U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ONE TOUCH TOTAL COMMUNICATIONS, INC.
(Name of Small Business Issuer in its charter)
Nevada 335000 91-1933601
(State or jurisdiction of (Primary Standard Industrial I.R.S. Employer
or organization) Classification Code Number) Identification No.)
1630 South Sunkist Street, Suite K, Anaheim, California 92806; (714) 456-0874
(Address and telephone number of Registrant's principal
executive offices and principal place of business)
Brian F. Faulkner, Esq., 3900 Birch Street, Suite 113, Newport Beach
California; (949) 975-0544
(Name, address, and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933 check the following box. [X]
If the delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of Amount to be Proposed Proposed Amount of
Securities Registered Maximum Aggregate Registration
to be Offering Offering Fee
Registered Price Per Price
Share (1)
Common
Stock 1,075,000 $0.135 $145,125 $36.28
The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting
under Section 8(a), may determine.
(1) Calculated in accordance with Rule 457(c): The average of
the bid and ask price as of June 14, 2001.
PROSPECTUS
ONE TOUCH TOTAL COMMUNICATIONS, INC.
1,075,000 Shares*
Common Stock
One Touch Total Communications, Inc., a Nevada corporation,
doing business as Communications Plus, is hereby offering shares
of common stock under SEC Rule 415 underthe terms of this
prospectus. A total of 1,075,000 shares of common stock are to
be registered:
This offering consists of 1,075,000 shares of common stock,
par value $0.001, by two selling shareholders of One Touch.
These selling shareholders may offer their stock through public
or private transactions, on or off the Pink Sheets LLC, at
prevailing market prices, or at privately negotiated prices.
One Touch will not receive any proceeds from these sales. One
Touch's common stock trades on the Pink Sheets LLC under the
trading symbol "OTTC".
The shares offered hereby are highly speculative and
involve a high degree of risk to public investors and should be
purchased only by persons who can afford to lose their entire
investment; see "Risk Factors" on page 4.
These securities have not been approved or disapproved by
the securities and exchange commission or any state securities
commission nor has the securities and exchange commission or any
state securities commission passed upon the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
Information contained in this document is subject to
completion or amendment. The registration statement relating to
the securities has been filed with the U.S. Securities and
Exchange Commission. The securities may not be sold nor may
offers to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer to
buy nor shall there be any sale of these securities in any State
in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws
of any such State.
Subject to Completion, Dated: _____________, 2001
* UnderSEC Rule 416, there will be a change in the amount of
securities being issued to prevent dilution resulting from stock
splits, stock dividends, or similar transaction.
Table Of Contents
Prospectus Summary 4
Risk Factors 4
Use of Proceeds 11
Selling Shareholders 12
Plan of Distribution 12
Legal Proceedings 16
Directors, Executive Officers, Promoters and Control Persons 16
Security Ownership of Certain Beneficial Owners and Management 17
Description of Securities 19
Interest of Named Experts And Counsel 20
Disclosure of Commission Position on Indemnification
for Securities Act Liabilities 20
Organization Within Last Five Years 30
Description of Business 30
Management's Discussion and Analysis of Financial Condition
and Results of Operations 35
Description of Property 36
Certain Relationships and Related Transactions 37
Market for Common Equity and Related Stockholder Matters 37
Executive Compensation 38
Financial Statements 40
Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure 54
Available Information 54
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by
detailed information appearing elsewhere in this prospectus.
Each prospective investor is urged to read this prospectus in
its entirety.
The Company.
One Touch Total Communications, Inc., doing business as
Communications Plus, has as its principal business the purchase
of new telephone equipment, the testing and refurbishment of
used telephone equipment, and the retail sale of such equipment.
One Touch also conducts business on the internet through its
website www.link4phones.com.
The principal offices of One Touch's are located at 1630
South Sunkist Street, Suite K, Anaheim, California 92806. The
telephone number for One Touch is: (714) 456-0874.
The Offering.
1,075,000 shares of common stock of One Touch will be
offered under a shelf registration under Rule 415, as follows:
Selling shareholders on a delayed basis: 1,075,000.
RISK FACTORS
The securities offered hereby are highly speculative in
nature and involve a high degree of risk. They should be
purchased only by persons who can afford to lose their entire
investment. Therefore, each prospective investor should, prior
to purchase, consider very carefully the following risk factors
among other things, as well as all other information set forth
in this prospectus.
Limited Prior Operations.
One Touch has only had limited prior operations, having
embarked on its current line of business in 1997. Thus, One
Touch is subject to all the risks inherent in the creation of a
new business. The likelihood of the success of One Touch must
be considered in the light of the problems, expenses,
difficulties, complications, and delays frequently encountered
in connection with the expansion of a business and the
competitive environment in which One Touch operates.
Unanticipated delays, expenses and other problems such as
setbacks in product development, and market acceptance are
frequently encountered in connection with the expansion of a
business. Consequently, there is only a limited operating
history upon which to base an assumption that One Touch will be
able to achieve its business plans.
No Assurance That Profits Will Be Generated in the Future.
One Touch has had limited revenue and operating profits to
date: net income of $541,919 for the fiscal year ended December
31, 1999, and a net loss of $268,454 for the fiscal year ended
December 31, 2000. As a result, there can be no assurance that
One Touch will generate significant revenues in the future; and
there can be no assurance that One Touch will operate at a
profitable level. If One Touch is unable to obtain customers
and generate sufficient revenues so that it can profitably
operate, One Touch's business will not succeed and the investor
may therefore lose his entire investment in One Touch's common stock.
Additional Financing May Be Required.
One Touch has sufficient cash flow to meet its cash
requirements through 2001. However, there can be no assurance
One Touch will continue to meet its cash requirements. One
Touch may add additional revenues through the acquisition of
other telecom companies which integrate into the companies
overall business plan through the issuance of additional
securities. Thus, One Touch may need to raise additional
capital over the next 12 months, up to $1,000,000. There can be
no assurance that One Touch will be able to obtain additional
funding when needed, or that such funding, if available, can be
obtained on terms acceptable to One Touch. If One Touch cannot
obtain needed funds, it may be forced to curtail or cease its
activities. If additional shares were issued to obtain financing,
current shareholders may suffer a dilution on their percentage of
stock ownership in One Touch.
Absence of Cash Dividends.
The board of directors does not anticipate paying cash
dividends on the shares for the foreseeable future and intends
to retain any future earnings to finance the growth of One
Touch's business. Payment of dividends, if any, will depend,
among other factors, on earnings, capital requirements, and the
general operating and financial condition of One Touch, and will
be subject to legal limitations on the payment of dividends out
of paid-in capital.
USE OF PROCEEDS
No proceeds will accrue to One Touch from sales under the
prospectus. If all of the shares being offered by the selling
shareholders are sold, this will result in gross proceeds to
these persons of $150,500 (based on the closing priced of $0.14
on June 12, 2001).
SELLING SHAREHOLDERS
Selling shareholders will be offering a total of 1,075,000
shares of common stock of One Touch, as follows:
Name of Amount Amount Offered Amount Percentage
Selling Beneficially for Selling Beneficially Ownership
Shareholders Owned Prior Shareholder's Owned After After
to Offering Account Offering Offering (1)
C. Jay Smith 4,680,766 1,000,000 3,680,766 24.91%
Lanette B.
Faulkner 75,000 75,000 0 0.00%
Total 4,755,766 1,075,000 3,680,766 24.91%
(1)Based on the total issued and outstanding common stock of 14,778,399 as of
March 1, 2001.
These restricted shares were issued in connection with founders
stock and consulting services rendered to One Touch.
PLAN OF DISTRIBUTION
Registration under this Offering.
1,075,000 shares of common stock of One Touch will be
offered promptly after effectiveness of this registration
statement, and will be made on a continuous basis and continue
for a period in excess of 30 days from the date of initial
effectiveness under a shelf registration under Rule 415, as follows:
Selling shareholders: 1,075,000.
Selling Shareholders.
Manner of Sales; Broker-Dealer Compensation.
The selling shareholders, or any successors in interest to
the selling shareholders, may sell their shares of common stock
in one or more of the following methods:
Ordinary brokers' transactions;
Transactions involving cross or block trades or otherwise on the Bulletin
Board;
Purchases by brokers, dealers or underwriters as
principal and resale by these purchasers for their own
accounts underthis prospectus;
"At the market" to or through market makers or into an
existing market for One Touch's common stock;
In other ways not involving market makers or
established trading markets, including direct sales
to purchases or sales effected through agents;
Through transactions in options, swaps or other
derivatives (whether exchange-listed or otherwise);
In privately negotiated transactions; or
Any combination of the foregoing.
One Touch has been advised by the selling shareholders that
they have not made any arrangements for the distribution of the
shares of common stock. Brokers, dealers or underwriters who
effect sales for the selling shareholders may arrange for other
brokers, dealers or underwriters to participate. Brokers,
dealers or underwriters engaged by the selling shareholders will
receive commissions or discounts from them in amounts to be
negotiated prior to the sale. These brokers, dealers or
underwriters may act as agent or as principals.
Subject to the limitations discussed above, a selling
shareholder may enter into hedging transactions with broker-
dealers and the broker-dealers may engage in short sales of One
Touch's common stock in the course of hedging the positions they
assume with this selling shareholders, including in connection
with distributions of the common stock by these broker-dealers.
A selling shareholder may also enter into option or other
transactions with broker-dealers that involve the delivery of
One Touch's common stock to the broker-dealers, who may then
resell or otherwise transfer these shares. A selling
shareholder also may loan or pledge One Touch's common stock to
a broker-dealer and the broker-dealer may sell the common stock
so loaned or upon a default may sell or otherwise transfer the
pledged common stock.
Filing of a Post-Effective Amendment.
If any selling shareholders notifies One Touch that he or
she has entered into a material arrangement (other than a
customary brokerage account agreement) with a broker or dealer
for the sale of shares of common stock under this prospectus
through a block trade, purchase by a broker or dealer or similar
transaction, One Touch will file a post- effective amendment to
the registration statement for this offering. The post-
effective amendment will disclose:
The name of each broker-dealer involved in the transaction.
The number of shares of common stock involved.
The price at which those shares of common stock were sold.
The commissions paid or discounts or concessions
allowed to the broker-dealer(s).
If applicable, that these broker-dealer(s) did not
conduct any investigation to verify the information
contained or incorporated by reference in this
prospectus, as supplemented.
Any other facts material to the transaction.
Persons May Be Deemed to Be Underwriters.
The selling shareholders and any broker-dealers who execute
sales for them may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933 because of the number of
shares of common stock to be sold or resold by these persons or
entities or the manner of sale of these shares, or both. If a
selling shareholder or any broker-dealer or other holders were
determined to be underwriters, any discounts, concessions or
commissions received by them or by brokers or dealers acting on
their behalf and any profits received by them on the resale of
their shares of common stock might be deemed to be underwriting
discounts and commissions under the Securities Act.
Regulation M.
One Touch has informed the selling shareholders that
Regulation M promulgated under the Securities Exchange Act of
1934 may be applicable to them with respect to any purchase or
sale of One Touch's common stock. In general, Rule 102 under
Regulation M prohibits any person connected with a distribution
of One Touch's common stock from directly or indirectly bidding
for, or purchasing for any account in which it has a beneficial
interest, any of the common stock or any right to purchase this
stock, for a period of one business day before and after
completion of its participation in the distribution.
During any distribution period, Regulation M prohibits the
selling shareholders and any other persons engaged in the
distribution from engaging in any stabilizing bid or purchasing
One Touch's common stock except for the purpose of preventing or
retarding a decline in the open market price of the common
stock. None of these persons may effect any stabilizing
transaction to facilitate any offering at the market. As the
selling shareholders will be reoffering and reselling One
Touch's common stock at the market, Regulation M will prohibit
them from effecting any stabilizing transaction in contravention
of Regulation M with respect to this stock.
LEGAL PROCEEDINGS
One Touch is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against One Touch has been threatened.
DIRECTORS, EXECUTIVE OFFICERS, KEY EMPLOYEE,
PROMOTERS, AND CONTROL PERSONS
The names, ages, and respective positions of the directors,
executive officers, and key employee of One Touch are set forth
below. The directors named below will serve until the next
annual meeting of One Touch's stockholders or until their
successors are duly elected and have qualified. Directors are
elected for a one-year term at the annual stockholders'
meeting. Officers will hold their positions at the will of the
board of directors, absent any employment agreement, of which
none currently exist or are contemplated. There are no
arrangements, agreements or understandings between non-
management shareholders and management under which non-
management shareholders may directly or indirectly participate
in or influence the management of One Touch's affairs. There
are no other promoters or control persons of One Touch. There
are no legal proceedings involving the directors of One Touch.
C. Jay Smith, President/Director
Mr. Smith, age 53, has twenty years' experience as both an
entrepreneur and consultant, with an emphasis on
telecommunications business development and marketing
strategies. From 1993 to 1996, Mr. Smith served as Executive
Vice President of Cancall Cellular Communication, a publicly
traded company on the Vancouver Stock Exchange. Cancall
specialized in providing pre-paid cellular services to the
credit challenged and rentals to the business traveler and
international tourist, utilizing state of the art technology.
Mr. Smith negotiated numerous airtime contracts with carriers
such as Bell NYNEX, Airtouch, AT&T Wireless, GTE Wireless, Bell
South and others, and personally operated corporate locations in
Los Angeles, CA; San Francisco, CA; San Diego, CA; Las Vegas,
NV; Hawaii; Washington, D.C. and Philadelphia and Pittsburgh,
PA. In 1997, Mr. Smith founded California Telephone Company,
which eventually became One Touch Total Communications, Inc.
Paul Palant, Director.
Mr. Palant, age 49, passed the California State Bar exam in
February 1979 and was engaged in private practice in California
from 1978 through 1988. From 1988 to 1994, he sat as a Judge Pro
Tem for the El Dorado County Municipal Court; from 1994 to 2000,
he served as a status conference judge for the El Dorado County
Superior Court. Mr. Palant has recently taught law classes in
community property and civil litigation at the Lake Tahoe
Community College, and is Special Master for the California State
Bar Association for El Dorado, Alpine and Placer Counties since
1990. Mr. Palant has experience as a member of the boards of
directors of Matrix Medical Group, Inc., Medical Investors, Inc.,
and Go Big, Inc. Mr. Palant was appointed to the board of
directors of One Touch on January 21, 2001. He continues to
practice law in California on a part-time basis.
Michael Smith, Director.
Mr. Smith, age 51, served as chief information technology
architect, manager of advanced technology, Zions Bancorporation
from October 1995 to April 1999, responsible for secure
electronic commerce, authentication, online banking, online
trading and other projects for the regional bancorporation and
its subsidiaries, including the founding of the Digital Signature
Trust Company. From April 1999 to the present, Mr. Smith has
been the founder and a principal of MFSNet.Com, Inc., an
ecommerce incubator, developer and hosting service provider.
From February 2000 through December 2000, he served as founder,
vice president, and chief operating officer, and director of
business operations, of BroadStream.Com, Inc., a provider of
statistics and smart distribution services to the Streaming
Media. Mr. Smith was appointed to the board of directors of One
Touch on January 21, 2001, and is a brother of C. Jay Smith.
Richard G. Luna, Vice President/General Manager.
Mr. Luna, age 42, serves as vice president and general
manager, where he is responsible for maintaining end-to-end
supervision of the direct sales teams, product marketing,
product development, and the operations department (including
customer care, order operations, and technical engineering). He
joined One Touch in November 1999. As a member of One Touch's
team, Mr. Luna brings more than 23 years of experience in
service operations and sales in the telecommunications industry.
He is tasked with leading the development and implementation of
all end user sales and installations.
Prior to his position with One Touch, Mr. Luna served as
Vice President of Southern California Telephone, a distributor
of communications equipment manufactured by Nortel and Lucent.
In this position, which he held from October 1997 to October
1999, he oversaw 125 employees in the sales and operations
departments. From August 1989 to October 1997, Mr. Luna served
as the President and CEO of E.A.R. Communications, Inc., a
company which he founded and which distributed Nortel products
and resold long distance service..
Mr. Luna has been awarded a Bachelor of Science Degree from
University of Phoenix. He is currently working on a Masters in
Information Technology degree from the same school.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the
beneficial ownership of shares of One Touch's common stock as of
March 1, 2001 (14,778,399 issued and outstanding) by (i) all
stockholders known to One Touch to be beneficial owners of more
than 5% of the outstanding common stock; and (ii) all directors,
executive officers, and key employees of One Touch, individually
and as a group:
Title of Name and Address Amount of Percent of
Class of Beneficial Owner Beneficial Class
Ownership(1)
Common C. Jay Smith 4,680,766(2) 31.67%
Stock 1630 South Sunkist Street
Suite K
Anaheim, CA 92806
Common Marc R. Tow 1,250,000(3) 8.46%
Stock 3900 Birch Street, Suite 113
Newport Beach, CA 92660
Common Michael Smith 100,000(4) 0.68%
Stock 1630 South Sunkist Street
Suite K
Anaheim, CA 92806
Common Paul Palant 50,000 0.34%
Stock 1630 South Sunkist Street
Suite K
Anaheim, CA 92806
Common Richard G. Luna 50,000 0.34%
Stock 1630 South Sunkist Street
Suite K
Anaheim, CA 92806
Common Shares of all directors, 6,130,766 41.48%
Stock executive officers, and key
Employees as a group (4 persons)
(1) Other than as footnoted, none of these security holders has
the right to acquire any amount of common stock within sixty
days from options, warrants, rights, conversion privilege, or
similar obligations.
(2) In October 1998, C. Jay Smith was granted options to
purchase 1,500,000 shares of One Touch's common stock. The
options to purchase 500,000 shares out of the total amount
vest on January 1 and expire on December 31 of each year for
three consecutive years. The exercise price of each option is
$0.50 per share. The total for Mr. C. Jay Smith includes the
current 500,000 options which vested on January 1, 2001. None
of the options granted will remain outstanding after December
31, 2001.
(3) In October 1998, Marc R. Tow, a former director of One
Touch, was granted options to purchase 750,000 shares of One
Touch's common stock. The options to purchase 250,000 shares
out of the total amount vest on January 1 and expire on
December 31 of each year for three consecutive years. The
exercise price of each option is $0.50 per share. The total
for Mr. Tow includes the current 250,000 options which vested
on January 1, 2001. None of the options granted will remain
outstanding after December 31, 2001.
(4) 50,000 of this total is held in the name of MFSNET.com, a
company controlled by Michael Smith.
DESCRIPTION OF SECURITIES
General Description.
The securities being offered are shares of common stock.
The authorized capital of One Touch consists of 200,000,000
shares of common stock, $0.001 par value per share. The holders
of common stock shall:
have equal ratable rights to dividends from funds legally
available therefore, when, as, and if declared by the board
of directors of One Touch
are entitled to share ratably in all of the assets of One
Touch available for distribution upon winding up of the
affairs of One Touch
are entitled to one cumulative vote per share on all
matters on which shareholders may vote at all meetings of
shareholders.
The shares of common stock do not have any of the following rights:
special voting rights
preference as to dividends or interest
preemptive rights to purchase in new issues of Shares
preference upon liquidation, or
any other special rights or preferences.
In addition, the Shares are not convertible into any other
security. There are no restrictions on dividends under any loan
other financing arrangements or otherwise. As of March 1, 2001,
One Touch had 14,778,399 shares of common stock issued and
outstanding. One Touch does not have any preferred stock
authorized in its articles of incorporation.
Dividends.
One Touch does not currently intend to pay cash dividends.
One Touch's proposed dividend policy is to make distributions of
its revenues to its stockholders when One Touch's Board of
Directors deems such distributions appropriate. Because One
Touch does not intend to make cash distributions, potential
shareholders would need to sell their shares to realize a return
on their investment. There can be no assurances of the projected
values of the shares, nor can there be any guarantees of the
success of One Touch.
A distribution of revenues will be made only when, in the
judgment of One Touch's Board of Directors, it is in the best
interest of One Touch's stockholders to do so. The Board of
Directors will review, among other things, the investment
quality and marketability of the securities considered for
distribution; the impact of a distribution of the investee's
securities on its customers, joint venture associates,
management contracts, other investors, financial institutions,
and One Touch's internal management, plus the tax consequences
and the market effects of an initial or broader distribution of
such securities.
Transfer Agent.
One Touch has engaged the services of First American Stock
Transfer, 1717 East Bell Road, Suite 2, Phoenix, Arizona 85022,
to act as transfer agent and registrar.
INTEREST OF NAMED EXPERTS AND COUNSEL
Other than as set forth below, no named expert or counsel
was hired on a contingent basis, will receive a direct or
indirect interest in the small business issuer, or was a
promoter, underwriter, voting trustee, director, officer, or
employee of One Touch.
Brian F. Faulkner, A Professional Law Corporation, counsel
for One Touch named in this registration statement as giving an
opinion on the validity of the securities, has received 75,000
shares of restricted common stock in exchange for legal services
previously rendered, and to be rendered in the future, to One
Touch. These legal services consist of advice and preparation
work in connection with reports of One Touch which will be filed
in the future under the Securities Exchange Act of 1934, and
other general corporate and securities work for One Touch.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The following is a summary of the relevant provisions in
the Articles of Incorporation, Bylaws, and Nevada and California
law with regard to limitation of liability and indemnification
of officers, directors and employees of One Touch. The full
provisions are contained in such documents.
Limitation of Liability.
The articles of incorporation of One Touch provide that the
personal liability of a director or officer of One Touch to One
Touch or its shareholders for damages for breach of fiduciary
duty as a director or officer shall be limited to acts or
omissions which involve intentional misconduct, fraud or a
knowing violation of law.
Indemnification.
Articles of Incorporation.
The articles of incorporation of One Touch provide that
each director and each officer of the One Touch may be
indemnified by the corporation against expenses, including
attorney's fees, judgment, fines and amounts paid in settlement,
actually and reasonably incurred by him in connection with the
action, suit or proceeding, if he acted in good faith and in a
manner which he reasonably believed to be in or opposed to the
best interests of One Touch and with respect to any criminal
action or proceeding, had not reasonable cause to any action,
suit or proceeding, had not reasonable cause to believe his
conduct was unlawful.
To the extent that a director, officer, employee or agent
of One Touch has been successful on the merits or otherwise in
defense of any action, suit or proceeding, or in defense of any
claim, issue or matter, he must be indemnified by the
corporation against expenses, including attorney's fees,
actually and reasonably incurred by him in connection with the defense.
Any indemnification, unless ordered by a court or advanced
by One Touch, must be made only as authorized in the specific
case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances. The
determination must be made:
By the stockholders;
By the board of directors by majority vote of a quorum
consisting of directors who were not parties to that act,
suit or proceeding;
If a majority vote of a quorum consisting of directors who
were not parties to the act, suit or proceeding cannot be
obtained, by independent legal counsel in a written
opinion; or
If a quorum consisting of directors who were not parties to
the act, suit or proceeding cannot be obtained, by
independent legal counsel in a written opinion;
Expenses of officers and directors incurred in defending a
civil or criminal action, suit or proceeding must be paid by One
Touch as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of
an undertaking by 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.
Bylaws.
The bylaws of One Touch provide similar provisions with
respect to indemnification. In addition, they provide that One
Touch may purchase and maintain insurance or make other
financial arrangements on behalf of any person who is or was a
director, officer, employee or agent of the company, or is or
was serving at the request of One Touch in such capacity for
another corporation, partnership, joint venture, trust or other
enterprise for any liability asserted against him or her and
liability and expenses incurred by him or her in such capacity,
whether or not One Touch has the authority to indemnify him or
her against such liability and expenses.
Nevada and California Laws.
Nevada and California laws also provide similar provisions for
indemnification of officers, directors, and employees of a
company, except that California law has more specific provisions
with regard to exclusions for indemnification. Specifically,
under California law, no indemnification is to be made for any
of the following:
In a matter in which the person is adjudged to be liable to
the corporation in the performance of that person's duty to
the corporation and its shareholders, unless and only to
the extent that the court in which the proceeding is or was
pending determines that the person is fairly and reasonably
entitled to indemnity for expenses and then only to the
extent that the court shall determine.
Amounts paid in settling or otherwise disposing of a
pending action without court approval.
Expenses incurred in defending a pending action which is
settled or otherwise disposed of without court approval.
In addition, no indemnification or advance is to be made in any
circumstance where it appears:
That it would be inconsistent with a provision of the
articles, bylaws, a resolution of the shareholders, or an
agreement in effect at the time of the accrual of the
alleged cause of action asserted in the proceeding in which
the expenses were incurred or other amounts were paid,
which prohibits or otherwise limits indemnification.
That it would be inconsistent with any condition expressly
imposed by a court in approving a settlement.
Undertaking.
One Touch undertakes the following:
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 (the "Act") may be
permitted to directors, officers and controlling
persons of the small business issuer underthe
foregoing provisions, or otherwise, the small business
issuer has been advised that in the opinion of the
U.S. Securities and Exchange Commission such
indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
ORGANIZATION WITHIN LAST FIVE YEARS
The promoters of One Touch are Mr. Smith and Mr. Tow. None
of the promoters have received anything of value from One Touch
in such capacity other than as follows:
At a duly called meeting of the board of directors of One
Touch on August 1, 1997, the company was authorized to sell to
Mr. Smith and Mr. Tow 6,000,000 and 1,250,000 restricted shares,
respectively, at $0.001 per share out of authorized but unissued
shares of the Company.
During the fiscal year ended December 31, 1998, a total of
5,394,601 shares of common stock were issued for services valued
at $360,091 (weighted average of $0.07 per share) to those two
individuals as part of the total issuances approved above.
DESCRIPTION OF BUSINESS
Business Development
The company was incorporated in the State of Nevada in May
1986 under the name of Alternate Fuel, Inc. The company
underwent several name changes until May 1999, when it changed
its name to NetTel, Inc. In August 1999, the company consummated
an agreement to acquire all of the outstanding capital stock of
California Telephone Company, Inc., a Nevada corporation, in
exchange for 10,914,659 shares of the company's common stock.
Prior to this transaction, NetTel, Inc. was a non-operating shell
company with no operations, assets, liabilities, and 5,078,740
shares of common stock issued and outstanding; and California
Telephone Company, Inc. was an operational privately held company.
In October 1998, California Telephone Company, Inc. acquired
Communications Plus for $950,000 plus inventory of approximately
$250,000 to be carried on consignment. In consideration, the
company paid $350,000 in cash and financed $600,000 with a note
payable at 8% interest annually. In October 1999, the company
changed its name to One Touch Total Communications, Inc.
The Company.
The company, doing business as Communications Plus since
1994, has as its principal business the purchase of new and used
telephone equipment, the refurbishment of used phone equipment,
and the retail sale of new, used, and refurbished phone
equipment. The company also conducts business on the internet
through its website www.link4phones.com. This site offers a
simple concept of "point and click" to the small and medium sized
business executive looking to purchase a Business Telephone
System. The potential customer can view numerous pre configured
business systems or simply review the online catalog for
individual items.
The company has a testing and refurbishing facility in house
whereby older, out of service equipment is re-conditioned and
sold as refurbished. Refurbishing consists of cleaning all
working parts inside and out, addressing all cosmetic issues
(some cases will be replaced) and repackaging in boxes. Not all
equipment obtained by the company is refurbished for various
reasons: defective, damaged, discolored, etc.; in that case
equipment will be resold to other dealers at a discounted price.
The company's source for equipment that it refurbishes is
through advertising in national trade magazines, e-commerce
sites, auctions, and local network satlink (on-line system of
national brokers, current customer base of interconnects and
distributors, yellow pages, etc.). The company offers a full
line of products from leading manufacturers worldwide with a
particular emphasis on Northern Telecom (Nortel) and AT&T
(Lucent). Business products and services offered include
complete telephone and voice mail systems; computer-networking
T1/CSU's as well as voice/data wire and cable; all products are
offered both new and reconditioned.
Direct Business Model.
Through this direct business model, the company offers in-
person relationships with corporate and institutional customers;
telephone and online technical support; and next-day, on-site
product service. Utilizing a simple concept: that by selling
small business telephone systems directly to customers, the
company can best understand their needs and provide the most
effective telecommunications solutions to meet those needs.
Today, the company is enhancing and broadening the fundamental
competitive advantages of the direct model by increasingly
applying the efficiencies of the Internet to its entire business.
Growth in the telecommunications market is fueled by a number of
factors:
the need to transmit larger volumes of information
increased spending by small and medium-sized companies
the desire to integrate voice and data
greater interoperability of equipment stemming from the
development of standards
the search for cost-effective solutions
an expanding international market.
The company arranges for system installation and management;
guides customers through technology transitions, and provides an
extensive range of other services. The company designs and
customizes products and services to the requirements of the
organizations and individuals purchasing them, and sells an
extensive selection of peripheral hardware and expansion software.
At the heart of the company's customer service is its
direct-to-customer business model. "Direct" refers to the
company's relationships with its customers, from consumers to the
large corporations. There are no retailers or other resellers
adding unnecessary time and cost, or diminishing the company's
understanding of customer expectations.
Price for Performance- the company offers its customers
powerful, richly configured systems at competitive prices.
Customization - Every system is built to order. Customers
get exactly what they want.
Reliability, Service and Support-the company uses knowledge
gained from direct customer contact before and after the
sale to provide reliability and tailored customer service.
Purchasing Technology-the company introduces the latest
relevant purchasing technology much more quickly than
companies with slow-moving indirect buyer channels. The
company has developed a "just in time" purchasing philosophy
to satisfy the "just in time" needs of the business
telephone end users.
Industry Overview.
There is currently an ever-increasing telecommunications
aftermarket, a market that provides a lifeline of affordable
technology to the ever-growing mid-size company on a worldwide
basis. There are no significant sales figures or statistics to
quote as yet, since this market is just ready to come into its own.
Today's technology empowers people by giving them immediate
access to information required to complete a task, thereby
allowing them to be more efficient and thus more productive.
Also, the spectrum of technology is so vast that people can pick
and choose the applications that are appropriate for their
specific use, supporting continued growth in traditional
technologies as well as emerging markets.
Company Market Strategy.
Driven by the need to compete against the giants of their
industry on a cost effective basis, small to mid-size companies
want and need the best tools technology has to offer.
Unfortunately, not all companies can afford them "NEW".
One Touch Total Communications can make these necessary
tools available to companies of all sizes. The company
advertises in numerous trade journals such as The Gear, The Mart,
Telecom Suppliers and other industry publications as well as The
Network and a private satellite link through Datacom offering
live quotes for new and out of service equipment nationally
through 300 brokers. Utilizing these services, the Internet and
local advertising through the yellow pages the Company continues
to try and stay in the public eye.
Domestic US Telecommunications Market Analysis.
Spending on PBXs, key telephone systems (KTS)/hybrid systems
and voice processing equipment increased substantially in recent
years. The PBX market continued its strong expansion, fueled by
system upgrades and add-on lines, as well as by new purchases and
inroads into small systems markets traditionally served by KTS
and Centrex. The majority of shipments and the fastest growth
have occurred in systems with 1,000 lines or fewer, reflecting
the trend in the overall economy in which small and medium-sized
companies are acquiring the technology previously available only
to large companies. The increase in the voice communications
market also reflects a boost in spending on maintenance and repair.
With the world's phone lines, satellites and cables
overflowing, the race is on to develop the technologies for high-
speed data delivery. Deregulation, combined with the Internet-
driven transformation from a voice to data telecommunications
infrastructure and from analog to digital, is powering the U.S.
telecommunications industry to record highs. U.S. factory sales
of telecommunications equipment have more than doubled since 1992
and are growing at a rate several times faster than the overall
U.S. economy.
International Telecommunications Market Analysis.
Internationally, newly privatized markets look to U.S.
suppliers for competitively priced, innovative products and
continue to find them. U.S. exports of telecommunications
equipment have increased in recent years.
With foreign governments and companies looking to maintain a
competitive presence in the global marketplace, they will need to
have an eye on technology, cost and service. The company feels
it will be able to penetrate world markets by offering its full
product line of high quality replacement equipment at competitive
prices.
The Company's Commitment.
The company is continuously refining its direct approach to
remanufacturing, selling and servicing business telephone
systems. Currently the company initiatives include moving even
greater volumes of product sales, service and support to the
Internet; using the Internet to improve the efficiency of the
company's procurement, manufacturing and distribution process;
and further expanding an already broad range of value-added
services. The company management is focused on enhancing
telecommunications solutions and simplifying the system buying
decisions of current and potential customers. The company
believes that it produces a consistent high quality product at a
fair price with exceptional customer care and service, which
places it at a competitive advantage compared with other
companies in this industry.
In this regard, the company has expanded its testing
facility the past two years to provide better quality control;
expenses for equipment in connection with this expansion have
been approximately $20,000. The result of this has been a
decrease in the returns for defective equipment; this has enabled
the company to offer a full one year warranty on all refurbished
and reconditioned equipment.
General.
The company is not dependent on one or a few major
customers. In addition, the company does not have any patents,
trademarks, licenses, franchises, concessions, royalty agreements
or labor contracts. Also, there is no need for government
approval of the principal products and services offered by the
company. The company currently has 15 full-time employees; the
company has four in house salespeople who sell telephone
equipment to interconnects, wholesalers and end users through
telemarketing and employs one outside sales director who has
extensive industry experience and contacts to solicit larger
national accounts, i.e. hotels/motels, contractors, etc.
Risk Factors in Connection with Business of One Touch.
Acceptance and Effectiveness of Internet Electronic Commerce.
One Touch's success in marketing its products on-line, as
well as through other mediums will be dependent on consumer
acceptance of e-retailing and an increase in the use of the
Internet for e-commerce. If the markets for e-commerce do not
develop or develop more slowly than One Touch expects, its e-
commerce business may be harmed. If Internet usage does not
grow, One Touch may not be able to realize revenues in 2001 from
Internet advertising and sponsorships, which also may harm both
One Touch's retail and e-commerce businesses. Internet use by
consumers is in an early stage of development, and market
acceptance of the Internet as a medium for content, advertising
and e-commerce is uncertain. A number of factors may inhibit the
growth of Internet usage, including inadequate network
infrastructure, security concerns, inconsistent quality of
service, and limited availability of cost-effective, high-speed
access. If these or any other factors cause use of the Internet
to slow or decline, our results of operations could be adversely affected.
Competition in Selling Communications Equipment.
One Touch faces significant competition from other
companies selling communications equipment, including those
selling refurbished equipment. Although One Touch believes that
the quality of its products, as well as its customer service and
support set it apart from other companies, other firms in this
field are much larger and better capitalized. As a result, many
of One Touch's present and potential competitors are likely to
enjoy substantial competitive advantages, including more fully-
developed e-commerce opportunities, larger technical and
production staffs, and substantially greater financial,
marketing, technical and other resources. Such competition
could result in reduced margins or loss of market share, any of
which could harm the business of One Touch. Competition is
likely to increase significantly as new companies enter the
market and current competitors expand their services. If One
Touch does not compete effectively or if it experiences any
pricing pressures, reduced margins or loss of market share
resulting from increased competition, One Touch's business could
be adversely affected.
Unreliability of Internet Infrastructure.
If the Internet continues to experience increased numbers of
users, frequency of use or increased bandwidth requirements, the
Internet infrastructure may not be able to support these
increased demands or perform reliably. The Internet has
experienced a variety of outages and other delays as a result of
damage to portions of its infrastructure, and could face
additional outages and delays in the future. These outages and
delays could reduce the level of Internet usage and traffic. In
addition, the Internet could lose its viability due to delays in
the development or adoption of new standards and protocols to
handle increased levels of activity. If the Internet
infrastructure is not adequately developed or maintained, use of
One Touch website may be reduced. Even if the Internet
infrastructure is adequately developed, and maintained, One Touch
may incur substantial expenditures in order to adapt its services
and products to changing Internet technologies. Such additional
expenses could severely harm One Touch's financial results.
Transactional Security Concerns.
A significant barrier to Internet e-commerce is the secure
transmission of confidential information over public networks.
Any breach in security could cause interruptions and have an
adverse effect on One Touch's business.
Governmental Regulation of Communications Equipment and the Internet.
The equipment sold by One Touch must meet standards as set
forth by the U.S. Federal Communications Commission. If new or
additional regulations are enacted, then they could have an
adverse affect on the business of One Touch. Until such
regulations are proposed, One Touch is unable to predict the
nature of any such affect.
There are currently few laws that specifically regulate
communications or commerce on the Internet. Laws and regulations
may be adopted in the future, however, that address issues
including user privacy, pricing, taxation and the characteristics
and quality of products and services sold over the Internet.
Possible future consumer legislation, regulations and actions
could cause additional expense, capital expenditures,
restrictions and delays in the activities undertaken in
connection with the party planning business, the extent of which
cannot be predicted. The exact affect of such legislation cannot
be predicted until it is in final form.
Influence of Other External Factors on Prospects for Company.
The industry of One Touch in general is a speculative
venture necessarily involving some substantial risk. There is no
certainty that the expenditures to be made by One Touch will
result in a commercially profitable business. The marketability
of its products will be affected by numerous factors beyond the
control of One Touch. These factors include market fluctuations,
and the general state of the economy, including the rate of
inflation, and local economic conditions, which can affect
companies' spending. Factors which leave less money in the hands
of potential customers of One Touch will likely have an adverse
effect on One Touch. The exact effect of these factors cannot be
accurately predicted, but the combination of these factors may
result in One Touch not receiving an adequate return on invested capital.
Success of One Touch Dependent on Management.
One Touch's success is dependent upon the hiring of key
administrative personnel. None of One Touch's officers,
directors, and key employees, except for the president and the
general manager, has an employment agreement with One Touch;
therefore, there can be no assurance that these personnel will
remain employed by One Touch after the termination of such
agreements. Should any of these individuals cease to be
affiliated with One Touch for any reason before qualified
replacements could be found, there could be material adverse
effects on One Touch's business and prospects.
In addition, all decisions with respect to the management of
One Touch will be made exclusively by the officers and directors
of One Touch. Investors will only have rights associated with
shareholders to make decisions which affect One Touch. The
success of One Touch, to a large extent, will depend on the
quality of the directors and officers of One Touch. Accordingly,
no person should invest in the shares unless he is willing to
entrust all aspects of the management of One Touch to the
officers and directors.
Control of One Touch by Officers and Directors.
One Touch's officers and directors beneficially own
approximately 40% of the outstanding shares of One Touch's
common stock. As a result, such persons, acting together, have
the ability to exercise influence over all matters requiring
stockholder approval. Accordingly, it may be difficult for
investors to effectuate control over the affairs of One Touch.
Therefore, it should be assumed that the officers, directors,
and principal common shareholders who control the majority of
voting rights will be able, by virtue of their stock holdings,
to control the affairs and policies of One Touch.
Limitations on Liability, and Indemnification, of Directors
and Officers.
The articles of incorporation of One Touch provide that the
personal liability of a director or officer of One Touch to One
Touch or the Shareholders for damages for breach of fiduciary
duty as a director or officer shall be limited to acts or
omissions which involve intentional misconduct, fraud or a
knowing violation of law. In addition, the articles and the
bylaws of One Touch provide for indemnification of officers and
directors of One Touch. Also, the Nevada Revised Statutes
provide for permissive indemnification of officers and directors
and One Touch may provide indemnification under such provisions.
Any limitation on the liability of any director, or
indemnification of directors, officer, or employees, could
result in substantial expenditures being made by One Touch in
covering any liability of such persons or in indemnifying them.
Potential Conflicts of Interest Involving Management.
Some of the officers and directors have other interests to
which they devote time, either individually or through
partnerships and corporations in which they have an interest,
hold an office, or serve on boards of directors, and each will
continue to do so notwithstanding the fact that management time
may be necessary to the business of One Touch. As a result,
conflicts of interest may exist between One Touch and its
officers and/or directors which may not be susceptible to resolution.
In addition, conflicts of interest may arise in the area of
corporate opportunities which cannot be resolved through arm's
length negotiations. All of the potential conflicts of interest
will be resolved only through exercise by the directors of such
judgment as is consistent with their fiduciary duties to One
Touch. It is the intention of management, so as to minimize any
potential conflicts of interest, to present first to the board
of directors of One Touch any proposed investments for its evaluation.
No Assurance of Continued Public Trading Market; Risk of Low
Priced Securities.
Since inception of public trading of One Touch's common
stock on the Over the Counter Bulletin Board on October 7, 1999,
there has been only a limited public market for the common stock
of One Touch. The common stock of One Touch is currently quoted
on the Pink Sheets LLC; One Touch intends to reapply for
relisting on the Over the Counter Bulletin Board after clearing
comments on this registration statement. As a result, an
investor may find it difficult to dispose of, or to obtain
accurate quotations as to the market value of One Touch's
securities. In addition, the common stock is subject to the
low-priced security or so called "penny stock" rules that impose
additional sales practice requirements on broker-dealers who
sell such securities. The Securities Enforcement and Penny
Stock Reform Act of 1990 requires additional disclosure in
connection with any trades involving a stock defined as a penny
stock: generally, according to recent regulations adopted by the
U.S. Securities and Exchange Commission, any equity security
that has a market price of less than $5.00 per share. The
regulations governing low-priced or penny stocks sometimes limit
the ability of broker-dealers to sell One Touch's common stock
and thus, ultimately, the ability of the investors to sell their
securities in the secondary market.
Effects of Failure to Maintain Market Makers.
If One Touch is unable to maintain a National Association
of Securities Dealers, Inc. member broker/dealers as market
makers after relisting on the Bulletin Board, the liquidity of
the common stock could be impaired, not only in the number of
shares of common stock which could be bought and sold, but also
through possible delays in the timing of transactions, and lower
prices for the common stock than might otherwise prevail.
Furthermore, the lack of market makers could result in persons
being unable to buy or sell shares of the common stock on any
secondary market. There can be no assurance One Touch will be
able to maintain such market makers.
Shares Eligible For Future Sale
All of the approximate 6,000,000 shares of common stock
which are currently held, directly or indirectly, by management
have been issued in reliance on the private placement exemption
under the Securities Act of 1933. Such shares will not be
available for sale in the open market without separate
registration except in reliance upon Rule 144 under the
Securities Act of 1933. In general, under Rule 144 a person, or
persons whose shares are aggregated, who has beneficially owned
shares acquired in a non-public transaction for at least one
year, including persons who may be deemed affiliates of One
Touch, as defined, would be entitled to sell within any three-
month period a number of shares that does not exceed the greater
of 1% of the then outstanding shares of common stock, or the
average weekly reported trading volume during the four calendar
weeks preceding such sale, provided that current public
information is then available. If a substantial number of the
shares owned by these shareholders were sold underRule 144 or a
registered offering, the market price of the common stock could
be adversely affected.
Potential Status as a Pseudo California Corporation.
Section 2115 of the California General Corporation Law
subjects foreign corporations doing business in California to
various substantive provisions of the California General
Corporation Law in the event that the average of its property,
payroll and sales is more than 50% in California and more than
one-half of its outstanding voting securities are held of record
by persons residing in the State of California. Section 2115
does not apply to any corporation which, among other things, has
outstanding securities designated as qualified for trading as a
national market security on NASDAQ if such corporation has at
least eight hundred holders of its equity securities as of the
record date of its most recent annual meeting of shareholders.
Currently, One Touch does meet the requirement of a pseudo
California corporation. Some of the substantive provisions of
California which apply to One Touch include laws relating to
annual election of directors, removal of directors without
cause, removal of directors by court proceedings,
indemnification of officers and directors, directors standard of
care and liability of directors for unlawful distributions. In
addition, Section 708 of the California General Corporation Law
which mandates that shareholders have the right of cumulative
voting at the election of directors applies to One Touch.
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the financial
statements of One Touch and notes thereto contained elsewhere in this report.
Results Of Operations.
Comparison of quarters ended March 31, 2001 and 2000
Revenues. Revenues for the quarter ended March 31, 2001
were $771,186, a decrease of approximately 31% from
revenues of $3,569,907 in the same period in 1999. The
decrease during the quarter is attributed primarily to a
change in market conditions which negatively affected sales
in the telecommunications industry. Net loss for this
quarter ended March 31, 2001 was $80,575 as compared with a
net income of $53,728 for the same period in 2000.
Selling, General and Administrative. Selling, general and
administrative expenses increased approximately 5% from
$322,780 for the quarter ended March 31, 2000 to $340,306
for the same period in 2001. The increase is primarily due
to the hiring of two new technicians to provide One Touch
the ability to refurbish and service its equipment sold or
to be sold rather than historically outsourcing such service.
Comparison of years ended December 31, 2000 and 1999
Revenues. Revenues for the fiscal year ended December 31,
2000 were $2,654,286, a decrease of approximately 26% from
revenues of $3,569,907 in the same period in 1999. The
decrease in 2000 is attributed primarily to a change in
market conditions which negatively affected sales in the
telecommunications industry; however, it was also due to
the loss of a sales person employed by company. Net loss
for this fiscal year ended December 31, 2000 was $268,454
as compared with a net income of $541,919 for the same
period in 1999.
Cost of Revenues. Cost of revenues decreased approximately
26% from $2,261,475 for the fiscal year ended December 31,
1999 to $1,675,740 for the same period in 2000. Decrease
compared to prior year is primarily the result of a
decrease in gross sales as previously discussed.
Selling, General and Administrative. Selling, general and
administrative expenses increased approximately 17% from
$1,069,145 for the fiscal year ended December 31, 1999 to
$1,258,200 for the same period in 2000. Increase compared
to the prior year are due primarily to approximately
$60,000 of consulting expenses related to investor
relations, and approximately $33,000 in bad debt expenses
on accounts receivable deemed to be uncollectible.
Other Expenses. Other expenses for depreciation and
amortization decreased approximately 23% to $125,311 for
the fiscal year ended December 31, 2000 from $162,156 for
the same period 1999. Decrease in amortization expense
compared to prior year is primarily due to a write-off of a
covenant not to compete during 1999. Interest expense
decreased to $2,972 for the fiscal year ended December 31,
2000 from $33,591 for the same period in 1999. Decrease in
interest expense compared to the prior year was primarily
due to a promissory note that was forgiven during 1999.
In December 1999, two major stockholders and employees of
One Touch entered into a compromise and settlement
agreement, returning 2,000,000 shares of One Touch's common
stock to be cancelled due to a breach in their employment
contract and covenant not to compete. The 2,000,000 shares
of common stock were originally issued for consulting
services totaling $276,000 during 1998. The remaining
principal and accrued interest on a note payable in the
amount of $518,626 related to the Communications Plus
transaction was cancelled and recorded as a forgiveness of debt .
Liquidity And Capital Resources.
As of December 31, 2000, One Touch had working capital of
$88,722 compared to a working capital of $196,648 at December
31, 1999. One Touch's current ratio was 1.52:1 at December 31,
2000 as compared with a current ratio of 2.22:1 at December 31,
1999. The decrease in working capital was substantially due to
an net losses incurred in the 2000.
As a primary result of the losses incurred from operations
for the fiscal year ended December 31, 2000, One Touch generated
a cash flow deficit from operating activities of $14,350 as
compared with a cash flow deficit from operating activities of
$28,267 for the fiscal year ended December 31, 1999. During the
year ended December 31, 2000, accounts payable increased by
$109,805 as compared with a decrease of $238,541 for the
previous year ended.
As of December 31, 2000, One Touch has a net operating loss
carryforward of approximately $408,000 for tax purposes, which
will be available to offset future taxable income. If not used,
this carryforward will expire in the year 2020.
One Touch met its cash requirements during the fiscal year
ended December 31, 2000 from ongoing operations. One Touch has
issued shares of its common stock in the past to satisfy
obligations, and expects in the future to also acquire services,
satisfy indebtedness and/or make acquisitions utilizing
authorized shares of the capital stock of One Touch.
One Touch's growth strategy for the next twelve months
continues to be the increase of revenues through the sale of new
and refurbished equipment through a build out of its sales
force. Ongoing initiatives include moving even greater volumes
of product sales, service and support to the Internet; using the
Internet to improve the efficiency of the companies
procurement, remanufacture and redistribution process; and
further expanding an already broad range of value-added
services. One Touch has sufficient cash flow to meet its cash
requirements through 2001. However, there can be no assurance
One Touch will continue to meet its cash requirements. One
Touch intends to grow additional revenues through the
acquisition of other telecom companies which integrate into the
companies overall business plan through the issuance of
additional securities.
Forward Looking Statements.
This prospectus contains "forward looking statements"
within the meaning of Rule 175 under the Securities Act of 1933,
as amended, and Rule 3b-6 under the Securities Act of 1934, as
amended, including statements regarding, among other items, One
Touch's business strategies, continued growth in One Touch's
markets, projections, and anticipated trends in One Touch's
business and the industry in which it operates. The words
"believe," "expect," "anticipate," "intends," "forecast,"
"project," and similar expressions identify forward-looking
statements. These forward-looking statements are based largely
on One Touch's expectations and are subject to a number of risks
and uncertainties which are beyond One Touch's control. One
Touch cautions that these statements are further qualified by
important factors that could cause actual results to differ
materially from those in the forward looking statements,
including, among others, the following: reduced or lack of
increase in demand for One Touch's products, competitive pricing
pressures, changes in the market price of ingredients used in
One Touch's products and the level of expenses incurred in One
Touch's operations. In light of these risks and uncertainties,
there can be no assurance that the forward-looking information
contained in this document will in fact transpire or prove to be
accurate. One Touch disclaims any intent or obligation to
update "forward looking statements."
DESCRIPTION OF PROPERTY
At its offices in Anaheim, California, One Touch owns
approximately $31,000 of miscellaneous office furniture and
equipment, including computers. One Touch also leases a 2,000
square foot sales office (at $0.70 per square foot) and a 11,500
square foot warehouse (at $0.53 per square foot). Both leases
expire on October 1, 2001; One Touch has an option to renew each
lease for a period of three years.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the last two years, other than as set forth below,
there has not been any transaction, or proposed transactions, to
which One Touch was or is to be a party, in which any of the
officers or directors, or 5% or greater shareholders, had or are
to have a direct or indirect material interest.
At various times during the fiscal year ended December 31,
1999, a total of 360,000 shares of common stock were issued to
Mr. Smith and Mr. Tow based on the exercise of options
previously granted; these options were exercised in exchange for
services rendered to One Touch valued at $180,000 (weighted
average of $0.50 per share).
In May 1999, One Touch entered into a consulting agreement
with MFSNet.com which is owned and operated by a sibling of the
president and CEO of One Touch. The agreement is for networking
and website development related services and provides for
payment of 100,000 shares of One Touch's common stock for
services performed. These shares were issued to MFSNet.com in
March 2000. The transaction has been valued at $28,613 based on
the value of the services rendered.
As of December 31, 2000, One Touch owes $48,069 to an
entity owned by the President and stockholder of One Touch. The
amount is unsecured, due on demand, and bearing an interest rate
of 8%.
MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
Market Information.
From October 7, 1999 to November 18, 1999, One Touch's
common stock was traded on the Over the Counter Bulletin Board.
After the latter date, the shares have been traded on the Pink
Sheets LLC under the symbol "OTTC". The range of closing prices
shown below is reported while trading on the Bulletin Board and
the Pink Sheets. The quotations shown reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may
not necessarily represent actual transactions.
Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ending December 31, 2001
High Low
Quarter Ended March 31, 2001 0.13 0.07
Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ended December 31, 2000
High Low
Quarter Ended December 31, 2000 0.30 0.11
Quarter Ended September 30, 2000 0.30 0.16
Quarter Ended June 30, 2000 0.70 0.25
Quarter Ended March 31, 2000 2.00 0.35
Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ended December 31, 1999
High Low
Quarter Ended December 31, 1999 0.69 0.15
In order to qualify for relisting on the Bulletin Board,
One Touch must comply with the new eligibility rules of the
Bulletin Board (that is, all listed companies must be reporting
companies), and accordingly One Touch is filing its Form SB-2
Registration Statement with the Securities and Exchange Commission.
Holders of Common Equity.
As of June 1, 2001, One Touch had approximately 390
shareholders of record of its common stock.
Dividend Information.
One Touch has not declared or paid a cash dividend to
stockholders since it was incorporated. The board of directors
presently intends to retain any earnings to finance company
operations and does not expect to authorize cash dividends in
the foreseeable future. Any payment of cash dividends in the
future will depend upon One Touch's earnings, capital
requirements and other factors.
EXECUTIVE COMPENSATION
Summary Compensation Table
Annual compensation Long-term
compensation
Awards Payouts
Other Securi All
Annual ties other
Name and compen Restrict under compen
Principal Year Salary Bonus sation stock lying LTIP sation
Position award options payouts
SARs
($) ($) ($) ($) (#) ($) ($)
C. Jay
Smith,
President
Director(1) 2000 125,000 0 0 0 0 0 0
1999 125,000 0 0 0 0 0 0
1998 0 0 0 0 1,500,000 0 0
Paul Palant
Director (2)
Michael
Smith
Director(2)
(1) In October 1998, Mr. Smith was granted options to purchase
1,500,000 shares of One Touch's common stock. The options to
purchase 500,000 shares vest on January 1 and expire on December
31 of each year for three consecutive years. The exercise price
of each option is $0.50 per share.
(2) Paul Palant and Michael Smith were only appointed to the
Board of Directors of One Touch on January 21, 2001.
Employment Agreement.
C. Jay Smith is employed under employment contract terms
dated September 1, 1998. Under these terms, Mr. Smith is paid
the following:
(a) Salary. A base salary $125,000 per year. This base
salary shall increase per annum, subject to Board of Director
approval and will increase as directly related to increase in
profits. Calculations will computed for the year ending on
August 31, in the following fashion: If profits are up 10%, then
base salary shall increase ten percent, but a decrease in
profits will not act to diminish the base salary.
(b) Bonus. A bonus shall be earned according to the
following parameters:
1. There shall not be a bonus due for gross revenues that
do not exceed $4,500,000.
2. A bonus shall be due for gross revenues that exceed
$4,500,000, but are less than $6,000,000. This bonus shall
be computed at the rate of 2% of such revenues.
3. A bonus shall be due for gross revenues that exceed
$6,000,000. This bonus shall be computed at the rate of 2
1/2% of such revenues.
This bonus shall be computed for the year ending August 31.
(c) Stock Options For Profitability.
If, on the year ending August 31, it is determined that One
Touch's gross profits exceed all expenses by greater than 1%,
then there shall be 250,000 options offered at a rate that is
25% less than the current market bid price.
Other Compensation.
(a) There are no annuity, pension or retirement benefits
proposed to be paid to officers, directors, or employees of One
Touch in the event of retirement at normal retirement date as
there is no existing plan provided for or contributed to by One Touch.
(b) No remuneration is proposed to be paid in the future
directly or indirectly by One Touch to any officer or director
since there is no existing plan which provides for such payment,
including a stock option plan.
FINANCIAL STATEMENTS
ONE TOUCH TOTAL COMMUNICATIONS, INC.
BALANCE SHEET
MARCH 31, 2001
(Unaudited)
ASSETS
Current assets
Cash -
Accounts receivable, net of allowance
for doubtful accounts of $36,191 177,104
Inventory 256,378
Total current assets 433,482
Fixed assets, net 28,948
Other assets
Deposits 6,957
Deferred tax asset 136,562
Intangible assets, net 621,758
Total other assets 765,277
Total assets 1,227,707
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Bank overdraft 9,900
Accounts payable 142,956
Accrued liabilities 73,032
Due to consultant 50,974
Income tax payable 70,359
Note payable - related party 48,069
Total current liabilities 395,290
Total liabilities 395,290
Commitments and contingencies -
Stockholders' equity
Common stock ($0.001 par value, 200,000,000
shares authorized, 14,778,399 shares issued and
outstanding) 14,778
Additional paid-in capital 1,095,748
Accumulated deficit (278,109)
Total stockholders' equity 832,417
Total liabilities and stockholders' equity 1,227,707
See Accompanying Notes to Financial Statements
ONE TOUCH TOTAL COMMUNICATIONS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For the three months ended
March 31,
2001 2000
Revenues $ 771,186 $ 796,130
Costs of revenues 480,992 495,550
Gross profit 290,194 300,580
Operating expenses
Selling, general and administrative 340,306 322,780
Depreciation and amortization 30,046 31,528
Total operating expenses 370,352 354,308
Loss from operations (80,158) (53,728)
Other expense
Interest expense 417 -
Loss before provision for income tax (80,575) (53,728)
Provision for income tax - -
Net loss (80,575) (53,728)
Basic and diluted loss per common share (0.01) (0.00)
Weighted average common shares
outstanding - basic 14,778,399 14,472,630
Weighted average common shares
outstanding - diluted 15,528,399 15,972,630
See Accompanying Notes to Financial Statements
ONE TOUCH TOTAL COMMUNICATIONS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
For the three months ended
March 31,
2001 2000
Cash flows from operating activities:
Net loss (80,575) (53,728)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciations and amortization 30,046 31,528
Common stock issued for services - 74,432
Changes in operating assets and
liabilities:
Increase in accounts receivable (47,265) (83,234)
(Increase) decrease in inventory 40,718 (27,318)
Decrease in other assets - 308
Increase in bank overdraft 9,900 27,368
Increase in accounts payable 5,169 13,145
Increase in accrued liabilities 39,979 11
Net cash used by operating activities (2,028) (17,488)
Cash flows from investing activities:
Purchase of fixed assets - (6,378)
Net cash used by investing activities - (6,378)
Net decrease in cash (2,028) (23,866)
Cash, beginning of period 2,028 23,866
Cash, end of period - -
Supplemental disclosure of cash flow:
Cash paid for interest 417 -
Cash paid for income taxes - -
See Accompanying Notes to Financial Statements
ONE TOUCH TOTAL COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying financial statements have been prepared in
accordance with Securities and Exchange Commission requirements
for interim financial statements. Therefore, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. The financial statements should be read in
conjunction with the Form 10-KSB for the year ended December 31,
2000 of One Touch Total Communications, Inc. ("the Company").
The results of operations for the interim periods shown in this
report are not necessarily indicative of results to be expected
for the full year. In the opinion of management, the
information contained herein reflects all adjustments necessary
to make the results of operations for the interim periods a fair
statement of such operation. All such adjustments are of a
normal recurring nature.
2. STOCKHOLDERS' EQUITY
The Company entered into a consulting agreement with MFSNet.com,
which is owned and operated by a sibling of the president and
CEO of the Company. The agreement is for networking and website
development related services and provides for payment of 100,000
shares of the Company's common stock for services performed.
These shares were issued to MFSNet.com in March 2000. The
transaction has been valued at $28,613 based on the value of the
services rendered.
In December 1999, the Company entered into a 48 month consulting
agreement with Rio Telecom, Inc. ("Rio") whereby Rio is to
receive $5,260 per month for 48 months and 100,000 shares of the
Company's common stock per month for ten months both beginning
in January 2000. As of March 31, 2000, 200,000 of the 1,000,000
shares of the Company's common stock has been issued to Rio
leaving 800,000 shares due to Rio as of March 31, 2000. Since
the consulting agreement spans over 48 months, Rio has earned
62,500 of the 200,000 shares issued thereby leaving 137,500
shares as a prepaid expense as of March 31, 2000. For the
purposes of this transaction the stock has been valued at
$0.4531 per common share using an 11 day average (5 days before
and 5 days after the date of the agreement) of the closing price
of the Company's common stock. During March 2000, the Company
recorded $28,300 as consulting services expense for the quarter
ended March 31, 2000 as a result of the Rio consulting
agreement.
In December 1999, the Company entered into a one-year employment
agreement with the General Manager of the Company. The
Agreement provided the General Manager with a bonus of 50,000
shares that were issued March 2000, valued at $17,500.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders
One Touch Total Communications, Inc.
Anaheim, California
We have audited the accompanying balance sheet of One Touch
Total Communications, Inc. as of December 31, 2000 and the
related statements of operations, stockholders' equity and cash
flows for the years ended December 31, 2000 and 1999. 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.
We conducted our audit in accordance with auditing standards
generally accepted in the United States of America. 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 all material respects, the financial position
of One Touch Total Communications, Inc. as of December 31, 2000
and the results of its operations and its cash flows for the
years ended December 31, 2000 and 1999 in conformity with
accounting principles generally accepted in the United States of America.
/s/ L.L. Bradford & Company, LLC
L.L. Bradford & Company, LLC
February 16, 2001
Las Vegas, Nevada
ONE TOUCH TOTAL COMMUNICATIONS, INC.
BALANCE SHEET
DECEMBER 31, 2000
Current assets
Cash 2,028
Accounts receivable, net of allowance
for doubtful accounts of $37,191 129,839
Inventory 297,096
Total current assets 428,963
Fixed assets, net 31,125
Other assets
Deposits 6,957
Deferred tax asset 136,562
Intangible assets, net 649,626
Total other assets 793,145
Total assets 1,253,233
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable 137,787
Accrued liabilities 61,361
Due to consultant 22,665
Income taxes payable 70,359
Note payable - related party 48,069
Total current liabilities 340,241
Total liabilities 340,241
Commitments and contingencies -
Stockholders' equity
Common stock ($0.001 par value, 200,000,000
shares authorized, 14,778,399 shares issued and
outstanding) 14,778
Additional paid-in capital 1,095,748
Accumulated deficit (197,534)
Total stockholders' equity 912,992
Total liabilities and stockholders' equity 1,253,233
See Accompanying Notes to Financial Statements
ONE TOUCH TOTAL COMMUNICATIONS, INC.
STATEMENTS OF OPERATIONS
For the Year Ended
December 31
2000 1999
Revenues 2,654,286 3,569,907
Costs of revenues 1,675,740 2,261,475
Gross profit 978,546 1,308,432
Operating expenses
Selling, general and administrative 1,260,040 1,069,145
Depreciation and amortization 124,275 162,156
Total operating expenses 1,384,315 1,231,301
Income (loss) from operations (405,769) 77,131
Other income (expense)
Interest (2,972) (33,591)
Cancellation of common stock - 276,000
Forgiveness of debt - 518,826
Total other income (expense) (2,972) 761,235
Income (loss) before provision for
income taxes (408,741) 838,366
Provision for income tax benefit (expense) 140,287 (296,447)
Net income (loss) (268,454) 541,919
Basic and diluted earnings (loss) per
common share (0.02) 0.04
Weighted average common shares
outstanding - basic 14,658,194 13,003,135
Weighted average common shares
outstanding - diluted 15,408,194 14,503,135
See Accompanying Notes to Financial Statements
ONE TOUCH TOTAL COMMUNICATIONS, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
Common Stock Additional Retained Total
# of Paid-In Earnings Stockholders
Shares Amount Capital (Accumu Equity
Lated
Deficit)
Balance
December 31, 1998 10,914,659 10,915 1,038,800 (470,999) 578,716
Cancellation of
common stock related
to Compromise and
Settlement Agreement
(see Note 10) (2,000,000 (2,000) (274,000) - (276,000)
Common stock issued
for acquisition of
NetTel, Inc.
$0.001 5,078,740 5,078 - - 5,078
Common stock
options exercised
for services$0.50 360,000 360 179,640 - 180,000
Net income - - - 541,919 541,919
Balance
December 31, 1999 14,353,399 14,353 944,440 70,920 1,029,713
Common stock
issued for services
$0.29 100,000 100 28,513 - 28,613
Common stock
issued as signing
bonus, $0.35 50,000 50 17,450 - 17,500
Common stock
issued for
services, $0.45 200,000 200 90,420 - 90,620
Common stock
issued for
services, $0.20 75,000 75 14,925 - 15,000
Net income - - - (268,454) (268,454)
Balance
December 31, 2000 14,778,399 14,778 1,095,748 (197,534) 912,992
See Accompanying Notes to Financial Statements
ONE TOUCH TOTAL COMMUNICATIONS, INC.
STATEMENTS OF CASH FLOWS
For the Year Ended December 31
2000 1999
Cash flows from operating activities:
Net income (loss) (268,454) 541,919
Adjustments to reconcile net income
(loss) to net cash used by operating
activities:
Depreciation and amortization 124,275 162,156
Forgiveness of debt - (518,826)
Cancellation of common stock - (276,000)
Common shares issued for services and
other expenses 151,733 185,078
Changes in operating assets and
liabilities:
(Increase) decrease in accounts
receivable (41,843) 16,895
Increase in inventory (3,516) (155,740)
Decrease in other assets 2,148 225,001
Increase in deferred tax asset (136,562) -
Increase (decrease) in accounts payable 109,805 (238,541)
Increase (decrease) in accrued
liabilities 51,789 (47,183)
Increase (decrease) in deferred tax liability (4,525) 4,525
Increase in income taxes payable 800 74,084
Decrease in due to officer - (1,635)
Net cash used by operating activities (14,350) (28,267)
Cash flows from investing activities:
Purchase of fixed assets (7,488) (10,196)
Net cash used by investing activities (7,488) (10,196)
Cash flows from financing activities:
Proceeds from issuance of notes payable
- - related party - 73,900
Principal payments on notes payable -
related party - (93,921)
Net cash used by financing activities - (20,021)
Net change in cash (21,838) (58,484)
Cash, beginning of period 23,866 82,350
Cash, end of period 2,028 23,866
Supplemental disclosure of cash flow:
Cash paid for interest 45 33,591
Cash paid for income taxes - -
See Accompanying Notes to Financial Statements
ONE TOUCH TOTAL COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
1. BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business - One Touch Total Communications, Inc.'s (the
"Company") principal business consists of the purchase of new
and used telephone equipment ("phone equipment"), the
refurbishment of used phone equipment, and the retail sale and
installation of new, used, and refurbished phone equipment. The
Company also conducts business on the internet through its
website www.link4phones.com.
History - One Touch Total Communications, Inc. was incorporated
in the State of Nevada in May 1986 under the name of Alternate
Fuel, Inc. The Company underwent several name changes until May
1996, when it changed its name to NetTel, Inc.
In August 1999, the Company consummated an agreement to acquire
all of the outstanding capital stock of California Telephone
Company, Inc., a Nevada Corporation, in exchange for 10,914,659
shares of the Company's common stock ("CTC Transaction"). Prior
to the CTC Transaction, NetTel, Inc. was a non-operating shell
company with no operations, assets, liabilities; and 5,078,740
shares of common stock issued and outstanding; and California
Telephone Company, Inc. was an operational company. The CTC
Transaction is considered to be a capital transaction in
substance, rather than a business combination. Inasmuch, the
CTC Transaction is equivalent to the issuance of stock by an
operational company (California Telephone Company, Inc.) for the
net monetary assets of a non-operational shell company (NetTel,
Inc.), accompanied by a recapitalization. The accounting for
the CTC Transaction is identical to that resulting from a
reverse acquisition, except goodwill or other intangible assets
will not be recorded. Accordingly, these financial statements
are the historical financial statements of California Telephone
Company, Inc.
In October 1998, California Telephone Company, Inc. acquired
Communications Plus for $950,000 ("CP Transaction") plus
inventory of approximately $250,000 to be carried on
consignment. In consideration, the Company paid $350,000 in
cash and financed $600,000 with a note payable at 8% interest
annually (see note 10). The entire purchase price has been
allocated to identifiable intangible assets. Identifiable
intangible assets consist of customer and vendor lists and a
covenant not to compete. Identifiable intangible assets
relating to this purchase have been amortized on a straight-line
basis over eight years.
In October 1999, the Company changed its name to One Touch Total
Communications, Inc.
Principles of consolidation - The financial statements include
the accounts of the Company and its subsidiary. All significant
intercompany balances and transactions have been eliminated in
consolidation.
Use of estimates - The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could
differ from those estimates.
Inventory - Inventory is stated at the lower of cost or market.
Cost is determined by using the average cost method.
Substantially all of the inventory consists of finished goods
held for sale. The Company's management monitors the inventory
for excess and obsolete items and makes necessary valuation
adjustments when required.
Fixed assets - Fixed assets are stated at cost less accumulated
depreciation. Depreciation is provided principally on the
straight-line method over the estimated useful lives of the
assets, which are generally 3 to 7 years. The cost of repairs
and maintenance is charged to expense as incurred. Expenditures
for property betterments and renewals are capitalized. Upon
sale or other disposition of a depreciable asset, cost and
accumulated depreciation are removed from the accounts and any
gain or loss is reflected in other income (expense).
The Company periodically evaluates whether events and
circumstances have occurred that may warrant revision of the
estimated useful lives of fixed assets or whether the remaining
balance of fixed assets should be evaluated for possible
impairment. The Company uses an estimate of the related
undiscounted cash flows over the remaining life of the fixed
assets in measuring their recoverability.
Intangible assets -Intangible assets consist of acquired
customer and vendor lists, licenses, and capitalized
organization costs amortized on a straight-line basis ranging
from 5 to 8 years. The Company periodically evaluates whether
changes have occurred that would require revision of the
remaining estimated useful life of the assigned intangible
assets or render them not recoverable. If such circumstances
arise, the Company would use an estimate of the undiscounted
value of the expected future operating cash flows to determine
whether the intangible assets are recoverable.
Comprehensive income (loss) - The Company has no components of
other comprehensive income (loss). Accordingly, net income
(loss) equals comprehensive income (loss) for all periods.
Earnings (loss) per common share - Basic earnings (loss) per
share excludes any dilutive effects of options, warrants and
convertible securities. Basic earnings (loss) per share is
computed using the weighted-average number of outstanding common
shares during the applicable period. Diluted earnings (loss)
per share is computed using the weighted average number of
common and common stock equivalent shares outstanding during the
period. Common stock equivalent shares are excluded from the
computation if their effect is antidilutive.
Recognition of revenue - Revenues are recognized when the
Company's products are shipped.
Recognition of expenses - Expenses incurred from costs of
revenues and operating expenses are recorded in the period incurred.
Advertising costs - Advertising costs are charged to operations
as they are incurred. Advertising expense incurred for the
years ended December 31, 2000 and 1999 were approximately
$39,000 and $31,000, respectively.
Stock-based compensation - The Company accounts for stock-based
employee compensation arrangements in accordance with provisions
of Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees," and complies with
the disclosure provisions of Statements of Financial Accounting
Standards (SFAS) No. 123, "Accounting for Stock-Based
Compensation." Under APB No. 25, compensation expense is based
on the difference, if any, on the date of the grant, between the
fair value of the Company's stock and the exercise price. The
Company accounts for stock issued to non-employees in accordance
with the provisions of SFAS No. 123 and the Emerging Issues Task
Force ("EITF") Issue No. 96-18.
Income taxes - The Company accounts for its income taxes in
accordance with SFAS No. 109, which requires recognition of
deferred tax assets and liabilities for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities
and their respective tax bases and tax credit carryforwards.
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. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period
that includes the enactment date.
Impairment of long-lived assets to be disposed - The Company
continually monitors events and changes in circumstances that
could indicate carrying amounts of long-lived assets may not be
recoverable. When such events or changes in circumstances are
present, the Company assesses the recoverability of long-lived
assets by determining whether the carrying value of such assets
will be recovered through undiscounted expected future cash
flows. If the total of the future cash flows is less than the
carrying amount of those assets, the Company recognizes an
impairment loss based on the excess of the carrying amount over
the fair value of the assets. Assets to be disposed are
reported at the lower of the carrying amount or the fair value
less costs to sell.
Recent accounting pronouncements - In December 1999, the
Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in
Financial Statements." SAB No. 101 provides guidance for
revenue recognition under certain circumstances. The
implementation of SAB No. 101 during fiscal year 2000 did not
have a material impact on the Company's financial statements.
In November 1999, the EITF commenced discussions on EITF No. 99-
17, "Accounting for Advertising Barter Transactions." The EITF
provides guidance on the recognition of Internet barter
advertising revenues and expenses under various circumstances.
The EITF reached a conclusion that revenues and expenses from
advertising barter transactions should be recognized at the fair
value of the advertising surrendered or received only when an
entity has a historical practice of receiving or paying cash for
similar advertising transactions. The adoption of EITF No. 99-
17 during fiscal year 2000 did not have a material impact on the
Company's financial statements.
2. FIXED ASSETS
Fixed assets consist of the following as of December 31, 2000:
Furniture and fixtures $ 4,486
Machinery and equipment 42,659
47,145
Less: accumulated depreciation 16,020
$ 31,125
3. INTANGIBLE ASSETS
Intangible assets consist of the following as of December 31, 2000:
Vendor List $ 428,188
Customer List 428,188
License 47,775
904,151
Less: accumulated amortization 254,525
$ 649,626
4. EMPLOYMENT AGREEMENTS
In September 1998, the Company entered into a three year
employment agreement (the "Agreement") with the Secretary of the
Company. The Agreement includes an option for an extension of
two additional years under the same terms and conditions upon
the mutual agreement of the Company and its Secretary. The
Agreement provides the Secretary with a base salary of $50,000
and provides for retirement benefit contributions at the maximum
amount allowable. In addition, a $250,000 death benefit is
payable by the Company in the event of the employee's death
during the term of the agreement. The Company is not insured
against such eventuality.
On September 1, 1998, the Company entered into a three year
employment agreement (the "Agreement") with the President of the
Company. The Agreement includes an option for an extension of
two additional years under the same terms and conditions upon
the mutual agreement between the Company and the President. The
Agreement provides the President with a base salary of $125,000
plus a bonus that is subject to the approval of the Board of
Directors. The President's bonus is predicated upon certain
benchmark performance goals. In addition, the President is to
receive coverage under a medical plan and provider selected by
the Company for ten years from the inception of the agreement
regardless of the status of his employment relationship with the
Company. The Agreement also provides a $1,000,000 death benefit
payable by the Company in the event of the employee's death
during the term of the agreement. The Company is not insured
against such eventuality.
In December 1999, the Company entered into a one-year employment
agreement with the General Manager of the Company. The
Agreement provides the General Manager with a base salary of
$72,000 per year plus commissions of 5% of gross sales and a
bonus of 50,000 shares of the Company's common stock. The
Agreement also provides the General Manager with 25,000 shares
of common stock per quarter for each quarter ended in the year 2000.
5. FAIR VALUES OF FINANCIAL INSTRUMENTS
The carrying amounts of cash, accounts receivable, inventory,
accounts payable, and accrued liabilities approximate fair value
because of the short-term maturity of these instruments.
6. RELATED PARTY TRANSACTIONS
In May 1999, the Company entered into a consulting agreement
with MFSNet.com which is owned and operated by a sibling of the
president and CEO of the Company. The agreement is for
networking and website development related services and provides
for payment of 100,000 shares of the Company's common stock for
services performed. These shares were issued to MFSNet.com in
March 2000. The transaction has been valued at $28,613 based on
the value of the services rendered.
As of December 31, 2000, the Company owes $48,069 to an entity
owned by the President and stockholder of the Company. The
amount is unsecured, due on demand, and bearing an interest rate of 8%.
7. EARNINGS PER COMMON SHARE
Basic earnings (loss) per common share is calculated by dividing
net income by the weighted average number of common shares
outstanding during the period. Diluted earnings (loss) per
common share is calculated by dividing net income by the sum of
the weighted average number of common shares outstanding, plus
all additional common shares that would have been outstanding if
potentially dilutive securities or common stock equivalents had
been issued.
The following table reconciles the number of shares used in the
earnings per share calculations:
December 31,
2000 1999
Weighted average common shares outstanding- basic 14,658,194 13,003,135
Effect of dilutive securities:
Stock options 750,000 1,500,000
Weighted average common shares outstanding - diluted 15,408,194 14,503,135
8. STOCKHOLDERS' EQUITY
In October 1998, the President and Secretary of the Company were
granted options to purchase 1,500,000 and 750,000 shares of the
Company's common stock, respectively. The options to purchase
500,000 and 250,000 shares, respectively, vest on January 1 and
expire on December 31 of each year for three consecutive years.
The exercise price of each option is $0.50, which exceeded the
fair value of the Company's common stock at the date of grant.
Consequently, no expense was recognized in connection with the
issuance of these options.
The following table summarizes the Company's stock option activity:
Number of Weighted
Shares Average
Exercise
Price
Balance, December 31, 1998 2,250,000 0.50
Options granted and assumed - -
Options expired 390,000 0.50
Options canceled - -
Options exercised 360,000 0.50
Balance, December 31, 1999 1,500,000 0.50
Options granted and assumed - -
Options expired 750,000 0.50
Options canceled - -
Options exercised - -
Balance, December 31, 2000 750,000 0.50
The following table summarizes information about options
outstanding and exercisable at December 31, 2000:
Shares Underlying Options Outstanding Shares Underlying
Options Exercisable
Weighted
Shares Average Weighted Shares Weighted
Underlying Remaining Average Underlying Average
Options Contractual Exercise Options Exercise
Exercise Price Outstanding Life Price Exercisable Price
$0.50 750,000 1 year $0.50 750,000 $ 0.50
9. INCOME TAXES
Provision for income tax benefit (expense) in the statements of
operations includes the following amounts:
For the Year Ended December 31
2000 1999
State and Federal:
Current (800) (69,559)
Deferred 141,086 (226,888)
Total 140,287 (296,447)
The provision for income taxes differs from the amount computed
by applying the statutory federal income tax rate to income
before taxes. As of December 31, 1998, the Company had a net
operating loss carryforward of $225,405 of which the entire
amount was utilized in 1999.
As of December 31, 2000, the Company has a net operating loss
carryforward of approximately $408,000 for tax purposes, which
will be available to offset future taxable income. If not used,
this carryforward will expire in the year 2020.
The tax effects of temporary differences that give rise to
significant portions of deferred tax assets and liabilities at
December 31, 2000 and 1999 are as follows:
December 31
2000 1999
Deferred tax assets:
Net operating loss carryover 138,699 -
Bad debt expense - -
138,699 -
Deferred tax liabilities:
Depreciation expense (2,137) (4,525)
(2,137) (4,525)
Total net deferred tax assets (liabilities) 136,562 (4,525)
The Company considers recording a valuation allowance in
accordance with the provisions of SFAS No. 109 to reflect the
estimated amount of deferred tax assets which may not be
realized. In assessing the realizability of deferred tax
assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will not be
realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during
the periods in which those temporary differences become
deductible. Management considers the scheduled reversal of
deferred tax liabilities, projected future taxable income and
tax planning strategies in making this assessment.
A reconciliation of income taxes at federal and state statutory
rates to the Company's provision for income tax benefit
(expense) is as follows:
For the Year Ended
December 31
2000 1999
Federal income tax at statutory rates 143,493 (278,626)
State income tax at statutory rates (800) (17,541)
Non-deductible expenses (2,406) (280)
140,287 (296,447)
10. CANCELLATION OF STOCK AND FORGIVENESS OF DEBT
In December 1999, two major stockholders and employees of the
Company entered into a Compromise and Settlement Agreement,
whereby, returning 2,000,000 shares of the Company's common
stock to be cancelled due to a breach in their employment
contract and covenant not to compete. The 2,000,000 shares of
common stock were originally issued for consulting services
totaling $276,000 during 1998. The remaining balance on a note
payable approximating $446,000 related to the CP Transaction, as
discussed in Note 1, was cancelled and recorded as a forgiveness
of debt. The remaining unamortized covenant not to compete and
goodwill have been written-off as of December 31, 1999.
11. COMMITMENTS AND CONTINGENCIES
Lease obligations - The Company has operating leases for all its
facilities. Future minimum lease payments under the operating
leases for the facilities as of December 31, 2000 are as
follows:
2001 $ 58,250
Rental expense, resulting from operating lease agreements,
approximated $84,000 and $86,000 for the years ended December
31, 2000 and 1999, respectively.
In December 1999, the Company entered into a 48 month consulting
agreement with Rio Telecom, Inc. ("Rio") whereby Rio is to
receive $5,260 per month for 48 months and 100,000 shares of the
Company's common stock per month for ten months both beginning
in January 2000. As of December 31, 2000, 200,000 of the
1,000,000 shares of the Company's common stock has been issued
to Rio leaving 800,000 shares due to Rio as of December 31,
2000. Since the consulting agreement spans over 48 months, Rio
has earned 250,000 of the 1,000,000 shares thereby leaving
50,000 shares as a liability as of December 31, 2000. For the
purposes of this transaction the stock has been valued at
$0.4531 per common share using an 11 day average (5 days before
and 5 days after the date of the agreement) of the closing price
of the Company's common stock. As of December 31, 2000, a
liability of $22,665 for the 50,000 shares Rio earned is shown
on the balance sheet as due to consultant.
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
(a) Effective on November 8, 1999, the independent
accountants who were previously engaged as the principal
accountants to audit California Telephone Company, Inc.'s
financial statements, Kelley & Company, were dismissed. The
decision to change accountants was approved by the Board of
Directors. This accountants' reports for December 31, 1998 and
1997 neither contained an adverse opinion or a disclaimer of
opinion, nor was qualified or modified as to uncertainty, audit
scope, or accounting principles.
There were no "reportable events" as described in Item
304(a)(1)(iv)(B)1 through 3 of Regulation S-B that occurred
within California Telephone Company, Inc.'s two most recent
fiscal years and the subsequent interim period preceding the
former accountant's dismissal. In addition, during such periods
there were no disagreements with the former accountant on any
matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure. The
company has received a letter from Kelly & Company regarding its
agreement with the statements made by the company in response to
Item 304(a)(1) of Regulation S-B.
(b) Effective on January 11, 2000, the firm of L.L.
Bradford & Company was engaged to serve as the new principal
accountants to audit the Company's financial statements for the
1998 and 1999 fiscal years. The decision to retain the new firm
was approved by the Board of Directors. During the company's
two most recent fiscal years, and the subsequent interim period
prior to engaging those accountants, neither the company (nor
someone on its behalf) consulted the newly engaged accountants
regarding any matter in connection with the application of
accounting principles to a specific completed or contemplated
transaction, or the type of audit opinion that might be rendered
on the company's financial statements.
AVAILABLE INFORMATION
The company has filed with the U.S. Securities and Exchange
Commission, Washington, D.C. 20549, a Registration Statement on
Form SB-2 under the Securities Act of 1933 with respect to the
shares of common stock offered by this prospectus. This
prospectus does not contain all of the information set forth in
the registration statement and the exhibits and schedules filed
with the registration statement. Certain items are omitted in
accordance with the rules and regulations of the Commission.
For further information with respect to the company and the
common stock offered by this prospectus, reference is made to
the registration statement and the exhibits and schedules filed
with the registration statement. Statements contained in this
prospectus as to the contents of any contract or any other
document referred to are not necessarily complete, and in each
instance, reference is made to the copy of such contract or
other document filed as an exhibit to the registration
statement, each such statement being qualified in all respects
by such reference.
A copy of the registration statement, and the exhibits
and schedules filed with it, may be inspected without charge at
the public reference facilities maintained by the Commission in
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
copies of all or any part of the registration statement may be
obtained from such offices upon the payment of the fees
prescribed by the Commission. The public may obtain information
on the operation of the public reference room by calling the
Commission at 1 (800) SEC-0330. The Commission maintains a
World Wide Web site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission, including the company. The
address of the site is http://www.sec.gov. The registration
statement, including all its exhibits and any amendments, has
been filed electronically with the Commission.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Information on this item is set forth in the propsectus
under the heading "Disclosure of Commission Position on
Indemnification for Securities Act Liabilities."
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the fees and expenses in
connection with the issuance and distribution of the securities
being registered, all of which are being paid by One Touch*:
Securities and Exchange Commission registration fee $ 36
Transfer agent's fees 1,000
Printing and engraving expenses 1,500
Legal fees and expenses 25,000
Accounting fees and expenses 5,000
State blue sky fees 5,000
Total $ 37,536*
* All fees, except the Securities and Exchange Commission
registration fee, are estimated.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES; USE OF PROCEEDS FROM
REGISTERED SECURITIES
Other than as set forth below, during the last three years
there have not been any sales of unregistered equity securities
of One Touch or its predecessors (One Touch's common stock
commenced trading on the Over the Counter Bulletin Board on
October 8, 1999). Except as noted, no commissions or fees were
paid in connection with these sales. All of the sales through
April 5, 1999 were undertaken underthe limited offering
exemption from registration under the Securities Act of 1933 as
provided in Rule 504 under Regulation D as promulgated by the
U.S. Securities and Exchange Commission. All offerings made
after that date were undertaken under Rule 506 of Regulation D.
The Rule 506 offerings also were made only to sophisticated
investors; that is, the investor either alone or with his
purchaser representative(s) has such knowledge and experience in
financial and business matters that he is capable of evaluating
the merits and risks of the prospective investment, or the
issuer reasonably believes immediately prior to making any sale
that such purchaser comes within this description.
(a) During the period of February 7, 1998 to August 30,
1998, a total of 1,709,059 units were sold at $0.50 per unit
($0.37 per share net of offering costs, including commissions).
Each unit consisted of one share of common stock and one-half
warrant (each full warrant exercisable upon issuance for a
period of two years at $0.50 per share. This offering raised a
gross total of $854,529 from 75 investors (total of $624,954
after deduction of offering costs totaling $229,875, including a
finder's fee paid of $190,000).
(b) In October 1998, C. Jay Smith, the president of One
Touch, was granted options to purchase 1,500,000 shares of One
Touch's common stock. The options to purchase 500,000 shares
vest on January 1 and expire on December 31 of each year for
three consecutive years. The exercise price of each option is
$0.50 per share.
(c) In October 1998, Marc R. Tow, a former director of One
Touch, was granted options to purchase 750,000 shares of One
Touch's common stock. The options to purchase 250,000 shares
vest on January 1 and expire on December 31 of each year for
three consecutive years. The exercise price of each option is
$0.50 per share.
(d) During the fiscal year ended December 31, 1998, a
total of 5,394,601 shares of common stock were issued for
services valued at $360,091 (weighted average of $0.07 per
share) to two accredited investors.
(e) In August 1999, One Touch consummated an agreement to
acquire all of the outstanding capital stock of California
Telephone Company, Inc., a Nevada Corporation, in exchange for
10,914,659 shares of One Touch's common stock. Prior to this
transaction, One Touch was a non-operating shell company with no
operations, assets, liabilities, and 5,078,740 shares of common
stock issued and outstanding; California Telephone Company, Inc.
was an operational privately held company. The number of
sharesholders of California Telephone Company, Inc. was 113.
This transaction was done as a straight share exchange with no
funds involved.
(f) At various times during the fiscal year ended December
31, 1999, a total of 360,000 shares of common stock were issued
to Mr. Smith and Mr. Tow based on the exercise of options
previously granted; these options were exercised in exchange for
services rendered to One Touch valued at $180,000 (weighted
average of $0.50 per share).
(g) On March 1, 2000, One Touch issued 200,000 shares of
common stock to Rio Telecom Inc. for consulting services to One
Touch valued at $90,620 (weighted average of $0.45 per share).
(h) On March 1, 2000, One Touch issued 50,000 shares of
common stock to Richard Luna as a bonus for signing an
employment with One Touch valued at $28,613 (weighted average of
$0.29 per share).
(i) On March 1, 2000, One Touch issued 100,000 shares of
common stock under the Electronic Commerce Architecture Project
between One Touch and MFSNet.Com, dated May 1, 1999.
(j) On November 1, 2000, One Touch issued a total of
75,000 shares of common stock to an individual for legal
services to One Touch valued at $15,000 (weighted average of
$0.20 per share).
ITEM 27. EXHIBITS
The exhibits required by Item 601 of Regulation S-B, and an
index thereto, are attached.
ITEM 28. UNDERTAKINGS
The undersigned company hereby undertakes to:
(a) (1) File, during any period in which it offers or
sells securities, a post-effective amendment to this
registration statement to:
(i) Include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) Reflect in the prospectus any facts or
events which, individually or together, represent a
fundamental change in the information in the
registration statement; and Notwithstanding the
forgoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation From the low or high end
of the estimated maximum offering range may be
reflected in the form of prospects filed with the U.S.
Securities and Exchange Commission underRule 424(b)
if, in the aggregate, the changes in the volume and
price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement.
(iii) Include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities
Act of 1933, treat each post-effective amendment as a new
registration statement of the securities offered, and the
offering of the securities at that time to be the initial
bona fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at
the end of the offering.
(e) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the small business issuer
under the foregoing provisions, or otherwise, the small business
issuer has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in
the Securities Act of 1933 and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the small business issuer
of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the small
business issuer will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act
of 1933, One Touch certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
SB-2 and authorized this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorize, in the
City of Anaheim, State of California, on June 15, 2001.
One Touch Total Communications, Inc.
By: /s/ C. Jay Smith
C. Jay Smith, President
Special Power of Attorney
The undersigned constitute and appoint C. Jay Smith their
true and lawful attorney-in-fact and agent with full power of
substitution, for him and in his name, place, and stead, in any
and all capacities, to sign any and all amendments, including
post-effective amendments, to this Form SB-2 registration
statement, and to file the same with all exhibits thereto, and
all documents in connection therewith, with the U.S. Securities
and Exchange Commission, granting such attorney-in-fact the full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all that
such attorney-in-fact may lawfully do or cause to be done by
virtue hereof.
Underthe requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the date indicated:
Signature Title Date
/s/ C. Jay Smith President/Treasurer June 15, 2001
C. Jay Smith (principal financial and
accounting officer)/Director
/s/ Paul Palant Director June 15, 2001
Paul Palant
/s/ Michael Smith Director June 15, 2001
Michael Smith
EXHIBIT INDEX
Exhibit Description
No.
2 Agreement for Exchange of Common Stock between the company
and California Telephone Company, Inc., dated August 6, 1999
(see below).
3.1 Articles of Incorporation, dated May 9, 1986 (see below).
3.2 Certificate of Amendment of Articles of Incorporation,
dated July 30, 1986 (see below).
3.3 Amended Articles of Incorporation, dated June 27, 1989 (see below).
3.4 Certificate of Amendment of Articles of Incorporation,
dated December 3, 1990 (see below).
3.5 Amended Articles of Incorporation, dated May 24, 1999 (see below).
3.6 Articles of Merger (including a name change), dated
September 22, 1999 (see below).
3.7 Certificate of Amendment to Articles of Incorporation,
dated February 28, 2001 (see below).
3.8 Bylaws, dated October 25, 1999 (see below).
5. Opinion Re: Legalitiy (see below).
10.1 Employment Agreement between One Touch and C. Jay Smith,
dated September 1, 1998 (see below)
10.2 Electronic Commerce Architecture Project between One Touch
and MFSNet.Com, dated May 1, 1999 (see below).
10.3 Employment Agreement between One Touch and Richard G.
Luna, dated December 6, 1999 (see below).
16 Letter on change in certifying accountant (see below).
23.1 Consent of Accountants (see below).
23.2 Consent of Counsel (see below).
24 Special Power of Attorney (see signature page).
EX-2
AGREEMENT FOR THE EXCHANGE OF COMMON STOCK
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "1933
ACT"), NOR REGISTERED UNDER ANY STATE SECURITIES LAW, AND ARE
"RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144
UNDER THE 1933 ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, THE AVAILABILITY
OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
AGREEMENT made this 6th day of August, 1999, by and between
NetTel, Inc., a Nevada corporation, (the "ISSUER") and the
individuals listed in Exhibit A attached hereto, (the
"SHAREHOLDERS"), which SHAREHOLDERS own all of the issued and
outstanding shares of CALIFORNIA TELEPHONE COMPANY, INC., a
Nevada corporation. ("CTC")
In consideration of the mutual promises, covenants, and
representations contained herein, and other good an valuable
consideration,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. EXCHANGE OF SECURITIES. Subject to the terms and
conditions of this Agreement, the ISSUER agrees to issue to
SHAREHOLDERS, 10,903,660 shares of the common stock of ISSUER,
$.001 par value (the "Shares"), in exchange for 100% of the
issued and outstanding shares of CTC, such that CTC shall become
a wholly owned subsidiary of the ISSUER.
2. REPRESENTATIONS AND WARRANTIES. ISSUER represents and
warrants to SHAREHOLDERS and CTC the following:
i. Organization. ISSUER is a corporation duly organized,
validly existing, and in good standing under the laws of
Nevada, and has all necessary corporate powers to own
properties and carry on a business, and is duly qualified
to do business and is in good standing in Nevada. All
actions taken by the Incorporators, directors and
shareholders of Issuer HAVE BEEN VALID AND IN ACCORDANCE
WITH THE LAWS OF THE state of Nevada.
ii. Capital. The authorized capital stock of ISSUER
consists of 20,000,000 shares of common stock, $.001 par
value, of which 5,078,740 are issued and outstanding. All
restrictions and legal or equitable rights of others not a
party to this Agreement. At closing, there will be no
outstanding subscriptions, options, rights, warrants,
convertible securities, or other agreements or commitments
obligating ISSUER to issue or to transfer from treasury any
additional shares of its capital stock. None of the
outstanding shares of ISSUER are subject to any stock
restriction agreements. All of the shareholders of ISSUER
have valid title to such shares and acquired their shares
in a lawful transaction and in accordance with the laws of Nevada.
iii. Absence of Changes. Since the date of the financial
statements, there has not been any change in the financial
condition or operations of ISSUER, except changes in the
ordinary course of business, which changes have not in the
aggregate been materially adverse.
iv. Liabilities. ISSUER does not have any debt,
liability, or obligation of any nature, whether accrued,
absolute, contingent, or otherwise, and whether due or to
become due, that is not reflected on the ISSUERS' financial
statement. ISSUER is not aware of any pending, threatened
or asserted claims, lawsuits or contingencies involving
ISSUER or its common stock. There is no dispute of any
kind between ISSUER and any third party, and no such
dispute will exist at the closing of this Agreement. At
closing, ISSUER will be free from any and all liabilities,
liens, claims and/or commitments.
v. Ability to Carry Out Obligations. ISSUER has the
right, power, and authority to enter into and perform its
obligations under this Agreement. The execution and
delivery of this Agreement by ISSUER and the performance by
ISSUER of its obligations hereunder will not cause,
constitute, or conflict with or result in (a) any breach or
violation or any of the provisions of or constitute a
default under any license, indenture, mortgage, charter,
instrument, articles of incorporation, bylaw, or other
agreement or instrument to which ISSUER or its shareholders
are a party, or by which they may be bound, nor will any
consents or authorizations of any party other than those
hereto be required, (b) an event that would cause ISSUER to
be liable to any party, or (c) an event that would result
in the creation or imposition or any lien, charge or
encumbrance on any asset of ISSUER OR upon the securities
of ISSUER to be acquired by SHAREHOLDERS.
vi. Full Disclosure. None of representations and
warranties made by the ISSUER, or in any certificate or
memorandum furnished or to be furnished by the ISSUER,
contains or will contain any untrue statement of a material
fact, or omit any material fact the omission of which would
be misleading.
vii. Contract and Leases. ISSUER is not currently carrying
on any business and is not a party to any contract,
agreement or lease. No person holds a power of attorney
from ISSUER.
viii. Compliance with Laws. ISSUER has complied with,
and is not in violation of any federal, state, or local
statute, law, and/or regulation pertaining to ISSUER.
ISSUER has complied with all federal and state securities
laws in connection with the issuance, sale and distribution
of its securities.
ix. Litigation. ISSUER is not (and has not been) a party
to any suit, action, arbitration, or legal, administrative,
or other proceeding, or pending governmental investigation.
To the best knowledge of the ISSUER, there is no basis for
any such action or proceeding and no such action or
proceeding is threatened against ISSUER and ISSUER is not
subject to or in default with respect to any order, writ,
injunction, or decree of any federal, state, local, or
foreign court, department, agency or instrumentality.
x. Conduct of Business. Prior to the closing, ISSUER
shall conduct its business in the normal course, and shall
not (1) sell, pledge, or assign any assets (2) amend its
Articles of Incorporation or Bylaws, (3) declare dividends,
redeem or sell stock or other securities, (4) incur any
liabilities, (5) acquire or dispose of any assets, enter
into any contract, guarantee obligations of any third
party, or (6) enter into any other transaction.
xi. Corporate Documents. Copies of each of the following
documents, which are true complete and correct in all
material respects, will be attached to and made a part of
this Agreement:
(1) Articles of Incorporation;
(2) Bylaws;
(3) Minutes of Shareholders Meetings;
(4) Minutes of Directors Meetings;
(5) List of Officers and Directors;
(6) stock register and stock records of ISSUER and a
current, accurate list of ISSUER's shareholders.
xii. Documents. All minutes, consents or other documents
pertaining to ISSUER to be delivered at closing shall be
valid and in accordance with the laws of Nevada.
xiii. Title. The Shares to be issued to SHAREHOLDERS
Will be, at closing, free and clear of all liens, security
interests, pledges, charges, claims, encumbrances and
restrictions of any kind. None of such Shares are or will
be subject to any voting trust or agreement. No person
holds or has the right to receive any proxy or similar
instrument with respect to such shares, except as provided
in this Agreement, the ISSUER is not a party to any
agreement which offers or grants to any person the right to
purchase or acquire any of the securities to be issued to
SHAREHOLDERS. There is no applicable local, state or
federal law, rule, regulation, or decree which would, as a
result of the issuance of the Shares to SHAREHOLDERS,
impair, restrict or delay SHAREHOLDERS' voting rights with
respect to the Shares.
3. SHAREHOLDERS and CTC represent and warrant to ISSUER the
following:
i. Organization. CTC is a corporation duly organized,
validly existing, and in good standing under the laws of
Nevada, has all necessary corporate powers to own
properties and carry on a business, and is duly qualified
to do business and is in good standing in Nevada. All
actions taken by the Incorporators, directors and
shareholders of CTC have been valid and in accordance with
the laws of Nevada.
ii. Shareholders and Issued Stock. Exhibit A annexed
hereto sets forth the names and share holdings of 100% of
CTC's shareholders.
iii. Listing Stock for Trading. Upon closing, SHAREHOLDERS
AND CTC shall take all steps reasonably necessary to get
the ISSUER's common stock listed for trading in NASD
Automated Bulletin Board and to, as soon as practicably
possible, have the company listed with Standard and Poors
or Moodys in their Accelerated Corporate Report.
iv. Counsel. SHAREHOLDERS and CTC represent and warrant
that prior to Closing, that they are represented by
independent counsel or have had the opportunity to retain
independent counsel to represent them in this transaction
and that prior to Closing, the law offices of Gary Wykidale
& Associates has acted as exclusive counsel to the ISSUER
and has not represented either the SHAREHOLDERS or CTC in
any manner whatsoever.
4. INVESTMENT INTENT. SHAREHOLDERS agree that the Shares
being issued pursuant to this Agreement may be sold, pledged,
assigned, hypothecate or otherwise transferred, with or without
consideration (a "Transfer"), only pursuant to an effective
registration statement under the Act, or pursuant to an
exemption from registration under the Act, the availability of
which is to be established to the satisfaction of ISSUER.
SHAREHOLDERS agrees, prior to any Transfer, to give written
notice to ISSUER expressing his desire to effect the transfer
and describing the proposed transfer.
5. CLOSING. The closing of this transaction shall take place
at the law offices of Marc R. Tow, 3900 Birch St., Suite 113,
Newport Beach, California.
6. DOCUMENTS TO BE DELIVERED AT CLOSING.
i. By the ISSUER:
(1) Board of Directors Minutes authorizing the
issuance of a certificate or certificates for
10,920,227 Shares, registered in the names of the
SHAREHOLDERS equal to their pro-rata holdings in CTC.
(2) The resignation of all officers of ISSUER.
(3) A Board of Directors resolution appointing such
person as SHAREHOLDERS designate as a director(s) of ISSUER.
(4) All of the business and corporate records of
ISSUER, including but not limited to correspondence
files, bank statements, checkbooks, savings account
books, minutes of shareholder and directors meetings,
financial statements, shareholder listings, stock
transfer records, agreements and contracts.
(5) Such other minutes of ISSUER's shareholders or
directors as may reasonably be required by SHAREHOLDERS.
(6) An Opinion Letter from ISSUER's Attorney
attesting to the validity and condition of the ISSUER.
ii. BY SHAREHOLDERS AND CTC:
(1) Delivery to the ISSUER, or to its Transfer Agent,
the certificates representing 100% of the issued and
outstanding stock of CTC.
7. REMEDIES.
i. Arbitration. Any controversy or claim arising out of,
or relating to, this Agreement, or the making, performance,
or interpretation thereof, shall be settled by arbitration
in Orange County, California in accordance with the
Commercial Rules of the American Arbitration Association
then existing. The arbitrator assigned shall have
authority and power to decide all arbitratable issues.
Judgment on the arbitration award may be entered in any
court having jurisdiction over the subject matter of the
controversy. The prevailing party in such claim or
controversy shall be entitled to recover all costs and
expenses of such claim or controversy, including attorneys
fees from the non-prevailing party.
8. MISCELLANEOUS.
i. Captions and Headings. The Article and paragraph
headings throughout this Agreement are for convenience and
reference only, and shall in no way be deemed to define,
limit, or add to the meaning of any provision of this Agreement.
ii. No Oral Change. This Agreement and any provision
hereof, may not be waived, changed, modified, or discharged
orally, but only by an agreement in writing signed by the
party against whom enforcement of any waiver, change,
modification, or discharge is sought.
iii. Non Waiver. Except as otherwise expressly provided
herein, no waiver of any covenant, condition, or provision
of this Agreement shall be deemed to have been made unless
expressly in writing and signed by the party against whom
such waiver is charged; and (I) the failure of any party to
insist in any one or more cases upon the performance of any
of the provisions, covenants, or conditions of this
Agreement or to exercise any option herein contained shall
not be construed as a waiver or relinquishment for the
future of any such provisions, covenants, or conditions,
(ii) the acceptance of performance of anything required by
this Agreement to be performed with knowledge of the breach
or failure of a covenant, condition, or provision hereof
shall not be deemed a waiver of such breach or failure, and
(iii) no waiver by any party of one breach by another party
shall be construed as a waiver with respect to any other or
subsequent breach.
iv. Time of Essence. Time is of the essence of this
Agreement and of each and every provision hereof.
v. Entire Agreement. This Agreement contains the entire
Agreement and understanding between the parties hereto, and
supersedes all prior agreements and understandings.
vi. Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, each of which
shall be deemed an original, but all of which together
shall constitute one and the same instrument.
vii. Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and
shall be deemed to have been duly given on the date of
service if served personally on the party to whom notice is
to be given, or on the third day after mailing if mailed to
the party to whom notice is to be given, by first class
mail, registered or certified, postage prepaid, and
properly addressed, and by fax, as follows:
ISSUER: Charles Maranto
3900 Birch St., Suite 113
Newport Beach, CA 92660
Copy to: Marc R. Tow, Esq.
3900 Birch St., Suite 113
Newport Beach, CA 92660
CTC: C. Jay Smith
1636 Stadium View
Anaheim, CA 92806
IN WITNESS WHEREOF, the undersigned has executed this
Agreement this 6th day of August 1999.
NetTel, Inc. California Telephone Company, Inc.
By: /s/ Charles Maranto By: /s/ C. Jay Smith
Charles Maranto, Secretary/Director C. Jay Smith, President/Director
EX-3.1
ARTICLES OF INCORPORATION
OF
ALTERNATE FUEL, INC.
We, the undersigned, have voluntarily associated ourselves
together for the purpose of forming a corporation under the laws
of State of Nevada related to private corporations, and to that
end do hereby adopt articles of incorporation as follows:
ARTICLE I. NAME: The name of the corporation is: ALTERNATE FUEL, INC.
ARTICLE II. LOCATION: The principal office of the
corporation is to be located at 610 So. Rancho Drive, Suite D30,
Las Vegas Nevada 89106.
The corporation may also maintain offices at such other
places within or outside the State of Nevada. Corporate business
of every kind and nature may be conducted and meetings of the
directors and stockholders held outside the State as well as
inside the State.
ARTICLE III. PURPOSE: The nature of the business, or
objects or purposes to be transacted, prompted, or carried on by
the corporation are to engage in any lawful activity.
ARTICLE IV. CAPITAL STOCK: The total number of shares
that the corporation may issue is 2,500 shared of common stock
with no par value per share. Any and all shares issued by the
corporation, the fixed consideration for which has been paid or
delivered, shall be deemed fully paid stock and not liable for
any further call or assessment.
ARTICLE V: DIRECTORS: The members of the governing
board of the corporation shall be styled directors. The number
of directors constituting the first board of directors shall be
three, who shall serve until their successors are duly elected
and qualified. Their names and addresses are as set out below.
The number of directors may be increased or decreased from
time to time in such manner as shall be provided by the By-Laws
of the corporation. The number shall never be less than three or
more than nine, except that in the event there are less than
three stockholders, there may be less than three directors.
Directors need not be stockholders, but shall be of full
age, and at least one of them shall be a citizen of the United States.
NAME ADDRESSES
Burla Sue Peters 601 So. Rancho Drive
Las Vegas, Nevada 89106
Cary Baker 601 So. Rancho Drive
Las Vegas, Nevada 89106
Cindy Laub 601 So. Rancho Drive
Las Vegas, Nevada 89106
ARTICLE VI. ASSESSMENTS: The capital stock of the
corporation, after the amount of the subscription price, or par
value, ahs been paid in money, property or services, as the
Directors shall determine, shall not be subject to assessment to
pay the debts of the corporation, nor for any other purpose, and
not stock issued as full paid shall be assessable or assessed,
and the Articles of Incorporation shall not be amended this particular.
ARTICLE VIII. INCORPORATIONS: The names and post office
addresses of the incorporates, which will shall be three in
number, signing the Articles of Incorporation, are as set forth
in paragraph V, above.
ARTICLE VIII. TERM: The corporation shall have perpetual existence.
/s/ Burla Sue Peters
Burla Sue Peters
/s/ Cary Baker
Cary Baker
/s/ Cindy Laub
Cindy Laub
State of Nevada
SS
County of Clark
On this 9th day of May, 1986, personally appeared before
me, a Notary Public in and for said County and State, Burla Sue
Peters, Cary Baker, and Cindy Laub, known to me to be the
persons described in and who executed the foregoing Articles of
Incorporation, and who each acknowledged to me that they
executed the same freely and voluntarily.
WITNESS MY HAND AND OFFICIAL SEAL the day and year first
above written.
By: /s/
Notary Public in and for said County and State
EX-3.2
CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
ALTERNATE FUEL, INC.
The undersigned do hereby declare and certify that they (1)
they comprise not fewer than two-thirds of the original
incorporators of ALTERNATE FUEL, INC. a Corporation organized
and existing under the laws of the State Of Nevada; (2) the
original Articles of Incorporation of said corporation were
filed with the Secretary of State on May 13, 1986, and with the
County Clerk of on May 20, 1986; and (3) to the date of this
Certificate, no part of the capital of said corporation has been paid.
The undersigned do further declare and certify that at a
meeting of the incorporators of said corporation duly called and
held on July 29, 1986, the following resolution was adopted:
RESOLVED, that Article IV of the Articles of Incorporation
of Alternate Fuel, Inc., be amended to read as follows:
CAPITAL STOCK: The total authorized capital stock of the
corporation shall consist of fifty million (50,000,000)
shares of common stock at $0.001 par value per share.
The undersigned do further declare and certify that they
have made and filed this Certificate pursuant to the foregoing resolution.
DATED this 30th day of July 1986.
/s/ Burla Sue Peters
Burla Sue Peters
/s/ Cary Baker
Cary Baker
/s/ Cindy Laub
Cindy Laub
State of Nevada
SS
County of Clark
On this 30th day of July, 1986, personally appeared before
me, a Notary Public in and for said County and State, Burla Sue
Peters, Cary Baker, and Cindy Laub, known to me to be the
persons described in and who executed the foregoing Certificate
of Amendment of Articles of Incorporation, and who each
acknowledged to me that they executed the same freely and voluntarily.
WITNESS MY HAND AND OFFICIAL SEAL the day and year first above written.
By /s/
Notary Public in and for said County and State
EX-3.3
ARTICLES OF INCORPORATION OF
ALTERNATE FUEL, INC.
Pursuant to Sections 78.385, 78.390 and 78.395 of the
Nevada Revised Statutes, we, the undersigned officers of
Alternate Fuel, Inc. (the "Corporation") do hereby certify the following:
1. That we are the duly- elected President and Secretary,
respectively, of the Corporation;
2. That the date of filing of the original Articles of
Incorporation of the Corporation with the Nevada Secretary of
State was May 13, 1986, and the date of the filing with the
Clark County Clerk was May 20, 1986;
3. That the date of filing of the original Amended
Articles of Incorporation of the Corporation, dated July 30,
1996, with the Nevada Secretary of Sate was August 8, 1986.
4. That the amendment to the Articles Of Incorporation
was passed by the a majority of vote by all the shareholders of
the Corporation by written consent of all the Shareholders of
the Corporation, dated June 26, 1989, there being 10,000,000
shares issued, outstanding and entitled to vote in favor of the
amendment; and
5. That the Articles of Incorporation as amended are so
designated pursuant to NRS 78.395 in the Amended Articles of
Incorporation, set forth in Exhibit A attached hereto.
/s/ Eric E. Gilmer
Eric E. Gilmer, President
/s/ Felice Padnos
Felice Padnos
EXHIBIT A
AMENDED ARTICLES OF INCORPORATION
OF
ALTERNATE FUEL, INC.
The undersigned, for the purposes of forming a corporation,
pursuant to and by virtue of Chapter 78 of the Nevada Revised
Statutes, hereby certify and adopt the following Articles of
Incorporation.
ARTICLE I
NAME
The name of the corporation shall be Fertility
Advancements, Inc. (amended by this Certificate).
ARTICLE II
LOCATION
The principal office of the corporation is to be located at
2950 East Flamingo Road, Suite G, Las Vegas, Nevada, 89121
(amended by this Certificate).
The corporation may also maintain offices at such other
place or places within or outside the State of Nevada. Corporate
business of every kind and nature may be conducted and meetings
of the directors and stockholders held outside the State as well
as inside the State (unamended).
ARTICLE III
PURPOSE
The nature of the business, or objects or purposes to be
transacted, prompted, or carried on by the corporation are to
engage in any lawful activity (unamended).
ARTICLE IV
CAPITAL STOCK
Section 1. The total authorized capital stock of the
corporation shall consist of one hundred million (100,000,000)
shares of common stock at $0.001 par value per share (amended by
Certificate of Amendment dated July 30, 1986 and filed with the
Secretary of State, State of Nevada, August 8, 1986, and by this
Certificate)
Section 2. Any and all shared issued by the corporation,
the fixed consideration for which has been paid or delivered
shall be deemed fully paid or deliver, shall be deemed fully
paid stock and not liable for any further call or assessment
(amended by this Certificate).
Section 3. Pre-emptive Rights. Except as may otherwise be
provided by the Board of Directors, no holder of any shares of
the stock of the Corporation, shall have any preemptive right to
purchase, subscribe for, or otherwise acquire any shares of
stock of the Corporation of any class now or hereafter
authorized, or any securities exchangeable for or convertible
into such shares, or any warrants or other instruments
evidencing rights or options to subscribe for, purchase, or
otherwise acquire such shares (amended by this Certificate).
Section 4. Stock Rights and Options. The corporation shall
have the power to create and issue rights, warrants, or options
entitling the holders thereof to purchase from the corporation
any shares of its capital stock of any class or classes, upon
such terms and conditions and at such times and prices as the
Board of Directors may provide, which terms and conditions shall
be incorporated in an instrument or instruments evidencing such
rights. In the absence of fraud, the judgment of the Directors
as to the adequacy of consideration for the issuance of such
rights or options and the sufficiency thereof shall be
conclusive (amended by this Certificate).
ARTICLE V
DIRECTORS
The members of the governing board of the corporation
shall be styled directors. The number of directors constituting
the first board of directors shall be three, who shall serve
until their successors are duly elected and qualified. Their
names and addresses are as set out below:
Section 1. Size of Board. The members of the governing
board of the Corporation shall be styled directors. The number
of directors of the Corporation, their qualifications, terms of
office, manner of election, time and place of meeting, and
powers and duties shall be such as are prescribed by statute and
in the by-laws of the Corporation (amended by this Certificate).
Directors need not be stockholders, but shall be of full
age, and at least one of them shall be a citizen of the United
States (unamended).
Name Address
Burla Sue Peters 601 So. Rancho Drive
Las Vegas, Nevada 89106
Cary Baker 601 So. Ranch Drive
Las Vegas, Nevada 89106
Cindy Laub 601 So. Rancho Drive
Las Vegas, Nevada 89106
(Unamended).
Section 2. Powers of Board. In furtherance and not in
limitation of the powers conferred by the laws of the State of
Nevada, the Board of Directors is expressly authorized and
empowered (amended by this Certificate):
(a) To make, alter, amend, and repeal the By-Laws subject to
the power of the shareholders to alter or repeal the By-Laws
made by the Board of Directors (amended by this Certificate);
(b) Subject to the applicable provisions of the By-Laws then
in effect, to determine, from time to time, whether and to what
extent, and at what times and places, and under what conditions
and regulations, the accounts and books of the corporation, or
any of them, shall be open to shareholder inspection. No
shareholder shall have any right to inspect any of the accounts,
books or documents of the corporation, except as permitted by
law, unless and until authorized to do so by resolution of the
Board of Directors or of the Shareholders of the corporation
(amended by this Certificate);
(c) To issue stock of the Corporation for money, property,
services rendered, labor performed, cash advanced, acquisitions
for other corporations or for any other assets of value in
accordance with the action of the board of directors without
vote or consent of the shareholders and the judgment of the
board of directors as to value received and in return therefore
shall be conclusive and said stock, when issued, shall be fully-
paid and non-assessable (amended by this Certificate);
(d) To authorize and issue, without shareholder consent,
obligations of the corporation, secured and unsecured, under
such terms and conditions, as the Board, in its sole discretion,
may determine, and to pledge or mortgage, as security therefore,
any real or personal property of the corporation, including
after-acquired property (amended by this Certificate);
(e) To determine whether any and, if so, what part, of the
earned surplus of the corporation shall be paid in dividends to
the shareholders, and to direct and determine other use and
disposition of any such earned surplus (amended by this
Certificate);
(f) To fix, from time to time, the amount of the profits of
the corporation to be reserved as working capital or for any
other lawful purpose (amended by this Certificate);
(g) To establish bonus, profit-sharing, stock option, or other
types of incentive compensation plans for the employees,
including officers and directors, of the corporation, and to fix
the amount of profits to be shared or distributed, and to
determine the persons to participate in any such plans and the
amount of profits to be shared and distributed, and to determine
the persons to participate in any such plans and the amount of
their respective participations (amended by this Certificate);
(h) To designate, by resolution or resolutions passed by a
majority of the whole Board, one of more committees, each
consisting of two or more directors, which, to the extent
permitted by law and authorized by the resolution or the By-
Laws, shall have and may exercise the powers of the Board
(amended by this Certificate);
(i) To provide for the reasonable compensation of its own
members by By-Law, and to fix the terms and conditions upon
which such compensation will be paid (amended by this
Certificate); and
(j) In addition to the powers and authority herein before, or
by statute, expressly conferred upon it, the Board of Directors
may exercise all such powers and do all such acts and things as
may be exercised or done by the corporation, subject,
nevertheless, to the provisions of the laws of the State of
Nevada, of these Articles or Incorporation, and of the By-Laws
of the corporation (amended by this Certificate).
ARTICLE VI
ASSESSMENTS
The capital stock of the Corporation, after the amount of
the subscription price, or par value, has been paid in money,
property or services, as the Directors shall determine, shall
not be subject to assessment to pay the debts of the
corporation, nor for any other purposes, and not stock issued as
fully paid shall be assessable or assessed and the Articles of
Incorporation shall not be amended in this particular (amended
by this Certificate).
ARTICLE VII
INCORPORATIONS
The names and post office addresses of the incorporators,
which shall be three in number, signing the Articles of
Incorporation, are as set forth in paragraph V, above (unamended).
ARTICLE VIII
TERM
The corporation shall have perpetual existence (unamended).
ARTICLE IX
POWERS
The powers of the Corporation shall be those in powers
granted by 78.060 and 78.070 of the Nevada Revised Statutes
under which this corporation is formed. In addition, the
corporation shall have the following specific powers (amended by
this Certificate):
(a) To elect or appoint officers and agents of the Corporation
and to fix their compensation; (b) To act as and agent for any
individual, association, partnership, corporation or other legal
entity; (c) To receive, acquire, hold, exercise rights arising
out of the ownership or possession thereof, sell, or otherwise
dispose of, shares or other interests in, or obligations of,
individuals, associations, partnerships, corporations, or
governments; (d) To receive, acquire, hold, pledge, transfer, or
otherwise dispose of shares of the corporation, but such shares
may only be purchased, directly or indirectly, out of earned
surplus; (e) To make gifts or contributions for the public
welfare or for charitable, scientific or educational purposes,
and in time of war, to make donations in aid of war activities
(amended by this Certificate).
ARTICLE X
LIMITATION OF LIABILITY OF OFFICERS OR DIRECTORS
The personal liability of a director or officer of the
Corporation to the Corporation or the Shareholders for damages
for branch of fiduciary duty as a director or officer shall be
limited to acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law (amended by this
Certificate).
ARTICLE XI
INDEMNIFICATION
Each director and each officer of the corporation may be
indemnified by the corporation as follows (amended by this
certificate):
(a) The corporation may indemnify any person who was or is
a party, or is threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation), by reason f the fact that he is or was a director,
officer, employee or agent of another corporation, partnership
or joint venture, trust or other enterprise, against expenses
(including attorney's fees) judgment, fines and amounts paid in
settlement, actually and reasonably incurred by him in
connection with the action, suit or proceeding, if he acted in
good faith and in a manner which he reasonably believed to be in
or opposed to the best interests of the corporation and with
respect to any criminal action or proceeding, had not reasonable
cause to any action, suite or proceeding, had not reasonable
cause to believe his conduct was unlawful. The termination of
any action, suite or proceeding, by judgment, order, settlement
conviction or upon a pleas of nolo contender or its equivalent,
does not of itself create a presumption that the person did not
act in good faith and in am manner which he reasonably believed
to be in or not opposed to the best interests of he corporation,
and that, with respect to any criminal action or proceeding, he
had reasonable cause to believer that his conduct was unlawful
(amended by this Certificate);
(b) The corporation may indemnify any person who was or is
a party, or is threatened to be made a party, to any threatened,
pending or completed action or suit by or in the right of the
corporation, to procure a judgment in tits favor by reason of
the fact that he is or was a director, officer, employee or
agent of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses including amounts paid in
settlement and attorneys' feels actually and reasonable incurred
by him in connection with the defense or settlement of the
action or suit, if he acted in good faith and in am manner which
he reasonably believed to be in or not opposed to the best
interests of the corporation. Indemnification may not be made
for any claim, issue or matter as to which such a person has
been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the
corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in
which the action or suit was brought or other court of competent
jurisdiction determines upon application that in view of all the
circumstances of the case the person is fairly and reasonably
entitled to indemnity for such expenses as the court deems
proper (amended by the certificate);
(c) To the extent that a director, officer, employee or
agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred
to tin subsections (a) and (b) of this Article, or in defense of
any claim, issue or matter therein, he must be indemnified by
the corporation against expenses, including attorney's fees,
actually and reasonably incurred by him in connection with the
defense (amended by this Certificate);
(d) Any indemnification under subsections (a) and (b),
unless ordered by a court or advanced pursuant to subsection
(e), must be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the
circumstances. The determination must be made (amended by the
Certificate):
(i) By the stockholders (amended by this Certificate);
(ii) By the board of directors by majority vote of a quorum
consisting of directors who were not parties to that act, suit
or proceeding (amended by this Certificate);
(iii) If a majority vote of a quorum consisting of directors who
were not parties to the act, suit or proceeding cannot be
obtained, by independent legal counsel in a written opinion
(amended by this Certificate); or
(iv) If a quorum consisting of directors who were not parties to
the act, suit or proceeding cannot be obtained, by independent
legal counsel in a written opinion (amended by this
Certificate);
(e) 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. The provisions of this
subsection do not affect any rights to advancement of expense to
which corporate personnel other than directors or officers maybe
entitled under any contract or otherwise by law (amended by this
Certificate);
(f) The indemnification and advancement of expenses
authorized in or ordered by a court pursuant to the section:
(i) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under
the certificate or articles of incorporation or any bylaw,
agreement, vote of stockholders or disinterested directors or
otherwise, for either and action in another capacity while
holding his office, except that indemnification, unless ordered
by a court pursuant to subsection (b) or for the advancement of
expenses made pursuant to subsection(e) may not be made to or on
behalf of any director or officer if a final adjudication
establishes that his acts or omissions involved intentional
misconduct, fraud or a knowing violation of the law and was
material to the cause of action (amended by this Certificate);
(ii) Continues for a person who has ceased to be a director,
officer, employee or agent and inures to the benefit of the
heirs, executors and administrators of such a person. (amended
by this Certificate)
ARTICLE XII
PLACE OF MEETING: CORPORATE BOOKS
Subject to the laws and State of Nevada, the shareholders
and the Directors shall have power to hold their meetings, and
the Directors shall have power to have an officer or offices and
to maintain the books of the corporation outside the State of
Nevada, at such place or places as may from time to time be
designated in the By- Laws or by appropriate resolution (amended
by this Certificate)
ARTICLE OF XIII
AMENDMENT OF ARTICLES
The provisions of these Articles of Incorporation may be
amended, altered or repealed from time to time to the extent and
in the manner prescribed by the laws of the State of Nevada, and
additional provisions authorized by such laws as are then in
force may be added. All rights herein conferred on the
directors, officers and shareholders are granted subject this
reservation. (amended by this Certificate)
IN WITNESS WHEREOF, the undersigned Officers and Directors
of the Corporation have executed these Amended Articles of
Incorporation to be effective on the 30th day of June 1989.
/s/ Syver Norderhaug
Syver Norderhaug, Vice President
/s/ Felice Padnos
Felice Padnos, Secretary
State of Nevada
SS
County of Clark
On this 27th day of June, 1989, before me, the undersigned
Notary Public, personally appeared Syver Norderburg, known to me
to be the Vice President and a Director, and Felice Padnos,
known to me to the Secretary, of Fertility Advancements, Inc.,
formerly Alternate Fuel, Inc,, a Nevada corporation, the
corporation which executed the attached instrument, and who
executed the same on behalf of said corporation, freely and
voluntarily and for the uses and purposes therein mentioned.
By: /s/
Notary Public in and for said County and State
EX-3.4
CERTIFICATE OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
FERTILITY ADVANCEMENTS, INC.
Pursuant to Sections 78.385, 78.390 and 78.395 of the
Nevada Revised Statutes, we the undersigned officers of
Fertility Advancements, Inc. (the "Corporation") do hereby
certify the following:
1. That we are the duly-elected President and Secretary,
respectively, of the Corporation;
2. That the date of filing of the original Articles of
Incorporation of the Corporation with Nevada Secretary of State
was on May 13, 1986, and the date of the filing with the Clark
County Clerk was May 20, 1986;
3. That the date of filing of the original Amended
Article of Incorporation of the Corporation, dated July 30,
1986, with the Nevada Secretary of State was August 8, 1986.
4. That the date of filing of the original Amended
Article of Incorporation of the Corporation, dated June 26,
1989, with the Nevada Secretary of State was June 28, 1989, and
that the date of the filing with Clark County Clerk was July 1, 1989.
5. That the amendment to the Articles of Incorporation
was passed by a vote of those shareholders of the Corporation
holding a majority of the issued and outstanding shares of the
common stock of the Corporation, by written consent of such
Shareholders of the Corporation, dated December 3, 1990; there
being 10,000,000 shares of common stock issued, outstanding and
entitled to vote thereon, and more than 5,000,000, a majority,
having voted in favor of the amendment; and
6. That the Articles of Incorporation as Amended are so
designated pursuant to NRS 78.395 in the Amended Articles of
Incorporation, set forth in Appendix A attached hereto.
/s/ Edward S. Padnos
Edward S. Padnos, President
/s/ Felice Padnos
Felice Padnos, Secretary
State of Nevada
SS
County of Clark
On this 3rd day of December, 1990, before me, the
undersigned Notary Public, personally appeared Edward S. Padnos,
known to me to be the President, and Felice Padnos, known to me
to the Secretary, of Fertility Advancements, Inc., a Nevada
corporation, the corporation which executed the attached
instrument, and who executed the same on behalf of said
corporation, freely and voluntarily and for the uses and
purposes therein mentioned.
By: /s/
Notary Public in and for said County and State
APPENDIX A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
EUBIX TECHNOLOGIES, INC.
The undersigned, for the purposes of forming a corporation,
pursuant to and by virtue of Chapter 78 of the Nevada Revised
Statutes, hereby certify and adopt the following Articles of
Incorporation.
ARTICLE I
NAME
The name of the corporation shall by Eubix Technologies,
Inc. (amended by this Certificate).
ARTICLE II
LOCATION
The principal office of the Corporation is to be located at
2950 East Flamingo Road, Suite G, Las Vegas, Nevada. Corporate
business of every kind and nature may be conducted and meetings
of the directors and stockholders held outside the State as well
as inside the State (unamended).
ARTICLE III
PURPOSE
The nature of the business, or objects or purposes to be
transacted, prompted, or carried on by the Corporation are to
engage in any lawful activity (unamended).
ARTICLE IV
CAPITAL STOCK
Section 1. The total authorized capital stock of the
corporation shall consist of one hundred million (100,000,000)
shares of common stock at $0.001 par value per share (amended by
this Certificate).
Section 2. Any and all shares issued by the
corporation, the fixed consideration for which has been paid or
delivered, shall not be deemed fully paid stock and not liable
for any further call or assessment (amended by Certificate of
Amendment of Articles of Incorporation of June 27, 1989).
Section 3. Preemptive Rights. Except as may otherwise
be provided by the Board of Directors, no holder of any shares
of the stock of the Corporation, shall have any preemptive right
to purchase, subscribe for, or otherwise acquire any shares of
stock of he Corporation of any class now or hereafter
authorized, or any securities exchangeable for or convertible
into such shares, or any warrants or other instruments
evidencing rights or options to subscribe for, purchase, or
otherwise acquire such shares (amended by Certificate of
Amendment of Articles the Incorporation of June 27, 1989).
Section 4. Stock Rights and Options. The Corporation
shall have the power to create and issue rights, warrants, or
options entitling the holders thereof to purchase from the
corporation any shares of its capital stock of any class or
classes, upon such terms and conditions and at such times and
prices as the Board of Directors may provide, which terms and
conditions shall be incorporated in an instrument or instruments
evidencing such rights. In the absence of fraud, the judgment of
the Directors as to the adequacy of consideration of the
issuance of such rights or options and the sufficiency thereof
shall be conclusive (amended by Certificate of Amendment of
Articles of Incorporation of June 27, 1989).
ARTICLE V
DIRECTORS
The members of the governing board of the corporation shall
be styled directors. The number of directors constituting the
first board of directors shall be three, who shall serve until
their successors are duly elected and qualified. Their names and
addresses are set out below:
Section 1. Size of the Board. The members of the
governing board of the Corporation shall be styled directors.
The number of directors of the Corporation, their
qualifications, terms of office, manner of election, time and
place of meeting, and powers and duties shall be such as are
prescribed by statute and in the by-laws of the Corporation
(amended by Certificate of Amendment of Articles of
Incorporation of June 27, 1989).
Directors need not be stockholders, but shall be of full
age, and at least one of them shall be a citizen of the United
States (unamended).
NAME ADDRESS
Burla Sue Peters 601 So. Rancho Drive
Las Vegas, Nevada 89106
Carla Baker 601 So. Rancho Drive
Las Vegas, Nevada 89106
Cindy Laub 601 So. Rancho Drive
Las Vegas, Nevada 89106
(unamended)
Section 2. Powers of Board. In the furtherance and not
in limitation of he powers conferred by the laws of the State of
Nevada, the Board of Directors is expressly authorized and
empowered (amended by Certificate of Amendment of Articles of
Incorporation on June 27, 1989):
(a) To make, alter, amend, and repeal the By-Laws
subject to the power of the shareholders to alter or
repeal the By-Laws made by the Board of Directors
(amended by Certificate of Amendment of Articles Of
Incorporation of June 27, 1989).
(b) Subject to the applicable provisions of the By-
Laws then in effect, to determine, from time to time,
whether and to what extent, and at what times and
places, and under what conditions and regulations, the
accounts and books of the Corporation, or any of them,
shall be open to shareholder inspection. No
shareholder shall any right inspect any of the
accounts, books or documents of the Corporation,
except as permitted by law, unless and until
authorized to do so by the Shareholders of the
Corporation (amended by Certificate of Amendment of
Articles Of Incorporation of June 27, 1989).
(c) To issue stock of he Corporation for money,
property, services rendered, labor performed, cash
advanced, acquisitions for other corporations or for
any other assets of value in accordance with the
action of the board of directors without vote or
consent of the shareholders and the and the judgment
of the board of directors as to value received and in
return therefore shall be conclusive and said stock,
when issued, shall be fully-paid and non assessable
(amended by Certificate of Amendment of Articles Of
Incorporation of June 27, 1989).
(d) To authorize and issue, without shareholders
consent, obligations of the Corporations of the
Corporation, secured and unsecured, under such terms
and conditions as the board in it's sole discretion,
may determine, and to pledge or mortgage, as security
therefore, any real or personal property of the
Corporation, including after-acquired property
(amended by Certificate of Amendment of Articles Of
Incorporation of June 27, 1989).
(e) To determine whether any and, if so, what part,
of the earned surplus of the Corporation shall be paid
in dividends to the shareholders, and to the direct
and determine other use and disposition of any such
earned surplus (amended by Certificate of Amendment of
Articles Of Incorporation of June 27, 1989).
(f) To fix, from time to time, the amount of the
profits of the Corporation to be reserved as working
capital or for any other lawful purpose (amended by
Certificate of Amendment of Articles Of Incorporation
of June 27, 1989).
(g) To establish bonus, profit sharing, stock option,
or other types of incentive compensation plans for the
employee, including officers and directors, of the
Corporation, and to fix the amount of profits to
shared or distributed, and to determine the persons to
participate in any such plans and the amount of their
respective participation's (amended by Certificate of
Amendment of Articles Of Incorporation of June 27, 1989).
(h) To designate, by resolution or resolutions passed
by a majority of the whole Board, one or more
committees, each consisting of two or more directors,
which to the extent permitted by law and authorized by
the resolution or the By-Laws, shall have and may
exercise the powers of the Board (amended by
Certificate of Amendment of Articles Of Incorporation
of June 27, 1989).
(i) To provide the reasonable compensation of its own
members by By-Law, and to fix the terms and conditions
upon which such compensation will be paid (amended by
Certificate of Amendment of Articles Of Incorporation
of June 27, 1989).
(j) In addition to the powers and authority herein
before, or by statute, expressly conferred upon it,
the Board of Directors may exercise all such powers
and do all such acts and things as may be exercised or
done by the corporation, subject, nevertheless, to the
provisions of the laws of the State of Nevada, of
these Articles of Incorporation, and of he By-Laws of
the corporation. (amended by Certificate of Amendment
of Articles Of Incorporation of June 27, 1989).
ARTICLE VI
ASSESSMENTS
The capital stock of the corporation, after the amount of
the corporation, after the amount of the subscription price, or
par value, has been paid in money, property or services, as the
Directors shall determine, shall not be subject to assessment to
pay the debts of he Corporation, nor for any other purpose, and
no stock issued as fully paid shall be assessable or assessed,
and the Articles of Incorporation shall not be amended in this
particular (amended by Certificate of Amendment of Articles of
Incorporation of June 27, 1989).
ARTICLE VII
INCORPORATORS
The names and post office addresses of the incorporators,
which shall be three in number, signing the Articles of
Incorporation, are as set forth in paragraph V, above (unamended).
ARTICLE VIII
TERM
The corporation shall have perpetual existence (unamended)
ARTICLE IX
POWERS
The powers of the Corporation shall be those powers granted
by 78.060 and 78.070 of the Nevada Revised Statutes under which
this corporation is formed. In addition, the corporation shall
have the following specific powers (amended by Certificate of
Amendment of Articles Of Incorporation of June 27, 1989):
(a) To elect or appoint officers and agents of he
Corporation and to fix their compensation; (b) To act as an
agent for any individual, association, partnership,
corporation or other legal entity; (c) To receive, acquire,
hold, exercise rights arising out of the ownership or
possession thereof, sell, or otherwise dispose of, shares
or other interests in, or obligations of, individuals,
associations, partnerships, corporations, or governments;
(d) To receive, acquire, hold, pledge, transfer, or
otherwise dispose of shares of the corporation, but such
shares may only be purchased, directly or indirectly; out
of the earned surplus; (e) To make gifts or contributions
for the public welfare or for charitable, scientific or
educational purposes, and in time of war, to make donations
in aid of war activities (amended by Certificate of
Amendment of Articles Of Incorporation of June 27, 1989).
ARTICLE X
LIMITATION OF LIABILITY OF OFFICERS OR DIRECTORS
The personal liability of a director or officer of the
Corporation to the Corporation or the shareholders for damages
for breach of fiduciary duty as a director or officer shall be
limited to acts or omissions which involve intentional
misconduct, fraud or a knowing violation of the law. (amended by
Certificate of Amendment of Articles of Incorporation of June 27, 1989).
ARTICLE XI
INDEMNIFICATION
Each director and each officer of the corporation may be
indemnified by the corporation may be indemnified by the
corporation as follows (amended by Certificate of Amendment of
Articles Of Incorporation of June 27, 1989):
(a) The corporation may indemnify any person who was or is
a party, or is threatened to be made a party, to any
threatened, pending or complete action, suite or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of
the corporation), by reason of the fact that his is or was
director, officer, employee or agent of the Corporation as
a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a
director, officer employee or agent of another corporation,
partnership, joint venture, trust or other enterprise,
against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement, actually and
reasonability incurred by him in connection with the
action, suit or proceeding, if he acted in good faith and
in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation and with
respect to any criminal action or proceeding, had no
reasonable cause to believe his suit or proceeding, by
judgment, order, settlement, convictions or upon a plea of
nolo contendere or its equivalent, not of itself create
that the person did not act in good faith and in a manner
the best interests of the Corporation, and that, with
respect to any criminal action or proceeding, he had
reasonable cause to believe that his conduct was unlawful
(amended by Certificate of Amendment of Articles Of
Incorporation of June 27, 1989);
(b) The corporation may indemnify any person who was or is
a party, or is threatened to be made a party, to any
threatened, pending or completed action or suit by or in
the right of the Corporation, to procure a judgment in its
favor by reason of the fact that his is or was a director,
officer, employee or agent of another enterprise against
expenses including amounts paid in incurred by him in
connection with the defense or settlement of he action or
suit, if he acted in good faith and in a manner which he
reasonably believed to be a I or opposed to the best
interests of the Corporation. Indemnification may not be
made for any claim, issue or matter as to which such a
person has been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom,
there to be liable to the corporation or for amounts paid
in settlement to the Corporation, unless and only to the
extent that the court in which the action or suit was
brought or other curt of competent jurisdiction determines
upon application that in view of all the circumstances of
he case the person expenses as the court deems proper
(amended by Certificate of Amendment of Articles of
Incorporation of June 27, 1989);
(c) To the extent that a director, officer, employee or
agent of a Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceedings
referred to in subsections (a) and (b) of this Article, or
in defense of any claim, issue or matter therein, he must
be indemnified by the Corporation against expenses,
including attorneys fees, actually and reasonably incurred
by him in connection with the defense (amended by
Certificate of Amendment of Articles of Incorporation of
June 27, 1989);
(d) Any indemnification under subsections (a) and (b)
unless ordered by court or advanced pursuant to subsection
(e) must be made the corporation only as authorized in the
specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the
circumstances. The determination must be made (amended by
Certificate of Amendment of Articles of Incorporation of
June 27, 1989);
(i) By the stockholders (amended by Certificate of
Amendment of Articles of Incorporation of June 27, 1989);
(ii) By the Board of directors by majority vote of a
quorum consisting of directors who were not parties to
the act, suit or proceeding (amended by Certificate of
Amendment of Articles of Incorporation of June 27, 1989);
(iii) If a majority vote of a quorum consisting of
directors who were not parties to the act, suit or
proceeding so orders, by independent legal counsel in
a written opinion (amended by Certificate of Amendment
of Articles of Incorporation of June 27, 1989);
(iv) If a quorum consisting of directors who were not
parties to the act, suit or proceeding cannot be
obtained by independent legal counsel in a written
opinion (amended by Certificate of Amendment of
Articles of Incorporation of June 27, 1989);
(e) 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 he final dispositions of he action, suit or
proceeding, upon receipt of an undertaking by or on behalf
of the directors 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. The provisions of this subsection do not
affect any rights to advancement of expenses to which be
entitled under any contract or otherwise by law (amended by
Certificate of Amendment of Articles of Incorporation of
June 27, 1989);
(f) The indemnification and advancement of expenses
authorized in or ordered by a court pursuant to this
section:
(i) Does not exclude any other rights to which a
person seeking indemnification or advancement of
expenses may be entitled under the certificate or
articles incorporation or any bylaw, agreement, vote
of stockholders or disinterested directors or
otherwise, for either an action in his official
capacity in another capacity while holding his office,
except that indemnification, (b) or for the
advancement of expenses made pursuant to subsection
(e) may not be made to or on adjudication establishes
that his acts or omissions involved international
misconduct, fraud or a knowing violation of the law
and was material to the cause of action (amended by
Certificate of Amendment of Articles of Incorporation
for June 27, 1989);
(ii) Continues for a person who has ceased to be a
director, officer, employee or agent and inures to the
benefit of the heirs, executors and administrators of
such a person (amended by Certificate of Amendment of
Articles of Incorporation for June 27, 1989).
ARTICLE XII
PLACE OF MEETING: CORPORATE BOOKS
Subject to the laws of the State of Nevada, the
shareholders and the Directors shall have power to hold their
meetings, and the Directors shall have power to have an offices
and to maintain the books of he Corporation outside the State of
Nevada, at such place or places as may from time to time be
designated in the By-Laws or by appropriate resolution. (Amended
by Certificate of Amendment of Articles of Incorporation for
June 27, 1989)
ARTICLE XIII
AMENDMENT OF ARTICLES
The provisions of these Articles of Incorporation may be
amended, altered or repealed from time to time to the extent and
in the manner prescribed by the laws of he State of Nevada, and
additional provisions authorized by such laws as are then in
force my be added. All rights herein conferred on the directors,
officers and shareholders are granted subject to this
reservation. Amended by Certificate of Amendment of Articles of
Incorporation for June 27, 1989)
IN WITNESS WHEREOF, the undersigned Officers and Directors
of the Corporation have executed these Amended Articles of
Incorporation to be effective on the 3rd day of December 1990.
/s/ Edward S. Padnos
Edward S. Padnos, President
/s/ Felice Padnos
Felice Padnos, Secretary
State of Nevada
SS
County of Clark
On this 3rd day of December, 1990, before me, the
undersigned Notary Public, personally appeared Edward S. Padnos,
known to me to be the President, and Felice Padnos, known to me
to the Secretary, of Fertility Advancements, Inc., a Nevada
corporation, the corporation which executed the attached
instrument, and who executed the same on behalf of said
corporation, freely and voluntarily and for the uses and
purposes therein mentioned.
By: /s/
Notary Public in and for said County and State
EX-3.5
AMENDED
ARTICLES OF INCORPORATION OF
EUBIX TECHNOLOGIES, INC.
Pursuant to the provisions of the Nevada Revised Statutes,
the undersigned Corporation adopts these Articles of Amendment
to its Articles of Incorporation:
FIRST: ARTICLE I of the Articles of Incorporation as now filed
is stricken in its entirety, and the following Article I
substituted therefore as if it had been a part of the original
Articles of Incorporation:
ARTICLE I
The complete name of the Corporation is : NetTel, Inc.
SECOND: The date of adoption of this amendment by the
shareholders of this Corporation is May 21, 1999.
THIRD: This amendment to the Articles of Incorporation of the
Corporation has been duly adopted in accordance with the
provisions of Sections 78.385 and 78.390 of the Nevada Revised
Statutes. The number of shares outstanding at the time of
adoption of this amendment was . An excess of 51% did vote in
favor of this amendment. The number voting against was zero.
IN WITNESS WHEREOF, the undersigned, the President and Secretary
of the Corporation, have executed this Amendment to the Articles
of Incorporation this 24th day of May, 1999.
/s/ James Clark
James Clark, President
/s/ Charles Maranto, Jr.
Charles Maranto, Jr., Secretary
State of Nevada
SS
County of Clark
On this 24th day of May, 1999, before me, a Notary Public
in and for said County and State, personally appeared James
Clark and Charles Maranto, Jr., both known to me to be the
persons whose names are subscribed to the foregoing instrument,
who duly acknowledged to me that they executed the same for the
purposes therein mentioned.
By: /s/
Notary Public in and for said County and State
EX-3.6
ARTICLES OF MERGER OF
ONE TOUCH TOTAL COMMUNICATIONS, INC. INTO
NET TEL, INC.
First: NetTel, Inc. (hereinafter referred to as the "parent
entity"), an entity of the jurisdiction of Nevada, owns all of
the outstanding shares of each class of California Telephone
Co., Inc. (hereinafter referred to as the "subsidiary entity"),
an entity of the jurisdiction of Nevada.
Second: A plan of merger was adopted by the parent entity and
the subsidiary entity whereby the subsidiary entity is to be
merged into the parent entity.
Third: Approval of the owners of either the parent or
subsidiary entity was not required.
Fourth: The complete executed plan of merger is on file at the
place of business of the parent entity located at 1630 Sunkist
Street, Suite K, Anaheim, California 92806 and a copy of the
plan will be furnished by the parent entity, on request and
without cost, to any owners of any entity which is a party to
this merger.
Fifth: The name of the surviving entity shall be that of
the subsidiary entity, One Touch Total Communications, Inc.
Dated: September 22, 1999.
Parent Entity: Subsidiary Entity
By: /s/ C. Jay Smith By: /s/ C. Jay Smith
C. Jay Smith, President C. Jay Smith, President
By: /s/ Marc Tow By: /s/ Marc Tow
Marc Tow, Secretary Marc Tow, Secretary
Verification
State of Nevada
SS
County of Clark
On this 22nd day of September, 1999, before me, the
undersigned, a Notary Public in and for said State, personally
appeared C. Jay Smith and Marc Tow, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the
persons who subscribed their names to the Articles of Merger and
acknowledged to me that they executed the same freely and
voluntarily and for the use and purposes therein mentioned.
By: /s/
Notary Public in and for said County and State
EX-3.7
CERTIFICATE OF AMENDMENT TO
ARTICLES OF INCORPORATION
1. Name of corporation: One Touch Total Communications, Inc.
2. The articles of incorporation have been amended as follows
(provide article numbers, if available):
Article IV - Capital Stock - Section 1. The total authorized
capital stock of the corporation shall consist of two hundred
million (200,000,000) shares of common stock at $0.001 par value
per share. (Amended by this Certificate)
3. The vote by which the stockholders holding shares in the
corporation entitling them to exercise at least a majority of
the voting power, or such greater proportion of the voting power
as may be required in the case of a vote by classes or series,
or as may be required by the provisions of the articles of
incorporation have voted in favor of the amendment is: 8,030,000.
4. Signatures (Required):
/s/ Jay Smith
President/Secretary
EX-3.8
BYLAWS
OF
ONE TOUCH TOTAL COMMUNICATIONS, INC.
Article I: Offices
The principal office of One Touch Total Communications,
Inc. ("Corporation") in the State of California shall be located
in Anaheim, County of Orange. The Corporation may have such
other offices, either within or without the State of Nevada, as
the Board of Directors my designate or as the business of the
Corporation my require from time to time.
Article II: Shareholders
Section 1. Annual Meeting. The annual meeting of the
shareholders shall be held during the third week of May of each
year, or on such other date during the calendar year as may be
designated by the Board of Directors. If the day fixed for the
annual meeting shall be a legal holiday in the State of Nevada,
such meeting shall be held on the next succeeding business day.
If the election of Directors shall be held on the day designated
herein for any annual meeting of the shareholders or at any
adjournment thereof, the Board of Directors shall cause the
election to be held at a special meeting of the shareholders as
soon thereafter as conveniently may be.
Section 2. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the President or by the
Board of Directors, and shall be called by the President at the
request of the holders of not less than twenty-five percent
(25%) of all the outstanding shares of the Corporation entitled
to vote at the meeting.
Section 3. Place of Meeting. The Board of Directors my
designate any place, either within our without the State of
Nevada, unless otherwise prescribed by statute, as the place of
meeting for any annual meeting or for any special meeting. A
waiver of notice signed by all shareholders entitled to vote at
a meeting may designate any place, either within our without the
State of Nevada, unless otherwise prescribed by statute, as the
place for the holding of such meeting. If no designation is
made, the place of meeting shall be the principal office of the
Corporation.
Section 4. Notice of Meeting. Written notice stating the
place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is
called, shall unless otherwise prescribed by statute, be
delivered not less than ten (10) nor more than sixty (60) days
before the date of the meeting, to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall
be deemed to be delivered when deposited in the United States
Mail, addressed to the shareholder at his address as it appears
on the stock transfer books of the Corporation, with postage
thereon prepaid.
Section 5. Closing of Transfer Books or Fixing of Record.
For the purpose of determining shareholders entitled to notice
of or to vote at any meeting of shareholders or any adjournment
thereof, or shareholders entitled to receive payment of any
dividend, or in order to make a determination of shareholders
for any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be
closed for a stated period, but not to exceed in any case fifty
(50) days. If the stock transfer books shall be closed for the
purpose of determining shareholders entitled to notice of or to
vote at a meeting of shareholders, such books shall be closed
for at least fifteen (15) days immediately preceding such
meeting. In lieu of closing the stock transfer books, the Board
of Directors may fix in advance a date as the record date for
any such determination of shareholders, such date in any case to
be not more than thirty (30) days and, in case of a meeting of
shareholders, not less than ten (10) days, prior to the date on
which the particular action requiring such determination of
shareholders is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or
the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
Section 6. Voting Lists. The officer or agent having
charge of the stock transfer books for shares of the Corporation
shall make a complete list of shareholders entitled to vote at
each meeting of shareholders or any adjournment thereof,
arranged in alphabetical order, with the address of and the
number of shares held by each. Such lists shall be produced
and kept open at the time and place of the meeting and shall be
subject to the inspection of any shareholder during the whole
time of the meeting for the purposes thereof.
Section 7. Quorum. A majority of the outstanding shares
of the Corporation entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of shareholders.
If less than a majority of the outstanding shares are
represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without
further notice. 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
noticed. The shareholders present at a duly organized meeting
may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave
less than a quorum.
Section 8. Proxies. At all meetings of shareholders, a
shareholder may vote in person or by proxy executed in writing
by the shareholder or by his or duly authorized attorney-in-
fact. Such proxy shall be filed with the secretary of the
Corporation before or at the time of the meeting. A meeting of
the Board of Directors my be had by means of telephone
conference or similar communications equipment by which all
persons participating in the meeting can hear each other, and
participation in a meeting under such circumstances shall
constitute presence at the meeting.
Section 10. Voting of Shares by Certain Holders. Shares
standing in the name of another Corporation may be voted by such
officer, agent or proxy as the Bylaws of such Corporation may
prescribe or, in the absence of such provision, as the Board of
Directors of such Corporation may determine.
Shares held by an administrator, executor, guardian or
conservator my be voted by him either in person or by proxy,
without a transfer of such shares into his name. Shares
standing in the name of a trustee may be voted by him, either in
person or by proxy, but no trustee shall be entitled to vote
shares held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by
such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer
thereof into his name, if authority to do so be contained in an
appropriate order of the court by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the
name of the pledgee, and thereafter the pledgee shall be
entitled to vote the shares so transferred.
Shares of its own stock belonging to the Corporation shall
not be voted directly or indirectly, at any meeting, and shall
not be counted in determining the total number of outstanding
shares at any given time.
Section 11. Informal Action by Shareholders. Unless
otherwise provided by law, any action required to be taken at a
meeting of the shareholders, or any other action which may be
taken at a meeting of the shareholders, may be taken without a
meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the shareholders entitled to
vote with respect to the subject matter thereof.
Article III: Board of Directors
Section 1. General Powers. The business and affairs of
the Corporation shall be managed by its Board of Directors.
Section 2. Number, Tenure and Qualifications. The number
of Directors of the Corporation shall be fixed by the Board of
Directors, but in no event shall be less than one (1). Each
Director shall hold office until the next annual meeting of
shareholder and until his successor shall have been elected and qualified.
Section 3. Regular Meetings. A regular meeting of the
Board of Directors shall be held without other notice than this
Bylaw immediately after, and at the same place as, the annual
meeting of shareholders. The Board of Directors may provide, by
resolution, the time and place for the holding of additional
regular meetings without notice other than such resolution.
Section 4. Special Meetings. Special meetings of the
Board of Directors may be called by or at the request of the
President or any two Directors. The person or persons
authorized to call special meetings of the Board of Directors
may fix the place for holding any special meeting of the Board
of Directors called by them.
Section 5. Notice. Notice of any special meeting shall be
given at least one (1) day previous thereto by written notice
delivered personally or mailed to each Director at his business
address, or by telegram. If mailed, such notice shall be deemed
to be delivered when deposited in the United Sates mail so
addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Any Directors
may waive notice of any meeting. The attendance of a Director
at a meeting shall constitute a waiver of notice of such
meeting, except where a Director attends a meeting for the
express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
Section 6. Quorum. A majority of the number of Directors
fixed by Section 2 of the Article III shall constitute a quorum
for the transaction of business at any meeting of the Board of
Directors, but if less than such majority is present at a
meeting, a majority of the Directors present may adjourn the
meeting from time to time without further notice.
Section 7. Manner of Acting. The act of the majority of
the Directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
Section 8. Action Without a Meeting. Any action that may
be taken by the Board of Directors at a meeting may be taken
without a meeting if a consent in writing, setting forth the
action so to be taken, shall be signed before such action by all
of the Directors.
Section 9. Vacancies. Any vacancy occurring in the Board
of Directors may be filled by the affirmative vote of a majority
of the remaining Directors though less than a quorum of the
Board of Directors, unless otherwise provided by law. A
Director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office. Any Directorship
to be filled by reason of an increase in the number of Directors
may be filled by election by the Board of Directors for a term
of office continuing only until the next election of Directors
by the shareholders.
Section 10. Compensation. By resolution of the Board of
Directors, each Director may be paid his expenses, if any, of
attendance at each meeting of the Board of Directors, and may be
paid a stated salary as a Director or a fixed sum for attendance
at each meeting of the Board of Directors or both. No such
payment shall preclude any Director from serving the Corporation
in any other capacity and receiving compensation thereof.
Section 11. Presumption of Assent. A Director of the
Corporation who is present at a meeting of the Board of
Directors at which action on any corporate matter is taken shall
be presumed to have assented to the action taken unless his
dissent shall be entered in the minutes of the meeting or unless
he shall file his written dissent to such action with the person
acting as the Secretary of the meeting before the adjournment
thereof, or shall forward such dissent by registered mail to the
Secretary of the Corporation immediately after the adjournment
of the meeting. Such right to dissent shall not apply to a
Director who voted in favor of such action.
Article IV: Officers
Section 1. Number. The officers of the Corporation shall
be a President, one or more Vice Presidents, a Secretary and a
Treasurer, each of whom shall be elected by the Board of
Directors. Such other officers and assistant officers as may be
deemed necessary may be elected or appointed by the Board of
Directors, including a Chairman of the Board. In its
discretion, the Board of Directors may leave unfilled for any
such period as it may determine any office except those of
President and Secretary. Any two or more offices may be held by
the same person. Officers may be Directors or shareholders of
the Corporation.
Section 2. Election and Term of Office. The officers of
the Corporation to be elected by the Board of Directors shall be
elected annually by the Board of Directors at the first meeting
of the Board of Directors held after each annual meeting of the
shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his
successor shall have been duly elected and shall have qualified,
or until his death, or until he shall resign or shall have been
removed in the manner hereinafter provided.
Section 3. Removal. Any officer or agent may be removed
by the Board of Directors whenever, in its judgment, the best
interests of the Corporation will be served thereby, but such
removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of an
officer or agent shall not of itself create contract rights, and
such appointment shall be terminable at will.
Section 4. Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification or otherwise, may
be filled by the Board of Directors for the unexpired portion of
the term.
Section 5. President. The President shall be the
principal executive officer of the Corporation and, subject to
the control of the Board of Directors, shall in general
supervise and control all of the business and affairs of the
Corporation. He shall, when present, preside at all meetings of
the shareholders and of the Board of Directors, unless there is
a Chairman of the Board, in which case the Chairman shall
preside. He may sign, with the Secretary or any other proper
officer of the Corporation thereunto authorized by the Board of
Directors, certificates for shares of the Corporation, any deed,
mortgages, bonds, contract, or other instruments which the Board
of Directors has authorized to be executed, except in cases
where the signing and execution thereof shall be expressly
delegated by the Board of Directors or by there Bylaws to some
other officer or agent of the Corporation, or shall be required
by law to be otherwise signed or executed; and in general shall
perform all duties incident to the office of President and such
other duties as may be prescribed by the Board of Directors from
time to time.
Section 6. Vice President. In the absence of the
President or in the event of his death, inability or refusal to
act, the Vice President shall perform the duties of the
President, and when so acting, shall have all the powers of and
be subject to all the restrictions upon the President. The Vice
President shall perform such other duties as from time to time
may be assigned to him by the President or by the Board of
Directors, If there is more than one Vice President, each Vice
President shall succeed to the duties of the President in order
of rank as determined by the Board of Directors. If no such
rank has been determined, then each Vice President shall succeed
to the duties of the President in order of date of election, the
earliest date having the first rank.
Section 7. Secretary. The Secretary shall: (a) keep the
minutes of the Board of Directors in one or more minute books
provided for the purpose; (b) see that all notices are duly
given in accordance with the provisions of the Bylaws or as
required by law; (c) be custodian of the corporate records and
of the seal of the Corporation and see that the seal of the
Corporation is affixed to all documents, the execution of which
on behalf of the Corporation under its seal is duly authorized;
(d) keep a register of the post office address of each
shareholder which shall be furnished to the Secretary by such
shareholder; (e) sign with the President certificates for share
of the Corporation, the issuance of which shall have been
authorized by resolution of the Board of Directors; (f) have
general charge of the stock transfer books of the Corporation,
and (g) in general perform all duties incident to the office of
the Secretary and such other duties as from time to time may be
assigned to him by the President or by the Board of Directors.
Section 8. Treasurer. The Treasurer shall: (a) have
charge and custody of and be responsible for all funds and
securities of the Corporation; (b) receive and give receipts
for moneys due and payable to the Corporation in such banks,
trust companies or other depositories as shall be selected in
accordance with the provisions of Article VI of these Bylaws;
and (c) in general perform all of the duties incident to the
office of Treasurer and such other duties as from time to time
may be assigned to him by the President or by the Board of
Directors. If required by the Board of Directors, the Treasurer
shall give a bond for the faithful discharge of his duties in
such sum and with such sureties as the Board of Directors shall
determine.
Section 9. Salaries. The salaries of the officers shall
be fixed from time to time by the Board of Directors, and no
officer shall be prevented from receiving such salary by reason
of the fact that he is also a Director of the Corporation.
Article V: Indemnity
Section 1. Definitions. For purposes of this Article,
"Indemnitee" shall mean each Director or Officer who was or is a
party to, or is threatened to be made a party to, or is
otherwise involved in, any Proceeding (as hereinafter defined),
by reason of the fact that he or she is or was a Director or
Officer of this Corporation or is or was serving in any capacity
at the request of this Corporation as a Director, Officer,
employee, agent, partner, or fiduciary of, or in any other
capacity for, another corporation, partnership, joint venture,
trust, or other enterprise. The term "Proceeding" shall mean any
threatened, pending or completed action or suit (including,
without limitation, an action, suit or proceeding by or in the
right of this Corporation), whether civil, criminal,
administrative or investigative.
Section 2. Indemnification. Each Indemnitee shall be
indemnified and held harmless by this Corporation for all
actions taken by him or her, and for all omissions (regardless
of the date of any such action or omission), to the fullest
extent permitted by Nevada law, against all expense, liability
and loss (including, without limitation, attorney fees,
judgments, fines, taxes, penalties, and amounts paid or to be
paid in settlement) reasonably incurred or suffered by the
Indemnitee in connection with any Proceeding. Indemnification
pursuant to this Section shall continue as to an Indemnitee who
has ceased to be a Director or Officer and shall inure to the
benefit of his or her heirs, executors and administrators. This
Corporation may, by action of its Board of Directors, and to the
extent provided in such action, indemnify employees and other
persons as though they were Indemnitees. The rights to
indemnification as provided in this Article shall be non-
exclusive of any other rights that any person may have or
hereafter acquire under an statute, provision of this
Corporation's Articles of Incorporation or Bylaws, agreement,
vote of stockholders or Directors, or otherwise.
Section 3. Financial Arrangements. This Corporation may
purchase and maintain insurance or make other financial
arrangements on behalf of any person who is or was a Director,
Officer, employee or agent of this Corporation, or is or was
serving at the request of this Corporation in such capacity for
another corporation, partnership, joint venture, trust or other
enterprise for any liability asserted against him or her and
liability and expenses incurred by him or her in such capacity,
whether or not this Corporation has the authority to indemnify
him or her against such liability and expenses.
The other financial arrangements which may be made by this
Corporation may include, but are not limited to, (a) creating a
trust fund; (b) establishing a program of self-insurance; (c)
securing its obligation of indemnification by granting a
security interest or other lien on any of this Corporation's
assets, and (d) establishing a letter of credit, guarantee or
surety. No financial arrangement made pursuant to this section
may provide protection for a person adjudged by a court of
competent jurisdiction, after exhaustion of all appeals
therefrom, to be liable for intentional misconduct, fraud, or a
knowing violation of law, except with respect to advancing
expenses or indemnification ordered by a court. Any insurance
or other financial arrangement made on behalf of a person
pursuant to this section may be provided by this Corporation or
any other person approved by the Board of Directors, even if all
or part of the other person's stock or other securities is owned
by this Corporation. In the absence of fraud:
(a) the decision of the Board of Directors as to the
propriety of the terms and conditions of any insurance or
other financial arrangement made pursuant to this
section, and the choice of the person to provide the
insurance or other financial arrangement is conclusive;
and
(b) the insurance or other financial arrangement is not
void or voidable; does not subject any Director approving
it to personal liability for his action; and even if a
Director approving the insurance or other financial
arrangement is a beneficiary of the insurance or other
financial arrangement.
Section 4. Contract of Indemnification. The provisions of
this Article relating to indemnification shall constitute a
contract between this Corporation and each of its Directors and
Officers, which may be modified as to any Director or Officer
only with that person's consent or as specifically provided in
this section. Notwithstanding any other provision of the Bylaws
relating to their amendment generally, any repeal or amendment
of this Article which is adverse to any Director or Officer
shall apply to such Director or Officer only on a prospective
basis and shall not limit the rights of an Indemnitee to
indemnification with respect to any action or failure to act
occurring prior to the time of such repeal or amendment.
Notwithstanding any other provision of these Bylaws, no repeal
or amendment of these Bylaws shall affect any or all of this
Article so as to limit or reduce the indemnification in any
manner unless adopted by (a) the unanimous vote of the Directors
of this Corporation then serving, or (b) the stockholders as set
forth in Article XII hereof; provided that no such amendment
shall have retroactive effect inconsistent with the preceding sentence.
Section 5. Nevada Law. References in this Article to
Nevada law or to any provision thereof shall be to such law as
it existed on the date these Bylaws were adopted or as such law
thereafter may be changed; provided that (a) in the case of any
change which expands the liability of an Indemnitee or limits
the indemnification rights or the rights to advancement of
expenses which this Corporation may provide, the rights to
limited liability, to indemnification and to the advancement of
expenses provided in this Corporation's Articles of
Incorporation, these Bylaws, or both shall continue as
theretofore to the extent permitted by law; and (b) if such
change permits this Corporation, without the requirement of any
further action by stockholders or Directors, to limit further
the liability of Indemnitees or to provide broader
indemnification rights or rights to the advancement of expenses
than this Corporation was permitted to provide prior to such
change, liability thereupon shall be so limited and the rights
to indemnification and advancement of expenses shall be so
broadened to the extent permitted by law.
Article VI: Contracts, Loans, Checks, and Deposits
Section 1. Contracts. The Board of Directors may
authorize any office or officers, agent or agents, to enter into
any contract or execute and deliver any instrument in the name
of and on behalf of the Corporation, and such authority may be
general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf
of the Corporation and no evidences of indebtedness shall be
issued in its name unless authorized by a resolution of the
Board of Directors. Such authority may be general or confined
to specific instances.
Section 3. Checks, Drafts, etc. All checks, drafts or
other orders for the payment of money, notes or other evidences
of indebtedness issued in the name of the Corporation, shall be
signed by such officer or officers, agent or agents of the
Corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
Section 4. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the
credit of the Corporation in such banks, trust companies or
other depositories as the Board of Directors may select.
Article VII: Certificates for Shares and Their Transfer
Section 1. Certificates for Shares. Certificates
representing shares of the Corporation shall be in such form as
shall be determined by the Board of Directors. Such
certificates shall be signed by the President and by the
Secretary or by such other officers authorized by law and by the
Board of Directors so to do, and sealed with the corporate seal.
All certificates for shares shall be consecutively numbered or
otherwise identified. The name and address of the person to
whom the shares represented thereby are issued, with the number
of shares and date of issue, shall be entered on the stock
transfer books of the Corporation. All certificates surrendered
to the Corporation for transfer shall be cancelled and no new
certificate shall be issued until the former certificate for a
like number of shares shall have been surrendered and cancelled,
expect that in case of a lost, destroyed or mutilated
certificate a new one may be issued therefore upon such terms
and indemnity to the Corporation as the Board of Directors may prescribe.
Section 2. Transfer of Shares. Transfer of shares of the
Corporation shall be made only on the stock transfer books of
the Corporation by the holder of record thereof or by his legal
representative, who shall furnish proper evidence of authority
to transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the
Corporation, and on surrender for cancellation of the
certificate for such shares. The person in whose name shares
stand on the books of the Corporation shall be deemed by the
Corporation to be the owner thereof for all purposes, Provided,
however, that upon any action undertaken by the shareholder to
elect S Corporation status pursuant to Section 1362 of the
Internal Revenue Code and upon any shareholders agreement
thereto restricting the transfer of said shares so as to
disqualify said S Corporation status, said restriction on
transfer shall be made a part of the Bylaws so long as said
agreements is in force and effect.
Article VIII: Fiscal Year
The fiscal year of the Corporation shall begin on the 1st
day of January and end on the 31st day of December of each year.
Article IX: Dividends
The Board of Directors may from time to time declare, and
the Corporation may pay, dividends on its outstanding shares in
the manner and upon the terms and condition provided by law and
its Articles of Incorporation.
Article X: Corporate Seal
The Board of Directors shall provide a corporate seal which
shall be circular in form and shall have inscribed thereon the
name of the Corporation and the state of incorporation and the
words "Corporate Seal."
Article XI: Waiver of Notice
Unless otherwise provided by law, whenever any notice is
required to be given to any shareholder or Director of the
Corporation under the provision of the Articles of Incorporation
or under the provisions of the applicable Business Corporation
Act, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the
time stated therein, shall be deemed equivalent to the giving of
such notice.
Article XII: Amendments
These Bylaws may be altered, amended or repealed and new
Bylaws may be adopted by the Board of Directors at any regular
or special meeting of the Board of Directors, or by the
shareholder as any regular or special meeting of the
shareholders.
The above Bylaws are certified to have been adopted by the
Board of Directors of the Corporation on the 25th day of
October, 1999.
/s/ C. Jay Smith
C. Jay Smith, Director
/s/ Marc R. Tow
Marc R. Tow, Director
/s/ Norman John Colavincenzo
Norman John Colavincenzo, Director
EX-5
OPINION RE: LEGALITY
Brian F. Faulkner
A Professional Law Corporation
3900 Birch Street, Suite 113
Newport Beach, California 92660
(949) 975-0544
June 14, 2001
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: One Touch Total Communications, Inc. - Form SB-2
Dear Sir/Madame:
I have acted as counsel to One Touch Total Communications,
Inc., a Nevada corporation ("Company"), in connection with its
Registration Statement on Form SB-2 relating to the registration
of 1,075,000 shares of its common stock ("Shares"), $0.001 par
value per Share.
In my representation I have examined such documents,
corporate records, and other instruments as I have deemed
necessary or appropriate for purposes of this opinion,
including, but not limited to, the Articles of Incorporation,
and all amendments thereto, and Bylaws of the Company.
Based upon and in reliance on the foregoing, and subject to
the qualifications and assumptions set forth below, it is my
opinion that the Company is duly organized and validly existing
as a corporation under the laws of the State of Nevada, and that
the Shares, when issued and sold, will be validly issued, fully
paid, and non-assessable.
My opinion is limited by and subject to the following:
(a) In rendering my opinion I have assumed that, at the
time of each issuance and sale of the Shares, the Company will
be a corporation validly existing and in good standing under the
laws of the State of Nevada.
(b) In my examination of all documents, certificates and
records, I have assumed without investigation the authenticity
and completeness of all documents submitted to me as originals,
the conformity to the originals of all documents submitted to me
as copies and the authenticity and completeness of the originals
of all documents submitted to me as copies. I have also assumed
the genuineness of all signatures, the legal capacity of natural
persons, the authority of all persons executing documents on
behalf of the parties thereto other than the Company, and the
due authorization, execution and delivery of all documents by
the parties thereto other than the Company. As to matters of
fact material to this opinion, I have relied upon statements and
representations of representatives of the Company and of public
officials and have assumed the same to have been properly given
and to be accurate.
(c) My opinion is based solely on and limited to the
federal laws of the United States of America and the Nevada
Revised Statutes. I express no opinion as to the laws of any
other jurisdiction.
Sincerely,
/s/ Brian F. Faulkner
Brian F. Faulkner, Esq.
EX-10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into to be effective on September
1, 1998, between CALIFORNIA TELEPHONE CO., INC., a Nevada
Corporation, hereinafter referred to as "Employer," and C. JAY
SMITH, hereinafter referred to as "Employee."
WHEREAS, Employee desires employment to work as an employee
of Employer; and
WHEREAS, Employer desires to employ Employee under the
terms and conditions of this Agreement.
NOW, THEREFORE, it is mutually agreed to as follows:
1. EMPLOYMENT
Employer hereby employs Employee and Employee hereby
accepts employment on the terms and condition as set forth
below.
2. SERVICES
Employee agrees to devote his time and attention to working
as the President for Employer. Expenditure of reasonable
amounts of time for personal or outside business, and charitable
and professional activities shall not be deemed a breach of this
Agreement, provided those activities do not materially
interfere with the services required to be rendered to Employer
under this Agreement.
3. EMPLOYER'S AUTHORITY
Employee agrees to observe and comply with Employer's rules
and regulations as adopted by Employer's Board of Directors
regarding performance of his duties and to carry out and to
perform orders, directions, and policies stated by Employer to
him periodically, either orally or in writing.
4. TERM
The term of this Agreement shall be for a period of three
(3) years beginning on the effective date of this Agreement.
subject to prior termination as provided herein. There shall be
an option for two (2) years that can be exercised by agreement
of the Employer and Employee.
5. COMPENSATION
(a) Employer agrees to pay to Employee during the term of
this Agreement a basic salary in an amount determined
periodically by Employer's Board of Directors in negotiations
with Employee, pursuant to the payroll schedule established by
Employer's Board of Directors for all employees of the Employer.
(b) The basic salary of the Employee may be changed by
mutual agreement of the parties at any time.
(c) The salary shall be fixed by the Board of Directors
based on Employee's demonstrated past earning capacity.
(d) All compensation shall be subject to the customary
withholding tax and other employment taxes as required with
respect to compensation paid by a corporation to an employee.
(e) All bonuses shall be paid to Employee at the end of
each corporate year. or at the option of the Employer, quarterly.
6. EXPENSES
During the period of his employment, Employee may be
reimbursed for his reasonable business expenses in accordance
with the general policy of Employer, as adopted by Employer's
Board of Directors from time to time. In addition to such
reimbursable expenses, Employee my incur and pay in the course
of his employment certain other expenses for which Employer
shall reimburse Employee, including, but not necessarily limited
to the following: automobile and transportation expenses;
entertainment and promotional expenses; educational expenses
incurred for the purpose of maintaining or improving Employee's
business and management skills; expenses or membership in civic
groups, business societies and all other items of reasonable
business expenses incurred by Employee in the interest of his
performing management services for Employer.
6. MEDICAL COVERAGE
See attached Exhibit A for terms.
7. RETIREMENT PLAN
See attached Exhibit A for terms.
8. PERFORMANCE BONUS
See attached Exhibit A for terms.
9. VACATION AND SICK LEAVE
Employee shall be entitled, without loss of compensation to
an annual vacation and to annual sick leave pursuant to the
policy pertaining to same established by Employer's Board of
Directors and agreed to by Employee. Vacation time shall be
deemed to be earned by the Employee ratably during each
employment year, and upon termination of this Agreement for any
reason whatsoever, the salary applicable to any unearned
vacation time which has be utilized by the Employee shall be
considered an indebtedness of the Employee to the Employer which
is due and payable upon the date of the termination. The
Employee shall be entitled to receive additional salary from the
Employer on account of his failure to utilize all or any portion
of his allotted vacation time, and shall be entitled to
accumulate unused vacation time from one employment year to the
next. If this Agreement is terminated due to Employee' s death
or permanent disability or at the election of the Employer, the
Employee (or his estate) shall be entitled to compensation for
any of Employee's earned but not used vacation time. Employee
shall be entitled to such additional time without loss of
compensation for attendance at meetings, conventions and post-
graduate courses as the Board of Directors of Employer shall,
from time to time, determine.
10. TERMINATION
Employee's employment with Employer shall be terminated if
any of the following occur:
(a) Whenever Employer and Employee shall mutually agree in
writing to termination;
(b) On the death of Employee;
(c) Whenever Employee shall fail to rectify a breach of
any of the terms, covenants and conditions contained herein
within thirty (30) days after Employee receives written notice
for Employer to cure such default;
(d) In the event total disability continues for three (3)
continuous months. For purposes of this Agreement, Employee
shall be considered permanently disabled if Employee is
determined to be permanently disabled by the disability insurer
insuring the Employee at the commencement of said disability.
In the event that there is no disability insurer at such time,
such determination shall be made by a medical doctor duly
licensed in the State of California, selected by mutual
agreement between the two parties at issue, and in the event
that the parties cannot so agree, selected by two other doctors
to be designated, one by each of the respective parties, that
the Employee is unable because of any physical or mental
disability to devote his full time and attention to the
corporation business.
11. DISABILITY
If Employee becomes disabled, his salary shall be
terminated, but he shall be entitled to receive disability
payments as follows:
(a) For the first three (3) months of disability, Employee
shall receive full salary per month. Thereafter, he shall
receive no further disability payments.
(b) If disability ceases before termination of his
employment with Employer, Employee's salary shall be reinstated
on the date disability ends.
12. DEATH BENEFIT
If Employee dies during the term of this Agreement and
while employed as provided herein, Employer will pay to the
surviving spouse or significant other, as soon as practical, the
sum of $1,000,000.
13. MISCELLANEOUS
(a) This Agreement is drawn to be effective in the State
of California and shall be construed in accordance with
California law. No amendment or variation of the term of this
Agreement shall be valid unless made in writing and signed by
Employee and Employer. A waiver of any term or condition of
this Agreement shall not be construed as a general waiver by
Employer, and Employer shall be free to reinstate any such term
or condition with or without notice to Employee.
(b) It is hereby agreed that Employee's rights and
obligations under this Agreement are personal and not
assignable. This Agreement contains the entire agreement and
understanding between the parties to it and shall be binding on
and inure to the benefit of the heirs, personal representatives.
successors, and assigns of the parties, subject however, to the
restrictions on assignment contained herein.
(c) Except as expressly provided in this Agreement, on
termination Employee shall be entitled to receive only the
compensation accrued but unpaid as of the termination date and
shall not be entitled to additional compensation.
(d) In the event suit or other proceedings are instituted
to enforce any of the terms or conditions of this Agreement, the
prevailing party shall not be necessarily entitled to attorneys'
fees and court costs as a matter of entitlement.
(e) In the event of any dispute under or relating to the
terms of this Agreement, or breach thereof, it is agreed that
the same shall be submitted to arbitration to the American
Arbitration Association, in Orange County, California. The
arbitration shall be conducted in accordance with the rules
promulgated by said Association except that pursuant to C.C.P .
1283.1(b), the provisions of C.C.P. 1283.05 are incorporated
into the arbitration. Any judgment upon the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction thereof.
IN WITNESS WHEREOF, this Agreement has been executed on the
day and year first written above.
EMPLOYER
California Telephone Co., Inc.
By: /s/ C. Jay Smith
C. Jay Smith, President
By: /s/ Marc Tow
Marc Tow, Secretary
EMPLOYEE
/s/ C. Jay Smith
C. Jay Smith
EMPLOYMENT CONTRACT TERMS
FOR
C. JAY SMITH
1. Base Salary
The base salary for C. Jay Smith, President, of California
Telephone Co., Inc., will be one hundred and twenty-five
thousand dollars ($125,000.00), per annum, payable in equal
installments according to the payroll schedule adopted by
California Telephone Co., Inc.
This base salary shall increase per annum, subject to Board
of Director approval and will increase as directly related to
increase in profits. Calculations will computed for the year
ending on August 31, in the following fashion: If profits are up
ten (10) percent, then base salary shall increase ten percent,
but a decrease in profits will not act to diminish the base salary.
2. Bonus
A bonus shall be earned according to the following parameters:
A. There shall not be a bonus due for gross revenues that do not
exceed four million, five-hundred thousand dollars ($4,500,000.00).
B. A bonus shall be due for gross revenues that
exceed four million, five-hundred thousand dollars
($4,500,000.00), but are less than six million dollars
($6,000,000.00). This bonus shall be computed at the
rate of two percent (2%) of such revenues.
C. A bonus shall be due for gross revenues that
exceed six million dollars ($6,000,000.00). This
bonus shall be computed at the rate of two percent
(2%) of such revenues.
This bonus shall be computed for the year ending August 31.
3. Stock Options For Profitability
If, on the year ending August 31, it is determined that the
company's profits are greater than one percent (1%), then there
shall be two-hundred and fifty thousand (250,000) options
offered at a rate that is twenty-five (25) percent less than Bid.
4. Medical Benefits
Medical coverage shall be as according to the plan and
provider authorized by California Telephone, and shall be
provided for a period of ten (10) years.
5. Retirement Benefits
Retirement benefits shall be provided and shall be funded
to the fullest and maximum annual contribution allowable
according to ERISA.
6. Vacation Benefits
There shall be vacation benefits allowable such that one
(1) month of vacation shall have accrued by the end of the
calendar year.
7. Auto Expense Benefits
There shall be an allowable monthly automobile expense for
two cars, that shall, at a maximum, be four hundred and eighty
dollars ($480.00) per car.
EX-10.2
NETTEL.COM
ELECTRONIC COMMERCE ARCHITECTURE PROJECT
(May 1, 1999)
1.0 Proposal Summary
MFSNet.Com proposes to NetTel.Com to prepare an electronic
commerce architecture model, various business models,
presentation materials and other publications. In addition,
MFSNet.Com proposes to provide analysis, design, modeling,
project management and technology management services and
systems to NetTel.Com under this contract.
2.0 Proposal Details
This document represents a proposal to NetTel.Com from
MFSNet.Com to provide the following services and works:
1. A Scalable Electronic Commerce Architecture for
NetTel.Com and its subsidiaries
2. Various Business and Information Technology (IT) Models
for NetTel.Com related to Electronic Commerce
3. Various Internet Site designs and implementations
4. Various Business and Electronic Commerce publications and
presentation materials (electronic and hard copy)
5. Professional Services
6. Technology Management Services
7. Contracted Staff Management Services
8. Project Management Services
9. Technical Writing and Editing
10. Electronic Commerce and Information Technology (IT)
Consulting Services
11. Equipment and Software Leases
12. Electronic Commerce, Enterprise Management and Supply
Chain Management systems analysis, modeling, design,
acquisition, integration and installation services
13. IT Vendor Management Services
14. Various IT prototype systems
Once accepted by both MFSNet.Com and NetTel.Com, this proposal
will be the contract to provide the proposed services as amended
by the attached addendum.
3.0 Electronic Commerce Architecture
The proposed Electronic Commerce Architecture (ECA) will address
the business processes and services of NetTel.Com and its
subsidiaries, including Communications Plus.
The Electronic Commerce Architecture (ECA) is intended to act as
a framework and blueprint within which MFSNet.Com will design,
acquire, build, implement and manage the electronic commerce
infrastructure for NetTel.Com.
The "NetTel.Com Business Relationship Mapping" illustrates the
business relationships of NetTel.Com with its subsidiaries, its
suppliers, its customers and investors. The ECA will attempt to
integrate these relationships within its systems and across the
private and public networks (Internet) as need be.
"Communications Plus Business Model" is illustrated for
discussion purposes of the NetTel.Com core business model and
supply chain management services.
The "NetTel.Com Electronic Commerce Architecture" document
illustrates the framework, or business parameters, within which
the ECA will be developed.
The ECA will also address the management service requirements
for NetTel.Com and its subsidiaries, as illustrated in the
attached document: "NetTel.Com Management Services Model".
These business services are the core business processes that the
information technology (IT) infrastructure needs to integrate
and support.
An early diagram of the information technology (IT)
infrastructure components needed to build the NetTel.Com ECA is
included in the diagram labeled: "NetTel.Com Information
Technology Model". In order to build out the IT infrastructure,
a large expenditure of capital and time would be required. A
more modest proposal is suggested to begin the ECA process.
The overall ECA project plan proposes to begin by implementing
working prototypes of the core components and putting them into
production when accepted by NetTel.Com management. As business
and revenue requirements demand or allow, the prototype systems
will be replaced with more robust, durable, secure and scalable
IT systems. The prototype systems are illustrated in the
document: "NetTel.Com Information Technology Model - Prototype
Development and Production.
The Key features of the ECA to be built for NetTel.Com will
eventually include the following:
Integrated enterprise management systems
Accounting
Human Resources
Purchasing
Inventory Control
Manufacturing Resource Planning
Budgeting
Customer Relationship Management
Supply Chain Management
Business Relationship Management
Internal Corporate Web Services
Policies
News releases
Standards
Customer Support Systems
Forms
Public Web Services
New Customer Acquisition and Setup
Automated System Configuration Assistance
Moderated Equipment Auctions
Audio Help and "How To"
News Releases
Equipment Information and Illustrations
Online Purchase Requests
Online Order Status
Change Requests
Customer Service (human and automated)
Product Catalogs and Availability
Bulk eMail
Targeted Marketing
Automated eMail responses
Automated database updating from eMail
Business Relationship Management Web Services
Connections with Equipment Manufacturer Sites
Connections (links) from and to the NetTel.Com business
partners (InterConnects)
Online Invoice tracking for Vendors and InterConnects
Investor Relations Web Services
Annual Reports
Press Releases
Notes from the Company
Current Stock Prices
"Broker-Assist" pages for the Over the Counter (OTC)
process as it relates to NetTel.Com
Individualized Subsidiary Services
4.0 Electronic Commerce Architecture Implementation Plan
The plan to build out the complete Electronic Commerce
Architecture and to implement the complete IT infrastructure and
business processes will be extensive. In order to provide the
basic online services to the NetTel.Com customers and investors,
a staged implementation plan is proposed by MFSNet.Com. Phase
One will include:
Design and build two basic Web sites: NetTel.Com and
Communications Plus
Build the Investor Relations Section of the NetTel.Com
site, publishing the Prospectus and offerings
Provide Online Customer Setup
Provide Online Configuration Support
Provide Online Customer Support
Provide Online Ordering
Provide online payment options (Credit Card)
Provide bulk eMail routing
The working prototypes will be built on systems provided and
managed by MFSNet.Com in the NetTel.Com facilities.
Phase Two will include:
Design of the NetTel.Com Electronic Commerce Architecture (ECA)
Preparation of an ECA plan and budget
Integration of the prototype web site services with
rudimentary customer relationship and business management
services for the NetTel.Com management staff
Add automated order and inquiry processing
Add automated eMail Responses
Add audio help and configuration assistance to the web site
Design, plan and budget the addition of Online Equipment
Auctions to the web site
Add the automated equipment catalog updating features to
the systems
Add more online payment options (Automated Clearing House
(ACH) electronic fund transfer)
Update the two initial Web Sites
The next phases will have their objectives determined based on
the business requirements of the NetTel.Com management.
5.0 Projected Budget
The budget is estimated for the successful completion of the
items listed in phases one and two. Actual costs will be
reimbursed, plus compensation for actual time charged for each
category of service.
Phase I Budget, June through Mid August 1999:
Server, Workstation, Equipment and
software lease @$500 mo. $ 1,250
Professional Services @$10,000 mo. 25,000
Web Development @ $65 hr 6,500
Proposal Development N/C
Business Modeling for Proposal N/C
Site Server (eCommerce), SQL Server (database),
Exchange Server (eMail) 16,000
Miscellaneous Web Tools Software 1,500
Internet Setup (DSL) 700
Monthly Internet Connection @$180 mo. 450
Database Development @ $95 hr 4,750
$56,450
Phase II Budget, Mid-August 1999 through December 1999:
Server, Workstation, Equipment and
software lease @$500 mo. $ 1,250
Professional Services @$10,000 mo. 45,000
Web Development @ $65 hr 13,000
Miscellaneous Web Tools Software 1,500
Monthly Internet Connection @$180 mo. 810
Database Development @ $95 hr 19,000
$80,560
Total estimated budget to accomplish the business objectives in
both Phase I and Phase II for NetTel.Com: $137,010
6.0 Services and Rates
The MFSNet.Com estimates are based on the following categories
and rates:
Professional Services, monthly charge $10,000
Web Development, hourly charge 65
Database Development, hourly rate 95
Monthly equipment lease 500
Mileage 0.29
Actual costs will be accounted. Consulting services acquired
for this project will be charged at actual rates plus 20%.
Software, consumables, supplies and equipment acquisitions on
behalf of NetTel.Com will be priced at actual cost with no
markup. Discounts and rebates on equipment or software will be
returned to NetTel.Com.
Local transportation and per diem for MFSNet.Com staff is
included in the professional service fee. If NetTel.Com wishes
the MFSNet.Com staff to attend briefings or meetings outside the
NetTel.Com office area, then all expenses will be estimated and
advanced. Actual expenses will be reimbursed net of the travel advance.
7.0 Compensation and Payment Schedules
Direct costs will be paid in cash. Professional Services fees
may be paid in equity of 100,000 shares under Rule 144 or cash.
8.0 Intellectual Property Rights
MFSNet.Com will retain its rights to all intellectual property
disclosed to NetTel.Com during the course of this project,
before the consummation of this contract and after the term of
this contract.
MFSNet.Com will allow NetTel.Com the non-exclusive rights to use
the intellectual property (and its representations) provided
under this contract in its internal publications, marketing
materials, prospectus, and presentations as long as proper
attribution is made to MFSNet.Com and agreed-upon compensation
has been received by MFSNet.Com.
Use by NetTel.Com staff or management of intellectual property
that was produced and provided to NetTel.Com in order for them
to review this proposal by MFSNet.Com will be considered
acceptance of this proposal in toto by NetTel.Com.
9.0 Non-Disclosure Agreement
NetTel.Com, by acceptance or use of this proposal, agrees not to
disclose proprietary or other intellectual property provided to
them or learned by them from MFSNet.Com in any public
presentation, publication or to any third party unless
specifically allowed in this contract or its amendments.
10.0 Indemnification Clause
MFSNet.Com makes no claims of suitability, merchantability, Year
2000 compliance or fitness of use for the systems designed,
acquired or implemented for NetTel.Com by either MFSNet.Com
personnel or contractors. In addition, MFSNet.Com accepts no
liability for use, errors or omissions in product acquired or
developed for NetTel.Com as part of this contract.
It is the responsibility of NetTel.Com to comply with all
National and International Copyright, Patent and Trademarks
rules for materials that they use.
It is the responsibility of NetTel.Com to comply with all
software licensing agreements that they use even those that may
have been provided to them by MFSNet.Com under the terms of this contract.
MFSNet.Com will not indemnify NetTel.Com.
NetTel.Com will indemnify and defend MFSNet.Com and Michael F.
Smith for any actions based on the use of any materials provided
by MFSNet.Com to NetTel.Com.
11.0 Arbitration
Any disputes between MFSNet.Com and NetTel.Com concerning the
terms or conditions of this contract that can not be negotiated
between the two parties will be brought to an authorized,
independent Arbitrator licensed in the State of California for
binding arbitration.
12.0 Contract Change Orders
All changes to this contract and the resultant budgetary and
project plan impacts will be written and accepted by signatories
of both NetTel.Com and MFSNet.Com and will be then accepted as
amendments to this contract.
13.0 About MFSNet.com
Michael F. Smith registered MFSNet.Com in January 1999, in Salt
Lake City, Utah. MFSNet.Com is intended to be a company that
specializes in producing and publishing intellectual property
for traditional publication outlets and the Internet.
In addition, MFSNet.Com staff will provide professional and
management services to companies and individuals that wish to
publish or otherwise establish electronic commerce services to
the Internet.
14.0 Signature Page
By signing below, authorized signatories from NetTel.Com and
MFSNet.Com bind the entities to the terms and conditions of this
contract, its amendments and addendum.
I accept this contract on behalf of my organization:
/s/ C. Jay Smith
C. Jay Smith, President, Net Tel.Com
/s/ Michael F. Smith
Michael F. Smith, President, MFSNet.com
EX-10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made effective
as of December 06, 1999, by and between Communications Plus,
("the Employer"), of 1636 Stadium View, Anaheim, California
92806 and Richard G. Luna, ("the Employee"), of 1319 West
Mauretania Street, Wilmington, California 90744.
A. Employer is engaged in the business of selling new
and used telephone equipment. The Employee will
primarily perform the job duties at the following
locations: 1636 Stadium View, Anaheim, California.
B. Employer desires to have the services of the Employee.
C. Employee is willing to be employed by Employer.
Therefore, the parties agree as follows:
1. EMPLOYMENT. Employer shall employ Employee as the General
Manager. Employee shall provide to Employer the following
services: Report directly to Jay Smith. Duties will include the
following: Provide management duties to all sales warehouse and
technical staff. Create new sales lead opportunities for sales
staff, provide technical support to the company and customers,
provide install support to interconnect companies, hire new
employees, provide administration support to the office
personnel. Employee accepts and agrees to such employment,
subject to the general supervision, advice and direction of Employer.
2. BEST EFFORTS OF EMPLOYEE. Employee agrees to perform
faithfully, industriously, and to the best of Employee's
ability, experience, and talents, all of the duties that may be
required by the express and implicit terms of this Agreement, to
the reasonable satisfaction of Employer. Such duties shall be
provided at such place(s) as the needs, business, or
opportunities of the Employer may require from time to time.
3. COMPENSATION OF EMPLOYEE. As compensation for the services
provided by Employee under this Agreement, Employer will pay
Employee $72,000.00 per year. This amount shall be paid weekly,
not later than 7 days after the payroll period that ended on the
preceding Saturday. Upon termination of this Agreement,
payments under this paragraph shall cease; provided, however,
that the Employee shall be entitled to payments for periods or
partial periods that occurred prior to the date of termination
and for which the Employee has not yet been paid. Accrued
vacation will be paid in accordance with state law and the
Employer's customary procedures. This section of the Agreement
is included only for accounting and payroll purposes and should
not be construed as establishing a minimum or definite term of
employment.
4. COMMISSION PAYMENTS. In addition to the payments under the
preceding paragraph, Employer will make commission payments to
the Employee based on 5% of Gross Sale on equipment. This
commission will be paid monthly on the last day of each month.
Commissions will be paid on all sales directly attributed to
employee through direct sales and sales staff.
a. Accounting. The employer shall maintain records in
sufficient detail for purposes of determining the amount of
the commission. The Employer shall provide to Employee a
written accounting that sets forth the manner in which the
commission payment was calculated.
b. Right to Inspect. The Employee, or the Employee's
agent, shall have the right to inspect Employer's records
for the limited purpose of verifying the calculation of the
commission payments, subject to such restrictions as
Employer may reasonably impose to protect the
confidentiality of the records. Such inspections shall be
made during reasonable business hours as may be set by Employer.
c. Death of the Employee. If Employee dies during the
term of this Agreement, Employee shall be entitled to
payments or partial commission payments for the period
ending with the date of Employee's death.
d. Disability of the Employee. If the Employee becomes
disabled during the term of this Agreement, the commission
payments shall continue at the same rate specified above.
If the disability continues for a continuous period of 90
days, the Employer, at its option may terminate commission
payments upon 30 days written notice to the Employee or the
Employee's personal representative; provided, however, all
commissions that have been earned by the Employee shall be
paid. For the purposes of this Agreement, "disability"
means a mental or physical illness or condition that
renders Employee incapable of performing the essential
functions of the services without reasonable accommodation.
5. REIMBURSEMENT FOR EXPENSES IN ACCORDANCE WITH EMPLOYER
POLICY. The Employer will reimburse Employee for "out-of-
pocket" expenses: Meals, parking and any other expenses must be
approved by management before the expense can be paid. All
expenses will be paid at the end of each month. Employer will
provide employee with a cell phone and gas card.
6. RECOMMENDATIONS FOR IMPROVING OPERATIONS. Employee shall
provide Employer with all information, suggestions, and
recommendations regarding Employer's business, of which Employee
has knowledge, that will be benefit to Employer.
7. CONFIDENTIALITY. Employee recognizes that Employer has and
will have information regarding the following:
inventions
products
prices
costs
discounts
future plans
business affairs
processes
trade secrets
technical matters
customer lists
and other vital information (collectively, "Information") which
are valuable, special and unique assets of Employer. Employee
agrees that the Employee will not at any time or in any manner,
either directly or indirectly, divulge, disclose, or
communication any Information to any third party without the
prior written consent of the Employer. Employee will protect
the Information and treat it as strictly confidential. A
violation by Employee of this paragraph shall be a material
violation of this Agreement and will justify legal and/or
equitable relief.
8. UNAUTHORIZED DISCLOSURE OF INFORMATION. If it appears that
Employee has disclosed (or has threatened to disclose)
Information in violation of this Agreement, Employer shall be
entitled to an injunction to restrain Employee from disclosing,
in whole or in part, such Information, or from providing any
services to any party to whom such Information has been
disclosed or may be disclosed. Employer shall not be prohibited
by this provision from pursuing other remedies, including a
claim for losses and damages.
9. CONFIDENTIALITY AFTER TERMINATION OF EMPLOYMENT. The
confidentiality provisions of this Agreement shall remain in
full force and effect for a 1 year period after the termination
of Employee's employment. During such 1 year period, neither
party shall make or permit the making of any public announcement
or statement of any kind that Employee was formerly employed by
or connected with Employer.
10. EMPLOYEE'S INABILITY TO CONTRACT FOR EMPLOYER. Employee
shall not have the right to make any contracts or commitments
for or on behalf of Employer without first obtaining the express
written consent of Employer.
11. VACATION. Employee shall be entitled to 1 Week of paid
vacation for each year of employment beginning on the first day
of Employee's employment. Such vacation must be taken at a time
mutually convenient to Employer and Employee, and must be
approved by Employer. Requests for vacation shall be submitted
to Employee's immediate supervisor 10 days in advance of the
requested date such vacation would commence.
12. HOLIDAYS. Employee shall be entitled to 5 holidays with
pay during each calendar year.
13. INSURANCE BENEFITS. Employee shall be entitled to
insurance benefits, in accordance with the Employer's applicable
insurance contract(s) and policies, and applicable state law.
These benefits shall include:
health insurance
disability insurance
14. OTHER BENEFITS.
Employee shall be entitled to the following additional benefits:
50,000 shares of stock in OTTC upon accepting employment and
25,000 shares per quarter for the first year of service. After
first year of service employee is entitled to the purchase
option of 25,000 shares per quarter.
15. TERM/TERMINATION. Employee's employment under this
Agreement shall be for an unspecified term on an "at will"
basis. This Agreement may be terminated by either party upon 5
days written notice. If Employee is in violation of this
Agreement, Employer may terminate employment without notice and
with compensation to Employee only to the date of such
termination. The compensation paid under this Agreement shall
be the Employee's exclusive remedy.
16. TERMINATION FOR DISABILITY. Employer shall have the option
to terminate this Agreement, if Employee becomes permanently
disabled and is no longer able to perform the essential
functions of the position with reasonable accommodation.
Employer shall exercise this option by giving 30 days written
notice to Employee.
17. COMPLIANCE WITH EMPLOYER'S RULES. Employee agrees to
comply with all of the rules and regulations of Employer.
18. RETURN OF PROPERTY. Upon termination of this Agreement,
the Employee shall deliver all property (including keys,
records, notes, data, memoranda, models, and equipment) that is
in the Employee's possession or under the Employee's control
which is Employer's property or related to Employer's business.
Such obligation shall be governed by any separate
confidentiality or proprietary rights agreement signed by the Employee.
19. NOTICES. All notices required or permitted under this
Agreement shall be in writing and shall be deemed delivered when
delivered in person or deposited in the United States mail,
postage paid, addressed as follows:
Employer:
Communications Plus
Jay Smith, President
1636 Stadium View
Anaheim, California 92806
Employee:
Richard G. Luna
1319 West Mauretania Street
Wilmington, California 90744
Such addresses may be changed from time to time by either party
by providing written notice in the manner set forth above.
20. ENTIRE AGREEMENT. This Agreement contains the entire
agreement of the parties and there are no other promises or
conditions in any other agreement whether oral or written. This
Agreement supersedes any prior written or oral agreements
between the parties.
21. AMENDMENT. This Agreement may be modified or amended, if
the amendment is made in writing and is signed by both parties.
22. SEVERABILITY. If any provisions of this Agreement shall be
held to be invalid or unenforceable for any reason, the
remaining provisions shall continue to be valid and enforceable,
but that by limiting such provision it would become valid or
enforceable, then such provision shall be deemed to be written,
construed, and enforced as so limited.
23. WAIVER OF CONTRACTUAL RIGHT. The failure of either party
to enforce any provision of this Agreement shall not be
construed as a waiver or limitation of that party's right to
subsequently enforce and compel strict compliance with every
provision of this Agreement.
24. APPLICABLE LAW. This Agreement shall be governed by the
laws of the State of California.
Employer:
Communications Plus
By: /s/ Jay Smith
Jay Smith, President
AGREED TO AND ACCEPTED
Employee:
By: /s/ Richard G. Luna
Richard G. Luna
EX-16
LETTER ON CHANGE IN CERTIFYING ACCOUNTANT
Kelly & Company
Certified Public Accountants
3931 MacArthur Boulevard, Suite 205
Newport Beach, California 92660
(949) 474-7440
March 2, 2001
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: One Touch Total Communications, Inc.
We have read the statements regarding the change of auditors
that we understand One Touch Total Communications, Inc.
(formerly California Telephone Company, Inc.) will include under
Item 23 titled "Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure" of the Form SB-2 it will
file. We agree with such statements made in the first and
second paragraphs thereof regarding our firm. We have no basis
to agree or disagree with other statements made under Item 23.
Truly yours,
/s/ Kelly & Company
Kelly & Company
EX-23.1
CONSENT OF ACCOUNTANTS
L.L. Bradford & Company, LLC
Certified Public Accountants
2901 El Camino Avenue, Suite 105
Las Vegas, Nevada 89102
(702) 735-5030
June 15, 2001
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: One Touch Total Communications, Inc. - Form SB-2
Dear Sir/Madame:
As independent certified public accountants, we hereby
consent to the incorporation by reference in this Registration
Statement on Form SB-2 of our report dated February 16, 2001 in
One Touch Total Communications, Inc.'s audited financial
statements, and to all references to our firm included in this
Registration Statement.
Sincerely,
/s/ L.L. Bradford & Company, LLC
L.L. Bradford & Company, LLC
EX-23.2
CONSENT OF COUNSEL
Brian F. Faulkner
A Professional Law Corporation
3900 Birch Street, Suite 113
Newport Beach, California 92660
(949) 975-0544
June 14, 2001
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: One Touch Total Communications, Inc. - Form SB-2
Dear Sir/Madame:
I have acted as counsel to One Touch Total Communications,
Inc., a Nevada corporation ("Company"), in connection with its
Registration Statement on Form SB-2 relating to the registration
of 1,075,000 shares of its common stock ("Shares"), $0.001 par
value per Share. I hereby consent to all references to my firm
included in this Registration Statement, including the opinion
of legality.
Sincerely,
/s/ Brian F. Faulkner
Brian F. Faulkner, Esq.