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): OCTOBER 10, 2003
COMMISSION FILE NO. 0-49915
HERBALORGANICS.COM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 88-049628
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(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
7708-119A STREET, DELTA, B.C., CANADA V4C 6N6
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(604) 596-9166
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(ISSUER TELEPHONE NUMBER)
7171 - 121ST STREET #109, SURREY, B.C., CANADA V3W 1G9
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(FORMER ADDRESS)
ITEM 1. CHANGES IN CONTROL OF THE REGISTRANT.
On October 10, 2003, Visioneer Holdings Group, Inc. ("Visioneer"),
TransCalling Communications, Inc., and Nicholas Shamy, respectively, subscribed
to 7,600,000, 1,235,000 and 665,000 restricted, newly issued shares of the
Registrant's common stock, $.001 par value per share (the "Common Stock" or the
"Shares"). Also on that same date, Visioneer purchased 10,000,000 shares of
issued and outstanding Common Stock from Thomas Whalen, the Company's former
Chief Executive Officer. As a result of the subscriptions and the purchase, the
control of the Registrant shifted to the following individual:
Name No. of shares Percentage
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Marius Silvasan 17,600,000(1) 64%
(1) Beneficially owned through Visioneer Holdings Group Inc.
Immediately after the transactions, there will be 27,500,000 shares of Common
Stock outstanding.
ITEM 2. ACQUISITION OF DISPOSITION OF ASSETS.
In September 2003, the Registrant formed a wholly-owned subsidiary,
Teleplus Retail Services, Inc., a Quebec, Canada Corporation ("Teleplus
Retail"). On October 1, 2003, Teleplus Retail purchased the following assets
(the "Purchased Assets") from 3577996 Canada Inc., a Canada Business Corporation
("3577996"), relating to 3577996's "TelePlus Consumer Services" business
("Teleplus" or the "Business"):
(a) The Cash;
(b) The Accounts Receivable;
(c) The Inventory;
(d) The Prepaid Expenses and Deposits to the extent they may be used by the
Purchaser;
(e) The Loans Receivable;
(f) The Computer Hardware;
(g) The Computer Software;
(h) The Leasehold Improvements;
(i) The Office Equipment and Furniture; and
(j) The Goodwill
The Registrant expects to change its name to Teleplus Enterprises, Inc. in the
near future.
A summarized description of TelePlus' business prior to the asset
Acquisition is provided below. TelePlus Retail intends to capitalize
on the achievements of TelePlus by using the purchased assets to create
shareholder value.
DESCRIPTION OF THE BUSINESS
Over the years, TelePlus has developed a reputation as the lead provider of
wireless and portable communication devices in Canada. Today TelePlus' products
include wireless handsets and services from major Canadian carriers,
international phones, satellites, home phones and other mobile electronic
devices including an exclusive line of international GSM world phones.
TelePlus has succeeded in creating a unique position in the wireless industry by
marketing a wide variety of wireless and communication products under a
"one-stop wireless shop" concept. Microcell Solutions, Telus, PageNet,
StarChoice, Olympus, Samsung, Sanyo and Vtech are among some of the brands
promoted by TelePlus.
TelePlus has shown strong revenue growth from US$1.4 million in 2000 to an
expected US$8.5 million by the end of 2003. TelePlus' delivers high consumer
confidence and exceptional customer service, which is evidenced by winning 2
consecutive times the "Consumer's Choice Award" for best wireless retail
business - 2002 & 2003.
DESCRIPTION OF PRINCIPAL PRODUCTS & SERVICES
Over the last few years, TelePlus has successfully negotiated distribution
agreements with the major Canadian wireless providers as well as with a variety
of communication vendors. Today, those agreements allow TelePlus to promote the
products and services of, among others:
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TABLE 1: RANGE OF PRODUCTS AND SERVICES
As of 2003
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* Product/Service : Providers/Vendors
* Wireless Products/Services : Microcell Solutions (Fido), Telus Mobility
* Home Phones : Panasonic, V-Tech, Sanyo, Siemens, Uniden
* Pagers and 2-way Pagers : PageNet, Unipage, Tele-Page
* Satellite Dish systems : StarChoice
* CD & MP3 Players : Sanyo, Samsung
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Our range of offering has continuously increased since 1999
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TelePlus' intends to continue developing its product offering over the next few
years to become the premier choice of consumers seeking the purchase of wireless
and portable communication devices in Canada.
COMPETITIVE BUSINESS CONDITIONS
TelePlus faces competition from different retail players, amongst which we can
find the shops of wireless carriers, large surface retailers and specialized
wireless and telephone shops.
Wireless Carriers' Shops
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TelePlus faces competition from the wireless carriers established corporate
stores and/or dealers. In this area TelePlus' primary competitors are the
following:
o Bell World
o Rogers AT&T
o Telus Mobility
o Fido
The above stated retailer outlets in all cases sell only the wireless products
and services of their respective carrier. In addition, these retail outlets in
all cases except Bell World do not promote any other services than wireless
products.
TelePlus' product offering is superior to those offered by these retail outlets
as TelePlus offers a "one-stop wireless shop" concept in promoting under one
roof a variety of wireless and communication products. This concept drastically
differs from conventional wireless stores as consumers are guided towards an
optimum wireless solution based on their needs and expectations.
Large Surface Retailers
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TelePlus also competes against large surface retailers, however, they only
promote wireless boxed products with limited customer support. The largest
players in Canada are:
o FutureShop
o Office Depot
o Best Buy
TelePlus intends to provide its full range of services through Wal-Mart and
Sam's Club stores. This will allow TelePlus to quickly penetrate the market
nationwide, limit direct competition and capitalize on these mass merchandisers
flow of customers.
Specialized Wireless & Phone Retailers
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Under this category we find those stores that are direct competitors to
TelePlus' "one-stop wireless store" concept. TelePlus main competitors are:
o Cabine Telephonique. Operates 42 stores primarily in Quebec and Ontario;
and promotes all brands of wireless products in addition to home phones and
related products.
o Wireless Wave. Operates 66 stores primarily in Western Canada and Toronto;
and its product line is limited to wireless products and services.
o Radio Shack. Operates 900 stores across Canada; and sells the wireless
services of Rogers AT&T in addition to a variety of phone products and
services.
Others
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In addition to the above-mentioned competitors, TelePlus faces competition from
a variety of independent retailers promoting one to a few wireless carriers'
products and services. In the last year, however, wireless carriers have been
limiting their issuance of new retail licenses and some of them have even
started reducing the number of issued retail licenses to consolidate their
efforts with larger customers such as TelePlus. This trend is expected to
continue in the coming year and it should prevent the upcoming of additional
competitors in the marketplace.
NO DEPENDENCE ON ONE OR A FEW CUSTOMERS
TelePlus is currently finalizing a concession agreement with Wal-Mart Canada &
SAM's CLUB Canada. Should such agreement be finalized TelePlus would operate
wireless kiosks located within various Wal-Mart and SAM's CLUB stores. This
would result in TelePlus' revenues and earnings bearing a high level of
dependency on Wal-Mart and SAM's CLUB. This relationship between Sam's Club,
Wal-Mart and TelePlus is expected to cover Canada. Sam's Club and Wal-Mart may
elect to transact with other third party management companies should TelePlus
fail to perform.
PATENTS, TRADEMARKS & LICENSES
No patents or licenses are required. TelePlus filed an application to obtain
"SimplySellular" as a trademark.
NEED FOR GOVERNMENT APPROVAL
TelePlus does not need any government approval.
RESEARCH & DEVELOPMENT OVER PAST TWO YEARS
TelePlus has spent approximately 2,000 hours over the last two years resulting
in a cost of approximately $200,000 for research and development.
EMPLOYEES
TelePlus has a total of 90 employees, 60 of which are full time.
DESCRIPTION OF PROPERTY
TelePlus currently has in place 23 leases for various properties. Twenty-two
are retail store leases and 1 lease is for its head office. TelePlus' retail
stores vary in size from 200 to 600 square feet. TelePlus' head office
(3,500 square feet) is located in an office building. All TelePlus' leases
except two are five years in length.
LEGAL PROCEEDINGS
The following proceedings have been instigated against TelePlus. TelePlus Retail
doesn't believe the following legal proceedings would impact TelePlus Retail on
a moving forward basis nevertheless such proceedings are disclosed.
o Labor: TelePlus is currently defending an action instigated against it by a
former employee. Such employee claims TelePlus dismissed her because she
became pregnant. TelePlus claims having dismissed her, within 3 months
following her commencement date, for lack of performance. Total liability
to TelePlus, if it losses the claim, may reach a maximum of $2,500.
TelePlus is currently defending a few non-material labor issues instigated
by former employees.
o Goods & Services: TelePlus is currently defending an action instigated
against it by one of its suppliers. Such supplier claims TelePlus defaulted
on the payment of goods sold by supplier to the company. TelePlus claims it
failed to pay the goods sold by supplier because such goods were purchased
contingent on supplier making available to TelePlus wireless network access
which supplier failed to provide. Thus TelePlus is unable to sell these
goods at retail and has attempted, without success, to return the goods to
the supplier. Supplier has refused to take the goods back. Total liability
to TelePlus, if it losses the claim, may reach a maximum of $20,000.
o Company Stock: TelePlus is currently defending an action instigated against
it by two private individuals. Such individuals claim having attempted to
purchase TelePlus stock from a consultant of TelePlus and such transaction
failed. These individuals claim having wired funds to the said consultant
but said consultant failed to provide the individuals with the purchased
TelePlus stock. The individuals claim that TelePlus and its president,
Marius Silvasan, are jointly responsible for the failed transactions thus
have filed a claim against TelePlus and its president for the amount of
their investment. TelePlus and its president claim having no responsibility
in the transaction. Such transaction was to occur between two third
parties, one owning some TelePlus stock and the other two individuals
interested to purchase such stock. The fact that the transaction failed to
be completed among the parties does in no way imply any responsibility on
TelePlus or its president. Total liability to TelePlus, if it losses the
claim, may reach a maximum of $7,500.
o Financing: TelePlus is currently defending an action arising out of a
proposed financing transaction that was never consummated and therefore,
terminated by TelePlus. That transaction contemplated that (i) TelePlus
would be merged with a subsidiary of a non-operating, publicly owned
company, (ii) that the shareholders of TelePlus would become the
controlling shareholders of the public company and (iii) thereafter several
prospective purchasers would purchase shares of stock of that public
company. The contemplated transactions were to have closed by the later of
September 15, 2003 or the delivery of a notice that TelePlus declined such
funding. The closing did not occur on September 15, 2003. Those prospective
investors, who are the complaining parties in this lawsuit, never purchased
any shares of the shell company and never formally offered to otherwise
provide funds to TelePlus. Accordingly, on September 23, 2003, TelePlus
notified the public company that it was not going to proceed with the
merger and notified the prospective investors that it was declining any
funding from them. The complaining parties filed their action against
TelePlus seeking a temporary restraining order and other injunctive relief
against TelePlus. On October 2, 2003, the Court denied the motion for a
temporary restraining order against TelePlus. A hearing on the motion for
the other injunctive relief has been scheduled for October 16, 2003.
TelePlus believes that this lawsuit is without any merit and intends to
vigorously defend itself in this lawsuit.
INFORMATION REGARDING LARGEST SHAREHOLDERS, NUMBER OF SHARES, NAME
Visioneer is the Company's largest shareholder. Visioneer is located at 1255
Phillips Square, Suite 605, Montreal, Quebec, H3B 3G5. Visioneer, for which
Marius Silvasan is the beneficiary holder, currently owns 17,600,000 shares,
which represent 64% of the issued and outstanding Common Stock.
TRANSACTIONS BETWEEN THE COMPANY AND ITS OFFICERS AND DIRECTORS OR OTHER
RELATED PARTIES, SUCH AS LEASES, EMPLOYMENT AGREEMENTS
The company currently has employment agreements with all company executives and
key managers.
RISKS:
Business Risk:
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o Limited duration of agreements in place with major wireless carriers. The
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TelePlus' current sales volumes have enabled the firm to build strong
relationships with a variety of wireless and communication partners thus,
minimizing the risks associated with the non-renewal of any of TelePlus
agreements.
o No product exclusivity. The current market consolidation undertaken by the
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major wireless carriers limit TelePlus risk associated with no product
exclusivity as new retail players can't readily get access to the products
and services offered by TelePlus;
o Rapid product obsolescence; the wireless and communication market place
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face rapid product obsolescence requiring TelePlus to maintain short
inventory cycles and technically enabled sales consultants;
o Price erosion; TelePlus is faced with high price elasticity resulting in
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the erosion of its margin on certain products;
o Negative impact on profit margins resulting from price wars;
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o Issuance of a large number of wireless licenses increasing the number of
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competitors;
o TelePlus' ability to hire and retain experienced industry professionals;
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and
o Reliance on Key Management. Our success is highly dependent upon the
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continued services of Marius Silvasan, our Chief Executive Officer, Benoit
Bube, our VP Sales, Darren Lisak, our Director of Procurement and Logistics
and David Spencer, our Director of Development. If any of the foregoing
persons were to leave us, it could have a materially adverse effect upon
our business and operations.
Financial Risk:
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o TelePlus' ability to secure competitive pricing arrangements in a market
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dominated by larger retailers with higher financial resources; TelePlus'
margins being very low any reduction in margin may adversely affect
TelePlus' profitability. TelePlus' ability to achieve economies of scale is
critical to TelePlus' long-term viability.
o TelePlus' capacity to secure required financing; TelePlus will be required
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to secure financing of approximately $4.3 million in order to implement its
business plan and in order to grow its business in the upcoming years.
Should TelePlus fail to secure the required financing TelePlus will not be
able to execute its growth strategy and could have a materially adverse
effect upon our ability to maintain current operations. As the industry
reaches saturation large incumbents will be better positioned to face
competitive demands. Small regional players will be called to disappear
favoring market consolidation. It is important for TelePlus to achieve a
dominant market position faster then its competitors. Such position will
favor TelePlus' long-term viability.
Economic Risk:
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o Uncertain growth in market demand: Current market conditions indicate a
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strong growth of wireless products in the upcoming years. Nevertheless
technological development and unstable economic growth may affect current
forecast which could adversely affect TelePlus revenues and profitability.
ITEM 5. OTHER EVENTS.
As a result of the purchase of assets from 3577996 and the change in focus of
the Registrant's business, the Registrant is changing its name from
HerbalOrganics.com, Inc. to Teleplus Enterprises, Inc. In addition, on October
10, 2003 the former sole director and sole officer of HerbalOrganics.com
resigned and Marius Silvasan was appointed director and Chief Executive Officer.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Financial Statements of 3577996 Canada Inc.
(a) Financial Statements of Businesses Acquired To Be Provided
(b) Pro Forma Financial Information To Be Provided
(c) Exhibits:
2.1 Memorandum of Agreement
10.1 Subscription Agreement In HerbalOrganics.com, Inc. for 7,600,000 Shares
10.2 Subscription Agreement In HerbalOrganics.com, Inc. for 1,235,000 Shares
10.3 Subscription Agreement In HerbalOrganics.com, Inc. for 665,000 Shares
Signatures
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HerbalOrganics.com, Inc.
October 14, 2003 /s/ Marius Silvasan
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Marius Silvasan
Chief Executive Officer