-----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, A9syF8FzwfN/xw1LwUWo7rYfnYuQO/1LgDF4/XhW20SYPIi4St0RKtxr2cJX34jr IpDsdVmzP1tM78bu32yjFQ== /in/edgar/work/20000828/0001010549-00-000548/0001010549-00-000548.txt : 20000922 0001010549-00-000548.hdr.sgml : 20000922 ACCESSION NUMBER: 0001010549-00-000548 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000825 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000828 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAS ACQUISITION XXV CORP CENTRAL INDEX KEY: 0001103023 STANDARD INDUSTRIAL CLASSIFICATION: [6770 ] IRS NUMBER: 352089880 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-28935 FILM NUMBER: 711319 BUSINESS ADDRESS: STREET 1: 1710 E DIVISION ST CITY: EVANSVILLE STATE: IN ZIP: 47711 BUSINESS PHONE: 8124797266 MAIL ADDRESS: STREET 1: 1710 E DIVISION ST CITY: EVANSVILLE STATE: IN ZIP: 47711 8-K 1 0001.txt U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: August 25, 2000 OMNINET MEDIA.COM, INC. - -------------------------------------------------------------------------------- (Exact Name of registrant as specified in its Charter) Nevada 0-28935 88-0398783 - ------------------------ ------------------- -------------------- (State of Incorporation) Commission File No. (IRS Employer Identification No.) 7825 Fay Avenue, Ste. 200, La Jolla, CA 92037 - ------------------------------------------------ ------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number,( 858 ) 456 - 5588 ----------- ------------- --------------- MAS ACQUISITION XXV CORP. 1710 East Division St. Evansville, IN 47711 (Registrant's former name and address) Item 1. CHANGES IN CONTROL OF REGISTRANT. (a) Pursuant to the Agreement and Plan of Reorganization effective August 17, 2000, OmniNet Media.com, Inc., ("OmniNet"), a Nevada corporation, acquired 5,000,000 shares of MAS Acquisition XXV Corp., for Five Thousand ($5,000) Dollars. As a result of the purchase MAS XXV became a subsidiary of OmniNet. The Stock Purchase Agreement was approved by the unanimous consent of the board of directors of OmniNet on July 18, 2000. Prior to the Agreement, OmniNet had 41,786,155 shares issued and outstanding. Following the Agreement, OmniNet has 41,811,155 shares issued and outstanding. In accordance with the terms of the agreement, the OmniNet remunerated MAS Capital, Inc, in the amount of $45,000 and 25,000 OmniNet restricted common shares in consideration for the return and cancellation of 8,250,000 common shares it owned of MAS Acquisition XXV. Upon effectiveness of the Agreement and Plan of Reorganization, pursuant to Rule 12g-3(a) of the General Rules and Regulations of the Securities and Exchange Commission, OmniNet became the successor issuer to MAS XXV for reporting purposes under the Securities Exchange of 1934, as amended. The officers, directors and By-laws of OmniNet continued without changes as the officers, directors and By-laws of the successor issuer. See Item 5. "Other Events" in this report. A copy of the Agreement and Plan of Reorganization is filed as an Exhibit to this Form 8-K Report and is incorporated into this report. Item 2. ACQUISITION OR DISPOSITION OF ASSETS. (a) Effective August 17, 2000 OmniNet Media.com, Inc. acquired 5,000,000 common shares of MAS Acquisition XXV Corp ("MAS), an Indiana corporation, making MAS a subsidiary of OmniNet. In evaluating OmniNet as a candidate for the business combination, MAS XXV used criteria such as the value of the assets of OmniNet, particularly its expertise of management, current business operations, and anticipated operations. MAS XXV determined that the consideration for the business combination was reasonable. In evaluating MAS XXV as a candidate for the proposed business combination, OmniNet used MAS XXV's status as a reporting company, its lack of operating history and lack of potential related liabilities. OmniNet determined that the consideration for the business combination was reasonable. Item 3. BANKRUPTCY OR RECEIVERSHIP. Not applicable. Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNT. The successor issuer registrant's certifying public accounting firm is DiRocco & Dombrow, P.A. of Fort Lauderdale, Florida. Item 5. OTHER EVENTS. (a) Successor Issuer Election. In accordance with Rule 12g-3(a) of the General Rules and Regulations of the Securities and Exchange Commission, OmniNet became the successor issuer to MAS Acquisition XXV for reporting purposes under the Securities Exchange Act of 1934 and elects to report under the Act. (b) OmniNet Media.com, Inc., formerly known as Tricom Technology, Inc., was incorporated on July 14, 1998. (See Exhibit 3.0) OmniNet Media.com, Inc., a Nevada corporation, was merged into and with Tricom Technology, Inc. At the time of the merger, Tricom changed its name to OmniNet Media.com, Inc. On June 8, 2000 OmniNet acquired 75.72% of the issued and outstanding common stock of U.S./ACE Security Laminates, Inc. Item 6. RESIGNATION OF DIRECTORS AND EXECUTIVE OFFICERS. Effective August 17, 2000, Aaron Tsai, the sole director and officer of MAS Acquisition XXV Corp, resigned appointing James Graves to fill his director and officer positions. Item 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements of business acquired. 1. Financial statements of OmniNet Media.com, Inc. as of December 31, 1999 and 1998 (Audited) 2. Financial statements of U.S./Ace Security Laminates, Inc. as of December 31, 1999 and 1998 (Audited) 3. Financial Statements of OmniNet Media.com, Inc. as of June 30, 2000 and 1999 (Unaudited) (b) Pro Forma financial information. 1. The Company pro forma condensed consolidated balance sheet as of June 30, 2000 (Unaudited) 2. The Company pro forma condensed consolidated statement of operation for the year ended December 31, 1999 (Unaudited) 3. The Company pro forma condensed consolidated statement of income for the six month period ended June 30, 2000 (Unaudited) (c) Index to Exhibits. Exhibit Number Description (2.0) Agreement and Plan of Reorganization (3.0) Articles of Amendment Tricom Technology Group, Inc. (3.1) Articles of Incorporation of Tricom Technology Group, Inc., now OmniNet Media.com, Inc. (3.2) By-Laws OmniNet Media.com, Inc. Item 8. CHANGES IN FISCAL YEAR. The successor issuer registrant's fiscal year ends December 31. 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 hereunto duly authorized. OMNINET MEDIA.COM, INC. Dated: August 25, 2000 By: /s/ James Graves --------------------- James Graves Title: V.P./Secretary OMNINET MEDIA.COM, INC. FINANCIAL STATEMENTS INCLUDING AUDITORS' REPORT FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999 AND THE FIVE MONTHS ENDED MAY 31, 2000 TABLE OF CONTENTS PAGE INDEPENDENT AUDITORS' REPORT............................ 1 FINANCIAL STATEMENTS BALANCE SHEETS........................................ 2 STATEMENTS OF OPERATIONS.............................. 3 STATEMENTS OF STOCKHOLDERS' EQUITY.................... 4 STATEMENTS OF CASH FLOWS ............................. 5 NOTES TO FINANCIAL STATEMENTS........................... 6 - 12 DIROCCO AND DOMBROW, P.A. 3601 W. COMMERCIAL BLVD., SUITE #39 FT. LAUDERDALE, FLORIDA 33309 (954) 731-8181 Independent Auditors' Report ---------------------------- To the Board of Directors OmniNet Media.Com, Inc. La Jolla, CA We have audited the accompanying balance sheets of OmniNet Media.Com, Inc. as of December 31, 1998 and 1999 and May 31, 2000, and the related statements of operations, changes in stockholders' equity (deficit) and cash flows for the years then ended and the five months ended May 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audits 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 OmniNet Media.Com, Inc. as of December 31, 1998 and 1999 and May 31, 2000, and the results of operations and its cash flows for the years then ended and the five months ended May 31, 2000 in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred significant losses and has negative net working capital from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plan in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. DiRocco and Dombrow, P.A. July 12, 2000
OMNINET MEDIA.COM, INC. BALANCE SHEETS ASSETS December 31, ---------------------- May 31, 1998 1999 2000 --------- --------- --------- Current Assets Cash $ -- $ 29 $ -- --------- --------- --------- Total Current Assets -- 29 -- --------- --------- --------- Total Assets $ -- $ 29 $ -- ========= ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current Liabilities Accrued expenses $ 8,000 $ 16,000 $ 20,225 --------- --------- --------- Total Current Liabilities 8,000 16,000 20,225 --------- --------- --------- Stockholders' Equity (Deficit) Preferred stock, $0.0001 par value; 10,000 shares authorized, no shares issued and outstanding -- -- -- Common stock, $0.0001 par value; 690,000,000 shares authorized; 11,260,748, 11,260,748 and 40,397,521 shares issued and outstanding, respectively 1,126 1,126 4,040 Additional paid-in capital 667,842 701,842 729,965 Accumulated deficit (676,968) (718,939) (754,230) --------- --------- --------- Total Stockholders' Equity (Deficit) (8,000) (15,971) (20,225) --------- --------- --------- Total Liabilities and Stockholders' Equity (Deficit) $ -- $ 29 $ -- ========= ========= =========
The accompanying notes are an integral part of the financial statements. -2-
OMNINET MEDIA.COM, INC. STATEMENTS OF OPERATIONS Five months Year ended December 31, ended ---------------------------- May 31, 1998 1999 2000 ------------ ------------ ------------ Revenues, net $ -- $ -- $ -- ------------ ------------ ------------ Total Revenue -- -- -- ------------ ------------ ------------ Expenses Consulting -- 22,500 2,000 Research and development -- 10,425 17,410 Transfer agent fee -- -- 5,477 Rent -- -- 2,954 Professional fee 8,000 8,000 4,000 Other -- 1,496 3,450 ------------ ------------ ------------ Total Expenses 8,000 42,421 35,291 ------------ ------------ ------------ Operating Loss (8,000) (42,421) (35,291) ------------ ------------ ------------ Other Income (Expenses) Interest income -- 450 -- Loss on disposal of asset (6,350) -- -- ------------ ------------ ------------ Total Other Income (Expenses) (6,350) 450 -- ------------ ------------ ------------ Net Loss $ (14,350) $ (41,971) $ (35,291) ============ ============ ============ Net Loss Per Common Share $ (0.00) $ (0.00) $ (0.00) ============ ============ ============ Weighted Average Number of Common Shares Outstanding 6,782,331 11,260,748 14,940,931 ============ ============ ============
The accompanying notes are an integral part of the financial statements. -3-
OMNINET MEDIA.COM , INC. STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) Preferred Stock Total $0.0001 Par Value Common Stock Additional Shareholders' ----------------- ------------------------ Paid-In Accumulated Equity Shares Amount Shares Amount Capital Deficit (Deficit) ------ ------ ----------- ----------- ----------- ----------- ----------- Balance at December 31, 1997 -- $ -- 7,787,406 $ 7,787 $ 654,831 $ (662,618) $ -- Issuance of common stock for exchange agreement at $0.001 -- -- 5,250,000 5,250 -- -- 5,250 Reverse split; 50:1 par $0.001 -- -- (12,776,658) (12,777) 12,777 -- -- Change in par value from $0.001 to $0.0001 -- -- -- (234) 234 -- -- Issuance of common stock through a limited offering at $0.0001 par value -- -- 11,000,000 1,100 -- -- 1,100 Net loss for the year ended December 31, 1998 -- -- -- -- -- (14,350) (14,350) ------ ------ ----------- ----------- ----------- ----------- ----------- Balance at December 31, 1998 -- -- 11,260,748 1,126 667,842 (676,968) (8,000) Additional investment by stockholders -- -- -- -- 34,000 -- 34,000 Net loss for the year ended December 31, 1999 -- -- -- -- -- (41,971) (41,971) ------ ------ ----------- ----------- ----------- ----------- ----------- Balance at December 31, 1999 -- -- 11,260,748 1,126 701,842 (718,939) (15,971) Reverse split; 500:1 par $0.0001 -- -- (11,238,227) (1,123) 1,123 -- -- Issuance of common stock for cash at $0.0001 -- -- 30,000,000 3,000 27,000 -- 30,000 Issuance of common stock for cash at $0.0001 -- -- 10,000,000 1,000 -- -- 1,000 Issuance of common stock for cash at $0.0001 -- -- 375,000 37 -- -- 37 Net loss for the five months ended May 31, 2000 -- -- -- -- -- (35,291) (35,291) ------ ------ ----------- ----------- ----------- ----------- ----------- Balance at May 31, 2000 -- -- 40,397,521 $ 4,040 $ 729,965 $ (754,230) $ (20,225) ====== ====== =========== =========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements. -4-
OMNINET MEDIA.COM, INC. STATEMENTS OF CASH FLOWS Five months December 31, ended -------------------- May 31, 1998 1999 2000 -------- -------- -------- Cash Flows From Operating Activities Net loss $(14,350) $(41,971) $(35,291) Adjustment to reconcile net loss to net cash used in operating activities: Loss on disposal of asset 6,350 -- -- Increase in accrued expenses 8,000 8,000 4,225 -------- -------- -------- Net Cash Used in Operating Activities ( -- ) (33,971) (31,066) -------- -------- -------- Cash Flows From Financing Activities Proceeds from issuance of stock 1,100 -- 31,037 Payment on stock issuances (1,100) -- -- Additional investment by stockholders -- 34,000 -- -------- -------- -------- Net Cash Provided by Financing Activities -- 34,000 31,037 -------- -------- -------- Net Increase (Decrease) in Cash -- 29 (29) Cash at beginning of year -- -- 29 -------- -------- -------- Cash at end of year $ -- $ 29 $( -- ) ======== ======== ========
The accompanying notes are an integral part of the financial statements. -5- OMNINET MEDIA.COM, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999 AND THE FIVE MONTHS ENDED MAY 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Operation - -------------------------- OmniNet Media.Com, Inc. (OmniNet), formerly known as TriCom Technology Group, Inc., was organized and exists under the General Corporation Law of the State of Nevada. OmniNet was incorporated in the State of Nevada on March 12, 1997 as Clinical Aesthetics Centre, Inc. (Clinical). Clinical was inactive from October 1997 to July 1998. On July 27, 1998, the Board of Director of Clinical approved the issuance of 5,250,000 shares of its common stock in exchange for all outstanding shares of common stock of TriCom Technology Group, Inc. (TriCom). TriCom was organized under the General Corporation Law of the State of Nevada on July 14, 1998. The merged company continued to operate under the name of TriCom but failed in its attempt to operate as an advertising and communications company and was inactive from the time of the merger until February 2000. On January 20, 2000, the Board of Directors of Kioskcoupon.Com, Inc., a Nevada company incorporated on January 7, 2000 to provide communications services, amended its Article of Incorporation to change its name to OmniNet Media.Com, Inc. On February 18, 2000, the Board of Directors of TriCom Technology Group, Inc. approved the issuance of 5,000,000 shares of its common stock to acquire all of the outstanding shares of OmniNet Media.Com, Inc. TriCom Technology Group, Inc., subsequently changed its name to OmniNet Media.Com, Inc. OmniNet is currently focused on acquiring well established businesses in the advertisement media, communications and transportation industries and products for strategic alliances and partnering agreements. U.S./ACE Security Laminates, Inc. U.S./ACE is a division of OmniNet Media.Com, Inc. whose primary responsibility is to provide marketing, training and installation support for Global Glass Guard. These safety film products were originally designed to protect property and people against terrorist attacks in Europe and the Middle East. Global safety and security film laminates work as an integral element for safety and security requirements - from thefts, accidents, explosions, hurricanes, tornados, or earthquakes. Global safety and security film laminates hold broken glass together like an invisible curtain. Global films create a safety and security barrier for your home, commercial, industrial, or government -6- OMNINET MEDIA.COM, INC. (FORMERLY CLINICAL AESTHETICS CENTRE, INC. AND TRICOM TECHNOLOGY GROUP, INC.) NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) Organization and Operation, (continued) - --------------------------------------- buildings, by discouraging break-ins, vehicle intruders and/or penetration of dangerous objects. Global security film laminates, when installed by authorized trained installation specialist offer "smash and grab", "bullet and bomb blast resistance", unmatched in today's worldwide market place. In a world of constant change, safety and security concerns have become the major driving force behind the overwhelming demand for global products, but safety and security are not the only benefits. These safety and security film laminates discourage "smash and grab" type crimes. Since time is vital in these situations, the thieves usually give up quickly. Even violent crimes and vandalism are greatly reduced, as a result, it limits the cost of damage, and repair and/or theft related problems. Global products reduce the chance of fatal or serious injury caused by flying glass fragments. Another common injury is from existing plate glass window and sliding glass doors, which were originally installed without any safety glass features. Our safety and security laminate films are excellent retrofit related products that will virtually eliminate these potential problems. Our safety and security film product line can be purchased and professionally instated at a fraction of the cost when compared to other alternatives available today. Global offers increased security for personal safety and valuables by protecting against flying glass and other material debris as a result of hurricanes, tornadoes, typhoons, earthquakes and other uncontrollable weather related conditions. Going Concern - ------------- The Company's financial statements are presented on a going concern basis which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced recurring losses since inception and has negative net working capital for the years ended December 31, 1998 and 1999 and the five months ended May 31, 2000. For the years ended December 31,1998 and 1999 and the five months ended May 31, 2000, the company experienced net losses of $14,350, $41,971 and $35,291, respectively. The Company's ability to continue as a going concern is contingent upon its ability to secure additional equity financing, initiate sales of its products, and attain profitable operations. -7- OMNINET MEDIA.COM, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999 AND THE FIVE MONTHS ENDED MAY 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) Going Concern, (Continued) - -------------------------- Management is pursuing financing by the issuance of common stock shares. Although the Company plans to pursue additional financing, there can be no assurance that the Company will be able to secure or obtain financing on terms beneficial to the Company. Without such funds the Company would be unable to comply with its payment obligations to its vendors. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. Income Taxes - ------------ The Company accounts for income taxes under Financial Accounting Standards Board of Financial Accounting Standards No. 109, "Accounting for Income Taxes." Under Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income in the period that includes the enactment date. No current or deferred income tax expense or benefit was recognized due to the Company not having any material operations for the years ended December 31, 1998 and 1999 and the five months ended May 31, 2000. Fair Value of Financial Instruments - ----------------------------------- The carrying amounts reported in the balance sheets for cash and cash equivalents and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. -8- OMNINET MEDIA.COM, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999 AND THE FIVE MONTHS ENDED MAY 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) Use of Estimates - ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Net Loss Per Common Share - ------------------------- Net loss per share is calculated based on the weighted average number of shares outstanding during the years ended December 31, 1998 and 1999 and the five months ended May 31, 2000. Recent Accounting Announcements - ------------------------------- The FASB recently issued Statement No. 137 "Accounting for Derivative Instruments and Hedging Activities-Deferral of Effective Date of FASB Statement No. 133". This statement defers for one year the effective date of FASB Statement No 133, "Accounting for Derivative Instruments and Hedging Activities". The rule now will apply to all fiscal quarters of all fiscal years beginning after June 15, 2000. In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," which is required to be adopted in years beginning after June 15, 1999. The Statement permits early adoption as of the beginning of any fiscal quarter after its issuance. The Statement will require the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value will be immediately recognized in earnings. The Company has not yet determined if it will early adopt and what the effect of SFAS No. 133 will be on the earnings and financial position of the Company. -9- OMNINET MEDIA.COM, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999 AND THE FIVE MONTHS ENDED MAY 31, 2000 NOTE 2 - INCOME TAXES The reasons for the differences between income taxes at the statutory income tax rates and the provision (benefit) for income taxes are summarized, as follows: December 31, May 31, -------------------- -------- 1998 1999 2000 ---- ---- ---- Income tax benefits at statutory rate $ (5,740) $(16,788) $(14,116) Change in valuation allowance related to deferred tax benefit carryforwards 5,740 16,788 14,116 -------- -------- -------- Income tax benefit $ -- $ -- $ -- ======== ======== ======== Due to net operating losses and the uncertainty of realization, no tax benefit has been recognized for operating losses. At May 31, 2000, cumulative net operating losses of $91,612 are available for carryforward against future years taxable income and expire through the year 2004. The Company's ability to utilize its net operating loss carryforwards is uncertain and thus a valuation reserve has been provided against the Company's net deferred tax assets. NOTE 3 - SUBSEQUENT EVENTS On June 8, 2000, the Company acquired 76% of a corporation in exchange for 1,370,480 of its common shares. The primary business of the acquired corporation is to provide marketing, training and installation of security film laminates. -10-
OMNINET MEDIA.COM, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999 AND THE FIVE MONTHS ENDED MAY 31, 2000 NOTE 4 - FAIR VALUE OF FINANCIAL INSTRUMENTS The estimated fair value of the Company's financial instruments, are as follows: December 31, May 31, ---------------------------- ------------------- 1998 1999 2000 ---- ---- ---- Carrying Fair Carrying Fair Carrying Fair Amount Value Amount Value Amount Value ------- ------- ------- ------- ------- --------- Assets Cash $ -- $ -- $ 29 $ 29 $ -- $ -- Liabilities Accrued expenses $ 8,000 $ 8,000 $16,000 $16,000 $20,225 $ 20, 225
NOTE 5 - STOCKHOLDERS' EQUITY Common Stock Issuances - ---------------------- Common stock was issued in the year ended December 31, 1998, 1999 and the five months ended May 31, 2000, as follows: a) On July 27, 1998, 5,250,000 shares of common stock were issued for the purpose of an Exchange Agreement between Tricom Technology Group, Inc. (Tricom) and Clinical Aesthetics Centre, Inc. (Clinical). The total of 5,250,000 shares of Clinical were delivered to the shareholders of Tricom in exchange for 10,500,000 shares of its common stock. b) On September 15, 1998, the Board of Directors of TriCom approved an amendment to the Articles of Incorporation to change the authorized capital to 690,000,000 common shares and 10,000,000 preferred shares. At the same time, a reverse split was approved in the ratio of 50:1 and the par value of the shares were changed from $0.001 to $0.0001. c) On December 15, 1998, 11,000,000 shares of common stock were issued through a limited offering. d) In fiscal year 1999, $34,000 was contributed to Tricom by shareholders. No shares were issued for this investment amount. e) On February 18, 2000, Tricom and OmniNet Media.Com, Inc. merged in an exchange of their common shares. Following the merger, Tricom's Board of Directors amended its Article of Incorporation to change its name to OmniNet Media.Com, Inc. (OmniNet) and authorized a 500:1 reverse stock split of its own shares. -11- OMNINET MEDIA.COM, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999 AND THE FIVE MONTHS ENDED MAY 31, 2000 NOTE 5 - STOCKHOLDERS' EQUITY (Continued) f) Pursuant to Rule 504D, OmniNet sold 30,000,000 shares of common stock to investors. In addition, the OmniNet issued 10,000,000 shares of restricted stock to sixteen individuals or entities on February 24, 2000. g) On April 30, 2000, OmniNet issued 50,000 shares of common stock to two investors. h) On May 17, 2000, OmniNet issued 325,000 shares of common stock to three individual investors. NOTE 7 - LEASE The Company entered into a month-to-month lease agreement for its office facility on April 1, 2000 expiring on June 30, 2003. Rent expense for the five months ended May 31, 2000 was $2,954. -12- U.S./ACE SECURITY LAMINATES, INC. FINANCIAL STATEMENTS WITH INDEPENDENT AUDITORS' REPORT FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 AND THE PERIOD FROM INCEPTION (SEPTEMBER 25, 1997) TO DECEMBER 31, 1997 TABLE OF CONTENTS PAGE INDEPENDENT AUDITORS' REPORT................................. 1 FINANCIAL STATEMENTS Balance Sheets............................................. 2 - 3 Statements of Operations................................... 4 Statements of Stockholders' Equity......................... 5 Statements of Cash Flows................................... 6 NOTES TO FINANCIAL STATEMENTS................................ 7 - 17 DIROCCO & DOMBROW, P.A. 3601 WEST COMMERCIAL BLVD., SUITE #39 FORT LAUDERDALE, FLORIDA 33309 (954) 731-8181 FAX (954) 739-1054 Board of Directors U.S./ACE Security Laminates, Inc. San Diego, CA 92121 We have audited the accompanying balance sheet of U.S./ACE Security Laminates, Inc. ("the Company"), as of December 31, 1999 and the related statements of operations, stockholders' equity and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of U.S./ACE Security Laminates, Inc. as of December 31, 1998 and the period from inception (September 25, 1997) to December 31, 1997 were audited by other auditors whose report dated February 8, 2000 expressed an unqualified opinion on those statements. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in a material respects, the financial position of the Company at December 31, 1999, and the results of their operations and cash flows for the year then ended, in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred significant losses and has negative net working capital from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plan in regards to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. We also audited the adjustments described in Note 11 that were applied to restate the 1998 and 1997 financial statements. In our opinion, such adjustments are appropriate and have been properly applied. August 11, 2000 -1- U.S./ACE SECURITY LAMINATES, INC. BALANCE SHEETS December December December 31, 1999 31, 1998 31, 1997 ---------- ---------- ---------- (Restated) (Restated) ASSETS Current Assets Cash $ 9,979 $ 164,212 $ 5,190 Prepaid expenses 19,231 5,717 -- ---------- ---------- ---------- Total Current Assets 29,210 169,929 5,190 ---------- ---------- ---------- Property and Equipment 170,827 157,779 2,610 Other Assets License agreements, net of amortization of $-0- , $ 226,324 and $4,443, respectively 767,000 1,608,676 120,557 Security deposits 2,790 8,875 -- ---------- ---------- ---------- Total Other Assets 769,790 1,617,551 120,557 ---------- ---------- ---------- Total Assets $ 969,827 $1,945,259 $ 128,357 ========== ========== ========== The accompanying notes are an integral part of these financial statements. -2-
U.S./ACE SECURITY LAMINATES, INC. BALANCE SHEETS (CONTINUED) December December December 31, 1999 31, 1998 31, 1997 ----------- ----------- ----------- (Restated) (Restated) LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable and accrued liabilities $ 48,218 $ 53,065 $ 22,005 Current portion of notes payable 667,000 -- 70,000 Notes payable to related parties 577,808 402,000 -- Advances payable -- 1,014,710 -- ----------- ----------- ----------- Total Current Liabilities 1,293,026 1,469,775 92,005 Long-Term Liabilities Notes payable less current portion -- 1,171,636 -- ----------- ----------- ----------- Total Liabilities 1,293,026 2,641,411 92,005 ----------- ----------- ----------- Commitments and Contingencies -- -- -- Stockholders' Equity Common stock, $0.10 par value, authorized 50,000,000, issued and outstanding 2,820,160, 2,444,560 and 2,444,560, respectively 282,016 244,456 244,456 Paid in capital 55,000 55,000 55,000 Accumulated deficit (660,215) (995,608) (263,104) ----------- ----------- ----------- Total Stockholders' Equity (323,199) (696,152) 36,352 ----------- ----------- ----------- Total Liabilities and Stockholders' Equity $ 969,827 $ 1,945,259 $ 128,357 =========== =========== ===========
The accompanying notes are an integral part of these financial statements. -3- U.S./ACE SECURITY LAMINATES, INC. STATEMENTS OF OPERATIONS For the Period from Inception (September Year Ended Year Ended 25, 1997) December December to December 31, 1999 31, 1998 31, 1997 ----------- ----------- ----------- (Restated) (Restated) License Sales $ 2,179,364 $ 627,981 $ -- Product Sales 725,409 -- -- Other Revenue -- 106,400 -- ----------- ----------- ----------- Total Revenue 2,904,773 734,381 -- Cost of Product Sold 465,457 -- -- ----------- ----------- ----------- Gross Profit 2,439,316 734,381 -- Expenses General and administrative 1,889,508 1,468,706 263,104 Impairment loss of license agreement 215,159 -- -- ----------- ----------- ----------- Total Expenses 2,104,667 1,468,706 263,104 ----------- ----------- ----------- Operating income (loss) 334,649 (734,325) (263,104) ----------- ----------- ----------- Other Income (Expense) Interest income 2,602 1,821 -- Other expense (1,858) -- -- ----------- ----------- ----------- Total Other Income (Expense) 744 1,821 -- ----------- ----------- ----------- Net Earnings (Loss) $ 335,393 $ (732,504) $ (263,104) =========== =========== =========== The accompanying notes are an integral part of these financial statements. -4-
US/ACE SECURITY LAMINATES, INC. STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) Common Stock $.10 Par Value Additional Total --------------------- Paid-In Accumulated Shareholders' Shares Amount Capital Deficit Equity --------- --------- --------- ----------- ------------ Balance at September 30, 1997 2,444,560 $ 244,456 $ -- $ -- $ 244,456 --------- --------- --------- ----------- ------------ Additional investment by stockholders -- -- 55,000 -- 55,000 Net loss for period September 25, 1997 to December 31, 1997 -- -- -- (263,104) (263,104) --------- --------- --------- ----------- ------------ Balance at December 31, 1997 (restated) 2,444,560 244,456 55,000 (263,104) (36,352) Net loss at December 31, 1998 -- -- -- (732,504) (732,504) --------- --------- --------- ----------- ------------ Balance at December 31, 1998 (restated) 2,444,560 244,456 55,000 (995,608) (696,152) Stock issuance for services 360,600 36,060 -- -- 36,060 Stock issuance for cash 15,000 1,500 -- -- 1,500 Net income at December 31, 1999 -- -- -- 335,393 335,393 --------- --------- --------- ----------- ------------ Balance at December 31, 1999 2,820,160 $ 282,016 $ 55,000 $ (660,215) $ (323,199) ========= ========= ========= =========== ============
The accompanying notes are an integral part of these financial statements. -5-
U.S./ACE SECURITY LAMINATES, INC. STATEMENT OF CASH FLOWS For the Period from Inception (September Year Ended Year Ended 25, 1997) December December to December 31, 1999 31, 1998 31, 1997 ----------- ----------- ----------- (Restated) (Restated) Cash Flows From Operating Activities Net income (loss) $ 335,393 $ (732,504) $ (263,104) Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities Depreciation and amortization 246,481 221,881 4,533 Impairment loss 215,159 Changes in Assets and Liabilities (Increase) decrease in security deposit 6,085 (8,875) -- (Increase) in prepaid expenses (13,514) (5,717) -- Increase (decrease) in accounts payable and accrued liabilities (4,847) 31,060 22,005 ----------- ----------- ----------- Net Cash Used In Operating Activities 784,757 (494,155) (236,566) ----------- ----------- ----------- Cash Flows From Investing Activities Purchase of license agreements (560,214) (630,497) -- Purchase of property and equipment (51,445) (162,653) (2,700) ----------- ----------- ----------- Net Cash Used In Investing Activities (611,659) (793,150) (2,700) ----------- ----------- ----------- Cash Flows From Financing Activities Net advances -- 1,014,710 -- Related party advances 175,805 402,000 -- Common stock issued 1,500 -- 244,456 Net advances on note payable -- 627,982 -- Principal payments on notes payable (504,636) (598,365) -- ----------- ----------- ----------- Net Cash Provided By Financing Activities (327,331) 1,446,327 244,456 ----------- ----------- ----------- Increase (Decrease) in Cash and Cash Equivalents (154,233) 159,022 5,190 Cash and Cash Equivalents, Beginning of Year 164,212 5,190 -- ----------- ----------- ----------- Cash and Cash Equivalents, End of Year $ 9,979 $ 164,212 $ 5,190 =========== =========== ===========
The accompanying notes are an integral part of these financial statements. -6- U.S./ACE SECURITY LAMINATES, INC. NOTES TO FINANCIAL STATEMENTS NOTE 1 - ORGANIZATION U.S./ACE Security Laminates, Inc. (the Company) was incorporated under the laws of the State of Delaware on September 25, 1997 as U.S. Glass Security Laminates, Inc. with authorized capital of 10,000 shares at $0.10 par value per common share. On November 27, 1997, the Company amended its articles of incorporation to increase the total number of authorized capital to 50,000,000 common shares. In 1997, the Company issued 2,444,560 shares of its common stock for services rendered at $0.10 per share. In 1997 and 1998, the Company purchased the rights to market and distribute universally patented security laminates for 5 and 10 year renewable terms in certain states and territories in the United States, Mexico and the Caribbean. The Company business is to sell master and dealership licenses under a licensing agreement to distributors and sales of security laminates through its distributors. A typical licensing agreement provides for a term payment plan and includes a quota purchase for distributors. Failure to meet purchase quotas will cause a licensee to forfeit their license with no recourse to recover term payments made. The Company commenced its operations it 1998. The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplates continuation of the Company as a going concern. In 1997, the Company was a development stage company as defined by Statement of Financial Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by Development Stage Enterprises". The Company was devoting substantially all of its efforts in securing and establishing a new business, and planned principal operations had not commenced. Working capital funds were to be obtained by seeking additional funding from private and public equity investments to meet such needs. The accompanying 1997 financial statements should not be regarded as typical for normal operating periods. Going Concern - ------------- The Company's financial statements are presented on a going concern basis which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced recurring losses in fiscal year 1998 and the period from inception (September 25, 1997) to December 31, 1997 and has negative working capital for the years ended December 31, 1999, 1998 and the period from inception. For the years ended December 31, 1998 and the period from inception to December 31, 1997, the Company experienced net losses of $734,325 and $263,104, respectively. In addition, the Company is involved in litigation, the outcome of which is unknown at this time, has defaulted on license agreements, and has failed to exercise the license agreement options. -7- U.S./ACE SECURITY LAMINATES, INC. NOTES TO FINANCIAL STATEMENTS, (CONTINUED) NOTE 1 - ORGANIZATION, (CONTINUED) Going Concern, (Continued) - -------------------------- The Company's ability to continue as a going concern is contingent upon its ability to secure additional equity financing and attain profitable operations. Management is pursuing financing by merging with a Company which publicly trades its common stock. Although the Company plans to pursue additional financing, there can be no assurance that the Company will be able to secure or obtain financing on terms beneficial to the Company. Without such funds the Company would be unable to comply with its payment obligations to its vendors. Management believes that actions presently being taken to revise the Company's operating and financial requirements provide the opportunity for the Company to continue as a going concern. The financial statements do not include any adjustments to reflect possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES Method of Accounting - -------------------- The Company's financial statements are prepared using the accrual method of accounting. Cash and Cash Equivalents - ------------------------- The Company considers all highly liquid debt instruments with a maturity of three months or less when acquired to be cash and cash equivalents. Concentration of Credit Risk - ---------------------------- Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash held in a financial institution. The Company deposits its cash and cash equivalents with high credit quality financial institutions that are insured by Federal Deposit Insurance Corporation (FDIC) up to $100,000. -8- U.S./ACE SECURITY LAMINATES, INC. NOTES TO FINANCIAL STATEMENTS, (CONTINUED) NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES, (CONTINUED) Property and Equipment - ---------------------- Property and equipment is stated at cost and depreciated under the double declining method over their estimated useful lives ranging from five to seven years. Repairs and maintenance expenses are charged to operations as incurred. Intangible Assets - ----------------- Intangible assets represent license agreements acquired and are recorded at cost in accordance with Accounting Principles Board (APB) Opinion No. 17, "Intangible Assets". The Company amortizes the intangible assets using the straight-line method over the term of the specific agreements of five to ten years. The Company evaluates whether the estimated useful life used to amortize an intangible asset is appropriate due to changing facts and circumstances resulting in increases or decreases in the asset's estimated useful life and records the change currently. Impaired Asset Policy - --------------------- In March 1995, the Financial Accounting Standards Board issued a statement titled "Accounting for Impairment of Long-lived Assets." In complying with this standard, the Company reviews its long-lived assets yearly to determine if any events or changes in circumstances have transpired which indicate that the carrying value of its assets may not be recoverable. The Company made adjustments for the carrying value of its assets at December 31, 1999. Revenue Recognition - ------------------- Revenues from sales to distributors and resellers are recognized when related products are shipped. Revenues from corporate license programs are based on the terms of the agreement which typically outline specific payment arrangements. Use of Estimates - ---------------- Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results may vary from the estimates that were assumed in preparing the financial statements. -9- U.S./ACE SECURITY LAMINATES, INC. NOTES TO FINANCIAL STATEMENTS, (CONTINUED) NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES, (CONTINUED) Income Taxes - ------------ The Company accounts for income taxes under Financial Accounting Standards Board of Financial Accounting Standards No. 109, "Accounting for Income Taxes." Under Financial Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income for the period that includes the enactment date. No current or deferred income tax expense or benefit was recognized due to the Company not having any material operations for the years ended December 31, 1999 and 1998 and the period from inception (September 25, 1997) to December 31, 1997. Fair Value of Financial Instruments - ----------------------------------- The carrying amounts reported in the balance sheets for cash and cash equivalents and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. Recent Accounting Announcements - ------------------------------- The FASB recently issued Statement No. 137 "Accounting for Derivative Instruments and Hedging Activities-Deferral of Effective Date of FASB Statement No. 133". This statement defers for one year the effective date of FSAB No. 133, "Accounting for Derivative Instruments and Hedging Activities". The rule now will apply to all fiscal quarters of all fiscal years beginning after June 15, 2000. In June 1998, the FSAB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", which is required to be adopted in the years beginning after June 15, 1999. The Statement permits early adoption as of the beginning of any fiscal quarter after its issuance. The Statement will require the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. -10- U.S./ACE SECURITY LAMINATES, INC. NOTES TO FINANCIAL STATEMENTS, (CONTINUED) NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES, (CONTINUED) If the derivative is a hedge, depending on the nature of the hedge; changes in the fair value of derivatives will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative change in fair value will be immediately recognized in earnings. The Company has not yet determined if it will early adopt and what the effect of SFAS No. 133 will be on the earnings and financial position of the Company. The Company has implemented SFAS No. 129, "Disclosure of Information about Capital Structure", effective January 1, 1998, which established standards for disclosing information about the entity's capital structure. The implementation of SFAS No. 129 had no effect on the Company's financial statements. NOTE 3 - PROPERTY AND EQUIPMENT Property and equipment consists of the following at December 31: 1999 1998 1997 -------- -------- -------- Machinery and equipment $123,568 $ 79,198 $ - Office equipment 54,874 54,874 2,700 Leasehold improvements 7,161 7,161 - Vehicle 24,121 24,121 - -------- -------- -------- 209,724 165,354 2,700 Less accumulated depreciation 38,897 7,575 90 -------- -------- -------- Property and equipment $170,827 $157,779 $ 2,610 ======== ======== ======== Depreciation charged to expense during the years ended December 31, 1999 and 1998 and the period from inception (September 25, 1997) to December 31, 1997 was $31,322, $7,485 and $90, respectively. NOTE 4 - LICENSE AGREEMENTS The Company has entered into a "Sales and Distribution Agreement" dated December 31, 1999, (which supersedes all other agreements previously entered as described below), with Clear Defense, Inc. of Virginia at a cost of $767,000 to become the exclusive retail dealer and distributor of the laminate products bearing the trademark commonly known, recognized, and understood as "Clear Defense" safety and security window film in specific territories as defined by the agreement. The safety and security laminates and their application to glass windows and doors will be sold to government, commercial, residential, and automotive markets. -11- U.S./ACE SECURITY LAMINATES, INC. NOTES TO FINANCIAL STATEMENTS, (CONTINUED) NOTE 4 - LICENSE AGREEMENTS, (CONTINUED) A lump sum license fee of $100,000 was paid at the signing of the agreement, for the exclusive distribution rights to the "Initial Territory" defined as the states of California, Arizona and Florida. A license fee of $667,000 is due for the exclusive distribution rights to the "Base Territory" as defined as the states of Nevada, Utah, New Mexico, Georgia, Texas, Louisiana, Alabama, Mississippi and the country of Mexico and parts of the Caribbean Islands. The payment schedule is as follows: $25,000 due by or before January 31, 2000; $25,000 due by or before February 28, 2000; and $617,000 due by or before March 31, 2000. The Company is also subject to minimum film purchase requirements under agreement. Interest is due at the rate of 18% per annum, or 1.5% per month on past due amounts. The Company had an option to obtain the exclusive rights for the remaining states within the United States of America for $333,000. The deadline for the exercise of the option expired on January 31, 2000. The agreement is for a term of five years and shall automatically renew for an additional successive term of five years so long as the terms and conditions of the agreement are met. The Company is currently in default of the license agreement with Clear Defense, Inc. of Virginia. In 1997 and 1998, the Company had entered into three separate agreements to become the exclusive retail dealer and distributor of the products described above with Ace/Clear Defense, Inc. of Quebec, Canada for a total cost of $1,835,000. These agreements have been cancelled by U.S./ACE Security Laminates, Inc. and are currently the subject of litigation (see Note 10). At December 31, 1999, license agreements have been adjusted from their 1998 book of $1,608,676 to net realizable value of $767,000. Amortization expense of $221,881, $221,881 and $4,443 was charged to operations during the years ended December 31, 1999 and 1998 and for the period from inception (September 25, 1997) to December 31, 1997, respectively. -12- U.S./ACE SECURITY LAMINATES, INC. NOTES TO FINANCIAL STATEMENTS, (CONTINUED) NOTE 5 - NOTES PAYABLE Notes payable at December 31, 1999 and 1998 and 1997 of $667,000, $1,171,636 and $70,000 represent amounts due under the new and original contracts as described in Note 4. Payments on these agreements have been terminated by the Company until resolution of the litigation. The 1998 liability of $1,171,636 has been restated to $667,000 in 1999, due to the Company entering into an agreement with a different vendor for the same territories. NOTE 6 - NOTES PAYABLE TO RELATED PARTIES Notes payable to related parties at December 31, consists of the following 1999 1998 1997 -------- -------- -------- Southwest Funding GP $ 16,200 $337,000 $ - Officers (2) 561,605 65,000 - -------- -------- -------- Total $577,805 $402,000 $ - ======== ======== ======== Southwest Funding GP (the Partnership) is a partnership formed to provide funding to enable the Company to secure marketing efforts. The Board of Directors and Management Team is principally the same as the Company's. The Partnership was formed to provide funding to enable the Company to put into place a marketing arm for the Company. Funds from Southwest Funding GP are non-interest bearing, unsecured, and due on demand. Advances from officers totaling $561,605 and $65,000 at December 31, 1999 and 1998, respectively, are non-interest bearing, unsecured, and due on demand. -13- U.S./ACE SECURITY LAMINATES, INC. NOTES TO FINANCIAL STATEMENTS, (CONTINUED) NOTE 7 - ADVANCES PAYABLE During 1997 and 1998, the Company received cash advances from a corporation which was the prior employer of the Company's president and major shareholder. On January 22, 1999, the Company was released of all obligations arising from the advances in exchange for dealership rights to the general Orlando, Florida territory. Since that date, the Company has repossessed the territory due to breach of contract arising from the failure to meet purchase quota requirements. NOTE 8 - INCOME TAXES There is no current or deferred tax expense for the years ended December 31, 1999 and 1998 and the period from inception (September 25, 1997) to December 31, 1997 due to the Company's loss position in 1998 and 1997 and the loss carryforward to 1999. Timing differences result from accelerated depreciation of assets and the capitalization of start up costs for tax purposes. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors including the Company's ability to generate taxable income within the net operating loss carryforward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes. The income tax effect of temporary differences compromising the deferred tax assets and deferred tax liabilities on the accompanying balance sheet is a result of the following: 1999 1998 1997 -------- -------- -------- Net Income (loss) $335,393 $(732,504) $(263,104) Timing Differences Permanent 52,172 69 - Temporary Capitalization of start up costs 8,650 (8,650) 263,104 -------- -------- -------- $396,215 $(741,085) $ - ======== ======== ======== -14- U.S./ACE SECURITY LAMINATES, INC. NOTES TO FINANCIAL STATEMENTS, (CONTINUED) NOTE 8 - INCOME TAXES, (CONTINUED) 1999 1998 1997 -------- -------- -------- Net Income (loss) carryforward $134,713 $(251,969) $ - Valuation allowance (134,713) 251,969 - -------- -------- -------- $ - $ - $ - ======== ======== ======== The Company has available net operating loss carryforwards of approximately $700,000 for tax purposes to offset future taxable income which expire principally in the year 2017. NOTE 9 - COMMITMENTS AND CONTINGENCIES Operating Lease - --------------- The Company leases a vehicle under a noncancelable operating lease agreement which expires in October, 2000. Lease expense for the year ended December 31, 1999, was $12,304. At December 31, 1999, the minimum aggregate lease commitments is $10,253. The Company has also entered into a non-cancelable operating lease agreement dated May 26, 1998 for a period of (60) sixty months expiring May 31, 2003 for approximately 3,200 square feet of office and warehouse space at a base rent of $2,790 per month. Prepaid rental of $14,591.93 was paid at the execution of the lease. On December 5, 1998, the Company expanded the premises for a total of approximately 5,700 square feet. Base rent was increased to $5,000 per month for a period of twelve (12) months, with a 4% increase in base rent every twelve months through the term of the lease. Rental expense for the year ended December 31, 1998 was $18,840. Future minimum annual rentals payable under this noncancelable operating agreement are, as follows: 2000 $63,948 2001 $66,494 2002 $69,142 2003 $29,371 -15- U.S./ACE SECURITY LAMINATES, INC. NOTES TO FINANCIAL STATEMENTS, (CONTINUED) NOTE 9 - COMMITMENTS AND CONTINGENCIES, (CONTINUED) Consulting Agreements - --------------------- The Company has entered into two separate consulting agreements for services June 1, 1998. Each agreement is effective for three (3) years and automatically renews for successive terms of the same duration unless either party provides thirty (30) days written notice to the other party prior to the termination of the applicable initial term or renewal. The agreements are for $96,000 and $72,000 per year, including commissions of all dealership sales at 30% and 5%, respectively. As of December 31, 1999 and 1998, the Company has accrued $-0- and $42,000, respectively, for unpaid fees under the agreements. Additionally, the Company has made and entered into two separate Stock Incentive Agreements with the above consultants as incentives for future performance, which provides each consultant with the option to purchase 200,000 shares for an aggregate purchase price of $2,000 and is exercisable until December 31, 2000. NOTE 10 - SUBSEQUENT EVENTS Litigation - ---------- The Company, including certain employees, officers, and directors, is a defendant in a lawsuit filed by the original licensor (in Quebec) of certain territories which the Company entered into contracts for dealership and distribution. The claim is for outstanding license fees allegedly owing pursuant to contracts dated February 9, 1998 and July 7, 1998. The suit asks for damages totaling approximately $9.3 million (Canadian) plus legal costs. Outside counsel for the Company has advised that, at this stage in the proceedings, he cannot offer an opinion as to the probable outcome. The Company believes the suit is without merit and is vigorously defending its position. Other Subsequent Events - ----------------------- On June 8, 2000, a Nevada corporation acquired 76% of the Company in exchange for 1,370,480 shares of common stock of the Nevada corporation. -16- U.S./ACE SECURITY LAMINATES, INC. NOTES TO FINANCIAL STATEMENTS, (CONTINUED) NOTE 11 - RECLASSIFICATIONS AND PRIOR PERIOD ADJUSTMENTS Certain amounts as of December 3, 1998 and 1997 have been reclassified to conform with the reporting as of December 31, 1999. Errors resulting in the misstatement of the license agreements, note payable, and the reported income of the prior year and the period of inception (September 25, 1997) to December 31, 1997 were corrected during 1999, resulting in the following changes: 1998 1997 ----------- ----------- (Losses) unadjusted $(1,314,521) $ (259,489) Recognition of revenue classified as note payable 627,981 -- Additional amortization of intangible assets (45,964) (3,615) ----------- ----------- (Losses) restated $ (732,504) $ (263,104) =========== =========== -17- OMNINET MEDIA.COM, INC. AND SUSIDIARY FINANCIAL STATEMENTS INCLUDING INDEPENDENT ACCOUNTANTS' REVIEW REPORT FOR THE SIX MONTHS ENDED JUNE 2000 AND 1999 TABLE OF CONTENTS PAGE INDEPENDENT ACCOUNTANTS' REVIEW REPORT..................... 1 FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS............................... 2 CONSOLIDATED STATEMENTS OF OPERATIONS..................... 3 CONSOLIDATED STATEMENTS OF CASH FLOWS..................... 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.................. 5 - 12 DIROCCO AND DOMBROW, P.A. 3601 W. COMMERCIAL BLVD., SUITE #39 FT. LAUDERDALE, FLORIDA 33309 (954) 731-8181 Independent Accountants' Review Report -------------------------------------- To the Board of Directors OmniNet Media.Com, Inc. and Subsidiary La Jolla, CA We have reviewed the accompanying consolidated balance sheets of OmniNet Media.Com, Inc.and Subsidiary as of June 30, 2000 and 1999 and the related consolidated statements of operations and cash flows for the six months then ended. These consolidated financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the consolidated financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modification that should be made to the accompanying consolidated financial statements for them to be in conformity with generally accepted accounting principles. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company's recurring operating losses and negative working capital raise substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters also are described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. DiRocco and Dombrow, P.A. August 11, 2000 -1-
OMMNINET MEDIA.COM, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS JUNE 30, 2000 AND 1999 ASSETS 2000 1999 ----------- ----------- Current Assets Cash $ 25,340 $ 2 Prepaid expenses 7,830 -- ----------- ----------- Total Current Assets 33,170 2 ----------- ----------- Property and Equipment 156,727 -- ----------- ----------- Other Assets License agreements, net of $47,313 amortization 719,687 -- Security deposits 2,790 -- ----------- ----------- Total Other Assets 722,477 -- ----------- ----------- ----------- ----------- Total Assets $ 912,374 $ 2 =========== =========== LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Accounts payable and accrued liabilities $ 117,516 $ 12,000 Note payable 642,000 -- Notes payable to related parties 758,603 -- ----------- ----------- Total Current Liabilities 1,518,119 12,000 ----------- ----------- Stockholders' Deficit Preferred stock, $0.0001 par value; 10,000 shares authorized Common stock, $0.0001 par value; 690,000,000 shares authorized; 41,786,155 and 11,260,748 shares issued and outstanding, respectively 4,179 1,126 Additional paid-in capital 729,965 701,842 Accumulated deficit (1,339,889) (714,966) ----------- ----------- Total Stockholders' Deficit (605,745) (11,998) ----------- ----------- Total Liabilities and Stockholders' Deficit $ 912,374 $ 2 =========== ===========
See accompanying notes and independent accountants' review report -2- OMNINET MEDIA.COM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 2000 1999 ------------ ------------ Revenues $ 39,900 $ -- Cost of Product Sold 4,000 -- ------------ ------------ Total Revenue 35,900 -- ------------ ------------ Expenses General and administrative 8,658 27,899 Research and development -- 10,099 Interest expense 7,100 -- Depreciation and amortization 2,625 -- ------------ ------------ Total Expenses 18,383 37,998 ------------ ------------ Net Income (Loss) $ 17,517 $ (37,998) ============ ============ Net Earnings (Loss) Per Common Share $ 0.001 $ (0.003) ============ ============ Weighted Average Number of Common Shares Outstanding 15,066,978 11,260,748 ============ ============ See accompanying notes and independent accountants' review report -3-
OMNINET MEDIA.COM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 2000 1999 --------- --------- Cash Flows From Operating Activities: Net loss $ 17,517 $ (37,998) Adjustment to reconcile net loss to net cash used in operating activities Depreciation and amortization 2,625 -- Increase in accounts payable and accrued liabilites 13,279 4,000 --------- --------- Net Cash Provided by (Used in) Operating Activities 33,421 (33,998) --------- --------- Cash Flows From Investing Activities: Purchase of subsidiary (102,286) -- --------- --------- Net Cash Used in Investing Activities (102,286) -- --------- --------- Cash Flows From Financing Activities: Proceeds from notes payable to related parties 63,000 -- Additional investment by stockholders -- 34,000 Proceeds from issuance of common stock 31,176 -- --------- --------- Net Cash Provided by Financing Activities 94,176 34,000 --------- --------- Net Increase in Cash 25,311 2 Cash, Beginning of Year 29 -- --------- --------- Cash, End of Year $ 25,340 $ 2 ========= =========
See accompanying notes and independent accountants' review report -4- OMNINET MEDIA.COM, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Operation - -------------------------- OmniNet Media.Com, Inc. (OmniNet), formerly known as TriCom Technology Group, Inc., was organized and exists under the General Corporation Law of the State of Nevada. OmniNet was incorporated in the State of Nevada on March 12, 1997 as Clinical Aesthetics Centre, Inc. (Clinical). Clinical was inactive from October 1997 to July 1998. On July 27, 1998, the Board of Director of Clinical approved the issuance of 5,250,000 shares of its common stock in exchange for all outstanding shares of common stock of TriCom Technology Group, Inc. (TriCom). TriCom was organized under the General Corporation Law of the State of Nevada on July 14, 1998. The merged company continued to operate under the name of TriCom but failed in its attempt to operate as an advertising and communications company and was inactive from the time of the merger until February 2000. On January 20, 2000, the Board of Directors of Kioskcoupon.Com, Inc., a Nevada company incorporated on January 7, 2000 to provide communications services, amended its Article of Incorporation to change its name to OmniNet Media.Com, Inc. On February 18, 2000, the Board of Directors of TriCom Technology Group, Inc. approved the issuance of 5,000,000 shares of its common stock to acquire all of the outstanding shares of OmniNet Media.Com, Inc. TriCom Technology Group, Inc., subsequently changed its name to OmniNet Media.Com, Inc. On June 8, 2000, OmniNet acquired 75.72% of the outstanding shares of common stock of U.S./ACE Security Laminates, Inc. (US/ACE) by trading one share of common stock of OmniNet for two shares of US/ACE common stock. US/ACE provides marketing, training and installation support for safety film products. The results of operations of US/ACE for the period from June 8, 2000 through June 30, 2000 are included in the consolidated statement of operations for the six months ended June 30, 2000. OmniNet is currently focused on acquiring well-established businesses in the advertisement media, communications and transportation industries and products for strategic alliances and partnering agreements. Consolidation Policy - -------------------- The accompanying consolidated financial statements include the accounts of the OmniNet and US/ACE. Intercompany transactions and balance have been eliminated in consolidation. -5- OMNINET MEDIA.COM, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) Going Concern - ------------- The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced recurring losses since inception and has negative net working capital of $1,455,949 and $11,998, respectively, for the six months ended June 30, 2000 and 1999. In addition, US/ACE is involved in litigation, the outcome of which is unknown at this time, has defaulted on license agreements and has failed to exercise the license agreement options. The Company's ability to continue as a going concern is contingent upon its ability to secure additional equity financing, initiate sales of its products, and attain profitable operations. Management is pursuing financing by the issuance of common stock shares. Although the Company plans to pursue additional financing, there can be no assurance that the Company will be able to secure or obtain financing on terms beneficial to the Company. Without such funds the Company would be unable to comply with its payment obligations to its vendors. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. Property and Equipment - ---------------------- Property and equipment is stated at cost and depreciated under the double declining method over their estimated useful lives ranging from five to seven years. Repairs and maintenance expenses are charged to operations as incurred. Depreciation charged to expense during the period from June 8, 2000 through June 30, 2000 was $654. Intangible Assets - ----------------- Intangible assets represent license agreements acquired and are recorded at cost in accordance with Accounting Principles Board (APB) Opinion No. 17, "Intangible Assets". The Company amortizes the intangible assets using the straight-line method over the term of the specific agreements of five to ten years. The Company evaluates whether the estimated useful life used to amortize an intangible asset is appropriate due to changing facts and circumstances resulting in increases or decreases in the asset's estimated useful life and records the change currently. -6- OMNINET MEDIA.COM, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) Intangible Assets, Continued - ---------------------------- Amortization expense of $1,971 was charged to operations during the period from June 8, 2000 through June 30, 2000. Impaired Asset Policy - --------------------- In March 1995, the Financial Accounting Standards Board issued a statement titled "Accounting for Impairment of Long-lived Assets." In complying with this standard, the Company reviews its long-lived assets yearly to determine if any events or changes in circumstances have transpired which indicate that the carrying value of its assets may not be recoverable. Revenue Recognition - ------------------- Revenues from sales to distributors and resellers are recognized when related products are shipped. Revenues from corporate license programs are based on the terms of the agreement, which typically outline specific payment arrangements. Income Taxes - ------------ The Company accounts for income taxes under Financial Accounting Standards Board of Financial Accounting Standards No. 109, "Accounting for Income Taxes." Under Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income in the period that includes the enactment date. No current or deferred income tax expense or benefit was recognized due to the Company not having any material operations for the six months ended June 30, 2000 and 1999. Fair Value of Financial Instruments - ----------------------------------- The carrying amounts reported in the balance sheets for cash and cash equivalents and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. -7- OMNINET MEDIA.COM, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) Use of Estimates - ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Net Loss Per Common Share - ------------------------- Net loss per share is calculated based on the weighted average number of shares outstanding during the six months ended June 30, 2000 and 1999. Recent Accounting Announcements - ------------------------------- The FASB recently issued Statement No. 137 "Accounting for Derivative Instruments and Hedging Activities-Deferral of Effective Date of FASB Statement No. 133". This statement defers for one year the effective date of FASB Statement No 133, "Accounting for Derivative Instruments and Hedging Activities". The rule now will apply to all fiscal quarters of all fiscal years beginning after June 15, 2000. In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," which is required to be adopted in years beginning after June 15, 1999. The Statement permits early adoption as of the beginning of any fiscal quarter after its issuance. The Statement will require the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value will be immediately recognized in earnings. The Company has not yet determined if it will early adopt and what the effect of SFAS No. 133 will be on the earnings and financial position of the Company. -8- OMNINET MEDIA.COM, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 NOTE 2 - PROPERTY AND EQUIPMENT Property and equipment consists of the following at June 30, 2000: Machinery and equipment $125,168 Office equipment 54,874 Leasehold improvements 7,161 Vehicle 24,121 -------- 211,324 Less accumulated depreciation 54,597 -------- Property and equipment $156,727 ======== NOTE 3 - LICENSE AGREEMENTS US/ACE has entered into a "Sales and Distribution Agreement" dated December 31, 1999, (which supersedes all other agreements previously entered as described below), with Clear Defense, Inc. of Virginia at a cost of $767,000 to become the exclusive retail dealer and distributor of the laminate products bearing the trademark commonly known, recognized, and understood as "Clear Defense" safety and security window film in specific territories as defined by the agreement. The safety and security laminates and their application to glass windows and doors will be sold to government, commercial, residential, and automotive markets. A lump sum license fee of $100,000 was paid at the signing of the agreement, for the exclusive distribution rights to the "Initial Territory" defined as the states of California, Arizona and Florida. A license fee of $667,000 is due for the exclusive distribution rights to the "Base Territory" as defined as the states of Nevada, Utah, New Mexico, Georgia, Texas, Louisiana, Alabama, Mississippi and the country of Mexico and parts of the Caribbean Islands. The payment schedule is as follows: $25,000 due by or before January 31, 2000; $25,000 due by or before February 28, 2000; and $617,000 due by or before March 31, 2000. The Company is also subject to minimum film purchase requirements under agreement. Interest is due at the rate of 18% per annum, or 1.5% per month on past due amounts. The Company had an option to obtain the exclusive rights for the remaining states within the United States of America for $333,000. The deadline for the exercise of the option expired on January 31, 2000. The agreement is for a term of five years and shall automatically renew for an additional successive term of five years so long as the terms and conditions of the agreement are met. -9- OMNINET MEDIA.COM, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 NOTE 3 - LICENSE AGREEMENTS, Continued The Company is currently in default of the license agreement with Clear Defense, Inc. of Virginia. In 1997 and 1998, the Company had entered into three separate agreements to become the exclusive retail dealer and distributor of the products described above with Ace/Clear Defense, Inc. of Quebec, Canada for a total cost of $1,835,000. These agreements have been cancelled by U.S./ACE. and are currently the subject of litigation (see Note 10). At December 31, 1999, license agreements have been adjusted from their 1998 book of $1,608,676 to net realizable value of $767,000. NOTE 4 - NOTES PAYABLE At June 30, 2000 in the amount of $642,000, which provides for interest at 18% per annum on the outstanding balance as of April 1, 2000, represents amounts due under the new contracts as described in Note 3. The Company has suspended payments on these agreements until resolution of the lawsuit. NOTE 5 - NOTES PAYABLE TO RELATED PARTIES Advances from officers totaling $758,603 at June 30, 2000 are non-interest bearing, unsecured, and due on demand. NOTE 6 - INCOME TAXES The reasons for the differences between income taxes at the statutory income tax rates and the provision (benefit) for income taxes as of June 30, 200 and 1999 are summarized, as follows: 2000 1999 -------- -------- Income tax (benefit) at statutory rate $ 8,370 $(12,919) Change in valuation allowance related to deferred tax (benefit) carryforwards (8,370) 12,919 -------- -------- Income tax (benefit) $ 0 $ 0 ======== ======== At June 30, 2000, cumulative net operating losses of approximately $25,300 are available for carryforward against future years taxable income and expire through the year 2004. The Company's ability to utilize its net operating loss carryforwards is uncertain and thus a valuation reserve has been provided against the Company's net deferred tax assets. -10-
OMNINET MEDIA.COM, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 NOTE 7 - FAIR VALUE OF FINANCIAL INSTRUMENTS The estimated fair values of the Company's financial instruments as of June 30, 2000 and 1999 are as follows: 2000 1999 --------------------- ---------------------- Carrying Fair Carrying Fair Amount Value Amount Value --------- --------- --------- --------- Assets Cash $ 25,340 $ 25,340 $ 2 $ 2 Prepaid expense $ 7,830 $ 7,830 $ 0 $ 0 Liabilities Accounts payable and accrued liabilities $ 88,516 $ 88,516 $ 12,000 $ 12,000 Note payable $ 642,000 $ 642,000 $ 0 $ 0 Note payable to related party $ 758,603 $ 758,603 $ 0 $ 0
NOTE 8 - STOCKHOLDERS' EQUITY Common Stock Issuances - ---------------------- Common stock was issued in the six months ended June 30, 2000, as follows: a) In fiscal year 1999, Tricom shareholders contributed $34,000. No shares were issued for this investment amount. b) On February 18, 2000, Tricom and OmniNet Media.Com, Inc. merged in an exchange of their common shares. Following the merger, Tricom's Board of Directors amended its Article of Incorporation to change its name to OmniNet Media.Com, Inc. (OmniNet) and authorized a 500:1 reverse stock split of its own shares. c) Pursuant to Rule 504D, OmniNet sold 30,000,000 shares of common stock to investors. In addition, the OmniNet issued 10,000,000 shares of restricted stock to sixteen individuals or entities on February 24, 2000. d) On April 30, 2000, OmniNet issued 50,000 shares of common stock to two investors. e) On May 17, 2000, OmniNet issued 325,000 shares of common stock to three individual investors. f) On June 8, 2000, OmniNet issued 18,099 shares of common stock to one investor. g) On June 13, 2000, OmniNet issued 1,370,480 shares of common stock to stockholders of the corporation purchase through a stock swap and cancelled the same number of share issued to the corporation on June 8, 2000. h) On June 28, 2000, OmniNet issued 55 fractional shares to investors. -11- OMNINET MEDIA.COM, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 NOTE 9 - LEASE The Company entered into a month-to-month lease agreement for its office facility on April 1, 2000 expiring on June 30, 2003. Rent expense for the six months ended June 30, 2000 was $2,954. NOTE 10 - SUBSEQUENT EVENTS Litigation - ---------- The Company, including certain employees, officers, and directors, is a defendant in a lawsuit filed by the original licensor (in Quebec) of certain territories, which the Company entered into contracts for dealership and distribution. The claim is for outstanding license fees allegedly owing pursuant to contracts dated February 9, 1998 and July 7, 1998. The suit asks for damages totaling approximately $9.3 million (Canadian) plus legal costs. Outside counsel for the Company has advised that, at this stage in the proceedings, he cannot offer an opinion as to the probable outcome. The Company believes the suit is without merit and is vigorously defending its position. -12- OMNINET MEDIA.COM, INC PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS On July 27, 2000, the Company acquired 5,000,000 of the issued and outstanding shares of the common stock of MAS Acquisition XXV Corporation for a cash price of $50,000 and 25,000 shares of its common stock valued at $25. The acquisition will be accounted for as a purchase, with the assets acquired and liabilities assumed recorded at fair values, and the results of MAS Acquisition, XXV Corporation's operations included in the Company's consolidated financial statements from the date of acquisition. The accompanying condensed consolidated financial statements illustrate the effect of the acquisition ("Pro Forma") on the Company's financial position and results of operations. The condensed consolidated balance sheet as of June 30, 2000 is based on the historical balance sheets of the Company and MAS Acquisition XXV Corporation as of that date and assumes the acquisition took place on that date. The condensed consolidated statement of income for the year ended December 31, 1999 and the statement of income for the six months ended June 30, 2000 are based on the historical statements of income of the Company and MAS Acquisition XXV Corporation for those periods. The pro forma condensed consolidated statements of income assume the acquisition took place on January 1, 1999. In addition, the consolidated proforma statements of income for the year ended December 31, 1999 includes the proforma acquisition of U.S./Ace Security Laminates, Inc. on June 27, 2000. The pro forma condensed consolidated financial statements may not be indicative of the actual results of the acquisition. In particular, the pro forma condensed consolidated financial statements are based on management's current estimate of the allocation of the purchase price, the actual allocation of which may differ. The accompanying condensed consolidated pro forma financial statements should be read in connection with the historical financial statements of the Company and MAS Acquisition XXV Corporation. A recapitalization of the stockholders' equity of the Company has not been presented as the acquisition of MAS Acquisition XXV Corporation (MAS Acquisition) is not a reverse acquisition and MAS Acquisition had an immaterial amount of net monetary assets at the time of acquisition. OmniNet was the acquirer of MAS Acquisition and the stockholders of OmniNet maintained majority stock ownership subsequent to the acquisition transaction.
OMNINET MEDIA.COM, INC. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) JUNE 30, 2000 OMNINET MAS MEDIA.COM ACQUISITION INC XXV CORP Adjustments Pro Forma ----------- ----------- ----------- ----------- ASSETS Current Assets Cash $ 25,340 $ -- $ $ 25,340 Prepaid expenses 7,830 -- 7,830 ----------- ----------- ----------- Total Current Assets 33,170 -- 33,170 ----------- ----------- ----------- Property and Equipment 156,727 -- 156,727 ----------- ----------- ----------- Cost in excess of net assets acquired -- -- (1) 47,025 47,025 ----------- ----------- ----------- Other Assets License agreements 719,687 -- 719,687 Other assets 2,790 26 2,816 ----------- ----------- ----------- Total Other Assets 722,477 26 722,503 ----------- ----------- ----------- Total Assets $ 912,374 $ 26 $ 959,425 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Accounts payable and accrued liabilities $ 117,516 $ -- $ 117,516 Notes payable 642,000 -- 642,000 Notes payable to related parties 758,603 -- 758,603 ----------- ----------- ----------- Total Current Liabilities 1,518,119 -- 1,518,119 ----------- ----------- ----------- Stockholders' Deficit (605,745) 26 (1) 47,025 (529,694) ----------- ----------- ----------- Total Liabilities and Stockholders' Equity $ 912,374 $ 26 $ 959,425 =========== =========== ===========
See Notes to Pro Forma Consolidated Financial Statements (Unaudited) -2-
OMNINET MEDIA.COM, INC. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) FOR THE SIX MONTHS ENDED JUNE 30, 2000 OMNINET MAS MEDIA.COM ACQUISITION INC XXV CORP Adjustments Pro Forma ----------- ----------- ----------- ----------- Revenues $ 39,900 $ -- $ 39,900 Cost of Product Sold 4,000 -- 4,000 ----------- ----------- ----------- Gross Profit 35,900 -- 35,900 Expenses General and administrative 18,383 10 (2) 1,000 19,393 ----------- ----------- ----------- Loss from continuing operations (17,517) (10) (16,507) ----------- ----------- ----------- Net Loss (17,517) (10) (16,507) =========== =========== =========== Loss per common share $ ( 0.01) $ (0.01) =========== =========== Weighted average number of shares outstanding 1,649,994 1,649,994 =========== ===========
See Notes to Pro Forma Consolidated Financial Statements (Unaudited) -3-
OMNINET MEDIA.COM, INC. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1999 OMNINET MAS MEDIA.COM ACQUISITION INC XXV CORP Adjustments Pro Forma ----------- ----------- ----------- ----------- Revenues $ 2,904,773 $ -- $ $ 2,904,773 Cost of Product Sold 465,457 -- 465,457 ----------- ----------- ----------- Gross Profit 2,439,316 -- 2,439,316 ----------- ----------- ----------- Expenses General and administrative 1,897,508 18 (2) 2000 1,899,526 Impairment loss of license agreement 215,159 -- 215,159 ----------- ----------- ----------- Total Expenses 2,112,667 18 2,114,685 ----------- ----------- ----------- Income (loss) from continuing operations 326,649 (18) 324,631 ----------- ----------- ----------- Other Income (Expense) Interest income 2,602 -- 2,602 Loss on diposal of asset (6,350) -- (6,350) Other expense (1,858) -- (1,858) ----------- ----------- ----------- Total Other Income (Expense) (5,606) -- (5,606) ----------- ----------- ----------- Net Income (Loss) $ 321,043 $ (18) $ 319,025 =========== =========== =========== Earnings per common share $ 0.23 $ 0.22 =========== =========== Weighted average numbe of shares outstanding 1,418,001 1,418,001 =========== ===========
See Notes to Pro Forma Consolidated Financial Statements -4- OMNINET MEDIA.COM, INC NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE A - The pro forma adjustments to the condensed consolidated balance sheet are, as follows: (1) To reflect the acquisition of MAS Acquisition XXV Corporation and the allocation of the purchase price on the basis of the fair values of the assets acquired and liabilities assumed. The components of the purchase price and its allocation to the assets and liabilities of MAS Acquisition XXV Corporation are, as follows: Components of purchase price: Cash $ 50,000 Common Stock of OmniNet Media.Com, Inc 25 --------- Total purchase price 50,025 Allocation of purchase price: Stockholders' equity of MAS Acquisition XXV Corporation 26 --------- Cost in excess of net assets acquired $ 49,999 ========= NOTE B - The pro forma adjustments to the condensed consolidated statements of income are, as follows: Six Months Ended Year Ended June 30, 2000 December 31, 1999 ---------------- ----------------- (2) Adjustments to general and Administrative expense: Amortization of excess cost over Fair value of the net assets Acquired $ 1,000 $ 2,000 EX-2.0 2 0002.txt AGREEMENT AND PLAN OF REORGANIZATION Exhibit 2.0 Agreement and Plan of Reorganization Effective Date August 17, 2000 AGREEMENT AND PLAN OF REORGANIZATION This agreement is entered into the 27th day of July, 2000 between OMNINET MEDIA.COM, INC., a Nevada corporation, (herein, "Company"), MAS ACQUISITION XXV CORP., an Indiana corporation, (herein, "MAS")and MAS Capital Inc. (herein, "MAS Capital"). The Company , MAS and MAS Capital desire to enter into this Agreement and Plan of Reorganization whereby the Company will acquire voting control, reorganize MAS and become a successor issuer to MAS's Securities and Exchange Commission (SEC) reporting obligations as provided for in SEC Rule 12g-3(a). For good and valuable consideration, receipt of which is acknowledged the parties agree, represent and warrant the following: Agreement --------- A. Sale of Shares. The Company agrees to purchase 5,000,000 MAS shares from MAS and MAS agrees to sell 5,000,000 MAS shares to the Company. The purchase price is Five Thousand ($5,000) Dollars. The MAS shares will be issued under the securities transaction exemption afforded by Section 4(2) of the Securities Act of 1933, as amended. B. Reorganization. In connection with a corporate succession transaction by means which may include, but not be limited to, merger, consolidation, exchange of securities acquisition of assets, or otherwise, MAS Capital, Inc. agrees tender Eight Million Two Hundred Fifty Thousand (8,250,000) MAS shares for cancellation at closing. In consideration for this action, Omninet agrees to pay and deliver to MAS Capital:(a) Forty-five Thousand ($45,000) Dollars and issue Twenty-five Thousand (25,000)of OmniNet common shares. The Omninet shares will be issued under the securities transaction exemption afforded by Section 4(2) of the Securities Act of 1933, as amended. C. Representations, Warranties and Covenants of the Company: The Company represents and warrants to Seller as of the date hereof and as of the Closing Date: SECTION 1. Enforceability of Agreement Against the Company. The Company has all necessary power and authority to enter into this Agreement to which it is a party, to carry out the obligations hereunder and to consummate the transactions contemplated hereby. This Agreement constitutes the legal, valid and binding obligations of the Company enforceable against it in accordance with the respective terms. SECTION 2. Incorporation, Authority and Qualification of The Company. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada. The Company has all necessary corporate power and authority to carry on the business now being conducted by it. The Company is duly qualified to do business, and is in good standing, in each jurisdiction, if any, where the character of its properties owned, operated or leased or the nature of its activities makes such qualification necessary. SECTION 3. No Conflict. The execution and delivery by the Company of this Agreement and each Related Document to which the Company is a party has been obtained and all applicable filings and notifications required by law, agreement or otherwise have been made, the performance by the Company of this Agreement and each Related Document to which they are parties will not: (a) Violate or conflict with any term or provision of the articles or certificate of incorporation (or other charter documents) of the Company; (b) Conflict with or violate any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award applicable to Company; (c) Conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of any lien on any of the assets pursuant to, any assigned contract or any licenses; (d) Without limiting the generality of the foregoing, result in the termination, denial or impairment of any material contract, arrangement or benefit granted with respect to the Company's business, or require the payment of any fees, taxes or assessments, pursuant to any federal, state or local program relating to minority-owned businesses. SECTION 4. Consents, Approvals and Notifications. The execution and delivery by the Company of this Agreement and each Related Document to which it is a party does not, and the performance by it of this Agreement and such Related Documents will not, require any consent, approval, authorization or other action by, or filing with or notification to, any Governmental Authority or any other Person with the exception of filings required by the Securities and Exchange Commission, including, but not limited to, a Current Report on Form 8-K which will be filed by the Company on, or before 15 days from the date of closing. The Company will become a successor issuer under Securities and Exchange Commission Rule 12g-3(a) and will elect successor issuer status. SECTION 5. Financial Statements. -------------------- 5.1 The Company has furnished to Seller copies of (a) audited balance sheets of the Company and audited statements of income, changes in shareholders' equity and statements of cash flow for the period ending December 31, 1998 and 1999, together with the reports and notes thereon, independent certified public accountants (collectively, the "Audited Financial Statements"). 5.2 The Audited Financial Statements (a) have been prepared in conformity with GAAP applied on a consistent basis from year to year (except as noted otherwise therein); and (b) assuming the Company will continue as a going concern, are true and correct and present fairly in all material respects the financial condition of the Company and the results of operations and changes in cash flow of the Company for the periods to which each relates. 5.3 To the knowledge of the Company, the Interim Financial Statements, if prepared, (a) have been prepared in conformity with GAAP applied on a consistent basis from year to year (except as noted otherwise therein), subject to normal recurring year-end adjustments (the effect of which will not, individually or in the aggregate, be material) and the absence of notes (which, if presented, would not differ materially from those included in the Audited Financial Statements), and (b) assuming the Company will continue as a going concern, are true and correct and present fairly in all material respects the financial condition of the Company and the results of operations and changes in cash flow of the Company for the periods to which each relates. SECTION 6. Litigation. There is no claim, action, investigation, arbitration or proceeding pending or, threatened against the Company, or against or relating to any of the assets or the ability of the Company to perform its obligations hereunder, before any arbitrator, judge, court or governmental authority. Company is not subject to any order, writ judgment, injunction, decree, determination or award of any arbitrator, judge, court or governmental authority. SECTION 7. Environmental Matters. The Company has not used any property, real or personal to generate, manufacture, refine, transport, treat, store, handle, or dispose of any hazardous substances except in accordance with all applicable federal and state environmental laws. SECTION 8. Taxes. The Company has or will duly file or caused to be filed all federal income tax returns and all other federal, state, county, local or city tax returns which are required to be filed, including, but not limited to, income and employee withholding taxes, and the Company has paid or caused to be paid all taxes shown on said returns or on any tax assessment received by it to the extent that such taxes have become due, or has set aside on its books reserves (segregated to the extent required by sound accounting practice) reasonably deemed by the Company to be adequate with respect thereto. No events have occurred which could impose upon Seller, any transferee liability for any taxes, penalties, or interest due or to become due from the Company. SECTION 9. Absence of Changes. Since the date of the Audited Financial Statements, the Company has operated its business in the ordinary course consistent with past practices and there has not been, except as disclosed in this Agreement or the Exhibits attached hereto: i. any Material Adverse Effect; ii. any damage, destruction or loss (whether or not covered by insurance) affecting any tangible asset or property used or useful in the business operations, normal wear and tear excepted; iii. any payments, discharges or satisfactions by the Company of any liens, claims, charges or liabilities (whether absolute, accrued, contingent or otherwise and whether due or to become due) relating to the business operations, other than in the ordinary course of the business and consistent with past practice; iv. any licenses, sales, transfers, pledges, mortgages or other dispositions of any tangible or intangible assets having a value over $1,000 (in the aggregate) used or held for use in connection with the operation of the business, other than in the ordinary course of business and consistent with past practice; v. any write-offs as uncollectible of any accounts receivable or notes receivable of the operations, or any portion thereof, not provided for in the allowance for uncollectible accounts in the Interim Financial Statements; vi. any cancellations of any material debts or claims of, or any amendments, terminations or waivers of any rights of material value to, the business operations; vii. any general uniform increase in or change in the method of computing the compensation of employees of the Company who perform services for the benefit of the business operations; viii. any material changes in the manner in which the Company extends discount or credits to customers or otherwise deals with customers of its business; ix. any material changes in the accounting methods or practices followed by the Company and or any changes in depreciation or amortization policies or rates theretofore adopted; x. any capital commitments by the Company and for additions to property, plant or equipment of the business operations; xi. any agreements or commitments to merge or consolidate with or otherwise acquire any other corporation, association, firm or other business organization or division thereof; xii. any declarations of dividend, payment of any dividend, issuance of any securities, purchase or redemption of any securities, commitments or authorizations for any changes to its Articles of Incorporation or amendments to any by-laws, conversions of any options, warrants or otherwise into common shares, and except as disclosed in paragraph B.3. relating to the total shares issued and outstanding which resulted from a corporate reorganization; xiii. any other material transaction relating to the Company other than in the ordinary course of the business and consistent with past practice; or xiv. any agreements or understandings, whether in writing or otherwise, for the Company to take any of the actions specified in items i. through xii. above. SECTION 10. Undisclosed Liabilities. The Company does not have any liabilities or obligations of any nature that would be required by GAAP to be reflected in the Financial Statements (subject, in the case of unaudited statements, to normal year-end audit adjustments), except: (a) such liabilities and obligations which are reflected in the Financial Statements, or (b) such liabilities or obligations which were incurred in the ordinary course of business for normal trade or business obligations and are not individually or in the aggregate in excess of $1,000. SECTION 11. Compliance with Laws. Except as individually or in the aggregate would not have a Material Adverse Effect, the Company has complied in all respects with all laws of all Governmental Authorities (including all tariff and reporting requirements) with respect to its business operations. D. Representations, Warranties Covenants of Seller and MAS: MAS and Seller represent and warrant to the Company as of the date hereof and as of the Closing Date: SECTION 1. Enforceability of Agreement Against the Seller and MAS. MAS and Seller have all necessary power and authority to enter into this Agreement to which each is a party, to carry out the obligations hereunder and to consummate the transactions contemplated hereby. This Agreement constitutes the legal, valid and binding obligations of the Seller and MAS enforceable against each in accordance with the respective terms. SECTION 2. Shares. Seller's shares have been validly issued and are free and clear of all liens, charges, demands or adverse claims or other restrictions on the exercise of any of the attributes of ownership. There are no contracts, arrangements, commitments or restrictions relating to the issuance, sale, transfer or purchase or obtaining of shares or other ownership interests in the Shares, except for this Agreement. SECTION 3. Incorporation, Authority and Qualification of MAS. MAS is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Indiana. MAS has all necessary corporate power and authority to carry on the business now being conducted by it. MAS is duly qualified to do business, and is in good standing, in each jurisdiction, if any, where the character of its properties owned, operated or leased or the nature of its activities makes such qualification necessary. MAS is authorized to issue 80,000,000 common shares, par value $0.001 per share. The company has 8,519,900 common shares issued and outstanding. MAS is authorized to issue 20,000,000 shares of preferred stock, par value $0.001 per share. No preferred shares have been issued. No other classes of stock are authorized or issued except as set forth herein. There are no outstanding options, warrants, rights, director/officer compensation rights, or otherwise, other than those disclosed herein and the financial statements. SECTION 4. No Conflict. The execution and delivery by the Seller and MAS of this Agreement and each Related Document to which the each is a party have been obtained and all filings and notifications required by law, agreement or otherwise have been made, the performance by the Seller and MAS of this Agreement and each Related Document to which each is a party will not: (i) Violate or conflict with any term or provision of the articles or certificate of incorporation (or other charter documents) of MAS; (ii) Conflict with or violate any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award applicable to MAS or Seller; (iii) Conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of any lien on any of the assets pursuant to, any assigned contract or any licenses; (vi) Without limiting the generality of the foregoing, result in the termination, denial or impairment of any material contract, arrangement or benefit granted with respect to MAS or Seller's business, or require the payment of any fees, taxes or assessments, pursuant to any federal, state or local program relating to minority-owned businesses. SECTION 5. Consents, Approvals and Notifications. The execution and delivery by the Seller and MAS of this Agreement and each Related Document to which each is a party does not, and the performance by it of this Agreement and such Related Documents will not, require any consent, approval, authorization or other action by, or filing with or notification to, any Governmental Authority or any other Person, with the exception of filings required by the Securities and Exchange Commission, including, but not limited to, a Current Report on Form 8-K which will be filed by the Company on, or before 15 days from the date of closing. SECTION 6. Financial Statements. -------------------- 6.1 Seller and MAS have furnished to the Company copies of (a) audited balance sheets of the Company and audited statements of income, changes in shareholders' equity and statements of cash flow for the period ending December 31, 1999, together with interim financial statements and the reports and notes thereon, independent certified public accountants (collectively, the "Audited Financial Statements"). 6.2 The Audited Financial Statements (a) have been prepared in conformity with GAAP applied on a consistent basis from year to year (except as noted otherwise therein); and are true and correct and present fairly in all material respects the financial condition of MAS and the results of operations and changes in cash flow of MAS for the periods to which each relates. 6.3 To the knowledge of the Seller and MAS , the Interim Financial Statements, (a) have been prepared in conformity with GAAP applied on a consistent basis from year to year (except as noted otherwise therein), subject to normal recurring year-end adjustments (the effect of which will not, individually or in the aggregate, be material) and the absence of notes (which, if presented, would not differ materially from those included in the Audited Financial Statements), and are true and correct and present fairly in all material respects the financial condition of the Company and the results of operations and changes in cash flow of MAS for the periods to which each relates. SECTION 7. Litigation. There is no claim, action, investigation, arbitration or proceeding pending or, threatened against MAS, or against or relating to any of the assets or the ability of it to perform its obligations hereunder, before any arbitrator, judge, court or governmental authority. MAS is not subject to any order, writ judgment, injunction, decree, determination or award of any arbitrator, judge, court or governmental authority. SECTION 8. Contracts. To the extent applicable, Exhibit "A" contains an accurate and complete list of all written and oral agreements and contracts in effect on the date of this Agreement to which MAS is a party in connection with the business operations or by which any of its properties or assets relating to the operation are bound. The are no contracts in formation or which are capable of subsequent formation as a result of future satisfied conditions. MAS has made available to the Company true and complete copies of the contracts (including any amendments or modifications thereto). SECTION 9. Environmental Matters. MAS has not used any property, real or personal to generate, manufacture, refine, transport, treat, store, handle, or dispose of any hazardous substances except in accordance with all applicable federal and state environmental laws. SECTION 10. Taxes. MAS has or will duly file or caused to be filed all federal income tax returns and all other federal, state, county, local or city tax returns which are required to be filed, including, but not limited to, income and employee withholding taxes, and it has paid or caused to be paid all taxes shown on said returns or on any tax assessment received by it to the extent that such taxes have become due, or has set aside on its books reserves (segregated to the extent required by sound accounting practice) reasonably deemed by it to be adequate with respect thereto. SECTION 11. Absence of Changes. Since the date of the Audited Financial Statements, including its interim unaudited financial statements filed on Form 10-QSB with the Securities and Exchange Commission, MAS has operated its business in the ordinary course consistent with past practices and there has not been, except as disclosed in this Agreement or the Exhibits attached hereto: i. any Material Adverse Effect; ii. any damage, destruction or loss (whether or not covered by insurance) affecting any tangible asset or property used or useful in the business operations, normal wear and tear excepted; iii. any payments, discharges or satisfactions by it of any liens, claims, charges or liabilities (whether absolute, accrued, contingent or otherwise and whether due or to become due) relating to the business operations, other than in the ordinary course of the business and consistent with past practice; iv. any licenses, sales, transfers, pledges, mortgages or other dispositions of any tangible or intangible assets having a value over $1,000 (in the aggregate) used or held for use in connection with the operation of the business, other than in the ordinary course of business and consistent with past practice; v. any write-offs as uncollectible of any accounts receivable or notes receivable of the operations, or any portion thereof, not provided for in the allowance for uncollectible accounts in the Interim Financial Statements; vi. any cancellations of any material debts or claims of, or any amendments, terminations or waivers of any rights of material value to, the business operations; vii. any general uniform increase in or change in the method of computing the compensation of employees of it who perform services for the benefit of the business operations; viii. any material changes in the manner in which MAS extends discount or credits to customers or otherwise deals with customers of its business; ix. any material changes in the accounting methods or practices followed by MAS and or any changes in depreciation or amortization policies or rates theretofore adopted; x. any capital commitments by MAS and for additions to property, plant or equipment of the business operations; xi. any agreements or commitments to merge or consolidate with or otherwise acquire any other corporation, association, firm or other business organization or division thereof; xii. any declarations of dividend, payment of any dividend, issuance of any securities, purchase or redemption of any securities, commitments or authorizations for any changes to its Articles of Incorporation or amendments to any by-laws, conversions of any options, warrants or otherwise into common shares, and except as disclosed in paragraph B.1. relating to the total shares issued and outstanding which resulted from a corporate reorganization; xiii. any other material transaction relating to MAS other than in the ordinary course of the business and consistent with past practice; or xiv. any agreements or understandings, whether in writing or otherwise, for MAS to take any of the actions specified in items i. through xii. above. SECTION 12. Undisclosed Liabilities. MAS does not have any liabilities or obligations of any nature that would be required by GAAP to be reflected in the Financial Statements (subject, in the case of unaudited statements, to normal year-end audit adjustments), except: (a) such liabilities and obligations which are reflected in the Financial Statements, or (b) such liabilities or obligations which were incurred in the ordinary course of business for normal trade or business obligations and are not individually or in the aggregate in excess of $100.00. MAS is obligated to pay MAS Capital, Inc. the sum of Five Thousand ($5,000) in fees. These funds will be paid to MAS Capital at closing from the proceeds of the shares sold to the Company. SECTION 13. Compliance with Laws. Except as individually or in the aggregate would not have a Material Adverse Effect, MAS has complied in all respects with all laws of all Governmental Authorities (including all tariff and reporting requirements) with respect to its business operations. SECTION 14. Change in Control of MAS. The MAS Board of Directors will nominate James A. Graves as a successor director and President of MAS, effective at closing. E. Miscellaneous Provisions. ------------------------- SECTION 1. Conditions to Closing --------------------- 1.1 Escrow Agent. Gregory M. Wilson, Attorney at Law, will act as Escrow Agent for this transaction, as definitively set forth in the attached Escrow Instructions, Exhibit "B"). 1.2 Conditions to Obligations of the Company. The obligations of the Company to consummate the purchase of the shares shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions, any one of which may be waived by the Seller without waiver of any other rights or remedies which Seller may have under this Agreement: i. The Company's Closing Documents. At the Closing, Seller shall have executed and/or delivered the following Related Documents to which they are parties or for which each is responsible: (1) This Agreement, and (2) payment of purchase price. 1.3 Conditions to Obligations of Seller. The obligations of Seller to consummate the sale of the shares contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions, any one of which may be waived by the Company without waiver of any other rights or remedies which the Company may have under this Agreement. i. Closing Documents. At the Closing, Seller shall have executed and/or delivered this Agreement and delivered the MAS shares to the Escrow Agent. SECTION 2. Indemnification. ---------------- 2.1 Survival. All representations and warranties and covenants and agreements contained herein shall survive the execution of hereof and the Closing Date. Any investigations by or on behalf of any party shall not constitute a waiver as to enforcement of any representation, warranty or covenant contained in this Agreement. No notice or information delivered by one party shall affect the other party's right to rely on any representation or warranty made by the party delivering the notice or information or relieve that party of any obligations under this Agreement as the result of a breach of any of its representations and warranties. SECTION 3. General Provisions. ------------------- 3.1 Headings and Interpretation. The headings used in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of any term or provision of this Agreement. 3.2 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. 3.3 Entire Agreement. This Agreement represents the entire understanding of the parties with reference to the matters set forth herein. This Agreement supersedes all prior negotiations, discussions, correspondence, communications and prior agreements among the parties relating to the subject matter herein. 3.4 Amendment. This Agreement may not be amended or modified except by an instrument in writing signed by the parties hereto. 3.5 Applicable Law. This Agreement shall be governed by the substantive laws of the State of Nevada, without regard to its conflict of laws provisions. 3.6 Counterparts and Facsimile Transmission Copies of Originals. This Agreement may be executed in several original or facsimile copy counterparts and all so executed and transmitted shall constitute one Agreement, binding on all the parties hereto even though all the parties are not signatories to the original or the same counterpart. Facsimile transmitted signatures shall be deemed valid as though they were originals and the parties may perform any and all obligations and duties in reliance on the facsimile copies. 3.7 Further Assurances, Additional Documents, Etc. The parties will cooperate with each other to accommodate the intent of this agreement. MAS and Seller will provide the Company with all financial records of MAS so that there will be a seamless financial transition. IN WITNESS WHEREOF, the parties hereto have executed, or caused their duly authorized representatives to execute, this Stock Purchase Agreement as of the date first written above. OMNINET MEDIA.COM, INC. MAS ACQUISITION XXV CORP. /s/ James A. Graves /s/ Aaron Tsai - --------------------------- --------------------------- By: James A. Graves By: Aaron Tsai Title: Secretary/V.P. Title: President SELLER: MAS Capital Inc. /s/ Aaron Tsai - ---------------- By: Aaron Tsai Title: President EX-3.0 3 0003.txt AMENDMENT OF ARTICLES OF INCORPORATION Exhibit 3.0 Articles of Amendment Dean Heller Secretary of State State of Nevada Filed September 15, 1998 Certificate of Amendment of Articles of Incorporation (after organizational meeting) Tricom Technology Group, Inc. I, the undersigned, James I. Neusom, and of Tricom Technology Group, Inc. do hereby certify: That the Board of Directors of said corporation at a meeting duly convened, held on the 10th day of September, 1998, adopted a resolution to amend the original Articles as follows: Article IV is hereby amended to read as follows: The authorized shares of the Corporation shall be Seven Hundred Million (700,000,000). Six Hundred Ninety Million shares (690,000,000) common, Ten Million (10,000)000 shares Preferred. The new par value of the corporation shall be .0001. Adopted by a unanimous vote of the executive board. /s/ James I. Neusom ------------------------ James I. Neusom President, Secretary State of Nevada ) ) ss. County of Clark ) On September 15, 1998 personally appeared before me, a Notary Public James I Neusom, II who acknowledged that he executed the above instrument. /s/ David Jett [Notary Seal] - ------------------------ David Jett Signature of Notary EX-3.1 4 0004.txt ARTICLES OF INCORPORATION Exhibit 3.1 Filed July 14, 1998 Office of the Secretary of State State of Nevada C-16583-98 ARTICLES OF INCORPORATION OF TRICOM TECHNOLOGY GROUP, INC. We the undersigned, having associated ourselves for the purpose of forming a corporation under the general corporation laws of the State of Nevada do hereby certify: I The name of the corporation is: TRICOM TECHNOLOGY GROUP, INC. II The registered office is located at 9101 W. Sahara Ave., Ste. 105-159, Las Vegas, NV 89117 and the registered agent, James Neusom is located at: 9101 W. Sahara Ave., Ste. 105-159, Las Vegas, NV 89117. I, James Neusom II, hereby accept appointment as the registered agent for the above referenced corporation in accordance with NRS 78.090. /s/ James I. Neusom, II ------------------------ James I. Neusom, II III This corporation is organized for the object and purposes of engaging in every lawful activity, subject to expressed limitations. IV This amount of total authorized capital stock of this corporation is Sixty- Million (60,000,000) shares of common stock having par value of $0.001 per share, and said stock being non-assessable. Holders of this stock shall be entitled to vote at all corporate elections and may cast one vote for each share held in their name. V The members of the governing board of this corporation are styled directors and there are one (1) in number and the names and post office address of the first board of directors are as follows: Name Address James Neusom 9101 W. Sahara Ave., Ste. 105-159, Las Vegas, NV 89117 The number of members of the board of directors may, from time to time, be increased, but never less than one, in the manner provided for by the General Corporation Law. Director(s) need not be a stockholder, not to exceed ten directors. VI The board of directors shall have the power and authority to issue capital stock in exchange for money or other assets, or as legal payment for any services rendered. VII The names and post office address of each of the incorporators signing these articles of incorporation are as follows: Name Address James Neusom 9101 W. Sahara Ave., Ste. 105-159, Las Vegas, NV 89117 VIII The duration of the existence of this corporation is perpetual. IX As fully as possible under the laws of the State of Nevada as they now exist and as they may from time to time be revised, the corporation intends that its directors be protected from legal action by stockholders or other persons (natural or otherwise) on account of service as directors of the corporation sonic record, inc. a director shall not be liable for damages for actions of the corporation to stockholders or to any other person (natural or otherwise) unless such director engaged in personal fraud directly affecting such action or actions of the corporation. In witness whereof, we have subscribed our undersigned names this 16th day of July, 1998. /s/ James I. Neusom ----------------------- James Neusom STATE OF NEVADA ss. County of Clark On 7-15-98 before me, the undersigned, a Notary Public in and for said State, personally appeared James Neusom personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged that he executed the same. WITNESS my hand and official seal. Signature /s/ Frances R. Wilson [Notary Seal] --------------------- Frances R. Wilson EX-3.2 5 0005.txt BY-LAWS BY-LAWS OF OMNINET MEDIA.COM, INC. A NEVADA CORPORATION ARTICLE ONE ----------- OFFICES ------- Section 1.1. Registered Office - The registered office of this corporation shall be in the County of CLARK, State of Nevada. Section 1.2. Other Offices - The corporation may also have offices at such other places both within and without the State of Nevada as the Board of Directors may from time to time determine or the business of the corporation may require. ARTICLE TWO ----------- MEETINGS OF STOCKHOLDERS ------------------------ Section 2.1. Place - All annual meetings of the stockholders shall be held at the registered office of the corporation or at such other place within or without the State of Nevada as the directors shall determine. Special meetings of the stockholders may be held at such time and place within or without the State of Nevada as shall be stated in the notice of the meeting, or in a duly executed waiver of notice thereof. Section 2.2. Annual Meetings - Annual meetings of the stockholders, commencing with the year 2001 . shall be held on the SEVENTH day of JANUARY each year if not a legal holiday and. if a legal holiday, then on the next secular day following, or at such other time as may be set by the Board of Directors from time to time, at which the stockholders shall elect by vote a Board of Directors and transact such other business as may properly be brought before the meeting. Section 2.3. Special Meetings - Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Articles of Incorporation, may be called by the President or the Secretary by resolution of the Board of Directors or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose of the proposed meeting. Section 2.4. Notices of Meetings - Notices of meetings shall be in writing and signed by the President or a Vice-President or the Secretary or an Assistant Secretary or by such other person or persons as the directors shall designate. Such notice shall state the purpose or purposes for which the meeting is called and the time and the place, which may be within or without this State, where it is to be held. A copy of such notice shall be either delivered personally to or shall be mailed, postage prepaid, to each stockholder of record entitled to vote at such meeting not less than ten nor more than sixty days before such meeting. If mailed, it shall be directed to a stockholder at his address as it appears upon the records of the corporation and upon such mailing of any such notice, the service thereof shall be complete and the time of the notice shall being to run from the date upon which such notice is deposited in the mail for transmission to such stockholder. Personal delivery of any such notice to any officer of a corporation or association or to any member of a partnership shall constitute delivery of such notice to such corporation, association or partnership. In the event of the transfer of stock after delivery of such notice of and prior to the holding of the meeting it shall not be necessary to deliver or mail notice of the meeting to the transferee. Section 2.5. Purpose of Meetings - Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Section 2.6. Quorum - The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Articles of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. Section 2.7. Voting - When a quorum is present or represented at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall be sufficient to elect directors or to decide any questions brought before such meeting, unless the question is one upon which by express provision of the statutes or of the Articles of Incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question. Section 2.8. Share Voting - Each stockholder of record of the corporation shall be entitled at each meeting of stockholders to one vote for each share of stock standing in his name on the books of the corporation. Upon the demand of any stockholder, the vote for directors and the vote upon any question before the meeting shall be by ballot. Section 2.9. Proxy - At any meeting of the stockholders any stockholder may be represented and vote by a proxy or proxies appointed by an instrument in writing. In the event that any such instrument in writing shall designate two or more persons to act as proxies, a majority of such persons present at the meeting, or, if only one shall be present, then that one shall have and may exercise all of the powers conferred by such written instrument upon all of the persons so designated unless the instrument shall otherwise provide. No proxy or power of attorney to vote shall be used to vote at a meeting of the stockholders unless it shall have been filed with the secretary of the meeting when required by the inspectors of election. All questions regarding the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided by the inspectors of election who shall be appointed by the Board of Directors, or if not so appointed, then by the presiding officer of the meeting. Section 2.10. Written Consent in Lieu of Meeting - Any action which may be taken by the vote of the stockholders at a meeting may be taken without a meeting if authorized by the written consent of stockholders holding at least a majority of the voting power, unless the provisions of the statutes or of the Articles of Incorporation require a greater proportion of voting power to authorize such action in which case such greater proportion of written consents shall be required. ARTICLE THREE ------------- DIRECTORS --------- Section 3.1. Powers - The business of the corporation shall be managed by its Board of Directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders. Section 3.2. Number of Directors - The number of directors which shall constitute the whole board shall be TWO (2). The number of directors may from time to time be increased or decreased to not less than one nor more than fifteen by action of the Board of Directors. The directors shall be elected at the annual meeting of the stockholders and except as provided in Section 2 of this Article, each director elected shall hold office until his successor is elected and qualified. Directors need not be stockholders. Section 3.3. Vacancies - Vacancies in the Board of Directors including those caused by an increase in the number of directors, may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director, and each director so elected shall hold office until his successor is elected at an annual or a special meeting of the stockholders. The holders of a two-thirds of the outstanding shares of stock entitled to vote may at any time peremptorily terminate the term of office of all or any of the directors by vote at a meeting called for such purpose or by a written statement filed with the secretary or, in his absence. with any other officer. Such removal shall be effective immediately, even if successors are not elected simultaneously and the vacancies on the Board of Directors resulting therefrom shall be filled only by the stockholders. A vacancy or vacancies in the Board of Directors shall be deemed to exist in case of the death, resignation or removal of any directors, or if the authorized number of directors be increased, or if the stockholders fail at any annual or special meeting of stockholders at which any director or directors are elected to elect the full authorized number of directors to be voted for at that meeting. The stockholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors. If the Board of Directors accepts the resignation of a director tendered to take effect at a future time, the Board or the stockholders shall have power to elect a successor to take office when the resignation is to become effective. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of his term of office. ARTICLE FOUR ------------ MEETINGS OF THE BOARD OF DIRECTORS ---------------------------------- Section 4.1. Place - Regular meetings of the Board of Directors shall be held at any place within or without the State which has been designated from time to time by resolution of the Board or by written consent of all members of the Board. In the absence of such designation regular meetings shall be held at the registered office of the corporation. Special meetings of the Board may be held either at a place so designated or at the registered office. Section 4.2. First Meeting - The first meeting of each newly elected Board of Directors shall be held immediately following the adjournment of the meeting of stockholders and at the place thereof. No notice of such meeting shall be necessary to the directors in order legally to constitute the meeting, provided a quorum be present. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors. Section 4.3. Regular Meetings - Regular meetings of the Board of Directors may be held without call or notice at such time and at such place as shall from time to time be fixed and determined by the Board of Directors. Section 4.4. Special Meetings - Special Meetings of the Board of Directors may be called by the Chairman or the President or by any Vice-President or by any two directors. Written notice of the time and place of special meetings shall be delivered personally to each director, or sent to each director by mail or by other form of written communication, charges prepaid, addressed to him at his address as it is shown upon the records or is not readily ascertainable, at the place in which the meetings of the directors are regularly held. In case such notice is mailed or telegraphed, it shall be deposited in the United States mail or delivered to the telegraph company at lease forty-eight (48) hours prior to the time of the holding of the meeting. In case such notice is delivered as above provided, it shall be so delivered at lease twenty-four (24) hours prior to the time of the holding of the meeting Such mailing, telegraphing or delivery as above provided shall be due, legal and personal notice to such director. Section 4.5. Notice - Notice of the time and place of holding an adjourned meeting need not be given to the absent directors if the time and place be fixed at the meeting adjourned. Section 4.6. Waiver - The transactions of any meeting of the Board -of Directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present, and if, either before or after the meeting, each of the directors not present signs a written waiver of notice, or a consent to holding such meeting, or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Section 4.7. Quorum - A majority of the authorized number of directors shall be necessary to constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, unless a greater number be required by law or by the Articles of Incorporation. Any action of a majority, although not at a regularly called meeting, and the record thereof, if assented to in writing, by all of the other members of the Board shall be as valid and effective in all respects as if passed by the Board in regular meeting. Section 4.8. Adjournment - A quorum of the directors may adjourn any directors meeting to meet again at a stated day and hour; provided, however, that in the absence of a quorum, a majority of the directors present at any directors meeting, either regular or special, may adjourn from time to time until the time fixed for the next regular meeting of the Board. ARTICLE FIVE ------------ COMMITTEES OF DIRECTORS ----------------------- Section 5.1. Power to Designate - The Board of Directors may, by resolution adopted by a majority of the whole Board, designate one or more committees of the Board of Directors, each committee to consist of one or more of the directors of the corporation which, to the extent provided in the resolution, shall have and may exercise the power 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 papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by the Board of Directors. The members of any such committee present at any meeting and not disqualified from voting may, whether or not they constitute a quorum. unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. At meetings of such committees, a majority of the members or alternate members shall constitute a quorum for the transaction of business, and the act of a majority of the members or alternate members at any meeting at which there is a quorum shall be the act of the committee. Section 5.2. Regular Minutes - The committees shall keep regular minutes of their proceedings and report the same to the Board of Directors. Section 5.3. Written Consent - Any action required or permitted to be taken at any meeting of the Board, of Directors or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee. ARTICLE SIX ----------- COMPENSATION OF DIRECTORS ------------------------- Section 6.1. Compensation - The directors may be paid their expenses of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like reimbursement and compensation for attending committee meetings. ARTICLE SEVEN ------------- NOTICES ------- Section 7.1. Notice - Notices to directors and stockholders shall be in writing and delivered personally or mailed to the directors or stockholders at their addresses appearing on the books of the corporation. Notice by mail shall be deemed to be given at the time when the same shall be mailed. Notice to directors may also be given by telegram. Section 7.2. Consent - Whenever all parties entitled to vote at any meeting. whether of directors or stockholders, consent, either by a writing on the records of the meeting or filed with the secretary, or by presence at such meeting and oral consent entered on the minutes, or by taking part in the deliberations at such meeting without objection, the doings of such meetings shall be as valid as if had at a meeting regularly called and noticed, and at such meeting any business may be transacted which is not excepted from the written consent or to the consideration of which no objection for want of notice is made at the time, and if any meeting be irregular for want of notice or of such consent, provided a quorum was present at such meeting, the proceedings of said meeting may be ratified and approved and rendered likewise valid and the irregularity or defect therein waived by a writing signed by all parties having the right to vote at such meeting; and such consent or approval of stockholders may be by proxy or attorney, but all such proxies and powers of attorney must be in writing. Section 7.3. Waiver of Notice - Whenever any notice whatever is required to be given under the provisions of the statutes, of the Articles of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. ARTICLE EIGHT ------------- OFFICERS -------- Section 8.1. Appointment of Officers - The officers of the corporation shall be chosen by the Board of Directors and shall be a President, a Secretary and a Treasurer. Any person may hold two or more offices. Section 8.2. Time of Appointment - The Board of Directors at its first meeting after each annual meeting of stockholders shall choose a Chairman of the Board who shall be a director, and shall choose a President, a Secretary and a Treasurer, none of whom need be directors. Section 8.3. Additional Officers - The Board of Directors may appoint a Vice Chairman of the Board, Vice-Presidents and one or more Assistant Secretaries and Assistant Treasurers and such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors. Section 8.4. Salaries - The salaries and compensation of all officers of the corporation shall be fixed by the Board of Directors. Section 8.5. Vacancies - The officers of the corporation shall hold office at the pleasure of the Board of Directors. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors. Any vacancy occurring in any office of the corporation by death, resignation, removal or otherwise shall be filled by the Board of Directors. Section 8.6. Chairman of the Board - The Chairman of the Board shall preside at meetings of the stockholders and the Board of Directors. and shall see that all orders and resolutions of the Board of Directors are carried into effect. Section 8.7. Vice-Chairman - The Vice-Chairman shall, in the absence or disability of the Chairman of the Board, perform the duties and exercise the powers of the Chairman of the Board and shall perform such other duties as the Board of Directors may from time to time prescribe. Section 8.8. President - The President shall be the chief executive officer of the corporation and shall have active management of the business of the corporation. He shall execute on behalf of the corporation all instruments requiring such execution except to the extent the signing and execution thereof shall be expressly designated by the Board of Directors to some other officer or agent of the corporation. Section 8.9. Vice-President - The Vice-President shall act under the direction of the President and in the absence or disability of the President shall perform the duties and exercise the powers of the President. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. The Board of Directors may designate one or more Executive Vice Presidents or may otherwise specify the order of seniority of the Vice-Presidents. The duties and powers of the President shall descend to the Vice-Presidents in such specified order of seniority. Section 8.10. Secretary - The Secretary shall act under the direction of the President. Subject to the direction of the President he shall attend all meetings of the Board of Directors and all meetings of the stockholders and record the proceedings. He shall perform like duties for the standing committees when required. He shall give, or cause to be given. notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the President or the Board of Directors. Section 8.11. Assistant Secretaries - The Assistant Secretaries shall act under the direction of the President. In order of their seniority, unless otherwise determined by the President or the Board of Directors. they shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. Section 8.12. Treasurer - The Treasurer shall act under the direction of the President. Subject to the direction of the President he shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all monies and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the corporation as may be ordered by the President or the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings. or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the corporation. Section 8.13. Surety - If required by the Board of Directors, he shall give the corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the corporation. in case of his death, resignation, retirement or removal from office, of all books. papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation. Section 8.14. Assistant Treasurer - The Assistant Treasurer in the order of their seniority, unless otherwise determined by the President or the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer. They shall perform such other duties and have such other powers as the President or the Board of Directors may from time to time prescribe. ARTICLE NINE ------------ CERTIFICATES OF STOCK --------------------- Section 9.1. Share Certificates - Every stockholder shall be entitled to have a certificate signed by the President or a Vice-President and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the corporation, certifying the number of shares owned by him in the corporation. If the corporation shall be authorized to issue more than once class of stock or more than one series of any class. the designations, preferences and relative, participating, optional or other special rights of the various classes of stock or series thereof and the qualifications, limitations or restrictions of such rights, shall be set forth in full or summarizes on the face or back of the certificate which the corporation shall issue to represent such stock. Section 9.2. Transfer Agents - If a certificate is signed (a) by a transfer agent other than the corporation or its employees or (b) by a registrar other than the corporation or its employees, the signatures of the officers of the corporation may be facsimiles. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall cease to be such officer before such certificate is issued, such certificate may be issued with the same effect as though the person had not ceased to be such officer. The seal of the corporation, or a facsimile thereof, may, but need not be, affixed to certificates of stock. Section 9.3. Lost or Stolen Certificates - The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost or destroyed upon the making of an affidavit o that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost or destroyed. Section 9.4. Share Transfers - Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation, if it is satisfied that all provisions of the laws and regulations applicable to the corporation regarding transfer and ownership of shares have been complied with, to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books Section 9.5. Voting Shareholder - The Board of Directors may fix in advance a date not exceeding sixty (60) days nor less than ten (10) days preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining the consent of stockholders for any purpose, as a record date for the determination of the stockholders entitled to notice of and to vote at any such meeting, and any adjournment thereof; or entitled to receive payment of any such dividend, or to give such consent, and in such case, such stockholders, and only such stockholders as shall be stockholder of record on the date so fixed, shall be entitled to notice of and to vote at such meeting, or any adjournment thereof, or to receive payment of such dividend. or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the corporation after any such record date fixed as aforesaid. Section 9.6. Shareholders Record - The corporation shall be entitled to recognize the person registered on its books as the owner of shares to be the exclusive owner for all purposes including voting and dividends, and the corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as other wise provided by the laws of Nevada. ARTICLE TEN ----------- GENERAL PROVISIONS ------------------ Section 10.1. Dividends - Dividends upon the capital stock of the corporation, subject to the provisions of the Articles of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash. in property or in shares of the capital stock, subject to the provisions of the Articles of Incorporation. Section 10.2. Reserves - Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends or for repairing or maintaining any property of the corporation or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created. Section 10.3. Checks - All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. Section 10.4. Fiscal Year - The fiscal year of the corporation shall be fixed by resolution of the Board of Directors. Section 10.5. Corporate Seal - The corporation may or may not have a corporate seal, as may from time to time be determined by resolution of the Board of Directors. If a corporate seal is adopted, it shall have inscribed thereon the name of the Corporation and the words "Corporate Seals" and "Nevada". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. ARTICLE ELEVEN -------------- INDEMNIFICATION --------------- Every person who was or is a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil. criminal, administrative or investigative, by reason of the fact that he or a person of whom he is the legal representative is or was a director or officer of the corporation or is or was serving at the request of the corporation or for its benefit as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the General Corporation Law of the State of Nevada from time to time against all expenses, liability and loss (including attorneys' fees, judgments, fines and amounts paid or to be paid in settlement) reasonably incurred or suffered by him in connection therewith. The expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the corporation. Such right of indemnification shall be a contract right which may be enforced in any manner desired by such person. Such right of indemnification shall not be exclusive of any other right which such directors, officers or representatives may have or hereafter acquire and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of stockholders, provision of law or otherwise, as well as their rights under this Article. The Board of Directors may cause the corporation to purchase and maintain insurance on behalf of any person who 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, or as its representative in a partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the corporation would have the power to indemnify such person. The Board of Directors may from time to time adopt further Bylaws with respect to indemnification and may amend these and such Bylaws to provide at all times the fullest indemnification permitted by the General Corporation Law of the State of Nevada. ARTICLE TWELVE -------------- AMENDMENTS ---------- Section 12.1 By Shareholder - The Bylaws may be amended by a majority vote of all the stock issued and outstanding and entitled to vote at any annual or special meeting of the stockholders, provided notice of intention to amend shall have been contained in the notice of the meeting. Section 12.2 By Board of Directors - The Board of Directors by a majority vote of the whole Board at any meeting may amend these Bylaws, including Bylaws adopted by the stockholders, but the stockholders may from time to time specify particular provisions of the Bylaws which shall not be amended by the Board of Directors. APPROVED AND ADOPTED this 1st. day of August, 2000. /s/ James A. Graves --------------------------------- James A. Graves V.P./Secretary, OmniNet Media.com -----END PRIVACY-ENHANCED MESSAGE-----