-----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, UUugbOETSXr5bg6iJ4vwL9U8pxL5R1LYyD3Lss5QbTn/I3fpzVbEZKS4cHiM0/Rf OxBahLOKcNpMkiBpORJwWA== 0000943440-02-000319.txt : 20020814 0000943440-02-000319.hdr.sgml : 20020814 20020814180846 ACCESSION NUMBER: 0000943440-02-000319 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIVERSAL COMMUNICATION SYSTEMS INC CENTRAL INDEX KEY: 0001098207 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 860887822 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-30405 FILM NUMBER: 02738048 BUSINESS ADDRESS: STREET 1: 407 LINCOLN ROAD STREET 2: SUITE 6K CITY: MIAMI STATE: FL ZIP: 33139 BUSINESS PHONE: 5108396100 MAIL ADDRESS: STREET 1: 407 LINCOLN ROAD STREET 2: SUITE 6K CITY: MIAMI STATE: FL ZIP: 33139 FORMER COMPANY: FORMER CONFORMED NAME: WORLD WIDE WIRELESS COMMUNICATIONS INC DATE OF NAME CHANGE: 20000124 10QSB 1 universal602-10q.txt U.S. SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2002 ------------------ [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO ______ Commission file number: 000-30405 Universal Communication Systems, Inc. ---------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Nevada 4812 860887822 ---------------------- ---------------------------- -------------- (State or jurisdiction (Primary Standard Industrial (IRS Employer of incorporation Classification No.) Identification or organization) Code No.) 407 Lincoln Rd, Suite 6K Miami Beach, FL 33139 ----------------------- (Address of principal executive offices) (305) 672-6344 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] State the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date. Class Outstanding as of August 12, 2002 ----- ---------------------------------- Common Stock, $.001 par value 343,496,981 Transitional Small Business Disclosure Format: Yes [ ] No [X] TABLE OF CONTENTS PART I FINANCIAL INFORMATION Page - ---- Item 1. Consolidated Financial Statements: Consolidated Balance Sheet - September 30, 2001 and June 30, 2002 3 Consolidated Statement of Operations for the three months and nine months Ended June 30, 2002 and 2001 4 Consolidated Statement of Cash Flows for the three months and nine months Ended June 30, 2002 and 2001 5 Notes to the Consolidated Financial Statements June 30, 2002 6 Item 2. Management's Discussion and Analysis or Plan of Operations 8 PART II OTHER INFORMATION Item 1. Legal Proceedings 12 Item 6. Exhibits and Reports on Form 8-K 13 Item 7. Signatures 14 2 Part I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS Universal Communication Systems, Inc. & Subsidiaries Condensed Consolidated Balance Sheets
June 30, September 30, 2002 2001 ---- ---- (unaudited) (see note 1) ----------- ------------ Assets Current Assets: Cash & cash equivalents $ 519 $ 4,082 Other current assets - 48,991 -------------------- --------------------- Total Current Assets 519 53,073 -------------------- --------------------- Deposit in acquisition, net of impairment - 197,506 -------------------- --------------------- Advances to acquisition targets 125,149 - -------------------- --------------------- Fixed Assets: Equipment 52,971 300,670 Furniture and fixtures 20,580 20,580 Less: Accumulated depreciation & amortization (30,145) (99,779) -------------------- --------------------- Total Fixed Assets 43,406 221,471 -------------------- --------------------- Investment in unconsolidated subsidiaries, net of impairment - - Other assets 11,250 6,650 -------------------- --------------------- Total Assets $ 180,324 $ 478,700 ==================== ===================== Liabilities and Stockholders' Deficit Current Liabilities: Accounts payable, trade $ 2,023,200 $ 840,520 Accrued expenses 195,386 1,124,751 Due to related party 40,664 - -------------------- --------------------- Total Current Liabilities 2,259,250 1,965,271 Convertible debentures 7,218,722 7,077,104 -------------------- --------------------- Total Liabilities 9,477,972 9,042,375 -------------------- --------------------- Commitments and Contingencies - - Stockholders' Deficit: Committed common stock not issued 7,265 - Common Stock held in escrow (25,000) - Common stock, par value $.001 per share, 800,000,000 shares authorized, 323,996,981 issued and outstanding 323,997 137,993 Additional paid-in capital 20,124,578 19,576,098 Accumulated deficit (29,609,454) (28,158,732) Accumulated other comprehensive loss (119,034) (119,034) -------------------- --------------------- Total Stockholders' Deficit (9,297,648) (8,563,675) -------------------- --------------------- Total Liabilities and Stockholders' Deficit $ 180,324 $ 478,700 ==================== =====================
See notes to condensed consolidated financial statements. 3 Universal Communication Systems, Inc. & Subsidiaries Condensed Consolidated Statements of Operations UNAUDITED
Three Months Ended June 30, Nine Months Ended June 30, ---------------------------- -------------------------- 2002 2001 2002 2001 ---------- -------- ---------- --------- Revenue $ - $ 155,347 $ - $ 556,801 Cost of goods sold - 43,008 - 313,801 ---------- --------- --------- --------- Gross profit - 112,339 - 243,000 Operating expenses 501,060 1,078,030 870,194 4,867,169 Write down of Inventory and Equipment - - 205,181 - Impairment loss on deposits - - 197,506 - Recovery of deposits (68,800) - (68,800) - ---------- --------- --------- --------- Operating (loss) (432,260) ( 965,691) (1,204,081) (4,624,169) Interest (expense) (83,491) (63,641) (246,641) (141,654) ---------- --------- --------- --------- Net loss $ (515,751) $(1,029,332) $(1,450,722) $(4,765,823) ========== ========= ========= ========= Basic and diluted loss per share $ (0.002) $ (0.01) $ (0.008) $ (0.04) ========== ========= ========= ========= Number of shares used in computing basic and diluted loss per share 264,104,271 118,658,025 182,098,740 118,658,025 =========== =========== =========== ===========
See notes to condensed consolidated financial statements. 4 Universal Communication Systems, Inc. & Subsidiaries Condensed Consolidated Statement of Cash Flows UNAUDITED
For the For the Nine Months Nine Months Ended Ended June 30, June 30, 2002 2001 ------------------ ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $ (1,450,722) $ (4,765,823) Adjustments to reconcile net loss from operations to net cash used by operating activities: Other comprehensive (loss) - (10,850) Common stock issued for services 320,810 106,250 Depreciation and amortization expense 21,876 228,525 Interest payable added to principal of debentures 207,048 196,036 Loss on write down of assets 156,189 - Impairment loss 197,506 - Changes in operating assets and liabilities: (Increase) decrease in prepaid and other 48,991 (768,598) Decrease in accounts receivable - 306,977 Increase (decrease) in accounts payable and accrued expenses 253,315 (112,743) Increase in due to related party 40,664 - ------------------ ----------------- Net Cash (Used) by Operating Activities (204,323) (3,283,030) ------------------ ----------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of fixed assets - (1,349,726) Increase in advances to acquisition targets (112,711) - Increase in other assets - deposits (4,600) (1,693,914) ------------------ ----------------- Net Cash (Used) by Investing Activities (117,311) (3,043,640) ------------------ ----------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from the issuance of senior secured convertible debentures, net 218,070 993,349 Proceeds from the sale and leaseback of assets - 1,999,014 Sale of common stock 100,000 456,741 Other 1 - ------------------ ----------------- Net Cash Provided by Financing Activities 318,071 3,449,104 ------------------ ----------------- NET (DECREASE) IN CASH AND CASH EQUIVALENTS (3,563) (2,877,566) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,082 3,111,150 ------------------ ----------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 519 $233,584 ================== ================= SUPPLEMENTAL DISCLOSURES OF CASH: Interest paid $ - $ - Income taxes paid $ - $ - SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES: Interest accrued on debentures, added to the principal of the debentures $207,048 $196,036 Debentures converted to capital stock $283,500 $939,022
See notes to condensed consolidated financial statements. 5 UNIVERSAL COMMUNICATION SYSTEMS, INC. & SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS NOTE 1 - General and Summary of Business and Significant Accounting Policies. Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with instructions to Form 10-QSB and Regulation S-B. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete consolidated financial statements included in this Form 10-QSB. The results of operations for any interim period are not necessarily indicative of results for the full year. These statements should be read in conjunction with the audited financial statements and accompanying notes for the year ended September 30, 2001. The balance sheet at September 30, 2001 has been derived from audited financial statements, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. Organization The consolidated financial statements presented are those of Universal Communication Systems, Inc., (the Company) and its subsidiaries, Infotel Argentina, S.A. and Digital Way S.A. The Company is engaged in activities related to advanced wireless communications, and acquisition of telecommunication related businesses. Consolidated Financial Statements The accounts of the Company and its consolidated subsidiaries are included in the consolidated financial statements after elimination of significant intercompany accounts and transactions. The consolidated subsidiaries, Infotel Argentina of Argentina and Digital Way S.A. of Peru, are included in the results for the quarter ended June 30, 2001 only (see note 3). NOTE 2 - BASIC AND DILUTED NET LOSS PER SHARE CALCULATION Loss per common share is calculated in accordance with Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share." Basic loss per share is computed by dividing the loss available to common shareholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. For the three and nine months ended June 30, 2002 and 2001, common stock equivalents have been excluded from the aforementioned computations as their effect would be anti-dilutive. 6 NOTE 3 - OPERATING RESULTS BY COMPANY AND CONSOLIDATED FOR THE QUARTER ENDED JUNE 30, 2002 During the fiscal year ended September 30, 2001, the Company had lost management control of its two subsidiaries, Infotel Argentina S.A. and Digital Way S.A. of Peru. Because of the situation, the Company recognized an impairment of the Company's remaining investments in those two subsidiaries, in the amount of $5,555,254 at September 30, 2001. Although the Company has reached an agreement with Digital Way S. A., it has not been able to regain management control of either subsidiary at June 30, 2002, and therefor, is unable to include the activities of the subsidiaries in the results for the nine months ended June 30, 2002. NOTE 4 - FINANCIAL CONDITION AND LIQUIDITY The Company's financial statements are prepared using U.S. generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has experienced losses since inception, and had an accumulated deficit of $29,609,454 at June 30, 2002. Net losses are expected for the foreseeable future. Management is considering alternatives to its business strategy, including modifications of its business plan and possible sale or licensing of certain assets. Simultaneously, the Company is evaluating whether to secure additional capital through sales of common stock through the current operating cycle. There is no assurance that management will be successful in its efforts. NOTE 5 - ADVANCES TO ACQUISITION TARGETS On November 1, 2001, the Company signed a non-binding letter of intent to acquire the Hard Disc Cafe, Inc. On April 8, 2002, the shareholders of Hard Disc Cafe, Inc. agreed to a stock exchange agreement. In connection with this acquisition, the Company has advanced the Hard Disc Cafe, Inc. $125,149. NOTE 6 - DUE TO RELATED PARTY The Chairman of the Company has advanced $40,664 to the Company at June 30, 2002. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Except for historical information contained herein, the statements in this report (including without limitation, statements indicating that the Company "expects," "estimates," anticipates," or "believes" and all other statements concerning future financial results, product offerings, proposed acquisitions or combinations or other events that have not yet occurred) are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Forward-looking statements involve known and unknown factors, risks and uncertainties, which are discussed below and in the Company's other filings with the Securities and Exchange Commission, and which may cause the Company's actual results in future periods to differ materially from forecasted results. Forward looking statements are all based on current expectations, and the Company assumes no obligation to update this information. RISK FACTORS We will require additional capital in the short term to remain a going concern. We will require substantial short term outside investment on a continuing basis to finance our current operations and any limited capital expenditures identified to protect existing investments. Our revenues for the foreseeable future may not be sufficient to attain profitability. Since inception, we have generated little revenue and have incurred substantial expenditures. We expect to continue to experience losses from operations while we reorganize our wireless Internet service system and possibly develop other technologies or activities. In view of this fact, our auditors have stated in their report for the period ended September 30, 2001 that our ability to meet our future financing requirements, and the success of our future operations, cannot be determined at this time. In order to finance our working capital requirements we are negotiating equity investments, but there can be no assurance that we will obtain the required capital or that it will be obtained on terms favorable to us. If we do not obtain short term financing we may not be able to continue as a viable concern. We do not have a bank line of credit and there can be no assurance that any required or desired financing will be available through bank borrowings, debt, or equity offerings, or otherwise, on acceptable terms, if at all. If future financing requirements are satisfied through the issuance of equity securities, investors may experience significant dilution in the net book value per share of common stock. We are subject to substantial governmental regulations that could adversely affect our business. BUSINESS AND ORGANIZATION Universal Communication Systems, Inc., and its subsidiaries, Infotel Argentina S.A. and Digital Way S.A. (collectively the "Company", "us" or "we"), have been engaged in activities related to advanced wireless communications, including the acquisition of radio- frequency spectrum internationally. We also own a U. S. patent on our Distributed Wireless Call Processing System technology. Following the change in management, as noted below, we continue to evaluate the advanced wireless comunications business for further development and opportunities. Additionally, we are also focused on acquisition and expansion of themed internet cafes in selected high traffic markets and the sale of prepaid stored money cards. 8 PROPOSED ACQUISITIONS On November 1, 2001, we signed a non-binding letter of intent to acquire Hard Disc Cafe, Inc., a privately held Florida corporation which intends to develop and license themed internet cafes. Terms call for the Company to pay $1,000,000 in cash and 25 million shares of common stock for a total stated value of $1,250,000. On June 12, 2002, we announced the signing of a letter of intent to acquire Card Universal Corporation, a privately held development stage Florida corporation which intends to provide and market prepaid stored money cards. These acquisitions are subject to the signing of definitive agreements, and to the availability of appropriate financing. OUTLOOK On November 1, 2001, Michael J. Zwebner became our Chief Executive Officer and Chairman of the Board of Directors. Along with his appointment, we announced that Alexander Walker Jr. was appointed to the Board of Directors and as Secretary to the corporation and Curtis Orgill was appointed to the Board of Directors and as the Company's Chief Financial Officer. In the near term, new management anticipates restructuring our obligations, disposing of non-productive assets, re-aligning corporate resources into income and profit producing activities and completing acquisitions to give us net revenue growth. Management believes that with the proper restructuring and targeted growth by acquisition, we will recover from our current financial condition and provide growth and value to our shareholders. As previously reported, our partners in Argentina have closed the offices. In Peru, we have been advised by our partners that we have defaulted under the purchase agreement for our operating subsidiary, and they have withheld information and access to the activities of the subsidiary. However, on May 10, 2002, an agreement was reached with the individuals in Peru with respect to Digital Way S.A. Under the terms of the agreement, we relinquished 73% of our holdings in the subsidiary, but retained the right to the proceeds of any distributions or sale of 50% on the first $6,400,000. Proceeds or distributions in excess of that amount will be divided on the basis of shareholdings. All parties agreed to cancel any claims against each other and to cooperate with each other in the promotion of the subsidiary's business. Although an agreement has been signed with Digital Way S. A., we have not received information on the subsidiary's activities for the current reporting period. We recorded an impairment loss for both investments, in the fiscal year ended September 30, 2001, resulting from our loss of control of those subsidiaries and investments. We continue to pursue recovery of these assets and are attempting to negotiate an equitable settlement on related obligations of these entities. On April 8, 2002, an agreement was signed finalizing the terms of the acquisition of Hard Disc Cafe, Inc. The Agreement calls for the shareholders of Hard Disc Cafe, Inc. to surrender their stock in exchange for three year interest bearing notes totaling about $1 million and 25 million restricted shares of the Company's common stock. In March, 2002, with respect to $852,006 of vendor trade payables, we negotiated either a substantial reduction of amounts owed or more favorable long term payment plans. We offered three plans: 1) ninety percent reduction in the amount owed with payment in one installment within ninety days of agreement, or 2) seventy percent reduction in the amount owed with payment in six installments commencing twelve months after agreement, or 3) fifty percent reduction in the amount owed with payment in common stock to be registered or tradeable within 180 days from the date of agreement. As of June 30, 2002, none of the creditors who had accepted the payment plans has been paid. We have not recorded any gain from forgiven vendor payables until such time that adequate resources are available to honor the agreements. There are no material commitments for capital expenditures. On January 25, 2002, we entered into a lease for 1,400 square feet of office space at 407 Lincoln Road, Miami Beach, Florida. The lease is for a thirty six month period commencing February 1, 2002, and represents a total obligation of $108,600. Under the terms of the lease, we may cancel after the first year by giving the landlord ninety days notice. 9 SUBSEQUENT EVENTS On August 9, 2002, the Hard Disc Cafe, Inc., vacated the premises at 1542 Washington Ave, Miami Beach, Florida. The Hard Disc Cafe, Inc. is in the process of securing a new retail location on Miami Beach which will better serve its target market. On August 11, 2002, an offer in full and final settlement was made to Mr. Howard Hager and to the Trustees of World Services International (in bankruptcy), with respect to the acquisition of World Services International, a Puerto Rico corporation. The offer is still in negotiation and it is anticipated will be finalized during the fourth quarter of this fiscal year. RESULTS OF OPERATIONS Three Months and Nine Months Ended June 30, 2002 Compared to the Three Months and Nine Months Ended June 30, 2001. We had limited operational activity during the three month and nine month periods ended June 30, 2002. Therefore, we believe that any comparisons of the results of operations for the respective periods have very limited value for evaluating trends and/or as a basis for predicting future results. There were no revenues or cost of sales for the three months and nine months ended June 30, 2002 compared to $155,347 of revenues and $43,008 of cost of sales for the three months ended June 30, 2001, and $556,801 of revenues and $313,801 of cost of sales for the nine months ended June 30, 2001. All revenues in the prior year periods were derived from the sale of telephone system integration and engineering in our Argentine subsidiary and through the initiation of internet service in our Peruvian subsidiary. As previously noted, our partners in those subsidiaries have withheld information for the current reporting periods. Operating expenses for the three months and nine months ended June 30, 2002 amounted to $501,060 and $870,194, respectively, compared to $1,078,030 and $4,867,169 for the three months and nine months ended June 30, 2001. For the current reporting period, these expenses were primarily consultants, professional fees and rents, and write down of assets and impairment losses totaling $402,687. During the current period, we recovered $68,800 of deposits previously reserved as an impairment loss. For the prior year periods, the expenses were primarily generated by our foreign subsidiaries and from the increased parent company costs in expanding the business and managing the foreign subsidiaries. Net losses for the three months ended June 30, 2002 were $515,751, as compared with $1,029,332 for the three months ended June 30, 2001. Net losses for the nine months ended June 30, 2002 were $1,450,722, as compared with $4,765,823 for the nine months ended June 30, 2001. LIQUIDITY AND CAPITAL RESOURCES On June 30, 2002, we had cash and cash equivalents of $519 compared with $4,082 as of September 30, 2001. During the nine months ended June 30, 2002, $218,070 was received from the sale of 8% senior secured convertible debentures and $100,000 was received from the sale of common stock. These funds were used to pay the cash operating expenses for the nine month period ended June 30, 2002. While management restructures the Company, current operating cash is being provided by loans and the sale of common stock. The working capital deficit at June 30, 2002 amounted to $2,134,101. Management is attempting to reduce this deficit through arrangements with creditors. Although we have made some arrangements, if we do not make satisfactory arrangements with all of the creditors and obtain sufficient funding to satisfy those arrangements or obtain short term financing, we may not be able to continue as a viable concern. We do not have a bank line of credit and there can be no assurance that any 10 required or desired financing will be available through bank borrowings, debt, or equity offerings, or otherwise, on acceptable terms, if at all. If future financing requirements are satisfied through the issuance of equity securities, investors may experience significant dilution in the net book value per share of common stock. 11 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS On July 20, 2001, World Services International, Inc. ("WSI"), a Puerto Rican corporation, and its principal officer and shareholder Howard Hager, filed suit against the Company in the U.S. District Court in Puerto Rico for breach of contract and damages in the amount of $4,675,000. The claims arise out of an alleged agreement on the part of the Company to acquire WSI and provide it with substantial financing. On November 2, 2001, the court granted a default judgement subject to the plaintiffs filing a motion for judgement with certain supporting documentation by November 15, 2001. Such filing was not done. In an effort to mitigate the expense of and management's attention to a legal conflict in the court system, an offer in full and final settlement was made to Mr. Howard Hager and to the Trustees of World Services International (in bankruptcy). We anticipate a resolution in the near future. ITEM 2. DEFAULTS ON SENIOR SECURITIES On January 14, 2001, we entered into a Loan Agreement with our systems integrator, Andrew Corporation, to repay costs incurred in purchasing their services and equipment. Under the Loan Agreement, we agreed to pay the company an initial payment of $100,000 and then an additional $100,000 each month until the loan is repaid. We are currently in default under this obligation. The amount payable each month is subject to an increase if we receive additional financing. In addition, we issued the company a warrant to purchase no less than 200,000 shares and no greater than 500,000 shares of common stock. The warrants are exercisable until January 24, 2005 at an exercise price of $0.23 per share. The warrants were issued in lieu of interest. We are required to register the shares underlying the warrants. Further, on July 23, 2001, we entered into an agreement with Andrew Corporation to resolve all our remaining indebtedness, including the monthly obligations above, to Andrew. This agreement requires the return of all equipment previously shipped to Argentina, most of which has been held in the duty free zone in La Plata, Argentina. This agreement does not require the return of any equipment shipped by Andrew to Peru. We have not been able to release the equipment from the authorities in Argentina and we believe it may no longer be located there. We have made several settlement offers to Andrews Corporation as an alternative to prior agreements, but have not reached a definitive agreement in this matter. We anticipate a resolution of this matter during the fourth quarter of this fiscal year ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Company's annual meeting of stockholders was held on May 21, 2002. The directors elected at the meeting were:
For Withheld ------------ ------------ Curtis A. Orgil 220,319,870 517,340 Ramsey Sweis 220,319,870 517,340 Alexander H. Walker, Jr. 220,319,870 268,103 Michael J. Zwebner 220,319,870 655,034
Approval of the amendment to the Articles of Incorporation increasing the number of shares of common stock authorized for issuance from 300,000,000 shares of common stock to 800,000,000 shares of common stock:
For Against Withheld ------------ -------------- ------------ 214,716,200 5,803,789 462,126
Approval of the amendment to the Company's Articles of Incorporation to give the Board of Directors the authority to effect a reverse split of the Company's common stock without having to correspondingly reduce the number of authorized shares of common stock: 12
For Against Withheld ------------ -------------- ------------ 210,751,535 9,901,745 378,016
Ratification of the selection of Reuben E. Price, P.A., as the Company's independent auditors for the fiscal year ending September 30, 2002:
For Against Withheld ------------ -------------- ------------ 218,681,146 815,914 1,538,334
The foregoing matters are described in detail in the Company's proxy statement dated April 23, 2002 for the 2002 Annual Meeting of Stockholders. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) The following exhibits are included herewith: EXHIBIT NO. DOCUMENT ----------- -------- 3.1 Certificate of Amendment to the Articles of Incorporation of Universal Communication Systems, Inc. 11 Computation of Weighted Average Common Stock Shares Outstanding 99.1 Certifications pursuant to 18 U.S.C. Section 1350 99.2 Settlement and Stock Transfer Agreement 99.3 Press Release - Results of Shareholder Meeting (b) The Company filed the following reports on Form 8-K during the quarter for which this form is filed: Form 8-K dated April 16, 2002, reporting: Item 5, Other Events - Change of name and symbol 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: August 14, 2002 UNIVERSAL COMMUNICATION SYSTEMS, INC. /s/ MICHAEL J. ZWEBNER ---------------------------- Michael J. Zwebner Chief Executive Officer, Chairman of the Board 14 EX-3.1 3 universalex3-1.txt EXHIBIT 3.1 CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF UNIVERSAL COMMUNICATION SYSTEMS, INC. Michael J. Zwebner and Alexander Walker, Jr. certify that: 1. They are the duly appointed, qualified Chairman and Secretary of Universal Communication Systems, Inc., a Nevada Corporation (the "Corporation"). 2. The Articles of Incorporation of the Corporation is amended and restated in its entirety as follows: "ARTICLE I. The name of the corporation is Universal Communication Systems, Inc. ARTICLE II. The name and address of the Corporation's resident agent is The Nevada Agency and Trust Company, 50 West Liberty Street, Reno, Nevada 89501. ARTICLE III. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Nevada. ARTICLE IV. The Corporation is authorized to issue two classes of shares, designated "Common Stock" and "Preferred Stock," respectively. The Corporation is authorized to issue 500,000,000 shares of Common Stock with par value of $0.001, and 10,000,000 shares of Preferred Stock with par value of $0.001. The Preferred Stock may be issued in any number of series, as determined by the board of directors. The board may by resolution fix the designation and number of shares of any such series. The board may determine, alter, or revoke the powers, designations, preferences and relative, participating, optional or other rights, if any or the qualifications, limitations or restrictions thereof, pertaining to any wholly unissued class or series of Preferred Stock. The board may thereafter in the same manner increase (but not above the total number of authorized shares of the class) or decrease (but not below the number of shares thereof then outstanding) the number of shares of any such series. Except as otherwise required by law, the board of directors may, by resolution, decrease the number of issued and outstanding shares of a class or series of common or preferred stock without correspondingly decrease the number of authorized shares of the same class or series and without a stockholder vote. ARTICLE V. Pursuant to Nevada Revised Statutes ("NRS") 78.037 a director or officer of the Corporation shall not be personally liable to the Corporation or its stockholders for damages for breach of fiduciary duty as a director or officer, provided, however, that the personal liability of a director or officer shall not be eliminated (i) for acts or omissions which involve intentional misconduct, fraud or a Exhibit 3.1 - Pg. 1 knowing violation of law, or (ii) the payment of distributions in violation of NRS 78.300. ARTICLE VI. The Corporation shall, to the fullest extent permitted by Nevada Law, indemnify and hold harmless each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in, any threatened, pending or completed actions, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise in connection with any matter relating to the Corporation's business or affairs, against any losses, claims, damages or liabilities. The right to indemnification conferred in this ARTICLE VI shall also include the right to be paid by the Corporation the expenses incurred in connection with any such proceeding in advance of it final disposition to the fullest extent authorized by Nevada Law. The right to indemnification conferred in this ARTICLE VI shall be a contract right. ARTICLE VII. The first board of directors of the Corporation consisted of two (2) members and the names and addresses of these directors are: Cindy Robison 3157 E. Linden, Tuscon, AZ 85716 Joel Watkins 3653 E. Second, #205, Tuscon, AZ 85716 ARTICLE VIII. The names and addresses of the incorporators of the Corporation are: Candice Maerz 3225 N. Central Ave., Phoenix, AZ 85012 Terrie L. Bates 3225 N. Central Ave., Phoenix, AZ 85012 ARTICLE IX. The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Articles of Incorporation, in the manner now or hereafter prescribed by statute, and, with the sole exception of those rights and power conferred under the above ARTICLES V AND VI, all rights and powers conferred upon stockholders, directors and officers herein are granted subject to this reservation." 3. The foregoing Amendment of the Articles of Incorporation was duly adopted by the shareholders and the board of directors of the Corporation in accordance with the provisions of the NRS 78.385 and NRS 78.390. IN WITNESS WHEREOF, I have signed my name this 22nd day of May, 2002. /s/ Michael J. Zwebner -------------------------------- Michael J. Zwebner, Chairman /s/ Alexander Walker Jr. -------------------------------- Alexander Walker, Jr., Secretary Exhibit 3.1 - Pg. 2 EX-11 4 universalex-11.txt EXHIBIT 11 UNIVERSAL COMMUNICATION SYSTEMS, INC. COMPUTATION OF WEIGHTED AVERAGE COMMON STOCK SHARES OUTSTANDING
Three Months Nine Months Total Number Ended Ended of Shares June 30, 2002 June 30, 2002 ------------ ------------- -------------- Outstanding shares as of October 1, 2001 137,530,725 137,530,725 137,530,725 Conversion of debt 02/05/02 2,003,825 2,003,825 1,064,303 Sale of common shares 02/21/02 13,254,447 13,254,447 6,263,090 Issued for services 02/22/02 1,000,000 1,000,000 468,864 Issued for services 04/08/02 26,013,918 23,726,980 7,908,993 Conversion of debt 04/08/02 45,000,000 41,043,956 13,681,319 Transfer to Escrow for Acquisition 04/08/02 25,000,000 22,802,198 7,600,733 Issued for services 04/25/02 2,000,000 1,450,549 483,516 Sale of common shares 04/25/02 11,000,000 7,978,022 2,659,341 Issued for services 05/22/02 17,800,000 7,628,571 2,542,857 Sale of common shares 06/17/02 20,000,000 2,857,143 952,381 Issued for services 06/19/02 23,394,066 2,827,854 942,618 ----------- ----------- ----------- Total Weighted Average Shares Outstanding 323,996,981 264,104,271 182,098,740 =========== =========== =========== Net Loss From Continuing Operations $ (515,751) $(1,450,722) =========== =========== Net Loss per common share (1) $ (0.002) $ (0.008)
(1) The effect of common stock options and warrants is excluded from diluted earnings per share as its inclusion would be anti-dilutive for the three month and nine month periods ended June 30, 2002. EX-99.1 5 universalex99-1.txt Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Universal Communication Systems, Inc. (the "Company") on Form 10-QSB for the period ended June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael J. Zwebner, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Michael J. Zwebner - ---------------------- Michael J. Zwebner Chairman and Chief Executive Officer August 14, 2002 Exhibit 99.1 - Pg. 1 Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Universal Communication Systems, Inc. (the "Company") on Form 10-QSB for the period ended June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Curtis Orgil, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Curtis Orgil - ---------------------- Curtis Orgil Chief Financial Officer August 14, 2002 Exhibit 99.1 - Pg. 2 EX-99.2 6 universalex99-2.txt Exhibit 99.2 SETTLEMENT AND STOCK TRANSFER AGREEMENT This Settlement and Stock Transfer Agreement executed this 10th day of May, 2002 by and between Anibal Eduardo Urteaga Fiol, Jose Antonio De Izcue Arnillas and Joaquin Gonzalez Mavila (collectively "Urteaga Group") and Universal Communications Systems, Inc. fka World Wide Wireless Communications, Inc., a Nevada corporation ("UCSI") is for the purposes of resolving outstanding obligations and disputes between the parties and facilitating the transfer and ownership of common stock interests. PRELIMINARY RECITALS A. Pursuant to an Agreement dated February 29, 2000 (the "Stock Sale Agreement"), the Urteaga Group sold, transferred and conveyed 100% of the common shares of Digital Way, S.A., a Peruvian corporation ("DWSA") to and for the benefit of UCSI; B. In exchange and as consideration for the transfer of the common shares of DWSA, UCSI agreed to make payments in cash and stock pursuant to the provisions of the Agreement and the subsequent Amendment to the agreement dated September 19, 2000 ("Amendment to Stock Sale Agreement"); C. As of the date of this Settlement Agreement, UCSI has failed to make all payments due and owing and has further failed to issue stock of UCSI in accordance with the terms of the Stock Sale Agreement and the Amendment to Stock Sale Agreement; D. In consideration of various economic, legal and practical issues, the parties have agreed to resolve their differences and disputes by virtue of this Settlement Agreement and this Settlement Agreement shall supercede, in all respects, the Stock Sale Agreement and the Amendment to Stock Sale Agreement and shall govern the future relationship, rights and obligations between the parties. NOW, THEREFORE, in consideration of the promises and the mutual agreements covenants hereafter set forth, the Parties hereby agree as follows: 1. INCORPORATION OF RECITALS. The preliminary recitals are incorporated into this Settlement Agreement as if fully restated in their entirety. 2. TRANSFER OF SHARES IN DIGITAL WAY S.A. UCSI shall transfer Seventy-Three Percent (73%) ("Transferred Shares") of the issued and outstanding share of DWSA to the Urteaga Group or its designee. UCSI shall retain Twenty-Seven Percent (27%) of the common shares of DWSA. The Transferred Shares shall be free and clear of liens, claims, encumbrances and attachments. The transfer shall be accomplished by endorsement and execution of a Power of Attorney to allow for the re-titling of the Transferred Shares on the transfer ledger of DWSA. Alternatively, all existing shares shall be canceled and newly issued shares shall be distributed in accordance with the percentages agreed in this Settlement Agreement. Upon the consummation of this Agreement, the transfer ledger of DWSA shall reflect the Urteaga Group as the holder of Seventy-Three Percent (73%) of the issued and outstanding shares of DWSA and UCSI as the holder of Twenty-Seven Percent (27%) of the issued and outstanding shares of DWSA. 3. CAPITALIZATION OF DEBT. UCSI claims that DWSA is indebted to it in the approximate amount of One Million Three Hundred Thousand Dollars ($1,300,000.00). All indebtedness of DWSA to UCSI shall be and is hereby released and discharged in full. DWSA shall restate its financial records to reflect this indebtedness as a capital investment. 4. DISTRIBUTION UPON SALE. Upon the sale of all or substantially all of the assets of DWSA, all proceeds whether in the form of a dividend or cash distribution, or otherwise, distributable to UCSI and the Urteaga Group shall be distributed equally between UCSI and the Urteaga Group up to the total sum of Six Million Four Hundred Thousand Dollars ($6,400,000.00: $3,200,000.00 to UCSI and $3,200,000.00 to the Urteaga Group). Any proceeds distributable to UCSI and the Urteaga Group in excess of Six Million Four Hundred Thousand Dollars ($6,400,000.00) shall be distributed in accordance with the parties' respective percentage of ownership of the shares of DWSA, 73% for the Urteaga Group and 27% for UCSI. Exhibit 99.2 - Pg. 1 5. MUTUAL RELEASE. Except for claims arising under this Settlement Agreement, the Urteaga Group, for themselves, their agents, successors, attorneys, assigns and personal representatives do hereby release and forever discharge UCSI including their servants, employees, agents, successors, assigns, parent or subsidiary companies, attorneys, insurers and personal representatives of, from and against any and all claims of every kind and nature whatsoever which the Urteaga Group may have or claim to have against UCSI or any of them, or their servants, employees, agents, successors, assigns, parent or subsidiary companies, attorneys, insurers and personal representatives, for damages, costs, loss and expenses of every kind and nature whatsoever, whether known or unknown, anticipated or unanticipated, and whether accrued or hereafter to accrue from the beginning of time to the date hereof. Except for claims arising under this Settlement Agreement, UCSI, for themselves, their agents, successors, attorneys, assigns and personal representatives do hereby release and forever discharge the Urteaga Group including their servants, employees, agents, successors, assigns, parent or subsidiary companies, attorneys, insurers and personal representatives of, from and against any and all claims of every kind and nature whatsoever which UCSI may have or claim to have against the Urteaga Group or any of them, or their servants, employees, agents, successors, assigns, parent or subsidiary companies, attorneys, insurers and personal representatives, for damages, costs, loss and expenses of every kind and nature whatsoever, whether known or unknown, anticipated or unanticipated, and whether accrued or hereafter to accrue from the beginning of time to the date hereof. 6. WARRANTIES OF SELLER. 6.1 Ownership of Shares. UCSI is the legitimate owner and holder of 100% of the issued and outstanding shares of DWSA and UCSI has clear title to the DWSA shares, free and clear of any liens, encumbrances or ownership claims by any other party. 6.2 Corporate Status. UCSI is a duly constituted corporation under the laws of the state of Nevada in good standing and there are no agreements, judgment or orders restricting its ability to perform under this Settlement Agreement. 6.3 Survival of Representations and Warranties. All representations and warranties by UCSI shall survive the closing of this transaction and shall be forever binding upon UCSI, and its successors and assigns. 6.4 Successors and Assigns. Assignment by either party. Both parties shall require any successors (whether direct or indirect, by purchase, merger, consolidation or otherwise) to part or all or substantially all of the business and/or assets of the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the parties would be required to perform if no such succession had taken place. As used in this Section, the "Parties" shall mean the parties as hereinbefore defined and any successor to its business and/or assets as aforesaid which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law and this Agreement shall be binding upon, and inure to the benefit of, the Parties, as so defined. 6.4 a) Assignment by UCSI. UCSI may assign their interest, in part or in whole, in this Agreement or any part hereof on terms and conditions that may be offered, subject to first offering the Urteaga Group the rights of first refusal. In the event The Urteaga Group shall decline the offer for the right of first refusal, UCSI shall inform the Urteaga Group of their desire and intention to assign, and the Urteaga Group shall not unreasonably withhold consent to the proposed assignment, such consent shall be delivered within 30 days of notification. 6.4 b) Assignment by The Urteaga Group. The Urteaga Group may assign their interest, in part or in whole, in this Agreement or any part hereof on terms and conditions that may be offered, subject to first offering UCSI the rights of first refusal. In the event the UCSI shall decline the offer for the right of first refusal, The Urteaga Group shall inform UCSI of their desire and intention to assign, and UCSI shall not unreasonably withhold consent to the proposed assignment, such consent shall be delivered within 30 days of notification. 7. NOTICE. Any and all notices, requests, demands and other communications that may be necessary, proper or convenient under this Agreement or any other related documents, shall be conclusively deemed given, when given in writing, on the date it is personally delivered to the person set forth below, or by mail, postage prepaid, certified return receipt requested, addressed as set forth below, or telefaxed to: Exhibit 99.2 - Pg. 2 UCSI: UCSI 407 Lincoln Rd Ste 6K Miami Beach, FL 33139 Urteaga Group The Urteaga Group 3301 N.E. 42nd Court Ft. Lauderdale, Florida 33308 With a copy to: Jonathon M. Yarger, Esq. Kohrman Jackson & Krantz P.L.L. 1375 E. Ninth Street, Suite 2000 Cleveland, Ohio 44114 Any of the parties may change the person authorized to receive any notice, request, demand or other communications and/or its mailing or physical address by giving notice to the other party pursuant to this paragraph. 8. FURTHER COOPERATION. The Urteaga Group and UCSI agree to execute and deliver any and all additional necessary documents, and will cause any other action to be taken, which may be necessary or proper to effect or evidence the provisions of this Settlement Agreement and the transactions contemplated under this Settlement Agreement. 9. REPRESENTATION BY COUNSEL; CONSTRUCTION. 9.1 Representation by Counsel. All parties have either been represented by counsel or had an opportunity to seek counsel and representation in connection with the negotiation and execution of this Settlement Agreement and the transactions described in this Settlement Agreement. All parties have either availed themselves of such representation or have consciously decided not to seek such counsel. 9.2 Construction of Agreement. The parties agree that no term or concept contained in this Settlement Agreement shall be construed against any party who directly or indirectly drafted this Settlement Agreement. No presumption of construction shall be applied merely relating to the identity of the drafting party. 10. MISCELLANEOUS PROVISIONS. 10.1 This Agreement may not be amended, supplemented or otherwise modified, except by an instrument in writing signed by each of the parties hereto. 10.2 This Settlement Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their heirs, successors, personal representatives and assigns of individual parties, and the successors in interest and assigns. 10.3 The failure to enforce any violation or breaches of this Settlement Agreement shall not be deemed a waiver of said violations, defaults or breaches, and each party reserves unto itself the right to enforce the same at a later time. Each party reserves the right to waive any condition imposed herein for its benefit. 10.4 The paragraph headings contained in this Settlement Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 10.5 This Settlement Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 10.6 This Settlement Agreement sets forth the entire understanding and agreements of the parties hereto relating to the subject matter of this Agreement; and supersedes any and all oral or written agreements and understandings made prior to the execution of this Settlement Agreement. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first stated above. THE URTEAGA GROUP By: /s/ Anibal Urteses - ------------------------------ ------------------------------ Print name: Anibal Urteses Its: - ------------------------------ ------------------------------ Exhibit 99.2 - Pg. 3 By: /s/ Jose A. De Lzcue - ------------------------------ ------------------------------ Print name Jose A. De Lzcue Its: - ------------------------------ ------------------------------ By: /s/ J. Gonzales Mauha - ------------------------------ ------------------------------ Print name J. Gonzales Mauha Its: - ------------------------------ ------------------------------ UNIVERSAL COMMUNICATIONS SYSTEMS, INC. f/k/a/ World Wide Wireless Communications, Inc., a Nevada Corporation By: /s/ Michael J. Zwebner - ------------------------------ ------------------------------ Print name Michael J. Zwebner Its: Chairman - ------------------------------ ------------------------------ DIGITAL WAY, S.A. By: /s/ Jose A. De Lzcue - ------------------------------ ------------------------------ Print name Jose A. De Lzcue Its: - ------------------------------ ------------------------------ Exhibit 99.2 - Pg. 4 EX-99.3 7 universalex99-3.txt Exhibit 99.3 Wednesday May 22, 8:00 am Eastern Time Press Release SOURCE: Universal Communication Systems, Inc. Universal Communication Systems, Inc. Announces Results of Annual Shareholders' Meeting 88 Percent Re-Elect Existing Board, Approve Auditors and Over 84 Percent Vote in Favor of Articles of Incorporation Amendment Proposals MIAMI--(BUSINESS WIRE)--May 22, 2002-- Universal Communication Systems Inc. (OTCBB:UCSI - News), Chairman Michael J. Zwebner announced today the results of the annual shareholder meeting held yesterday at the Company's corporate headquarters in Miami Beach, Florida. At the meeting, stockholders approved the re-election of the existing Board of Directors, approved the re-appointment of Reuben E. Price, P.A. to serve as the Company's independent auditors for the current fiscal year's financial statements, and approved the amendments to the Company's Articles of Incorporation. Represented at the meeting, either by proxy or in person, were 227,395,345 shares of the Common Stock of the company. This constituted 91.1% of the 249,802,915 shares of Common Stock outstanding on the date of record, April 8, 2002. Noting the high percentage of approval by the shareholders on the proposals, Mr. Zwebner commented: "The shareholders have confirmed their confidence in the current management and with the Directors' decisions and plans in revitalizing the Company in an effort to build long term value. I am pleased with the confidence and positive votes we have received from our shareholders." At the meeting, the Company reported continuing progress in reducing debts, cutting administrative costs and negotiating settlements on various contract disputes. About Universal Communication Systems, Inc. Universal Communication Systems, Inc. and its subsidiaries have been engaged in activities related to advanced wireless communications, including the acquisition of radio-frequency spectrum internationally. The Company also owns a U.S. patent on a Distributed Wireless Call Processing System technology. The Company recently announced the finalization of its acquisition of Hard Disc Cafe, Inc. Hard Disc Cafe is in the business of themed Internet Cafes, targeting densely populated urban areas and tourist sites with a unique high tech space themed image. For additional information please visit the Company's web site at http://www.harddisccafe.com. Interested parties are advised to click on the "Brochures" icon, and download a copy of the company's current brochure. (some sections of the site may still be under construction). Safe Harbor Statement Statements in this press release that are not historical including statements regarding Universal Communication Systems, Inc. or management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. It is important to note that the Company's actual results could differ materially from those in any forward-looking statements. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release. Factors that could cause actual results to differ materially from forward looking statements are listed from time to time in the Company's SEC reports, including but not limited to, the annual report on form 10-KSB for the year ended September 30, 2001 and the quarterly report on forms 10-QSB for the periods ending December 31, 2001 and March 31, 2002. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities. Contact: Universal Communication Systems, Inc., Miami Michael J. Zwebner, 305/672-6344 -----END PRIVACY-ENHANCED MESSAGE-----