UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) JANUARY 11, 2005
AXIA GROUP, INC.
(Exact name of registrant as specified in its charter)
NEVADA 001-09418 87-0509512
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1324 N. MAGNOLIA AVENUE, EL CAJON, CALIFORNIA 92020
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (619) 444-1919
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2.below):
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(C) under the
Exchange Act (17 CFR 240.13e-4(c))
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
1. RESCISSION OF D&R CRANE ACQUISITION
On January 11, 2005, Axia Group, Inc., or Axia, D&R Crane, Inc., a
California corporation, or D&R Crane, Jody R. Regan, and Dawnelle Patrick
entered into a rescission agreement with respect to Axia's acquisition of all of
the capital stock of D&R Crane on or about July 21, 2004.
On or about July 21, 2004, Mr. Regan and Ms. Patrick sold all of the
capital stock of D&R Crane to Axia in exchange for 100,000,000 "pre-split"
shares of Axia common stock and 5,000,000 shares of Axia Series C Preferred
Stock. On October 18, 2004, Axia conducted a 1,000 for 1 reverse stock split of
its common stock, pursuant to which the "pre-split" shares of common stock were
reduced to 100,000 shares. On October 22, 2004, Mr. Regan and Ms. Patrick
converted the Series C Preferred Stock into an aggregate of 500,000,000 shares
of Axia common stock.
Under the terms of the rescission agreement, Mr. Regan and Ms. Patrick
returned the 500,100,000 shares of "post-split" common stock to Axia for
cancellation, and Axia transferred all of the capital stock of D&R Crane back to
Mr. Regan and Ms. Patrick. In connection therewith, Ms. Patrick resigned as an
officer and director of Axia. Mr. Regan and Ms. Patrick agreed to, among other
things, cooperate with Axia in connection with its filings under the federal
securities laws and provide Axia with a general release, in exchange for which
Axia agreed to indemnify Mr. Regan, Ms. Patrick, and D&R Crane, assume a note
issued by D&R Crane in the principal amount of $215,000, and provide Mr. Regan,
Ms. Patrick and D&R Crane with a general release.
2. SERIES D STOCK PURCHASE AGREEMENT
On January 12, 2005, Axia issued 5,000,000 shares of Series D Preferred Stock to
Richard F. Schmidt for $20,000 in cash and a note in the principal amount of
$30,000.00, payable in three monthly installments of $10,000.00 each. The terms
of the Series D Preferred Stock are set forth in Item 5.03. In connection
therewith, Axia appointed Mr. Schmidt as a director of Axia. The issuance of the
Series D Preferred Stock was exempt from registration under the Securities Act
of 1933, as amended, pursuant to Section 4(2) of that Act.
3. RESCISSION OF REGAN STOCK PURCHASE
On January 13, 2005, Axia and Jody R. Regan entered into a rescission
agreement with respect to Mr. Regan's acquisition of 10,000,000 "pre-split"
shares of Axia common stock on or about May 25, 2004.
On or about May 25, 2004, Mr. Regan purchased 10,000,000 "pre-split"
shares of Axia common stock for $50,000.00. On October 18, 2004, Axia conducted
a 1,000 for 1 reverse stock split of its common stock, pursuant to which the
"pre-split" shares of common stock were reduced to 10,000 shares.
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Under the terms of the rescission agreement, Mr. Regan returned the
10,000 shares of "post-split" common stock to Axia for cancellation, and Axia
paid Mr. Regan $20,000 in cash and issued a note in the principal amount of
$30,000.00, payable in three monthly installments of $10,000.00 each. In
connection therewith, Mr. Regan resigned as an officer and director of Axia. Mr.
Regan agreed to, among other things, cooperate with Axia in connection with its
filings under the federal securities laws and provide Axia with a general
release, in exchange for which Axia agreed to provide Mr. Regan with a general
release.
4. SERIES C STOCK PURCHASE AGREEMENT
On January 28, 2005, Axia issued 250,000 shares of Series C Preferred
Stock to Richard F. Schmidt for $5,000 in cash. The issuance of the Series C
Preferred Stock was exempt from registration under the Securities Act of 1933,
as amended, pursuant to Section 4(2) of that Act.
ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
See Item 1.01.
ITEM 1.03 BANKRUPTCY OR RECEIVERSHIP.
Not Applicable.
SECTION 2 - FINANCIAL INFORMATION
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
See Item 1.01.
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
Not Applicable.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN
OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A
REGISTRANT.
Not Applicable.
ITEM 2.04 TRIGGERING EVENTS THAT ACCELERATE OR INCREASE A DIRECT
FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE
SHEET ARRANGEMENT.
Not Applicable.
ITEM 2.05 COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES.
Not Applicable.
ITEM 2.06 MATERIAL IMPAIRMENTS.
Not Applicable.
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SECTION 3 - SECURITIES AND TRADING MARKETS
ITEM 3.01 NOTICE OF DELISTING OR FAILURE TO SATISFY A CONTINUED LISTING
RULE OR STANDARD: TRANSFER OF LISTING.
Not Applicable.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
See Item 1.01.
ITEM 3.03 MATERIAL MODIFICATION TO RIGHTS OF SECURITY HOLDERS.
See Item 5.03.
SECTION 4 - MATTERS RELATED TO ACCOUNTANTS AND FINANCIAL STATEMENTS
ITEM 4.01 CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not Applicable.
ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A
RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW.
Not Applicable.
SECTION 5 - CORPORATE GOVERNANCE AND MANAGEMENT
ITEM 5.01 CHANGES IN CONTROL OF REGISTRANT.
See Items 1.01, 5.02.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS.
See Item 1.01.
On January 13, 2005, the board of directors Axia appointed Richard D.
Mangiarelli to fill a vacancy on the board of directors and appointed Richard F.
Schmidt as President, Chief Financial Officer, and Secretary of Axia.
Richard F. Schmidt is a director of Axia and its President, Chief
Financial Officer, and Secretary. Mr. Schmidt, age 40, has an extensive
background in corporate finance, with over 15 years of direct financial and tax
management experience. Mr. Schmidt is currently the Chief Financial Officer of
Cybertel Communications, a publicly-traded corporation. He is responsible for
all aspects of treasury management, public reporting and investor relations. He
is also a director of Global Resource Corporation, a publicly-traded business
development company. Mr. Schmidt formerly worked as the Senior Vice President of
Iseki, Inc., an international sales and leasing company, assisting the Company
with the management and review of its administrative, legal and human resources.
Previously at Iseki, Inc., Mr. Schmidt had served as Chief Financial Officer. He
also served as a manager and multinational tax and business consultant for
Coopers & Lybrand. Mr. Schmidt is a Certified Public Accountant licensed in
California.
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Richard Mangiarelli is a director of Axia. He is the Chairman of the
Board, Chief Executive Officer, Chief Financial Officer and Secretary of Global
Resource Corporation, a publicly traded business development company, and is
also the Chief Executive Officer, President and Director of Cybertel
Communications Corp., a publicly traded corporation. Mr. Mangiarelli is 61 years
old. In 1985, he founded USA Energy Corporation, a licensed general and
electrical contractor dedicated to energy conservation contracting. He was the
Chief Operating Officer of Fulham Company, an electronic ballast manufacturer,
from 1993 to 1995. Mr. Mangiarelli holds a BA degree from the University of
Connecticut and an MBA degree from Pepperdine University. He is a licensed
general contractor and licensed electrical contractor and is retired from the
United States Marine Corps at the rank of Colonel.
ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS:
CHANGE IN FISCAL YEAR.
On January 12, 2005, Axia designated a series of preferred stock to be
known as Series D Preferred Stock, par value $0.001 per share. Each share of
Series D Preferred Stock is convertible into such number of shares of Axia
common stock equal to $0.01 per share divided by fifty percent (50%) of the
average of the per share market during the three (3) trading days immediately
preceding the conversion date. Holders of the Series D Preferred Stock shall be
entitled to receive dividends or other distributions with the holders of our
common stock on an as converted basis when, as, and if declared by our board of
directors. The holders of the Series D Preferred Stock shall also be entitled to
receive, upon liquidation, an amount equal to $0.01 per share of the Series D
Preferred Stock plus all declared but unpaid dividends with respect to such
shares. The shares of Series D Preferred Stock are not redeemable.
The holders of Series D Preferred Stock and the holders of our common
stock shall be entitled to notice of any stockholders' meeting and to vote as a
single class upon any matter submitted to the stockholders for a vote as
follows: (i) the holders of Series D Preferred Stock shall have such number of
votes as is determined by multiplying (a) the number of shares of Series D
Preferred Stock held by such holder, (b) the number of issued and outstanding
shares of our common stock (on a fully-diluted basis) as of the record date for
the vote, or, if no such record date is established, as of the date such vote is
taken or any written consent of stockholders is solicited, and (c) 0.0000004;
and (ii) the holders of our common stock shall have one vote per share of common
stock held as of such date.
ITEM 5.04 TEMPORARY SUSPENSION OF TRADING UNDER REGISTRANT'S EMPLOYEE
BENEFIT PLANS.
Not Applicable.
ITEM 5.05 AMENDMENTS TO THE REGISTRANT'S CODE OF ETHICS, OR WAIVER OF A
PROVISION OF THE CODE OF ETHICS.
Not Applicable.
SECTION 6 - [RESERVED]
Not Applicable.
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SECTION 7 - REGULATION FD
ITEM 7.01 REGULATION FD DISCLOSURE.
Not Applicable.
SECTION 8 - OTHER EVENTS
ITEM 8.01 OTHER EVENTS.
Effective February 1, 2005, Axia effectuated a 1-for-500 reverse split
of its outstanding common stock. The number of shares of authorized common stock
was not changed by this reverse stock split.
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
Not Applicable.
(b) Pro forma financial information.
Not Applicable.
(c) Exhibits.
Exhibit # Description
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4.1 Certificate of Designation of the Rights and
Preferences of the Series D Convertible Preferred
Stock of Axia Group, Inc.
10.1 Rescission Agreement between Axia Group, Inc., Jody
R. Regan, Dawnelle Patrick, and D&R Crane, Inc.
10.2 Stock Purchase Agreement between Axia Group, Inc. and
Richard F. Schmidt
10.3 Rescission Agreement between Axia Group, Inc. and
Jody R. Regan
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AXIA GROUP, INC.
(Registrant)
Date: February 14, 2005 By: /s/ Richard F. Schmidt
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Richard F. Schmidt, President,
Chief Financial Officer, and Secretary
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