Special meetings may be called without notice, provided a written waiver of notice is executed by a majority of the Board of Directors. D) CHAIRMAN: At all meetings of the Board of Directors, the Chairman shall preside. If there is no Chairman one shall be chosen by the Directors. E) QUORUM: A majority of the Board of Directors shall constitute a quorum. F) VACANCIES: Any vacancy in the Board of Directors, unless the vacancy was caused by stockholder removal of a Director, shall be filled for the unexpired term by a majority vote of the remaining Directors, though less than a quorum at any regular or special meeting of the Board of Directors called for that purpose. G) A RESOLUTION in writing signed by a majority of the Board of Directors, shall constitute action by the Board, with the same force and effect as though such resolution had been passed at a duly convened meeting. The Secretary shall record each resolution in the minute book. H) COMMITTEES may be appointed by a majority of the Board of Directors from its number, by resolution, with such powers and authority to manage the business as granted by the resolution. I) SALARIES of the Corporate Officers shall be determined by the Board of Directors. ARTICLE III OFFICERS A) TITLE: This Corporation shall have a president, secretary, treasurer, and such other officers as may be necessary. Any two or more officers may be held by the same person. The officers shall be appointed by the Board of Directors at the regular normal meeting of the Board. B) DUTIES: THE PRESIDENT SHALL: 1) Be the chief executive officer of the Corporation. 2) Preside at all meetings of the Directors and the Stockholders. 3) Sign or countersign all certificates, contracts and other instruments of the Corporation as authorized by the Board of Directors and shall perform all such other incidental duties. THE SECRETARY SHALL: 1) have charge of the corporate books, responsible to make the necessary, reports to the Stockholders and the Board of Directors. 2) prepare and disseminate notices, waivers, consents, proxies and other material necessary for all meetings. 3) file the sixty (60) day list of officers, directors, name of the resident agent and the filing fee to the Secretary of State. 4) file the designation of resident agent in the office of the County Clerk in which the principal office of the Corporation in Nevada is located. 5) file the annual list of officers, directors and designation of resident agent along with the filing fee. 6) be the custodian of the certified articles of incorporation, bylaws and amendments thereto. 7) supply to the Resident Agent or Principal Corporate Nevada Office the name of the custodian of the stock ledger or duplicate stock ledger, along with the complete Post Office address of the custodian, where such stock ledger or duplicate stock ledger is kept. THE TREASURER SHALL: 1) Have the custody of all monies and securities of the Corporation and shall keep regular books of account. 2) Perform all duties incidental to his office as directed of him by the Board. of Directors and the President ARTICLE IV STOCK A) The certificates representing shares of the Corporations stock shall he in such form as shall be adopted by the Board of Directors, numbered and registered in the order issued. The certificates shall hear the following; the holders name, the number of shares of stock, the signature either of the Chairman of the Board of Directors or the President, and either the Secretary or Treasurer. B) No certificate shall be issued until the full amount of consideration has been paid, except as otherwise provided by law. C) Each share of stock shall entitle the holder to one vote. ARTICLE V DIVIDENDS DIVIDENDS may be declared and paid out of any funds available therefor, as often in such amounts as the Board of Directors may determine, except as limited by law. ARTICLE VI FISCAL YEAR THE FISCAL YEAR of the Corporation shall be determined by the Board of Directors. ARTICLE VII INDEMNIFICATION PURSUANT TO NRS 78.751 any person who is a Director, Officer, Employee, or Agent of this Corporation, who becomes a party to an action is entitled to indemnification against expenses including attorney fees, judgments, fines and amounts paid in settlement, if he acted in good faith and he reasoned his conduct or action to he in the best interest of the Corporation. ARTICLE VIII AMMENDMENTS A) STOCKHOLDERS shall have the authority to amend or repeal all the bylaws of the Corporation and enact new bylaws, by affirmative vote of the majority of the outstanding shares of stock entitled to vote. B) THE BOARD OF DIRECTORS shall have the authority to amend, repeal, or adopt new bylaws of the Corporation, but shall not alter or repeal any bylaws adopted by the stockholders of the Corporation. EX-10.0 4 LICENCING AGREEMENT LICENCING AGREEMENT This Licensing Agreement (the "Agreement") is made and effective this 15th day of August, 1998 by and between Adriatic Holdings Limited, a corporation duly organized under the laws of Nevada and doing its principal place of business at 114 W. Magnolia Street, Suite 446, Bellingham, WA. (the "Buyer"), and J.A. Industries (Canada) Inc., a corporation duly organized under the laws of British Columbia and having its principal place of business at 2755 Lougheed Highway, Suite 179, Port Coquitlam, B.C. (the "Seller") and is made with reference to the following facts. Seller has developed and owns all rights including the copyright, Industrial Design and Patents, to certain Multiple Tiered Underground Electrical Junction Boxes and related documents (the "Boxes"). Seller has developed substantial goodwill and reputation associated with the Boxes. Buyer wishes to purchase, and Seller wishes to sell, such Boxes and documentation, the related goodwill and all other associated property rights, including all copyrights, industrial design and patent and all rights to enhanced, modified and updated versions and derivative works related thereto. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows: 1. Transfer. A. Boxes. Seller hereby sells, assigns, conveys and transfers to Buyer all of Seller's right, title and interest in and to the following described Boxes: The Multiple Tier Junction Box represented by United States Patent #5,142,102 filed on August 25, 1992. The Boxes shall include, but not limited to: (i) The Boxes in all versions and all forms of expression thereof, including but not limited to the Boxes diagrams, documentation, previous versions, notes, other information relating to the Boxes; and all copyrights, trade secrets, patentable inventions, proprietary rights and intellectual property contained therein or connected therewith, including without limitation Seller's copyright in the Boxes; (ii) All existing copies of the Boxes in Seller's possession or control; and (iii) All of Seller's interest in the license(s) of the Boxes including original copies of all outstanding license agents granted to the following, if any: None. B Delivery. The Boxes shall be delivered to Buyer within 7 days following execution of this Agreement. Seller shall from time to time, but without further consideration than that amount agreed upon in paragraph 2.A. of this Agreement, execute and deliver such 1 instruments or documents and take such other action as is reasonably necessary which Buyer may request in order to more effectively carry out this Agreement and to vest in Buyer the Boxes and title thereto and the United States Patent. 2. Royalties. In consideration of the rights granted to Buyer in paragraph 1 above, Buyer shall pay Seller a licensing fee of Five United States Dollars ($5.00 USD) for every Junction Box sold by Buyer. Buyer shall provide Seller with a Minimum Annual Licensing of $2,000 USD per year for 1998 and $10,000 USD per year for the life of the Agreement ("Minimum Licensing Fee"), payable annually. Such Minimum Licensing Fee is equal to the sale of four hundred (400) Boxes in 1998 and two thousand (2,000) Boxes each subsequent year. However, in the event that Buyer is unable to sell the required number of Boxes in any particular year, the Minimum Licensing Fee shall be deemed fully earned when paid. Furthermore, within 10 days from the date of Buyer's failure to pay the Minimum Licensing Fee, Seller may demand that Buyer return to Seller any Boxes in Buyer's or its agent's possession and reassign all patents, trademarks and other rights associated, either directly or indirectly, with the Boxes. In accordance with Seller's demand, Buyer hereby agrees to return any such Boxes and reassign all patents, trademarks and other rights associated, either directly or indirectly, with the Boxes. 3. Representations and Warranties of Seller. Seller represents the following: A. Seller has good and marketable title to the Boxes, including the Patent to the Boxes, and has all necessary rights to enter into this Agreement without violating any other agreement or commitment of any sort. Seller does not have my outstanding agreements, understandings, written or oral, concerning the Boxes or the patent, except as identified in Section 1.A. (iii) above. The Boxes do not in fringe or constitute a misappropriation of any trademark, patent, copyright, trade secret, proprietary right or similar property right. Seller agrees to defend, indemnify and hold Buyer, its subsidiaries, affiliates and licensees harmless against any action, suit, expense, claim, loss, liability or damage based on a claim that the Boxes infringes or constitutes a misappropriation of any trademark. patent, copyright, trade secret, proprietary right or similar property right. Buyer shall give Seller prompt written notice of any such claim. Seller shall assume responsibility for defending any suit or proceeding brought against Buyer based on any claim that the Boxes infringes or constitutes a misappropriation of any trademark, patent copyright, trade secret, proprietary right or similar property right; provided, however, that Buyer shall give Seller prompt notice in writing of the assertion of any such claim and of the threat or institution of any such suit or proceeding, and all authority, information and assistance required for the defense of the same. Seller shall pay all damages and costs awarded against Buyer, but shall not be responsible for any costs, expense or compromise incurred without Seller's consent. All written correspondence between Buyer and Seller shall be made at the addresses found in paragraph 13. of this Agreement. 2 B. No Liens. The Boxes are not subject to any lien, encumbrance, mortgage or security interest of any kind. Seller's conveyance of the Boxes shall be free of any such interest, excepting only the interests of the third party licenses identified in Section l.A. (iii) above, if any. C. Authority Relative to this Agreement. This Agreement is a legal, valid and binding obligation of Seller. The execution and delivery of this Agreement by Seller and the performance of and compliance by Seller with the terms and conditions of this Agreement will not result in the imposition of any lien or encumbrance on any of the Assets, and will not conflict with or result in a breach by Seller of any of the terms, conditions or provisions of any order, injunction, judgment, decree, statute, rule, or regulation applicable to Seller, the Boxes, or any note, indenture, or other agreement, contract, license or instrument by which any of the Boxes may be bound or affected. No consent or approval by any person or public authority is required to authorize or is required in connection with, the execution, delivery or performance of this Agreement by Seller. D. No Default. There is no outstanding default by Seller or any third party license of the Boxes of any material obligation in the licenses identified in Section l.A.(iii) above, if any. E. Litigation. Seller is currently the defendant in a lawsuit with regards to the patent of its product. The statement of claims, among other things, alleges that the Canadian patent issued on the electrical junction boxes is invalid. The Seller feels that the suit is without merit but at this time does not have the necessary funds to adequately defend itself though it has entered a statement of defence. If the plaintiffs were successful in this action the validity of the patent on the underground junction boxes would be declared invalid and not provide the Buyer with protection from competition. If the patent is declared invalid, the Buyer has the option to cancel the licensing agreement unconditionally. 4. No Brokers. All negotiations relative to this Agreement have been carried on by Buyer directly with Seller, without the intervention of any person as the result of any act of Buyer or Seller (and, soft as known to either party, without the intervention of any such person) in such manner as to give rise to any valid claim against the parties hereto for brokerage commissions, finder's fees or other like payment. 5. Consents, Further Instruments and Cooperation. Buyer and Seller shall each use their respective best efforts to obtain the consent or approval of each person or party, if any, whose consent or approval shall be required to permit it to consummate the transactions contemplated hereby, and to execute and deliver such instruments and to take such other action as may be required to carry out any transaction contemplated by this Agreement. Seller shall execute, or cause its employees and agents to execute, any patent or 3 copyright application or other similar document or instrument, following Buyer's reasonable request. 6. Limitation of Liability. OTHER THAN AS SET FORTH IN SECTION 3.A. OR UPON THE BREACH OF ANY WARRANTY, NEITHER BUYER NOR SELLER SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY PERFORMANCE HEREUNDER, EVEN IF SUCH PARTY HAS ADVANCE NOTICE OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER BASED ON A THEORY OF CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE. 7. Buyer's Use of Boxes. Buyer may, at its sole discretion, market, license and sell the Boxes under names and trade names of its own choosing, and may develop updated and modified versions and derivative works of the Boxes without attribution of authorship to Seller. Buyer shall own all rights and title, including copyrights and patents, in and to may updated and modified versions and derivative works of the Boxes without requiring permission from Seller and without incurring payment obligations in addition to those provided herein. Buyer may market or use the Boxes in whatever manner and at whatever prices it sees fit. Except in the event of a breach of this Agreement by either party, seller shall have no rights in any updated or modified versions (including on any patents) relating to the Boxes. 8. Seller's Non-Use of the Assets. Seller retains no rights whatsoever in the Boxes and does not retain the right to use the Boxes or any material relating to the Boxes for any purpose, personal, commercial, or otherwise, Seller furthermore shall maintain all information relating to the Boxes or use of the Boxes in confidence and shall not disclose any aspect of the Boxes to any third party without the prior written consent of Buyer. Seller agrees not to participate in any activities relating to development, marketing or sale of Boxes or other material that would compete, directly or indirectly, with Buyer's marketing or distribution of the Boxes for a period of twenty-four (24) months. 9. Term. The term of this licensing agreement shall be for a period of ten years from the date first written above subject to Paragraph 2. Royalties. 10. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of 4 Nevada. 11. Assignment. Seller may not assign this Agreement or any obligation herein without the prior written consent of Buyer. This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective permitted heirs, executors, personal representatives, successors and assigns. 12. Entire Agreement. This Agreement contains the entire understanding of the parties, and supersedes any and all other agreements presently existing or previously made, written or oral, between Buyer and Seller concerning its subject matter. This Agreement may not be modified except in writing executed by both parties. 13. Severability. If any provision of this Agreement is declared by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this Agreement nevertheless will continue in full force and effect without being impaired or invalidated in any way. 14. Notices. Any notices required or permitted to be given under this Agreement shall be denied sufficiently given if mailed by registered mail, postage prepaid, addressed to the party to be notified at the addresses shown below, or at such other address as may be furnished in writing by such party to the notifying party. If to Buyer: Adriatic Holdings Limited 114 W. magnolia Street Suite 446 Bellingham, WA 98225 If to Seller: J.A. Industries (Canada) Inc. 34A-2755 Lougheed Highway, Suite 179 Port Coquitlam B.C. V3B 5Y9 Canada 5 15. Relationship of the Parties. The relationship between Buyer and Seller under this Agreement is intended to be that of buyer and seller, and nothing in this Agreement is intended to be construed so as to suggest that the parties hereto are partners or joint ventures, or either party or its employees are the employee or agent of the other. Except as expressly set forth herein, neither Buyer nor Seller has any express obligation on behalf of or in the name of the other to bind the other in any contract, agreement or undertaking with any third party. 16. Headings. Headings used in this Agreement are provided for convenience only and shall not be used to construe meaning or intent. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. Adriatic Holdings Limited J.A.. Industries (Canada) Inc. By: /s/ Robert Knight By: /s/ Richard Klassen --------------------------- -------------------------- Robert Knight Richard Klassen President President EX-23.1 5 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS Ex.23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS We hereby consent to the use in the Adriatic Holdings Limited registration statement, on Form SB-2, of our report dated May 5, 1999, accompanying the financial statements of Adriatic Holdings Limited for the period from inception (July 9, 1998) through December 31, 1998 which is part of the registration statement and to the reference to us under the heading "Experts" in such registration statement. /s/ SPICER, JEFFRIES & CO. -------------------------- SPICER, JEFFRIES & CO. Denver, Colorodo December 20, 1999 EX-27.1 6 FDS OF ADRIATIC HOLDINGS LIMITED
5 This schedule contains summary financial information extracted from the financial statement of Adriatic Holdings Limited included in the Company's Form SB-2 dated September ___, 1999 and is qualified in its entirety by reference to such financial statements. YEAR DEC-31-1998 DEC-31-1998 46 0 0 0 0 46 0 0 46 960 0 0 0 2,050 (2,964) 46 0 0 0 0 (11,964) 0 0 (11,964) 0 0 0 0 0 (11,964) (.01) (.01)
EX-27.2 7 FDS ADRIATIC HOLDINGS LIMITED
5 This schedule contains summary financial information extracted from the financial statement of Adriatic Holdings Limited included in the Company's Form SB-2 dated September ___, 1999 and is qualified in its entirety by reference to such financial statements. 9-MOS DEC-31-1999 SEP-30-1999 114 0 0 0 0 114 0 0 114 960 0 0 0 2,090 (2,936) 114 0 0 0 0 (1,932) 0 0 (1,932) 0 0 0 0 0 (1,932) (.00) (.00)
EX-99.1 8 EXHIBIT 99.1 United States Patent [19] [11] Patent Number: 5,142,102 Michie [45] Date of Patent:Aug.25,1992 [54] MULTIPLE TIER JUNCTION BOX [75] Inventor: Alexander Michie, Coquitlam, CANADA [73] Assignee: Pacific Rim Polytech Corp., Burnaby, CANADA [21] Appl.No.: 623,153 [22] Filed: Dec. 6, 1990 [51] Int. Cl. ..............................H02G 3/08 [52] U.S. Cl. ..............................174/50; 174/37; 174/57 [58] Field of Search.........................174/37, 48, 50, 53, 174/57 [56] References Cited U.S. Patent Documents 3.115.539 12/1963 Stuessel st al. ..............174/48 3.346.230 10/1967 Tolf.Jr. .....................174/37 X 3.701.837 09/1972 Fork..........................174/50 3.873.757 03/1975 Berke et al. .................174/52 R 3.911.635 09/1975 Traupe .......................52/221 4.059.199 11/1977 Quaney .......................174/66 X 4.591.656 05/1986 Mohr .........................174/48 4.916.258 04/1990 Mohr .........................174/48 5.008.491 04/1991 Bowman .......................174/48 Foreign Patent Documents 528475 07/1956 CANADA 656567 01/1963 CANADA 673746 11/1963 CANADA 765970 08/1967 CANADA 767295 09/1967 CANADA 908825 08/1972 CANADA 989053 05/1976 CANADA 990843 06/1976 CANADA 1185668 04/1985 CANADA 1185688 04/1985 CANADA Primary Examiner - Leo P. Picard Assistant Examiner - David A. Tone Attorney, Agent or Firm - McFadden, Finchan, Marcus & Anissimoff [57] Abstract There is disclosed an electrical junction box having a plurality if tiers each of which increases in cross-sectional area from the top of the box to the bottom thereof. The tiers, being annular are adapted to receive conduits from a plurality of angles or levels. A releaseably engageable lid covers the box which may be mounted to or within a substrate by a mounting member integral with the junction box. 23 Claimes, 2 Drawing Sheets 5,142,102 - -1- MULTIPLE TIER JUNCTION BOX FIELD OF THE INVENTION The present invention relates to junction boxes, more particularly it relates to a multi-tiered junction box which can accommodate a plurality of conduits from a variety of different levelled tiers on angles thereon. BACKGROUND OF THE INVENTION Generally, junction boxes are well known in the art. Such boxes are used in residential, industrial and commercial installations and in such instances, are of a relatively small size e.g. 4" in diameter and 1" to 3" in depth. They are normally placed in ceilings, walls, flooring, etc. To receive spliced conduits, valved conduits and other joints. Several examples of this junction box are known in the art as exemplified by U.S. Pat. Nos. 3,873,757 and 4,916,258 as well as Canadian patent Nos. 765,295, 908,825 AND 1,185,668. Junction boxes are also used in major installations in underground construction, where large cables are joined for high voltage lines. In such cases, the junction boxes are many times the size of the above type and may, for example, be 2'to 4'in diameter and 1' to 4' high. In the latter case, the construction and structural characteristics required for such junction boxes are significantly different than the small residential or like installations. Where such junction boxes are used exteriorly, they may be buried in the ground or mounted on a slab construction which is subsequently covered with earth, sand, or the like. In addition to other factors, such junction boxes must obviously meet requirements for exposure to outdoor criteria e.g. water resistance, etc. In the case of outdoor junction boxes, for large electrical installations, one possibility has been to construct a fixed enclosure of suitable material e.g. concrete, metal housings ot the like. Apart from the cost effectiveness of such construction, there are also other considerations such as transportation, installation, etc. Which add to the total economic factor for such apparatus. It would be desirable if there could be provided a junction box structure and apparatus which can readily be mounted exteriorly as well as one which can be manufactured in an economic and simple manner while a the same time providing a unit which can be readily secured in place under different locations and circumstances. Conventionally the known junction boxes include clamps to fasten a cable therein entering the box. Typically the boxes include "knockouts" to permit reception of a conduit within the box. Further, the known junction boxes comprise an electroconductive material which requires that electrical conduits be grounded thereto. SUMMARY OF THE INVENTION The present invention provides a junction box adapted for mounting to or within a substrate. Applicant, in one aspect on the invention, provides a multi-tiered integrally molded junction box. The tiers are preferably circular in increase in cross-sectional are from the top of the junction box to the bottom. The box is preferably molded from a rigid material, e.g. a polyelastomer to provide a non-electroconductive housing which may be apertured by drilling, etc. This material, in combination with the multiple circular tiered structure allows a pluity of conduits to enter the box via apertures provided by the user from a variety of angles and tiers. Further, the tiers may be cut, etc. For different applications, e.g. variable level terrain, underground applications, etc. According to another aspect of the present invention, there is provided mounting means for mounting the junction box to or within a substrate. In one form, the mounting means includes a circular wall extending outwardly and spaced from a bottom tier. Spacer means between the wall and the lowest tier impart structural integrity to the wall. A base wall extending between the circular wall and the lowest tier cooperates with the spacer means to provide an open top mounting means. This arrangement stabilizes the box when positioned within a substrate. According to a further aspect of the invention, there is provided integrally molded reinforcement means extending vertically down the integral periphery of the box. Since the reinforcing means are molded with the box. Removal of one or some of the tiers will not affect the reinforcing capability for the remaining tiers. In a further aspect of the present invention. Applicant provides a lower member having engages means for cooperation with cover receiving means associated with the junction box. The cover, as in the junction box, includes reinforcing means. In a further aspect of the present invention, the junction box may be turned upside down with the mounting means facing upward. Means for interconnection with another similarly disposed. As such, the assembled boxes have been found to function effectively as a manhole. According to a particularly preferred aspect of the present invention, there id provided a junction box adapted for connection of one or more electrical members, the improvement wherein the junction box comprises a hollow body having a plurality of tiers, the tiers comprising a plurality of diverging stages, each of the tiers having a cross-sectional area greater than a preceding stage and less than a succeeding stage. In an alternate form, the junction box may include an adapter ring which fits around the top of the box to anchor the same fopr applications where cement sidewalls are being installed around the opening thus preventing any shifting. Further, the ring may be adapted to fit the junction box regardless of which tier is cut. In another form where several boxes may be required, the boxes may include cooperating engaging means for connection with an adjacent box. Further, the boxes may be linked with a conduit integrally molded therewith for communication between a plurality of boxes. According to further preferred features of the present invention, the junction box may be formed of a suitable thermoplastic or thermoset material and the choice of such material will depend on various factors such as location of the junction box, i.e. above or below ground, whether moisture is a consideration, etc. Typically, Suitable thermoplastic materials include various types of resins such as polyolefins, e.g. polypropylenes, polyamides, such as the "nylon" polyamides, polycarbonates, etc. In Addition, such resinous materials allow for the junction boxes to be produced by a simple molding techniques, for example, by injection molding. Still further, the junction box may, however, be formed of suitable metal materials such as aluminum, iron, steel or the like for other specific applications by suitable techniques such as molding, casting or the like. In Accordance with the invention, the junction boxes having the multi-tiered configuration preferably have a substantially circular configuration although it will be understood that for various applications, other configurations such as oblong or oval shapes may be employed. In other cases, a polygon shaped configuration may be desirable. However, in the preferred form of the junction box, the circular shape of the junction box provides substantially greater strength for the outer walls to withstand horizontal forces, when installed in the ground, from ground pressure in order to maintain shape integrity. The preferred configuration of a circular structure also facilitates provision of entry apertures into the junction box from any direction, for insertion of wiring or conduits. Thus, this preferred configuration is not limited as in the case of square junction boxes. In accordance with this invention, the junction box may be provided with cover means for closing one end of the junction box, or both ends, if required. The cover means preferably has a structure corresponding to and dimensioned for the size and configuration of the opening at one or both ends of the junction box. In the case of a circular or cylindrically shaped body, a circularly shaped lid will be employed, which in turn, results in a combination having several advantages over a square shaped junction box which would employ a square shaped lid. Thus, for example, a circularly shaped lid, when subjected to downwardly exerted pressure as would result from vehicular traffic running over the top of a junction box, would result in a substantially uniformed distribution of the downward pressure about the complete junction box. Still further, a circularly shaped lid cannot drop pr fall into the junction box during installation of the lid, in contrast to a square shaped lid which may accidentally penetrate through the open top and fall into the interior chamber of the junction box resulting in damage. In general, the tiered body structure preferably comprises three or more tiers although the exact number will depend on the height or overall size of the unit. Preferably between three to eight tiers are employed depending on the requirements for each application; preferably, the tiers are such that each succeeding tier, of a diverging nature, increases the cross-sectional size of the junction box by between 2% to 20% and desirably 5% to 15%. The electrical junction box of the present invention includes means for permitting the same to be secured or anchored to a substrate; for example, when the junction box is placed on a supporting surface, in an outdoor underground installation, the locale surrounding the junction box may be backfilled with earth or suitable filing material and in order to ensure the stability and prevent the apparatus from shifting, suitable means may be associated with or form an integral part of the junction box for this purpose. To this end, the junction box may be provided with an outwardly and upwardly extending rim, preferably in the form of a coextensive wall of a generally co-planar nature, which is exteriorly located, and which is adapted to receive such fill material to position the box in place. In other embodiments, suitable brackets (one or more) or arms may project exteriorly and laterally of the lower outer wall, which may be anchored by a suitable means to the substrate (e.g. by placing anchor bolts, etc. into the soil through the brackets). Still Further, such anchoring means may also be located interiorly of the lower wall so that anchoring of the device may be accomplished during initial installation of the unit. The junction box of the present invention may optionally have incorporated therein individual "knock-outs" provisions and means for securing incoming and outgoing electrical connections, e.g. clamps although for most purposes, these will be separately provided where and as required. The device of the present invention includes several advantageous features compared to prior art structures for instance, tiering allows for the adding of strengthening gussets along the inside of the junction when it is buried. The tiering itself adds strength to withstand horizontal sidewall forces from the earth pushing in against the junction box when it is buried. The tiering itself adds strength to withstand horizontal sidewall forces as the top of each tier adds horizontal thickness to the walls. Still further, tiering allows the top of the junction box to be smaller than the body. As the top of the junction box is at ground level, the lid can be made smaller and consequently, a smaller area is exposed at ground level. BRIEF DESCRIPTION OF THE DRAWINGS Having thus generally described the invention, reference will now be made to the accompanying drawings illustrated preferred embodiments and, in which: FIG.1 is a perspective view of the present invention; FIG.2 is a bottom view of the junction box of the present invention; FIG.3 is a sectional view taken along line 3-3 of FIG.1; FIG.4 is a top view of the cover member of the junction box of the present invention; FIG.5 is a sectional view taken along line 5-5 of FIG.4; and FIG.6 is a side view of FIG.4. DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS Referring to FIG.1. shown is a perspective view of the junction box of the present invention, generally indicated by numeral 10. The box 10 has an open top 12 and open bottom 14 with a plurality of tiers preferably circular in cross-sectional extending there between. It is particularly preferred that each of the tiers 16 have a greater cross-sectional area than a preceding tier, while having a smaller cross-sectional area than a succeeding tier. In this arrangement, the tubular junction box 10 diverges from top 12 to bottom 14. In greater detail the bottom 14 of the box 10 preferably includes mounting the box 10 to or with a substrate, e.g. concrete, ground, etc. Th mounting mean 24 includes a circular wall 20 extending outwardly from and concentrically with tier 16 adjacent bottom 14of the junction box 10. The wall 20 is maintained in a spaced relationship from tier 16 adjacent bottom 12 by spacer means. The spacer means comprise a plurality of individual spaced apart plate members 26 preferably radiating externally from tier 16 adjacent bottom 14 and extending between this tier and wall20. The mounting means 24 additionally provides a base member 28 integrally molded with the box 10. The base member 28 extends perpendicularly from the bottom 22 of wall 20 to the exterior of tier 16 adjacent bottom 14 to thus provide a closed bottom-open top mounting means 24. As briefly mentioned herein, the box 10 preferably is molded using a suitable material for such a structure which houses electrical conduits, pipes, etc. Such suitable materials include polymeric substances, more particularly rigid polymers. These materials provide strength and are light weight non-electroconductive. When electrical conductivity is not a concern, e.g. for housing pipe junctions, etc. other materials such as cast aluminum, steel, etc. may be employed. By incorporating the polymeric material however, one may easily drill, for example, into the structure at any position aling a tier 16 and at any selected tier. Referring to FIG. 2 shown is a bottom view of the junction box 10. The base member 28, discussed previously herein, preferably includes first engaging means 30.e.g. projections extending perpendicularly and projecting downwardly therefrom regularly spaced apart therefrom second engaging means 32.e.g. recesses extending upwardly therein. The engaging means 30 and 32 extend about the circumference of base 28; the recesses 32 are dimensioned to frictionally engage the projections 30. Thus, the first and second engaging means 30 and 32 of one junction box 10 can engage and interlock the second and first engaging means 32 and 30 respectively of a similar base 28 of a similar junction box 10 in a superimposed relationship. this allows the superimposed and interlocked junction boxes to provide double the height of one individual box 10 to thus accommodate a variety of applications. Further, since the boxes diverge, as illustrated in FIG. 3 they may be stacked. The stacking allows the height of box 10 to be increased by an amount equal to the width of the circular walls 20 of mounting means 24; the spacer means 26located therein additionally provide support for boxes 10 stacked in this manner. In one application, the box 10 may be situated within the ground and the open top of the mountings means filled with earth. The spacer means 26 prevent the rotation along a vertical axis in the box 10 while mounted in the ground and keep the same from rising upward from underground forces, etc. The tier 16, comprising the polymeric materially previously mentioned herein, allows the same to be cut to thereby "customize" the junction box 10 to any terrain. Applicant has found that the circular tiered structure of the box 10 adequately withstands horizontal forces externally exerted on the same while in situ. To further enhance the strength of the tiers 16, reinforcing means 34 are provided and integrally molded within the internal periphery of box 10, (preferably vertically therein) in a regularly spaced apart manner. This is shown if FIG. 3. The reinforcing means 34, being integrally molded with the box 10, thus conform to each of the tiers 16; this provides reinforcement for subsequent tiers 16 in the event one is removed, cut, etc. Referring back to FIG. 3 the top 12 of the box 10 preferably includes, spaced inwardly from the internal periphery, receiver means 36. The cover receiving means 36 comprises a groove adapted to frictionally engage engagement means 38 of cover 40 (shown in FIGS. 4 and 5). The engaging means 38 of cover 40 preferably comprises a downward projection extending about the internal periphery of the cover 40. In addition, the top 12 of the box 10 includes an aperture flange 37 extending inwardly thereof. The flange 37 may receive a threaded insert to accommodate a bolt etc. (not shown) which may extend through a suitable dimensioned aperture in the cover 40 for connection therewith. The cover 40 comprises a similar material as the box 10 and additionally includes integrally molded reinforcing means 42 extending radially from the center of the cover 40. An annual reinforcement 44 is provided intermediate of the periphery and center of the cover 40. The central portion of 46 of the cover 40 is preferably frustoconical as illustrated in FIG. 6. Applicant, by incorporating the reinforcement means 42 and 44 has found that the circular cover 40, while positioning on box 10, substantially dissipates any weight placed thereon by distribution to the periphery thereof. This, in turn, applies equivalent downward force to all areas of the box. Thus, the cover 40 effectively releases engages the receiving means 36 of the box 10 to provide re-enterable, non-electrical conductive junction box 10, which can receive conduits, etc. from plurality of angles and levels. Although various embodiments have been described herein, it will be understood that various modifications can be made to the above-described embodiments without departing from the spirit and scope of the invention. I claim: 1. In a junction box for connection of one or more electrical members, the improvement wherein said junction boxes comprises a hollow circular body, having a plurality of circular tiers, said tiers comprising a plurality of diverging stages, each of said tiers having a cross-sectional area greater than a preceding stage and less than a succeeding stage; an inwardly extending support member extending circumferentially within said open top, said support member including an annular recess in an upper surface, a circular cover for positioning in said open top, said cover including annular means for engagement in said annular recess and also including radially extending reinforcement means dissipating weight on said cover by distribution of said weight to the periphery thereof, and subsequently to the body. 2. The junction box as defined in claim 1, wherein said junction box includes means for mounting said box to a substrate, said mounting means extending outwardly and concentrically from a bottom tier of said box. 3. The junction box as defined in claim 2, further including an outer circumferential wall, said mounting means extending outwardly and concentrically from a bottom tier of said box. 4. The junction box as defined in claim 3, wherein said circumferential wall includes a base member. 5. The junction box as defined in claim 4, wherein said base member includes first engaging means projecting therefrom and spaced apart second engaging means and said first engaging means being adapted for reception in respective second and first engaging means of a similar bar member of similar structure thereby inter-engaging said junction box are in superposed relation. 6. The junction box as defined in claim 1, wherein said junction box includes a circular, said circular wall including spacer means for spacing said wall from a bottom tier. 7. The junction box as defined in claim 6, wherein said spacer means comprises a plurality of individual spaced apart members. 8. The junction box as defined in claim 7, wherein said spaced apart members radiate laterally from said bottom tier. 9. The junction box as defined in claim 8, wherein said spaced apart members extend between said circumferential walls and said bottom tier. 10. The junction box as defined in claim 1, wherein each of said tiers includes reinforcing means. 11. The junction box as defined in claim 1, wherein said reinforcing means are integrally molded with said cover member. 12. The junction box as defined in claim 11, wherein said reinforcing means are annular reinforcing means spaced inwardly from said periphery of said cover member. 13. The junction box as defined by claim 11, wherein said reinforcing means comprise radially oriented reinforcing means radiating from a central portion of said cover member. 14. The junction box as defined in claim 1, wherein said cover member is frustoconical in profile. 15. The junction box as defined in claim 1, wherein said cover member comprises a polymeric material. 16. The junction box as defined in claim 1, wherein said cover member ccomprises a non-electroconductive material. 17. The junction box as defined in claim 1, wherein said cover comprises a molded polymeric material. 18. A multi-tiered electrical junction box having a body defining a chamber therein, said body having an open top and an open bottom. said body having a plurality of spaced apart circular tiers forming diverging stages in said body, each of said circular tiers having a cross-sectional area greater than a preceding stage and less than a succeeding stage to thereby from a tiered internal and external configuration: mounting means for mounting said box to a substrate, said mounting means extending outwardly and concentrically from at least one of said tiers to permit said body to be secured to a substrate; an inwardly extending support member extending circumferentially within said open top, said support member including an annular recess in an upper surface, a circular cover for positioning in said open top on said support member to close said open top, said cover including annular means for engagement in said annular recess and also including radially extending reinforcement mean, said radially extending reinforcement means dissipating weight on said cover by distribution of said weight to periphery therof, and subsequently to the body. 19. The junction box as defined in claim 18, wherein said mounting in L-shaped in cross section. 20. The junction box as defined in claim 18, wherein said junction box comprises a rigid material. 21. The junction box as defined in claim 18, wherein said junction box comprises a non-electroconductive material. 22. The junction box as defined in claim 18, wherein said junction box comprises a polymeric material. 23. The junction box as defined in claim 18, wherein said junction box comprises a molded polymeric material. EX-99.2 9 EXHIBIT 99.2 [letterhead CANADIAN INTELLECTUAL PROPERTY OFFICE] (11)(c) 2,030,251 (22) 1990/11/19 (43) 1992/05/20 (45) 1996/01/02 (52) 347-12 (51) Int.C1. H02G 3/08 (19) (CA) CANADIAN PATENT (12) (54) Multiple Tier Junction Box (72) Michie, Alexander , Canada (73) J.A. Industries (Canada) Inc. , Canada (57) 23 Claims ABSTRACT OF THE DISCLOSURE There is disclosed an electrical junction box having a plurality of tiers each of which increases in cross-sectional area from the top of the box to the bottom thereof. The tiers, being annular are adapted to receive conduits from a plurality of angles or levels. A releasably engageable lid covers the box which, may be mounted to or within a substrate by a mounting member integral with the junction box. MULTIPLE TIER JUNCTION BOX FIELD OF THE INVENTON The present invention relates to junction boxes, more particularly it relates to a multi-tiered junction box which can accommodate a plurality of conduits from a variety of different levelled tiers on angles thereon. BACKGROUND OF THE INVENTION Generally, electrical junction boxes are well known in the art. Such boxes are used in residential, industrial and commercial installations and in such instances, are of a relatively small size e.g. 4" in diameter and 1" to 3" in depth. They are normally placed in ceilings, walls, flooring, etc, to receive spliced conduits, valved conduits and other joints. Several examples of this type of junction box are known in the art as exemplified by U.S. Patent Nos. 3.873,757 and 4,916.258, as well as Canadian Patent Nos. 765,295, 908.825, 528.475 and 1.185.668. Junction boxes are also used in major installations in underground construction, where large cables are joined far high voltage lines. In such cases, the junction boxes are many times the size of the above type and may, for example, be 2' to 4' in diameter and 1' to 4' high. In the latter case, the construction and structural characteristics required for such junction boxes are significantly different than the small residential or like installations. Where such junction boxes are used exteriorly, they may be buried in the ground or mounted on a slab construction which is subsequently covered with earth, sand or the like. In addition to other factors, such junction boxes must obviously meet requirements for exposure to outdoor criteria e.g. water resistance, etc. In the case of outdoor junction boxes, for large electrical installations, one possibility has been to construct a fixed enclosure of suitable material, e.g. concrete, metal housings or the like. Apart from the cast effectiveness of such construction, there are also other considerations such as transportation, installation, etc. which add to the total economic factor for such apparatus. It would be desirable if there could be provided a junction box structure and apparatus which can readily be mounted exteriorly, as well as one which can be useful for interior installation, and which can be manufactured in an economic and simple manner while at the same time providing a unit which can be readily secured in place under different locations and circumstances. Conventionally the known junction boxes include clamps to fasten a cable therein entering the box. Typically, the boxes include "knockouts" to permit reception of a conduit within the to box. Further, the known junction boxes comprise an electroconductive material which requires the electrical conduits be grounded thereto. SUMMARY OF THE INVENTION The present invention provides a junction box for mounting to or within a substrate. Applicant, in one aspect of the invention, provides a multitiered integrally molded junction box. The tiers are preferably circular and increase in cross-sectional area from the top of the junction box to the bottom. The box is preferably molded from a rigid material, e.g. a polyelastomer to provide a non-electroconductive housing which may be apertured by drilling, etc. This material, in combination with the multiple circular tiered structure allows a plurality of conduits to enter the box via apertures provided by the user from a variety of angles and tiers. Further, the tiers may be cut, etc. for different applications, e.g. variable level terrain, underground applications, etc. According to another aspect of the present invention, there is provided mounting means for mounting the junction box to or within a substrate. In one form, the mounting means includes a circular wall extending outwardly and spaced from a bottom tier. Spacer means between the wall and the lowest tier impart structural integrity to the wall. A base wall extending between the circular wall and the lowest tier cooperates with the spacer means to provide an open top mounting means. This arrangement stabilizes the box when positioned within a substrate. According to a further aspect of the invention, there is provided integrally molded reinforcement means extending vertically down the integral periphery of the box. Since the reinforcing means are molded with the box, removal of one or some of the tiers will not affect the reinforcing capability for the remaining tiers. In a further aspect of the present invention, Applicant provides a lower member having engaging means for cooperation with cover receiving means associated with the junction box. The cover, as in the junction box, includes reinforcing means. In a further aspect of the present invention, the junction box may be turned upside down with the mounting means facing upward. Means for interconnection with another similarly disposed box allows the two to be superposed. As such, the assembled boxes have been found to function effectively as a manhole. According to a particularly preferred aspect of the present invention, there is provided a junction box adapted for connection of one or more electrical members, the improvement wherein the junction box comprises a hollow body having a plurality of tiers, the tiers comprising a plurality of diverging stages, each of the tiers having a cross-sectional area greater than a preceding stage and less than a succeeding stage. In an alternate form, the junction box may include an adapter ring which fits around the top of the box to anchor the same for applications where cement sidewalls are being installed around the opening thus preventing any shifting. Further, the ring may be adapted to fit the junction box regardless of which tier is cut. In another form where several boxes may be required, the boxes may include cooperating engaging means for connection with an adjacent box. Further, the boxes may be linked with a conduit integrally molded therewith for communication between a plurality of boxes. According to further preferred features of the present invention, the junction box may be formed of a suitable thermoplastic or thermoset material and the choice of such material will depend on various factors such as location of the junction box, i.e. above or below ground, whether moisture is a consideration, etc. Typically, suitable thermoplastic materials include various types of resins such as polyolefins, e.g. polypropylenes, polyamides, such as the "nylon" polyamides, polycarbonates, etc. In addition, such resinous materials allow far the junction boxes to be produced by a simple molding technique as, for example, by injection molding. Still further, the junction box may, however, be formed of suitable metal material such as aluminum, iron, steel or the like for other specific applications by suitable techniques such as molding, casting or the like. In accordance with the invention, the junction boxes having the multi-tiered configuration preferably have a substantially circular configuration although it will be understood that for various applications, other configurations such as oblong or oval shapes may be employed. In other cases, a polygon shaped configuration may be desirable. However, in the preferred form of the junction box, the circular shape of the junction box provides substantially greater strength for the cuter walls to withstand horizontal forces, when installed in the ground, from ground pressure in order to maintain shape integrity. The preferred configuration of a circular structure also facilitates provision of entry apertures into the junction box from any direction, for insertion of wiring or conduits. Thus, this preferred configuration is not limited as in the case of square junction boxes. In accordance with this invention, the junction box may be provided with cover means for closing one end of the junction box, or both ends, if required. The cover means preferably has a structure corresponding to and dimensioned for the size and configuration of the opening at one or both ends of the junction box. In the case of a circular or cylindrically shaped body, a circularly shaped lid will be employed, which in turn, results in a combination having several advantages over a square shaped junction box which would employ a square shaped lid. Thus, for example, a circularly shaped lid, when subjected to downwardly exerted pressure as would result from vehicular traffic running over the top of a junction box, would result in a substantially uniformed distribution of the downward pressure about the complete junction box due to the circular lid in contrast to the pressure which would be exerted on a square shaped junction box. Still further, a circularly shaped lid cannot drop or fall into the junction box during installation of the lid, in contrast to a square shaped lid which may accidentally penetrate through the open top and fall into the interior chamber of the junction box resulting in damage. In general, the tiered body structure preferably comprises three or more tiers although the exact number will depend on the height or overall size of the unit. Preferably between three to eight tiers are employed depending on the requirements for each application; preferably, the tiers are such that each succeeding tier, of a diverging nature, increases the cross-sectional size of the junction box by between 2% to 20% and desirably 5% to 15%. The electrical junction box of the present invention includes means for permitting the same to be secured or anchored to a substrate; for example, when the junction box is placed on a supporting surface, in an outdoor underground installation, the locale surrounding the junction box may be backfilled with earth or suitable filling material and in order to ensure the stability and prevent the apparatus from shifting, suitable means may be associated with or form an integral part of the junction box for this purpose. To this end, the junction box may be provided with an outwardly and upwardly extending rim, preferably in the form of a coextensive wall of a generally co-planar nature, which is exteriorly located, and which is adapted to receive such fill material to position the box in place. In other embodiments, suitable brackets (one or more) or arms may project exteriorly and laterally of the lower outer wall, which may be anchored by suitable means to the substrate (e.g. by placing anchor bolts, etc. into the soil through the brackets). Still further, such anchoring means may also be located interiorly of the lower wall so that anchoring of the device may be accomplished during initial installation of the unit. The junction box of the present invention may optionally have incorporated therein individual "knockouts" provisions and means far securing incoming and outgoing electrical connections, e.g. clamps although for most purposes, these will be separately provided where and as required. The device of the present invention includes several advantageous features compared to prior art structures; for instance, tiering allows for the adding of strengthening gussets along the inside of the junction box. The gussets add strength to withstand horizontal sidewall forces from the earth pushing in against the junction box when it is buried. The tiering itself adds strength to withstand horizontal sidewall forces as the top of each tier allows the top of the junction box to be smaller than the body. As the top of the junction box is at ground level, the lid can be made smaller and consequently, a smaller area is exposed at ground level. BRIEF DESCRIPTION OF THE DRAWINGS Having thus generally described the invention, reference will now be made to the accompanying drawings illustrating preferred embodiments and, in which: Figure 1 is a perspective view of the present invention; Figure 2 is a bottom view of the junction box of the present invention: Figure 3 is a sectional view taken along line 5-5 of Figure Figure 4 is a top view of the cover member of the junction bar of the present invention: Figure 5 is a sectional view taken along line 2-2 of Figure 4: and Figure 6 is a side view of Figure 4. DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS Referring to Figure 1, shown is a perspective view of the junction box of the present invention, generally indicated by numeral 10. The box 10 has an open top 12 and open bottom 14 with a plurality of tiers preferably circular in cross-section extending therebetween. It is particularly preferred that each of the tiers have a greater cross-sectional area than a preceding tier, while having a smaller cross-sectional area than a succeeding tier. In this arrangement, the tubular junction box 10 diverges from top 12 to bottom 14. In greater detail, the bottom 14 of the box 10 preferably includes mounting means 24 for mounting the box 10 to or within a substrate, e.g. concrete, ground, etc. The mounting means 24 includes a circular wall 20 extending outwardly from and concentrically with tier 16 adjacent bottom 14 of the junction box 10. The wall 20 is maintained in a spaced relationship from tier 16 adjacent bottom 12 by the spacer means. The spacer means comprise a plurality of individual spaced apart plate members 26 preferably radiating externally from tier 16 adjacent bottom 14 and extending between this tier and wall 20. The mounting means 24 additionally provides a base member 28 integrally molded with the box 10. The base member 28 extends perpendicularly from the bottom 22 of wall 20 to the exterior of tier 16 adjacent bottom 14 to thus provide a closed bottom-open top mounting means 24, generally defining an L-shape in cross-section. As briefly mentioned herein, the box 10 preferably is molded using a suitable material for such a structure which houses electrical conduits, pipes, etc. Such suitable materials include polymeric substances, more particularly rigid polymers. These materials provide strength and are light weight non-electro- conductive. When electrical conductivity is not a concern, e.g. for housing pipe junctions, etc. other materials such as cost aluminum, steel, etc, may be employed. By incorporating the polymeric material, however, one may easily drill, for example, into the structure at any position along a tier 16 and at any selected tier. Referring to Figure 2, shown is a bottom view of the junction box 10. The base member 28, discussed previously herein, preferably includes first engaging means 30, e.g. projections extending perpendicularly and projecting downwardly there from and regularly spaced apart therefrom, second engaging means 32, e.g. recesses extending upwardly therein. The engaging means 30 and 32 extend about the circumference of base 28: the recesses 32 are dimen- sioned to frictionally engage the projections 30. Thus, the first and second engaging means 30 and 32 of one junction box 10 can engage and interlock the second and first engaging means 32 and 30, respectively of a similar base 28 of a similar junction box 10 in a superposed relationship. This allows the superposed and interlocked junction boxes to provide double the height of one individual box 10 to thus accommodate a variety of applications. Further, since the boxes diverge, as illustrated in Figure 3, they may be stacked. The stacking allows the height of a box 10 to be increased by an amount equal to the width of the circular walls 20 of mounting means 24; the spacer means 26 located therein additionally provide support for boxes 10 stacked in this manner. In one application, the box 10 may be situated within the ground and the open top of the mounting means filled with earth. The spacer means 26 prevent the rotation along a vertical axis of the box 10 while mounted in the ground and keep the same from rising upward from underground forces, etc. The tier 16, comprising the polymeric material previously mentioned herein, allows the same to be cut to thereby "customize" the junction box 20 to any terrain. Applicant has found that the circular tiered structure of the box 10 adequately withstands horizontal forces externally exerted on the same while in situ. To further enhance the strength of the tiers 16, reinforcing means 34 are provided and integrally molded within the internal periphery of box 10, (preferably vertically therein) in a regularly spaced apart manner. This is shown in Figure 3. The reinforcing means 34, being integrally molded with the box 10, thus conform to each of the tiers 16; this provides reinforcement for subsequent tiers 16 in the event one is removed, cut, etc. Referring back to Figure 3, the top 12 of the box 10 preferably includes, spaced inwardly from the internal periphery cover, receiving means 36. The cover receiving means 36 comprises a groove adapted to frictionally engage engagement means 38 of cover 40 (shown in Figures 4 and 5). The engaging means 38 of cover 40 preferably comprises a downward projection extending about the internal periphery of the cover 40. In addition, the top 12 of the box 10 includes an apertured flange 37 extending inwardly thereof. The flange 37 may receive a threaded insert to accommodate a bolt, etc. (not shown) which may extend through a suitably dimensioned aperture in the cover 40 for connection therewith. The cover 40 comprises a similar material as the box 10 and additionally includes integrally molded reinforcing means 42 extending radially from the center of the cover 40. An annular reinforcement 44 is provided intermediate of the periphery and center of the cover 40. The central portion 46 of the cover 40 is preferably frustoconical as illustrated in Figure 6. Applicant, by incorporating the reinforcing means 42 and 44 has found that the circular cover 40, while positioned on box 10, substantially dissipates any weight placed thereon by distribution to the periphery thereof. This, in turn, applies equivalent downward force to all areas of the box. Thus, the cover 40 effectively releasably engages the receiving means 36 of the box 10 to provide a re-enterable, non-electroconductive junction box 10, which can receive conduits, etc. from a plurality of angles and levels. Although various embodiments have been described herein, it will be understood that various modifications can be made to the above-described embodiments without departing from the spirit and scope of the invention. THE EMBODIMENTS OF THE INVENTION IN WHICH AN EXCLUSIVE PROPERTY OR PRIVILEGE IS CLAIMED ARE DEFINED AS FOLLOWS: 1. In a junction box for connection of one or more electrical members, the improvement wherein said junction box comprises a hollow circular body, having an open top, said body having a plurality of circular tiers, said tiers comprising a plurality of diverging stages, each of said tiers having a cross- sectional area greater than a preceding stage and less than a succeeding stage: an inwardly extending support member extending circumferentially within said open top, said support member including an annular recess in an upper surface, a circular cover for positioning in said open top on said support member to close said open top, said cover including annular means for engagement in said annular recess and also including radially extending reinforcement means, said radially extending reinforcement means dissipating weight on said cover by distribution of said weight to the periphery thereof, and subsequently to the body. 2. The junction box as defined in claim 1, wherein said junction box includes means for mounting said box to a substrate, said mounting means extending outwardly from said junction box body. 3. The junction box as defined in claim 2, further including an outer circumferential wall, said mounting means extending outwardly and concentrically from a bottom tier of said box. 4. The junction box as defined in claim 3, wherein said circumferential wall includes a base member. 5. The junction box as defined in claim 4, wherein said base member includes first engaging means projecting therefrom and spaced apart second engaging means and said first engaging means being adapted for reception in respective second and first engaging means of a similar bar member of a similar structure thereby interengaging said junction box with a similar junction box when said boxes are in superposed relation. 6. The junction box as defined in claim 1, wherein said junction box body includes a circular wall, said circular wall including spacer means for spacing said wall from a bottom tier. 7. The junction box as defined in claim 6, wherein said spacer means comprises a plurality of individual spaced apart members . 8. The junction box as defined in claim 7, wherein said spaced apart members radiate laterally from said bottom tier. 9. The junction box as defined in claim 8, wherein said spaced apart members extend between said circumferential walls and said bottom tier. 10. The junction box as defined in claim 1, wherein each of said tiers includes reinforcing means. 11. The junction box as defined in claim 1, wherein said reinforcing means are integrally molded with said cover member. 12. The junction box as defined in claim 11, wherein said reinforcing means are annular reinforcing means spaced inwardly from said periphery of said cover member. 13. The junction box as defined in claim 11, wherein said reinforcing means comprise radially oriented reinforcing means radiating from a central portion of said cover member. 14. The junction box as defined in claim 1, wherein said cover member is frustoconical in profile. 15. The junction box as defined in claim 1, wherein said cover member comprises a polymeric material. 16. The junction box as defined in claim 1, wherein said cover member comprises a non-electroconductive material. 17. The junction box as defined in claim 1, wherein said cover member comprises a molded polymeric material. 18. A multi-tiered electrical junction box having a body defining a chamber therein, said body having an open top and an open bottom, said body having a plurality of spaced apart circular tiers forming diverging stages in said body, each of said circular tiers having a cross-sectional area greater than a preceding stage and less than a succeeding stage to thereby form a tiered internal and external configuration; mounting means for mounting said box to said substrate, said mounting means extending outwardly and concentrically from at least one of said tiers to permit said body to be secured to a substrate; an inwardly extending support member extending circumferentially within said open top, said support member including an annular recess in an upper surface, a circular cover for positioning in said open top on said support member to close said open top, said cover including annular means for engagement in said annular recess and also including radially extending reinforcement means, said radially extending reinforcement means dissipating weight on said cover by distribution of said weight to the periphery thereof, and subsequently to the body. 19. The junction box as defined in claim 18, wherein said mounting is L-shaped in cross-section. 20. The junction box as defined in claim 18, wherein said junction box comprises a rigid material. 21. The junction box as defined in claim 18, wherein said junction box comprises a non-electroconductive material. 22. The junction box as defined in claim 18, wherein said junction box comprises a polymeric material. 23. The junction box as defined in claim 18, wherein said junction box comprises a molded polymeric material. [Fig. 1] [Fig. 2] [Fig. 5] [Fig. 3] [Fig. 4] [Fig. 6] [Letterhead CANADIAN INTELLECTUAL PROPERTY OFFICE] Canadian Patent Office Certification This is to certify that the documents attached hereto and identified below are true copies of the documents on file in the patent office Canadian Patent Number: 2,030,251 including the Petition. /s/ signature - ------------------ Certifying Officer July 31, 1996 - ------------- Date CANADA THE PATENT ACT PETITION The Commissioner of Patents, Ottawa: The Petition of ALEXANDER MICHIE whose full post office address(es) is (are) 732 Rochester Ave. Coquitlam, British Columbia V3K 2V8 CANADA Sheweth: 1. That ALEXANDER MICHIE whose full post office address(es) is (are) 732 Rochester Ave. Coquitlam, British Columbia V3K 2V8 CANADA made the invention entitled: MULTIPLE TIERED JUNCTION BOX which is described and claimed in the specification submitted herewith. 1A. That the entire right to obtain a patent for said invention has been assigned in part to 2. That Your Petitioner(s) verily believe(s) that he (they)is (are) entitled to a patent for the said invention having regard to the provisions of the Patent Act. 2A. That this application is a division of application SN filed 3. Your petitioner(s) request(s) that this application be treated as entitled to the right accorded by section 29 of the said Act having regard to the application(s) of which particulars are set out below, and represent(s) that the said application(s) is (are) the first application(s) for patent for the said invention filed in any other country by him (them) or any one claiming under him (them); Country Filing Date Number 3A. That your petitioner(s) verily believe(s) that he (they) is (are) entitled to pay a filing fee as a small entity as defined in Section 2 of the Patent Rules. 4. That your Petitioner(s) hereby nominate(s) McFADDEN, FINCHAM, MARCUS & ALLEN whose full post office address is 606-225 Metcalfe Street, Ottawa, Ontario K2P 1P9 to be his (their) representative for the service of any proceedings taken under the Act. 5. That your petitioner(s)hereby nominate(s) McFADDEN, FINCHAM, MARCUS & ALLEN whose full post office address is 606-225 Metcalfe Street, Ottawa, Ontario K2P 1P9 as his (their) agent with full power to appoint an associate agent when required to do so by Section 144 of the Patent Rules and to revoke such an appointment, to sign the petition and drawings, to amend the specifications and drawings, to prosecute the application, and to receive the patent on the said application; and ratify(ies) any act done by the said Appointee in respect of the said application. 6. Your Petitioner(s) therefore pray(s) that a patent may be granted to him (them) for the said invention. SIGNED at Ottawa, Ontario, Canada this 18th day of November 1990. Alexander Michie /s/ McFadden, Fincham, Marcus & Allen - --------------------------------------- By: Agents of the Applicant - --------------------------- -----END PRIVACY-ENHANCED MESSAGE-----