Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act Of 1934
Date of Earliest Reported Event - April 5, 1999
eNote.com Inc.
(Exact name of Registrant as specified in its charter)
Delaware 0-7349 59-3453153
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification Number)
One Lawson Lane, Third Floor
Burlington, Vermont 05402
(Address of Registrant's principal executive offices)
(802) 862-5100
(Registrant's telephone number, including area code)
(802) 862-1631
(Registrant's facsimile number, including area code)
1612 OSCEOLA
CLEARWATER, FLORIDA
(Former name or former address, if changed since last report)
INTRODUCTORY NOTE
Unless otherwise indicated, all information in this Current Report on Form
8-K (the "Report") has been adjusted to reflect a 1-for-6-3/4 reverse stock
split effected on April 2, 1999 and a business combination transaction that
closed on April 5, 1999. References to "Webcor" shall refer to the company
before the business combination and references to "eNote," the "Company," "we,"
"us" and "our" shall refer to eNote.com, Inc. and our subsidiaries after the
business combination.
Our quarterly and annual operating results will be affected by a wide
variety of factors that could materially and adversely affect our actual
results. These factors include, but are not limited to:
o Changes in general economic conditions;
o Fluctuations in the securities markets;
o Changes in the demand for e-mail and online information services; o Changes in
the nature of our business resulting from the introduction of
new products and services;
o Competition from other firms who offer competitive products and services; o
Changes in regulatory requirements; and o Risks related to the year 2000.
As a result of these factors and others, our future operating results may
fluctuate on a quarterly or annual basis. Such fluctuations could materially and
adversely affect our business, financial condition, operating results, and stock
price.
This report and other documents that we file with the Securities and
Exchange Commission (the "SEC") contain forward-looking statements about our
business. These forward-looking statements are subject to many risks and
uncertainties. Therefore, our actual results may differ significantly from the
forward-looking statements. Except as specified in SEC regulations, we have no
duty to publicly release information that updates the forward-looking statements
contained in this Report. An investment in our stock involves various risks,
including those mentioned above and described elsewhere in this Report.
Additional risks will be disclosed from time to time in our future SEC filings.
Item 1.Change In Control of Registrant
General. eNote.com Inc. is a Delaware corporation that was formerly known
as Webcor Electronics, Inc. Webcor conducted an initial public offering in May
1982 pursuant to a Form S-1 Registration Statement under the Securities Act of
1933 (the "Securities Act"). In connection with an application to list its
Common Stock on the NASDAQ system, Webcor also registered its Common Stock
pursuant to Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange
Act"). As a result of a 1989 bankruptcy proceeding, Webcor became an inactive
shell that had with no material assets, liabilities or business activities.
Webcor remained inactive until March 11, 1997, when its stockholders approved a
plan of reorganization proposed by Capston Network Company of Clearwater,
Florida ("Capston"). This plan of reorganization authorized Capston to seek a
suitable business combination opportunity for Webcor, authorized a series of
changes in Webcor's corporate structure, and provided for stock-based
compensation to Capston and others for services rendered and to be rendered in
connection with the implementation of the plan of reorganization. Capston and
its president Sally A. Fonner, who also serves as our sole director, began
actively seeking a business combination opportunity for Webcor in the spring of
1997. After investigating a number of opportunities, Capston negotiated an
agreement with the stockholders of Navis Technologies, Ltd. ("Navis") in March
of 1999. In connection with this transaction, the stockholders of Navis agreed
to contribute all of their Navis stock to Webcor in exchange for 8,000,000
shares of common stock (the "Navis Transaction"). At the same time, Capston
negotiated an agreement with Friedlander International Limited ("Friedlander")
where Friedlander agreed to contribute $5,000,000 in cash to eNote in exchange
for 5,000,000 shares of convertible preferred stock and 2,000,000 common stock
purchase warrants (the "Friedlander Transaction"). The Navis Transaction closed
on April 5, 1999, and the Friedlander Transaction closed on April 6, 1999.
The Navis Transaction. Webcor acquired Navis in a business combination
transaction that was structured as a reverse takeover, or "RTO." In connection
with the Navis Transaction, the stockholders of Navis exchanged their Navis
stock for newly issued stock of Webcor, and Navis became a wholly-owned
subsidiary of our company. Before the Navis Transaction, Webcor had no material
assets, liabilities or business operations. No relationship existed between
Webcor and Navis prior to the Navis Transaction and no funds of Webcor were
spent to acquire the stock of Navis. As consideration for the Navis Transaction,
Webcor issued shares of Common Stock to the former stockholders of Navis. The
number of shares issued by Webcor in the Navis Transaction was determined by
arms-length negotiation between the parties.
Until March 31, 1999, Webcor had 3,476,370 shares of common stock ("Old
Common") issued and outstanding. In preparation for the Navis Transaction,
Webcor changed its name to eNote.com, Inc. It also effected a "reverse split"
where the Old Common was consolidated in the ratio of one post-consolidation
share ("Common Stock") for every six and three-quarters (6-3/4) shares of Old
Common, provided, that no stockholder's ownership was reduced to fewer than 100
shares of Common Stock if that stockholder owned at least 100 shares of Old
Common on March 31, 1999. In connection with the Navis Transaction, Webcor
agreed to acquire all of the issued and outstanding shares of Navis in exchange
for 8,000,000 shares of Common Stock. In addition, Webcor agreed to issue
1,460,000 shares of Common Stock to certain consultants and advisors, including
540,000 shares of Common Stock that were issued to persons designated by
Capston, 270,000 shares of Common Stock that were issued to legal counsel for
the parties and 650,000 shares of Common Stock that were issued to certain
financial consultants as finders fees.
The Friedlander Transaction. On April 6, 1999, eNote sold 5,000,000 shares
of convertible preferred stock ("Preferred Stock") and 2,000,000 common stock
purchase warrants ("Warrants") to Friedlander for $5,000,000 in cash. The
Preferred Stock has a liquidation preference of $1 per share, or $5,000,000 in
the aggregate, and is convertible into Common Stock on a share-for-share basis.
The Warrants are exercisable for five years from the date of issuance at a price
of $1 per share, and are subject to voluntary redemption by eNote at a
redemption premium of $1 per Warrant over the spread between the exercise price
of the Warrant and the market price of the Common Stock on the redemption date.
Under the Friedlander agreements, the holders of Preferred Stock and Warrants
are protected against dilution resulting from certain post-closing stock
issuances and are entitled to certain demand and piggy-back registration rights.
New Management Team. In connection with the closing of the Navis
Transaction, Sally A. Fonner appointed three persons designated by Navis to
serve as executive officers of eNote. Our new executive officers, and the
positions held by such persons are set forth below. It is anticipated that our
new executive officers will continue to serve in such capacities for the
foreseeable future.
Name Age Positions
John R. Varsames....... 48 President, Chief Executive
Officer
Michael T. Grennan..... 45 Chief Financial Officer
James D. Richards...... 44 Director of Technology
Under the terms of the Friedlander and Navis transactions, Friedlander and
the former stockholders of Navis have the right to replace the current board of
directors with their own nominees (the "New Directors"). Two New Directors have
already been nominated by the former stockholders of Navis and two New Directors
will be nominated by Friedlander. The former stockholders of Navis have
nominated John R. Varsames and Michael T. Grennan to serve as New Directors of
eNote. The proposed changes in our board of directors will not become effective
and the New Directors will not assume office until 10 days after we file an
Information Statement and Notice of Change in the Majority of the Board of
Directors with the SEC and send copies of the Notice to our stockholders. At
that time, Sally A. Fonner will appoint the New Directors and then resign from
our board of directors. Thereafter, the New Directors will manage our business.
John R. Varsames was appointed President and Chief Executive Officer of our
Company on April 5, 1999. He will also be appointed to serve as a New Director.
Mr. Varsames founded Navis in June 1996 and has served as the president and
chief executive officer of Navis since that time. Before forming Navis, Mr.
Varsames served as a consultant and then as Vice President for AirMouse Remote
Controls and its AirMarket Interactive System, a company specializing in
interactive peripherals and television technology, where he was instrumental in
the deployment of two interactive television projects. Previously, Mr. Varsames
co-founded and served for 10 years as the president and chief executive officer
of Northshore Companies, a construction, development and real estate investment
firm that grew to become one of Vermont's larger development and residential
construction firm.
Mr. Varsames is a graduate of St. Michael's College (Business
Administration/Political Science), and a past chairman of the St. Michael's
College Associate Board of Trustees. He served in the United States Air
Force, Reserve and Guard, during the Vietnam conflict in classified
communication and intelligence. Mr. Varsames has also pursued postgraduate
education in engineering, marketing and business. He has served his community
as a director of several charitable organizations and also served as a
National Director for the National Association of Home Builders.
Michael T. Grennan was appointed Chief Financial Officer of our Company on
April 5, 1999. He will also be appointed to serve as a New Director. Before
joining our company, Mr. Grennan worked for seven years as a self-employed
business and financial consultant. Previously, Mr. Grennan worked for 14 years
in public accounting, first on the audit staff of Coopers and Lybrand, and then
as a staff member, manager and partner of the accounting firm of Urbach, Kahn,
and Werlin, PC. Mr. Grennan is a 1977 graduate of the University of Florida
(BSBA in Accounting with High Honors), a Certified Public Accountant and a
former member of the AICPA's Ethics Enforcement Committee. In addition to his
experience in public accounting Mr. Grennan has extensive consulting experience
for a variety of public and private corporations including banks, manufacturing
and operating companies.
James T. Richards was appointed Director of Technology on April 5, 1999.
Mr. Richards founded SolutioNet in 1987 and has served as the president and
chief executive officer of SolutioNet since that time. SolutioNet has developed
and patented a Two-Way Infrared Protocol ("TWIRP(TM)") for wireless TV web
browser peripherals and licensed the TWIRP technology to Acorn Computers and the
Oracle Corporation. Over the course of his career, Mr. Richards has built a
high-technology company from start-up through $18 million in profitable annual
sales and raised over $20 million in capital for four emerging technology firms.
He also has been involved in the editing and acceptance of six technical papers
for Institute of Electrical and Electronics Engineers ("IEEE") conferences. Mr.
Richards is a 1977 graduate of the Massachusetts Institute of Technology (BS in
Electrical Engineering) and a member of the Technical Committee which is a part
of the Consumer Electronics Society of the IEEE.
Principal Stockholders. Taking all of the stock issuances into account,
there are 10,000,000 shares of Common Stock, 5,000,000 shares of Preferred Stock
and 2,000,000 Warrants issued and outstanding on the date of this Report. After
giving pro forma effect to the conversion of the Preferred Stock and the
exercise of the Warrants, the following table sets forth the number of shares of
Common Stock owned by (i) each executive officer and director, (ii) all
executive officers and directors as a group, and (iii) each person who will own
of record or own beneficially, more than five percent (5%) of our outstanding
Common Stock.
Name and Address of Beneficial Owner Shares Percent
Owned of Class
John R. Varsames (1)(2)(3) 7,100,000 47.3% (6)
Michael T. Grennan (1) 250,000 1.7% (6)
James D. Richards (1) 250,000 1.7% (6)
Friedlander International Limited (4)(5) 7,000,000 41.2% (7)
c/o Morning Star Ireland Limited,
132 Custom House Harbour
Dublin 1, Ireland
Bert Friedlander (3)(4) 7,000,000 41.2% (7)
Greenwich, Connecticut
Executive Officers and Directors as a Group (4 persons)7,600,000 50.1% (6)
(1) c/o eNote.com, Inc., One Lawson Lane, Third Floor Burlington, Vermont
05402
(2)Mr. Varsames shares beneficial ownership and voting power with his wife
Heidi A. Varsames.
(3)Includes 20,000 shares of Common Stock held of record by the children of
John R. and Heidi A. Varsames.
(4)Includes 5,000,000 shares of Common Stock issuable upon conversion of the
Preferred Stock and 2,000,000 shares of Common Stock issuable upon full
exercise of immediately exercisable Warrants.
(5)Mr. Friedlander exercises sole voting and investment control over shares of
Common Stock held by Friedlander International Limited.
(6) Based on 15,000,000 shares of Common Stock outstanding. (7) Based on
15,000,000 shares of Common Stock and 2,000,000 presently
exercisable Warrants outstanding.
Compensation to Capston and Others. In connection with the plan of
reorganization approved by Webcor's stockholders, certain persons designated by
Capston received 540,000 shares of Common Stock for administrative and
management services. Ms. Fonner received 180,600 shares of Common Stock for her
personal account. In addition, to the shares issued to designees of Capston,
270,000 shares of Common Stock were issued to legal counsel for the parties for
services rendered and 650,000 shares of Common Stock were issued to two finders
who assisted in the identification of Navis as a potential business combination
candidate, the introduction of Navis to Webcor, the collection and analysis of
due diligence information on Navis, and other financial consulting and advisory
services. All shares of Common Stock issued to designees of Capston, legal
counsel for the parties and the finders were registered prior to issuance on a
Form S-8 Registration Statement under the Securities Act of 1933. We believe
that each of these transactions were on terms that were no less favorable than
we could have obtained in transactions with unrelated third parties.
ITEM 2. Acquisition or Disposition of Assets
Introduction and Overview.
After extensive demographic and market studies, tvemail has been developed
to service the needs of those groups and individuals that are currently not
served or under served by computers and the internet. Therefore, we intend to
finish the development and begin commercialization of a proprietary "tvemail"
system developed by Navis. The tvemail system is designed to function as a low
cost Internet alternative for customers who want access to e-mail and other
online services, but want to avoid the cost and complexity of a personal
computer ("PC") or network computer ("NC") based system. The tvemail system will
be easier to use and much less expensive than any available alternative,
including PCs, NCs and Web TV(TM). We believe this low cost combination of
television, e-mail and limited online services will appeal to a large segment of
the potential market and help transform advertising, electronic commerce and
information delivery for the consumer mass market.
The Internet has experienced rapid growth over the last few years. Despite
this growth, approximately 65% of U.S. households have no access to e-mail and
other online services. While there seems to be almost universal agreement that
e-mail and online services are desirable, a large segment of the population does
not intend to "get wired" in the foreseeable future. The principal reasons cited
for a lack of e-mail and access to online services include:
o The cost, complexity and size of PC and NC equipment; o The time and effort
required to learn about information equipment and
services;
o The time and effort required to use PC and NC equipment; o The inability to
access desired content without time consuming log-on
and navigation procedures;
o The high monthly cost of online information services; and o "Information
Overload" resulting from too many choices.
The tvemail system has been designed to overcome all of these objections.
We have designed a compact in-home information terminal that uses the customer's
television set as a monitor and connects directly to the customer's telephone
line for access to our servers. The terminal uses a wireless keyboard as an
input device and can either be placed on top of the television set or discretely
tucked away. While PCs, NCs and other information appliances require the
customer to boot-up, log-on and navigate, our tvemail system automatically
downloads and stores the customer's e-mail and other content every few hours. A
blinking "message received" indicator notifies the customer when e-mail or other
new content has been received and reviewing the new material is as simple as
turning on the television set and selecting a color-coded icon from our
graphical user interface ("GUI").
The tvemail system does not provide complete Internet access and we do not
intend to compete for customers who already have complex information retrieval
systems. Instead, we intend to provide basic e-mail and a limited array of
online services, such as news, sports, weather reports and online shopping, to
the 65% of U.S. households that do not have or desire full Internet access. Due
to the simplicity of the tvemail system, we expect to be able to provide both
the in-home equipment and the required online services for $9.95 per month.
Since the tvemail system is simple, inexpensive, automatic and instantly
accessible, we believe it will have significant mass market appeal.
Nevertheless, our business is subject to considerable risk and uncertainty and
there is no assurance that we will succeed in our efforts to finish the
development and effectively market our tvemail system.
History of Navis and the tvemail Technology.
Navis was founded in 1996 for the purpose of developing and commercializing
communication appliances, electronic point of sale devices and infrared
subsystems for NCs (Network Computer) and other "thin client" data retrieval and
storage systems, As a subcontractor to Acorn, the team develop for Oracle, IBM,
Apple, Netscape, and Sun the original reference design for the NC concept. The
NC concept was designed as an alternative to the PC and the companies formed the
NC Consortium to develop and commercialize the technology. In an NC environment,
memory and processing intensive computer tasks are performed on a remote
computer and the user relies on a small and relatively unsophisticated data
entry and retrieval device that is connected to the main computer. In 1996,
Navis was selected by the NC consortium to develop the infrared communications
("IR") protocol and input devices to be used by the NC Consortium members.
Working in conjunction with SolutioNet, Navis developed a series of peripherals
that rely on SolutioNet's TWIRP technology. These peripherals were adopted by
the NC licencees and were implemented in the first generation of NC products. At
the date of this Report, Navis provides remote controls to three NC
manufacturers. Navis receives royalty revenues from third party sales of
TWIRP(TM) chips, advanced remote control units, and wireless keyboards. It also
derives revenue from contract engineering and consulting work in the field of NC
input devices and wireless communications. Since 1996, Navis has supplied
infrared protocol and advanced input devices to NC manufacturers such as Acorn,
NCI, RCA, Akai, and NetProducts.
Navis' involvement in the NC Consortium gave it extensive experience in
developing, manufacturing, and marketing specialized information appliances. The
experience also convinced Navis' management that a substantial market exists for
simple, low cost information appliances that will give users easy access to
e-mail and a limited variety of online services. Therefore, Navis has developed
the tvemail hardware, software and related server systems and is prepared to
launch commercial sales of the tvemail system in late 1999.
The tvemail System.
The tvemail system has been designed to give users easy access to e-mail,
information gathering, and online shopping services in a format that is far less
expensive and complex than Internet access technologies that operate on PC or NC
platforms. We believe the principal competitive advantages of the tvemail system
include:
o Low Cost--The tvemail system, including hardware, wireless keyboard and
monthly online service fees is expected to cost less than $120 per year. We
believe these costs compare quite favorably with a first-year outlay of
approximately $500 for WebTV and approximately $1,200 for an entry level
PC.
o Simplicity of Operation--While PCs, NCs and other information appliances
require the customer to boot-up, log-on and navigate, our tvemail system
automatically downloads and stores the customer's e-mail and other content
every few hours. As a result, checking messages on the tvemail system is as
simple as turning on the television set and selecting a color-coded icon
from our GUI.
o Customized Content--The tvemail system gives users the ability to select
the particular online services they want without receiving content or
advertising that they don't want. We intend to continually upgrade our
content options to meet the particular requirements of our customers and
expect that expanded service options will also give rise to new revenue
opportunities.
o Speed--Since the tvemail system automatically downloads and stores the
customer's e-mail and other content every few hours, retrieval of stored
information is virtually instantaneous. In addition, if a customer wants to
manually check messages or update his other content, total retrieval time
normally is less than 30 seconds, the time required to dial up and log-on
to a local server.
o Efficiency--The tvemail system makes very efficient use of server,
telephone and modem resources because the information is collected on the
server and/or the in-home terminal and automatically transferred at
pre-determined intervals. Since the user is not online while composing or
reading messages, the connect time for each session is minimal, and a large
number of clients can be accommodated on a single server.
Technical Specifications.
General. The tvemail system is comprised of two principal elements: an
in-home terminal, including an IR receiver, IR keyboard and accessories (the
"Client Hardware"), and our proprietary back-end server systems (the "Server
Systems"). We have completed the initial design and "proof of concept" phases on
both the Client Hardware and the Server Systems and are now redesigning the
Client Hardware to take advantage of value engineering and recent declines in
the price of semi-conductors and memory chips. Beta versions of the Server
Systems have also been evaluated and final specifications have been relayed to
our product development team. At the date of this Report, our Server Systems are
being implemented and back-end processes such as billing and reporting are being
evaluated. We expect fully operational beta versions of our Server Systems to be
available for pilot deployment by the second quarter of 1999. We intend to
conduct field trials of the entire tvemail system in the third quarter of 1999
and expect that participant feed-back will lead to additional modifications of
the Client Hardware Server Systems. Depending on the success of our field
trials, we intend to commence full scale commercial deployment of the tvemail
system in the fourth quarter of 1999.
Client Hardware Features. Our first generation Client Hardware will
offer the following features:
o A blinking LED indicator prompts the user to check messages; o A color-coded
GUI to guide the user through e-mail and other content
functions
o On demand send and receive e-mail functions; o Up to 5 password protected user
mailboxes per subscriber; o Storage capacity for up to 250 e-mail messages; o A
common address book plus customized user address books; o Simple text input for
e-mail, letters, book reports and other documents; o Send fax capabilities; o
Customizable content with news, sports and weather reports, online
shopping and other services;
o Targeted banner and direct e-mail advertising; and
o Simple downloadable games such as Tetris, crossword puzzles, Jumbles and
Hocus Focus.
Due to the inherent flexibility of the Client Hardware and Server System
many of the features mentioned above can be implemented or enhanced after
initial installation. The tvemail Client Hardware has been designed to satisfy
the user's requirements while maintaining an efficient telephone and server
usage profile that maximizes the return on the service provider's investment.
Since the user cannot be online while creating an e-mail message or fax the
modem is utilized only during prearranged dial-ups, or when the user initiates a
manual connection. The Client Hardware can be configured to poll the server to
send and receive e-mail and other content between four and twelve times per day
depending on user preferences. Individual units can be configured to dial during
different time windows so the call load can be distributed throughout the day
and concentrated during non-peak usage times. This allows us to secure low cost
Point of Presence ("POP") access from multiple Internet Service Providers
("ISPs").
Server System Specifications. Our proprietary Server System has been
designed to be modular, flexible, and compatible with most relational database
products. These features will facilitate reporting, scheduling and batch
processing, and permit us to send targeted advertising, mass mailings, and
surveys to our customers based on their particular location or other demographic
information. Additional services such as custom news, stock quotes, games,
online banking, and other content will use separate servers to ensure the
integrity of the tvemail system and prevent system crashes in the event that a
particular feature goes offline. In addition, our Server System incorporates the
following technical features:
o C,C+ and Visual Basic programming;
o Online maintenance of subscriber information for log-in synchronization,
billing, account management and advertising management;
o Easy interface with other servers for optional content including games,
news services, and stock quotes;
o Automatic conversion of Internet communications protocols (SMTP, HTML, and
GIF) to tvemail format.
o Optional storage of non-compatible e-mail attachments on the server for
forwarding to another e-mail address;
o Form processing for online shopping and surveys; and
o Debit and credit card billing capabilities for account management and
online transactions.
Business Strategy.
Our business objective is to transform advertising, commerce and
information delivery for the consumer mass market through the tvemail system
which combines the convenience of television with e-mail and limited online
services. The principal elements of our business strategy include:
Provide easy to use and cost-effective e-mail and online service access. We
offer customers easy to use and cost-effective e-mail and online service access
that is designed to the specific demands of customers who have no prior
experience with e-mail or the Internet. Our tvemail system is designed to
function as a low cost Internet alternative for customers who want access to
e-mail and other online services, but want to avoid the cost and complexity of a
PC or NC based system. We intend to capitalize on our expertise in thin client
server platforms to develop new products and services based on our tvemail
platform that meet the specific requirements of individual consumers and private
communications networks. These products will offer higher performance and more
advanced functionality while continuing to offer a simple and cost effective
solution for our customers.
Provide compelling value for end-users. While many companies focus on
providing content to people who have enough technical knowledge and appropriate
equipment to access and use the Internet, eNote is focused on bringing the
convenience and utility of e-mail and other online services to the 65% of U.S.
households that do not have PCs or Internet access. We designed the tvemail
system to provide a simple, compact and cost effective alternative to PCs, NCs,
WebTV and other full scale Internet access products. In contrast to other online
services, eNote does not require consumers to purchase or install any in-home
equipment. To use the tvemail system, a consumer needs only her existing
television, a phone line and the tvemail Client Hardware, which will be provided
without up-front cost when the customer signs a one-year service contract.
Provide compelling value for advertisers and e-commerce merchants. Due to
the nature of the tvemail system and our ability to sort our customers on the
basis of location or other demographic information, advertisers, online
merchants and other providers of online services will be able to carefully
target their promotions and surveys.
Develop and expand multiple distribution channels. We intend to distribute
our products through direct advertising, retail merchants, resellers and our
field sales team. To quickly reach a broad, worldwide audience, we will seek to
establish a world-wide network of retailer merchants, wholesale distributors and
resellers. We intend to develop multiple distribution channels directed at the
specific needs of individual consumers and private networks.
Aggressively penetrate global markets. We believe that the market for the
tvemail system is global in scope and we will seek to rapidly deploy our Server
Systems in the United States, Canada, China, Europe, Latin America and Southeast
Asia. Due to the simplicity and low cost of the tvemail system, we believe it is
likely to become the technology of choice in less developed countries and we
intend to provide local content directories and user interfaces in multiple
languages for the tvemail system as the demand arises.
Create brand identity. eNote intends to create an identity for its tvemail
system under the brand name "tvemail" and has registered this service mark in
the United States and Canada. We also intend to file service mark applications
in several countries. eNote believes that the creation of a brand identity is
important to its strategy to become the preferred provider of e-mail and online
information services to households that do not presently have access to PC or NC
based information retrieval systems. By creating consumer awareness of the
tvemail system, eNote believes it will drive penetration in its potential
markets and increase the pace at which consumers, online service providers and
e-commerce merchants recognize the service benefits of the tvemail system.
Develop Closed Network Applications. While eNote developed the tvemail
system for use as a mass market consumer product that would give our customers
easy access to e-mail and other online services, we believe the underlying
technology platform has significant potential for use in captive commercial
systems where the collection, archiving and distribution of internally and
externally generated information is important. Examples of the potential
commercial applications for private networks based on the tvemail technology
include:
o Hospitals and other health care facilities that need to collect, archive
and distribute patient information;
o Nursing homes and other extended care facilities that need to communicate
with physicians, staff and residents;
o Hotels, resorts and other accommodations that need to effectively
communicate with guests;
o Colleges and universities that need to communicate effectively with
resident students;
o Community organizations that need to effectively communicate with
members; and
o Other organizations where televisions are common and the collection and
distribution of data is important.
Product Testing and Marketing.
As noted above, we expect fully operational beta versions of our Server
Systems to be available for pilot deployment by the second quarter of 1999 and
we intend to conduct field trials of the entire tvemail system in the third
quarter of 1999. Concurrently with our field testing of the consumer version of
the tvemail system, we will commence three field trials for closed private
networks based on the tvemail technology. These pilot scale closed network
studies, when combined with feedback from our larger field trials of the public
tvemail system, are expected to provide valuable user feedback that will enable
us to further refine the tvemail system before commencing general
commercialization in the fourth quarter of 1999.
eNote will rely on a multi-pronged marketing approach for the tvemail
system. The principal elements of our planned product roll-out to the consumer
market include:
o An extensive television infomercial campaign will be conducted; o Targeted
advertising directed at senior citizens who do not typically
have Internet access but would like to use e-mail for communicating with
friends and family;
o Targeted advertising directed at other affinity groups whose members do not
typically have Internet access but would like to use e-mail and other
online services;
o Targeted advertising to families of college-aged children who frequently do
not have Internet access but would like to use e-mail and other online
services;
o Targeted advertising to low income families who could not otherwise afford
access to e-mail and other online services;
In addition to our planned roll-out to the consumer market, we intend to
conduct a focused marketing campaign directed at potential commercial users of
private tvemail systems, including:
o A customized network system for hospitals, HMOs and other healthcare
providers, tentatively named "ecare," that will enable health care workers
to call up patient medical information on demand and add information to
patient records on a real time basis, thereby reducing required paperwork
and increasing efficiency in diagnosis;
o A customized network system for hotels and resorts, tentatively named
"eguest," for the management of guest communications and the distribution
of detailed information on upcoming events and local services; and
o A customized network system for colleges and universities, tentatively
named "ecampus," for the management of student communications and the
distribution of detailed information on campus services, upcoming events
and other material;
We intend to provide the Client Hardware and associated online service for
a flat fee of $9.95 per month. Our proposed service will include unlimited
e-mail access, daily news, weather, sports, catalog shopping, fast food
delivery, and other consumer services. We believe the principal factor that
distinguishes the tvemail system from traditional Internet service providers is
our ability to send and deliver the user's mail automatically without direct
user involvement.
eNote plans to aggressively pursue partnerships with local ISPs and online
service providers such as banks and utilities for co-marketing of the tvemail
system. In addition, traditional advertising via print, radio, and infomercials
will heighten brand and product awareness on a regional and national scale.
eNote also plans to mount an online marketing effort for the tvemail system via
banner ads, direct e-mails, and online promotions. Targets for the online effort
include people who have a PC but not at home, and friends and family of avid PC
users. Points of purchase will include a 1-800 number, the tvemail web-site,
infomercials, and retail distribution locations.
Research and Development.
Since 1996, Navis has been actively involved in the design, development and
testing of components, embedded software and server systems necessary for the
effective deployment of the tvemail system. Substantially all of our Client
Hardware and Server Systems are in the final Beta prototype stage. Because of
the high levels of technical expertise required for the development of our
products, we have established a close working relationship with the NC
Consortium and a number of strategic alliances described elsewhere herein.
Substantially all of our activities to date have been financed by capital
contributions from the founder of Navis, subordinated third-party debt that was
converted into equity in connection with the Navis Transaction, and cash flow
from operations. It is expected that we will be required to pay all future R&D
costs from our own resources and may require additional R&D funding to complete
the development and commercialization of our existing and proposed products.
Features being explored for inclusion in our second and third-generation tvemail
devices include:
o MSR and smart card capability, for online purchases and bill paying
o Voice mail capability
o Digital camera support
o Flash ROM for full portability
o Modular upgrade for full web browsing
o Universal control with input devices
o Voice recognition
o Spyglass or comparable thin client web browser for unrestricted browsing
Employees.
As of the date of this Report, we have nine full-time employees, including
our three executive officers, two part-time employees and several consultants
who are employed on a full-time basis by others. Within the next twelve months,
we expect to hire 20 additional employees in the technology and marketing
departments. eNote is not subject to any collective bargaining agreements and we
consider our relations with employees to be good. All of eNote employees in the
technical area are all highly experienced electrical engineers, advanced
computer programmers, internet specialists and product marketing people.
In addition to our executive officers, we also rely on the education and
experience of several key technical employees who have been instrumental in the
development of the tvemail system. Each of the technical employees identified
below has entered into an employment agreement with the Company that provides
for a negotiated annual salary, participation in our stock option plans, annual
incentive bonuses at the discretion of the Board of Directors, the fringe
benefits offered generally to our employees, and reimbursement for expenses
incurred for the benefit of the Company. The agreements also prohibit direct
competition for a period of two years after termination of employment. Under the
terms of these agreements, the employees identified below are required to devote
substantially all of their business time to the affairs of the Company.
Legal Proceedings.
As of the date of this Report, there are no legal proceedings involving the
Company or the tvemail system.
Certain Important Risk Factors.
We may experience difficulties implementing our marketing and business
plans. Navis began operations and has spent the last three years developing the
tvemail technology. We have not yet derived any revenues from the sale of our
tvemail product to consumers. As a result, our operating, sales and marketing
and other strategies are still being developed, and we do not have a history
which may give us or you an indication of how we may respond to situations
presented to us. If we are not successful in implementing our marketing and
business plans on a timely basis or otherwise effectively managing our
development, our business, operating results and financial condition will be
materially and adversely affected.
If we continue to incur losses, we may not be able to finance the
commercial deployment of the tvemail system. While Navis operated profitably in
1996 and 1997, it experienced losses and had negative cash flow in each quarter
of 1998, and we expect to continue to operate at a loss for the foreseeable
future. For us to make a profit, we need introduce the tvemail system to the
market and obtain sufficient levels of sales at a low enough cost to generate
and operating profit. If we are not able to do so, our losses may extend beyond
the foreseeable future and we may not be able to finance the commercial
deployment, development and enhancement of the tvemail system.
We may be unable to obtain necessary additional capital to fund operations
in the future. To date, we have funded operations primarily through private
sales of equity and convertible debt securities. If we are unable to obtain
additional financing on terms acceptable to us as needed, our business,
operating results and financial condition would be materially and adversely
affected. Our capital requirements in the future will depend on numerous
factors, including:
o the rate of acceptance of the tvemail system by consumers, advertisers,
e-commerce companies and online service providers,
o our ability to maintain and expand the number of subscribers, and o the
expansion of our marketing activities into foreign countries.
We cannot accurately predict the timing and amount of our capital
requirements. Any additional equity financing, if available, may be dilutive to
our stockholders, and debt financing, if available, may involve significant
restrictions on our financing and operating activities.
Because television-based e-mail and online service access is new, we cannot
be certain that a market or sustainable demand for the tvemail system will
develop. The market for television-based e-mail and online service access is new
and evolving, and no single technology or approach to providing this access has
yet been broadly adopted by consumers. As a result, we cannot guarantee that a
market for television-based e-mail and online service access in general, or for
the tvemail system in particular, will develop or that demand for the tvemail
system will be sustainable. If the market does not develop, develops more slowly
than expected or becomes saturated with competitors, our business, operating
results, and financial condition will be materially and adversely affected.
The competitive market for e-mail and online service access may limit
demand or pricing for the tvemail system. We expect to experience intense
competition. Many companies provide e-mail and online service access and other
services, which provide functionality superior to those included in the tvemail
system. As a result of this competition, demand for the tvemail system may
suffer, we may be restricted in the service rates we can charge for the tvemail
system and our business, financial condition and results of operations may be
adversely affected. Competitors provide their services through a variety of
technologies, which are in various stages of implementation and adoption. Many
of our competitors have significantly greater financial, technical, marketing,
distribution, customer support, other resources, name recognition, compelling
content and access to consumers, advertisers and online service providers than
we have.
We are subject to capacity constraints and system failures. The ability of
the tvemail system to accommodate a substantial number of users is not yet
known. We cannot assure you that we will be able to provide reliable performance
and error free service as the number of subscribers grows. In addition, as
subscriber penetration grows it may be necessary for our local ISPs to purchase
additional equipment, and we cannot assure you that they will do so.
The performance of the tvemail system is also subject to reduction in
performance and interruption from human errors, telecommunication failures,
computer viruses and similar events. Any of these problems in our systems or
those of our local ISPs could result in reduced subscriber demand. We expect to
experience performance reduction and service interruptions from time to time.
Our failure to provide uninterrupted service at a level of performance
acceptable to our customers would have a material adverse effect on our
business, financial condition and results of operations.
We may have liability for information retrieved and replicated on the
internet. Claims for negligence, copyright or trademark infringement or other
legal theories could be made against us because information can be downloaded
and redistributed by users of the tvemail system. Copyright and trademark laws
are evolving both domestically and internationally and we are uncertain as to
their applicability to the tvemail system. The imposition of liability for
information carried by us would have a material adverse effect on our business,
operating results and financial condition.
We may have liability for e-commerce transactions. As part of our business,
we are seeking to enter into agreements with content providers, advertisers and
e-commerce merchants under which we will receive a share of revenue from the
purchase of goods and services by users of the tvemail system. These
arrangements may expose us to additional legal risks and uncertainties,
including potential liabilities to consumers of these products and services. Our
insurance may not cover potential claims of this type or may not be adequate to
indemnify us for all liability that may be imposed.
We could become subject to burdensome government regulation which affects
our ability to offer our service or which affects demand for our service. We are
subject to varying degrees of federal, state, local and foreign regulation as
well as laws enacted by the U.S. Congress and other governments. The Federal
Communications Commission has established regulations that among things set
licensure, installation and equipment standards for communications systems. A
number of these regulations will apply to the tvemail system and compliance with
existing and future regulations may increase our cost of providing the tvemail
service, or otherwise damage the competitive position of the tvemail service.
It is also anticipated that due to the increasing popularity and use of the
Internet, it will be subject to increased attention and regulation. These laws
and regulations may regulate issues such as user privacy, defamation, network
access, pricing, taxation, content, quality of products and services and
intellectual property ownership and infringement. These laws and regulations
could expose us to liability, materially increase our cost of providing our
service, and decrease the growth and acceptance of the Internet in general and
access to the Internet over cable systems.
Our business would suffer if we were to lose the services of Messrs.
Varsames and Richards or other key personnel. Our success depends in significant
part upon the continued service of our key technical, sales and senior
management personnel, particularly Messrs. Varsames and Richards, who have
significant relevant experience in the development of thin client information
retrieval systems. Our future success will also depend on our ability to
attract, train, retain and motivate highly qualified senior management,
technical, marketing and sales personnel. Because competition for these
personnel is intense, we cannot assure you that we will be able to do so.
Your ability to influence the outcome of stockholder votes will be limited.
After giving proforma effect to the conversion of the Preferred Stock and the
exercise of the Warrants, Friedlander will beneficially own 7,000,000 shares of
Common Stock and John Varsames will beneficially own 7,100,000 shares of Common
Stock. These ownership positions will each account for approximately 41% of the
outstanding common stock. Accordingly, Friedlander and Mr. Varsames will each
have the voting power to exercise substantial control over the election of our
board of directors and all votes on matters requiring stockholder approval. This
concentration of ownership may also have the effect of delaying or preventing a
change in control of our company.
Year 2000 risks may adversely affect eNote and the demand for the tvemail
system. Year 2000 problems experienced by us or any third parties could
materially adversely affect our business. Additionally, demand for the tvemail
system would suffer if the Internet experiences serious disruptions arising from
the Year 2000 problem. We cannot guarantee you that our own systems will be Year
2000 compliant in a timely manner, that any of our local ISPs will be Year 2000
compliant in a timely manner, or that there will not be problems with technology
systems working together. We also cannot guarantee that the Internet generally,
and the tvemail system specifically, will continue without serious disruptions
arising from the Year 2000 problem. Given the pervasive nature of the Year 2000
problem, we cannot guarantee that disruptions in other industries and market
segments will not adversely affect our business. Moreover, the costs related to
Year 2000 compliance could be significant.
Anti-takeover provisions in our charter documents could discourage unwanted
takeover attempts and could reduce the opportunity for stockholders to get a
premium for their shares. We are subject to Delaware laws and to provisions of
our certificate of incorporation and by-laws that could have the effect of
delaying, deterring or preventing a change in control of eNote. As a result, our
management could attempt to utilize these laws and provisions to discourage or
reject unsolicited bids to acquire us, including bids that would have paid
stockholders a premium over the then current market price of their shares.
Substantial sales of our common stock could lower our stock price. The
market price for our common stock could drop as a result of sales of a large
number of our presently outstanding shares, or the perception that these sales
could occur. These factors also could make it more difficult for us to raise
funds through future offerings of our common stock.
Our results can materially differ from those forecasted or expressed in the
forward-looking statements contained in this Report. This Report contains
forward-looking statements that are not historical facts, but rather are based
on our current expectations, estimates and projections about eNote's industry
and our beliefs and assumptions. Words such as "anticipates," "expects,"
"intends," "plans," "believes," "seeks," "estimates" and similar expressions are
intended to identify forward-looking statements. These statements are not
guarantees of future performance and are subject to some risks, uncertainties
and other factors, many of which are beyond our control, are difficult to
predict and could cause actual results to differ materially from those expressed
or forecasted in the forward-looking statements. We caution you not to place
undue reliance on these forward-looking statements, which reflect our
management's view only as of the date of this Report. We are not obligated to
update these statements or publicly release the result of any revisions to them
to reflect events or circumstances after the date of this Report or to reflect
the occurrence of unanticipated events.
Item 5.
Other Events
The Friedlander Transaction. On April 6, 1999, the Registrant sold
5,000,000 shares of Preferred Stock and 2,000,000 Warrants to Friedlander for a
total cash consideration of $5,000,000.
Until the fifth anniversary of the date of the Friedlander transaction, or
until Friedlander is the beneficial owner of less than 10% of the issued and
outstanding voting securities of the Registrant, whichever occurs first,
Friedlander shall be entitled to appoint two members of the Registrant's Board
of Directors. For so long as Friedlander is entitled to appoint two members of
the Registrant's Board of Directors, the total number of members constituting
the entire Board of Directors shall not exceed seven.
Description of Preferred Stock
Class and Number of Shares. The authorized Preferred Stock of the
Registrant consists of 5,000,000 shares of $0.01 par value Preferred Stock. All
5,000,000 authorized shares of Preferred Stock were issued and sold to
Friedlander International Limited in connection with the Friedlander
transaction. The Preferred Stock has a stated value of $1 per share and ranks
senior to the Common Stock with respect to the distribution of assets upon
liquidation, dissolution or winding up.
Anti-dilution Protection. The Preferred Stock contains typical antidilution
provisions, and also provides that the number of shares of Common Stock issuable
upon conversion of the Preferred Stock shall be subject to adjustment in the
event that the Registrant shall, at any time prior to the completion of an
underwritten secondary offering of Common Stock which has been registered under
the Securities Act of 1933, effect a sale of Common Stock, securities
convertible into common stock, or rights to purchase Common Stock which has not
been expressly approved in writing by a majority in interest of the holders of
Preferred Stock.
Dividends. The holders of Preferred Stock are not entitled to any dividend
preference but will share ratably with the holders of Common Stock in all
dividends that may be declared by the Board of Directors. For purposes of
calculating the dividends, if any, payable to the holders of Preferred Stock,
the Registrant will determine the number of shares of Common Stock that would be
issuable if the Preferred Stock had been converted into Common Stock immediately
prior to the record date, and then determine the per share dividend payable to
holders of Preferred Stock.
Liquidation Preference. In the event of a voluntary or involuntary
liquidation, dissolution or winding up of the Registrant, the holders of
Preferred Stock are entitled to receive a liquidation preference of $1 per share
before any distribution of assets is made to holders of Common Stock. After
payment of the full liquidation preference, the holders of shares of the
Preferred Stock will share proportionally with the holders of shares of Common
Stock in any additional distribution of the Registrant's assets.
Voting Rights. The holders of Preferred Stock (a) are entitled to the
number of votes equal to the number of shares of Common Stock into which shares
of Preferred Stock could be converted as of the record date for the
determination of stockholders entitled to vote on such matters, and (b) have
voting rights and powers equal to the voting rights and powers of the Common
Stock. Except as required by law, the holders of Preferred Stock and the holders
of Common Stock shall vote together as a single class and not as separate
classes.
So long as any Preferred Stock is outstanding, the Registrant shall not,
without the affirmative vote of the holders of at least 66% of all outstanding
shares of Preferred Stock, voting separately as a class, (i) amend, alter or
repeal any provision of the Certificate of Incorporation or the Bylaws of the
Registrant so as to adversely affect the relative rights, preferences,
qualifications, limitations or restrictions of the Preferred Stock, or (ii)
effect any reclassification of the Preferred Stock.
Optional Conversion. The holders of Preferred Stock have the right, at any
time, to convert each share of Preferred Stock into one share of Common Stock.
The Conversion Ratio will be subject to adjustment in certain events, including:
(i) stock splits and subdivisions of the Common Stock; (ii) combinations or
consolidations of the Common Stock; and (iii) future sales of Common Stock,
securities convertible into Common Stock, or rights to purchase Common Stock
which have not been expressly approved in writing by a majority in interest of
the holders of Preferred Stock. No adjustment in the Conversion Ratio will be
required to be made until cumulative adjustments aggregate 1% or more of the
Conversion Ratio as last adjusted; however, any adjustment not made shall be
carried forward.
In case of any reclassification of the Common Stock, any consolidation of
the Registrant with, or merger of the Registrant into, any other person, any
merger of any person into the Registrant (other than a merger that does not
result in any reclassification of, or change in the outstanding shares of Common
Stock), any sale or transfer of all or substantially all of the assets of the
Registrant (other than a sale-lease back, collateral assignment, mortgage or
other similar financing transaction), or any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or other properties,
then provision shall be made that the holders of Preferred Stock then
outstanding shall have the right thereafter to convert the Preferred Stock into
the kind and amount of securities, cash or other property receivable upon such
reclassification, consolidation, merger, sale, transfer or share exchange by a
holder of the number of shares of Common Stock into which such share of
Preferred Stock might have been converted immediately prior to such
reclassification, consolidation, merger, sale, transfer or share exchange.
No fractional shares of Common Stock will be issued upon conversion, but,
in lieu thereof, an appropriate amount will be paid in cash by the Registrant
based on the Closing Price for the shares of Common Stock on the trading day
before the date of conversion.
Automatic Conversion. If the Registrant successfully completes and closes
on an underwritten secondary offering of Common Stock which has been (a)
approved in writing by a majority in interest of the holders of Preferred Stock,
and (b) registered under the Securities Act of 1933, all shares of Preferred
Stock then outstanding shall immediately and automatically be converted into
shares of Common Stock.
Registration Rights. The holders of Preferred Stock have been granted
unlimited "piggy-back" registration rights and two (2) demand registration
rights for the shares of Common Stock issued or issuable upon conversion of the
Preferred Stock. Notwithstanding the foregoing, the holders of Preferred Stock
may not exercise their demand registration rights until 180 days after the
effective date of any registration statement for a public offering of securities
by the Registrant where the holder was afforded an opportunity to sell shares of
Common Stock pursuant to the piggy-back registration rights.
Description of Warrants
Class and Number of Warrants. In connection with the Friedlander
transaction, the Registrant authorized and issued 2,000,000 Warrants. The
Warrants are exercisable, at a price of $1 per share, at any time prior to
3:30 p.m., E.S.T. on March 31, 2004.
Anti-dilution Protection. The Warrant Agreement contains typical
antidilution provisions and also provides that the number of shares of Common
Stock issuable upon exercise of the Warrants shall be subject to adjustment in
the event that the Registrant shall, at any time prior to the completion of an
underwritten secondary offering of Common Stock which has been registered under
the Securities Act of 1933, effect a sale of Common Stock, securities
convertible into common stock, or rights to purchase Common Stock which has not
been expressly approved in writing by a majority in interest of the holders of
Preferred Stock.
Redemption of Warrants. Until April 1, 2000, the Registrant may repurchase
up to 500,000 Warrants for a redemption price which is equal to the greater of
$3 per Warrant, or the average closing bid price of the Registrant's Common
Stock during the 30 calendar days immediately preceding the date of the notice
of redemption. During the period between April 2, 2000 and April 1, 2001, the
Registrant may repurchase up to 500,000 Warrants (or 1,000,000 Warrants if the
first redemption option was not exercised) for a redemption price which is equal
to the greater of $7 per Warrant, or the average closing bid price of the
Registrant's Common Stock during the 30 calendar days immediately preceding the
date of the notice of redemption. During the period between April 2, 2001 and
April 1, 2002, the Registrant may repurchase all remaining unexercised Warrants
for a redemption price which is equal to the greater of $10 per Warrant, or the
average closing bid price of the Registrant's Common Stock during the 30
calendar days immediately preceding the date of the notice of redemption.
Notwithstanding the generality of the foregoing, if the Registrant mails a
notice of redemption and the Warrantholder exercises the number of Warrants
called for redemption in such notice within 10 days of the date of such notice,
then notice of redemption shall be null and void and the number of Warrants
subject to redemption by the Registrant shall be reduced by the number of
Warrants so exercised.
Registration Rights. The holders of Warrants have been granted unlimited
"piggy-back" registration rights and two (2) demand registration rights for the
shares of Common Stock issued or issuable upon exercise of the Warrants.
Notwithstanding the foregoing, the holders of Warrants may not exercise their
demand registration rights until 180 days after the effective date of any
registration statement for a public offering of securities by the Registrant
where the holder was afforded an opportunity to sell shares of Common Stock
pursuant to the piggy-back registration rights.
Item 6.
Resignations of Directors and Executive Officers.
No director has resigned or declined to stand for re-election to the Board
of Directors since the date of the last annual meeting of stockholders because
of any disagreement with the Registrant on any matter relating to the
Registrant's operations, policies or practices.
Under the terms of the Transactions, Friedlander and the former
stockholders of Navis have the right to replace the current board of directors
with their own nominees. Three of the New Directors have been nominated by the
former stockholders of Navis and two New Directors will be nominated by
Friedlander. The former stockholders of Navis have nominated John R. Varsames
and Michael T. Grennan to serve as directors of eNote (the "New Directors"). The
proposed changes in our board of directors will not become effective and the New
Directors will not assume office until 10 days after we file an Information
Statement and Notice of Change in the Majority of the Board of Directors with
the SEC and send copies of the Notice to our stockholders. At that time, Sally
A. Fonner will appoint the New Directors and then resign as a director.
Thereafter, the New Directors will manage our business.
Our Board does not currently have any committees. After the appointment of
the New Directors, the Board intends to form an Audit Committee and a
Compensation Committee. The Audit Committee will review the services provided by
our independent accountants, consult with our independent accountants on audits,
review certain filings with the SEC, assess need for internal auditing
procedures and assess the adequacy of internal controls. The Compensation
Committee will determine executive compensation and review transactions between
the Company and our affiliates, including any associates of affiliates.
Compensation of Executive Officers and Directors. Ms. Fonner has not
received any cash compensation for services performed during the two years
prior to the Transaction. In connection with the plan of reorganization
approved by Webcor's stockholders, certain persons designated by Capston
received 540,000 shares of Common Stock for administrative and management
services. Ms. Fonner received 180,600 shares of Common Stock for her personal
account.
Executive Employment Contracts. There are no employment agreements
between the Registrant and any of its current or former officers. The
Registrant intends to enter into employment agreements with Messrs. Varsames,
Grennan, and Richards.
ITEM 7. Financial Statements and Exhibits
(a) Financial statements of acquired business.
As permitted by Item 7(a)(4) of Form 8-K, the audited financial statements
of the acquired business will be filed within 60 days after the date of
this Report
(b) Pro forma financial information.
As permitted by Item 7(a)(4) of Form 8-K, complete pro forma financial
statements of the Registrant and its recently acquired subsidiary will be
filed within 60 days after the date of this Report.
(c) Exhibits.
(2.1) Reorganization Agreement, dated April 5, 1999, between and among the
Registrant, Navis Technologies Limited, and the stockholders of Navis
Technologies, Limited
(4.1) Certificate of Powers, Designations, Preferences and Rights
of the Convertible Preferred Stock Par Value $0.01 Per
Share of eNote.com, Inc.
(4.2) Form of Certificate for the $0.01 par value Convertible Preferred Stock
eNote.com, Inc.
(4.3) Common Stock Purchase Warrant dated April 6, 1999 between
eNote.com, Inc. and Friedlander International Limited
(10.1)Purchase and Sale Agreement dated April 6, 1999 between eNote.com, Inc.
and Friedlander International Limited
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
eNote.com Inc., a Delaware corporation
(formerly known as Webcor Electronics, Inc.)
April 20, 1999
By: /s/
John R. Varsames, Chief Executive Officer