U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission file number: 0-25909
Multi-Tech International, Corp.
(Name of small business issuer in its charter)
Nevada 86-0931332
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
760 Killian Road, Akron, Ohio 44319
(Address of principal executive offices) (Zip Code)
216-849-4934
(Issuer's telephone number)
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $.001
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.
[ ]
State issuer's revenues for its most recent fiscal year: 0
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days: $1,914,476 as of April 7, 2003.
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 40,257,934 as of April 4, 2003
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
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CONTENTS
PAGE
PART I
Item 1. Description of Business..............................................4
Item 2. Description of Property.............................................11
Item 3. Legal Proceedings...................................................11
Item 4. Submission of Matters to a Vote of Security Holders.................11
PART II
Item 5. Market for Common Equity and Related Stockholder Matters............12
Item 6. Management's Discussion and Analysis or Plan of Operation...........13
Item 7. Financial Statements................................................15
Item 8. Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure..............................15
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act..........15
Item 10. Executive Compensation..............................................17
Item 11. Security Ownership of Certain Beneficial Owners and
Management.......................................................17
Item 12. Certain Relationships and Related Transactions......................18
Item 13. Exhibits and Reports on Form 8-K....................................18
Item 14. Controls and Procedures.............................................19
SIGNATURES....................................................................20
2
Disclosure Regarding Forward-Looking Statements
Under the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995 (the "PSLRA"), we caution readers regarding forward looking
statements found in this report and in any other statement made by, or on our
behalf, whether or not in future filings with the Securities and Exchange
Commission. Forward-looking statements are statements not based on historical
information and which relate to future operations, strategies, financial results
or other developments. Forward looking statements are necessarily based upon
estimates and assumptions that are inherently subject to significant business,
economic and competitive uncertainties and contingencies, many of which are
beyond our control and many of which, with respect to future business decisions,
are subject to change. These uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from those expressed
in any forward-looking statements made by or on our behalf. We disclaim any
obligation to update forward-looking statements. This report contains
forward-looking statements. The forward-looking statements include all
statements that are not statements of historical fact. The forward-looking
statements are often identifiable by their use of words such as "may," "expect,"
"believe," "anticipate," "intend," "could," "estimate," or "continue," "plans"
or the negative or other variations of those or comparable terms. Our actual
results could differ materially from the anticipated results described in the
forward-looking statements. Factors that could affect our results include, but
are not limited to, those discussed in Item 6, "Management's Discussion and
Analysis or Plan of Operation" and included elsewhere in this report.
3
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Background and Organization
Multi-Tech International, Corp., a developmental stage company,
hereinafter referred to as "the Company", "we" or "us", was originally organized
by the filing of Articles of Incorporation with the Secretary of State of the
State of Nevada on September 21, 1998 under the name Oleramma, Inc. The Articles
of Incorporation authorized the issuance of one hundred fifty million
(150,000,000) shares, consisting of one hundred million (100,000,000) shares of
Common Stock at par value of $0.001 per share and fifty million (50,000,000)
shares of Preferred Stock at par value of $0.001. As of December 31, 2002, we
had 40,907,934 shares of Common Stock outstanding, no Preferred Stock issued or
outstanding, options to purchase 50,000 shares of Common Stock at $1.00 per
share and options to purchase 50,000 shares of Common Stock at $1.50 per share.
We were a company that hoped to develop a genetically engineered Pima
cotton seed, with a virus fatal to the bollworm. It was our hope to enter the
marketplace as the first genetically engineered Pima cotton, which is
genetically superior in combating infestations. Unfortunately we were not able
to achieve our original goals and on December 31, 2000 we changed our name to
BUCKTV.COM, Inc. pursued and began a new direction. At this time our principal
business strategy was to market consumer products through an Interactive
Website, and to promote this Website through commercial radio promotions, and
Internet search engines, utilizing the talent and skills of a famous
radio/television personality. However, this was unsuccessful and we began a
search for new opportunities.
On November 15, 2002, pursuant to an Asset Purchase Agreement (the
"Agreement") we acquired all the assets of AlphaCom, Inc. ("Alphacom"), setting
a new strategic direction for the Company, and changed the name of the Company
to Multi-Tech International, Inc. ("Multi-Tech" OTCBB:MLTI) and new management
joined the Company. In connection with this acquisition our principal business
is now in the field of spectrum technologies for broad based applications
worldwide.
Asset Purchase Agreement
Pursuant to the Agreement we issued a total of 30,320,552 shares of
our Common Stock (the "Shares") and a promissory note in the amount of
$4,319,000 payable to Alphacom representing 74.1 percent of our outstanding
shares of Common Stock in exchange for all of the assets of Alphacom including
all business and technologic developments and licensing and marketing rights to
such assets. The Shares are being held in escrow for 12 months pursuant to the
terms of the Agreement, and are subject to downward adjustment based upon
financial contingencies set forth in the Agreement. The acquisition has been
accounted for under purchase method accounting. As a condition to the closing we
effected a 1-for-14.525 reverse split of our Common Stock in November 2002.
The material provisions of the Agreement include:
o Appointment of the following individuals to positions within the
Company: John J. Craciun III (President and Chairman of the Board),
Dr. David Hostelley (Secretary, Treasurer and member of Board of
Directors), Steven Coutoumanos (Chief Executive Officer and member
of Board of Directors), David Boon (Chief Operating Officer, Mr.
Boon subsequently declined to accept such appointment), Mark P. Wing
(member of Board of Directors), and Lawrence Hartman (member of
Board of Directors).
4
o We may allocate 75% of the monies received by us from financing
activities or via licensing arrangements to pay the promissory note
due AlphaCom.
o Until we have received aggregate gross cash proceeds of not less
than $10,000,000 from (i) a direct equity investment or series of
investments from an outside third party or third parties, and/or
(ii) license fees and/or royalty payments received from the license
of the Intellectual Property to third party licensees we cannot have
more than 50,000,000 shares issued and outstanding.
o Alphacom maintains anti-dilution rights for the number of shares
issued to it based upon certain contingencies.
o For a period of 12 months following the closing of the transaction,
without the prior written consent of a majority of the shareholders
of Alphacom, on a fully-diluted basis, we are not permitted to do
any of the following (subject to the termination provisions of the
Agreement):
(i) amend any provisions of our Articles of Incorporation
or By Laws;
(ii) increase our authorized capital stock;
(iii) create or issue any capital stock except for the
issuance of up to 13,179,045 shares of Common Stock;
(iv) declare any dividend or distribution on any of its
capital stock;
(v) dispose of any Intellectual Property;
(vi) redeem, purchase or otherwise acquire any of our
equity securities;
(vii) voluntarily file for bankruptcy;
(viii) incur or assume any debt except the Note, provided
that the Note shall not be secured by any asset; or
(ix) transfer any asset, tangible or intangible, to any
subsidiary or make any investment (other than in cash
equivalents).
Pursuant to the Agreement we purchased all of the assets of Alphacom.
The assets purchased under the Agreement include: certain accounts receivable,
Alphacom's URL www.networkalpha.com; and certain patents (described below).
The transfer of the patents has not yet been properly perfected.
Currently, We along with Alphacom are investigating this matter to ensure that
all assignments are properly recorded. Alphacom believes that it has valid,
binding and legal right to all of the rights, title and interest in the patents.
The patents encompass the following: wireless digital transmission and
receiving method combining phase reversal keying with pulse position modulation;
improved binary data communication system employing improved VPSK encoding
procedure (as more fully discussed below); method for the transmission of
"biphase" digital data; communication system transmitting binary data: and high
speed data transfer in small amounts of bandwidth.
The VPSK encoding procedure is a modulation algorithm. When applied to
existing data transmission environments, VPSK is able to produce previously
unrealized bandwidth efficiencies. For example, Time Division Multiple Access
(TDMA), one of the leading standards of digital cellular communications, allows
for up to 128 simultaneous conversations per system. By utilizing VPSK
modulation, a TDMA-VPSK system using the same bandwidth as TDMA will allow for
over 4,500 simultaneous conversations, an increase in excess of 35 times. This
means that by incorporating this technology, the existing infrastructure
deployed by cellular carriers today will be able to support far more
revenue-producing subscribers.
Cellular technology is only one of many applications over which VPSK
can be deployed. VPSK can be deployed on most communications platforms including
both wireless and wireline. Not only will the use of VPSK produce a substantial
increase in the revenues of existing markets, the increased data potential
creates numerous new markets.
The assets also include: a five percent interest in AlphaCom
International Ltd. (ACIL) a company registered in Hong Kong (the remaining
ninety five percent is owned by ITM Ltd. (of which our President John J. Craciun
is a majority owner)). ACIL exclusively owns the AlphaCom master technology
license, including Manufacturing and Product Distribution Licenses and all
rights to sub-license the same for the following territories: Asia, Eastern
Europe - Romania & Bulgaria and South America - Venezuela and adjacent islands;
International License for Israel; International License Contract for the
European Union Countries; and International License Contract for Asia.
5
Plan of Operations
We are focused on developing and promoting spectrum technologies for
broad-based applications worldwide based upon the assets acquired from Alphacom.
The spectrum technologies product(s) Alphacom has developed provides far more
efficient use of bandwidth. Through the use of narrow-band frequencies and
patented algorithms, these spectrum technologies will use existing
infrastructure with efficiencies greater than conventional technologies.
Management believes it solves the power and noise problem through the
use of filtration techniques and patented modulation algorithms. The result is
a signal that can be carried over greater distances and with less power.
Concept and Products
We plan to introduce a technology that makes more efficient use of
bandwidth. Through the use of narrow-band frequencies and patented algorithms,
MLTI spectrum technology will travel over existing infrastructure with
efficiencies exponentially greater than conventional technologies. It is
anticipated that this will be done by a comparably small retrofit to existing
wireless and wire-line networks.
The key to this technology is a modulation and filtration technique
that enables more data to be carried, over greater distances, and with less
power. With a relatively small capital investment, service providers will be
able to increase their revenue potential through greater market penetration.
We believe this technology can be carried over virtually any medium,
including: Cable TV, Cable Modem, AM/FM Radio, Analog Cellular, Digital Mobile,
DSL, IP Wire-line Applications, WiFi (802.11b), Microwave, and/or Satellite.
Dependence on Outside Suppliers
We anticipate that we will have a relatively low dependence on outside
suppliers or vendors. The primary reason is that the MLTI spectrum technology
represents intellectual property, which will be marketed in the form of a
license or royalty contract. As such, we anticipate that no proprietary
hardware will be required in order to generate a revenue stream.
Marketing and Advertising
We anticipate building a grass roots awareness campaign across the
following channels:
Trade Advertising - three key vertical markets (content provider,
service provider, and end-user):
o Awareness campaigns.
o Operations campaigns.
Public Relations:
o Press Releases (announcing technology impact, customer
success, product releases, etc.)
o Case Studies (associated with customer success).
o Technology White Papers (Engineering inter-industry
publications, educational institutions, think tanks and
symposium presentations).
o Analyst & Editor Interviews.
6
Direct Mail/Email:
o Awareness Direct Mail to support Advertising.
o Tradeshow Support (Pre & Post show direct mail).
o Teaser Mailers to promote interest.
o Web Seminar notification & follow-up.
Tradeshows:
o Three key vertical markets (content provider, service
provider, and end-user).
Collateral:
o Overview Brochure.
o Product Profile - Content Provider.
o Product Profile - Service Provider.
o Product Profile - End User.
Seminars - two online Web Seminar series
1. Introduction to Ultra Narrowband Modulation.
2. Ultra Narrowband Modulation Solutions/Demo.
Technology Overview
Before voice, data, or video can be transmitted or received, it must be
encoded onto a carrier signal that will propagate by means of an electronic
wave. This process, called modulation is the science of placing intelligence on
a carrier. Using this principle, a data stream is converted to a waveform and a
carrier transports the data over a radio frequency, sound wave, or beam of
light.
Carrier signals can be fully described by three parameters that can be
mixed and matched:
1. Amplitude Modulation - ex. AM stations on a car radio
2. Frequency Modulation - ex. FM stations on a car radio
3. Phase Modulation - ex. Satellite communications
Each of the three modulation techniques listed above possess tradeoffs
in terms of power, performance, bandwidth efficiency, etc. Phase Modulation
generally uses bandwidth more efficiently than other types of modulation.
However, the improvement in bandwidth efficiency comes at the cost of decreased
power efficiency. The smaller separation between bits of data means it takes
less noise to corrupt the signal and cause the receiver to make an error. To
combat this, more power must be transmitted.
We believe the MLTI spectrum technology solves the power and noise
problem through the use of filtration techniques and patented modulation
algorithms. The result is a signal that can be carried over greater distances
and with less power. The signal can operate on existing carriers such as FM and
AM stations. This is profound since existing infrastructure can be
"retrofitted" to carry exponentially more voice, data, and video.
Market Research
Twenty-two million home users, in January 2002, a jump of 67 percent
from January 2001, were using current broadband technology, limited mostly to
accessing the Internet. The broadband population, which can access the Internet
at work, rose 42 percent to 25.5 million users.
While broadband users make up approximately 20 percent of the online
population, they account for half of the time spent on the Internet.
7
Some of the reasons surrounding the limited market penetration over the
past few years include:
1. Infrastructure: the lack of existing infrastructure to support high
speed connectivity.
2. Price: the consumer's ability to support the price point of
integrated voice, data, and video networks is currently too high.
3. Content: reliable content is mostly limited to banner ads, static
pictures, and text.
Management believes that in order for broadband to become something
other than a one-fifth share of an online market, it will need to successfully
address the Infrastructure, Price, and Content barriers across several
communication protocols and devices.
Given these qualifiers, the scope of the market potential can be
quantified by noting the size of the current market. A few data points on
telecom equipment and software purchases will demonstrate the scope of the
opportunity (source: Business Wire TIA 2002 Telecom Report - March 21, 2002):
o U.S. spending on telecom equipment and software in 2001 was $167
Billion.
o U.S. spending in 2002 is expected drop 10.8% to $148.9 Billion.
o U.S. spending will return to growth by 2004.
o By 2005, spending in US telecom industry will rise to $954 Billion.
o International spending for telecom equipment will finish 2002 at
$570 Billion.
o By 2005, worldwide spending in telecom will reach $1.8 Trillion.
Technology Development
Technology development strategies are targeted to address the needs of
telecom and electronic communications bandwidth. Using experience gained from
lab trials, the technology can be deployed on existing infrastructure with the
following planned results (pending further research and development for each
application):
Wireline Applications:
- DSL Service
- Expand the distance from the CO from 3 miles to 10 miles.
- Provide reliable data transmission even with corroded cable.
- Increase data rates over standard phone line from 1.5 to 3.0 Mbps.
- Cable and Cable Modem
- Effectively doubles the number of channels over standard coax.
- Increases the cable data throughput by approximately 10X.
- Potentially solves the problem of transmitting HDTV signal over coax.
- Access, Edge, and Core Applications
- Transform T1 lines into the performance equivalent of two T3 lines.
- Increase data throughput of copper ATM, Frame Relay, SS7, etc.
- Improve global telecom network performance and efficiency.
Wireless Applications:
- GSM / TDMA / CDMA / 3G Wireless
- Increase the number of GSM voice users from approx. 240 to over 12,000.
- Increase the number of C/TDMA users from approx. 200 to over 1,200.
- Provide 3G networks multiplexed voice/data/video sessions.
- Lower monthly operating costs for providers.
- Increase data rates from 14,400 bps to 1,600,000 bps.
- Double transmit/receive range while reducing voltages by 75%.
- Analog Wireless
- Increase the number of voice users from approx. 16 to more than 750.
- Increase data rates from 14,400 bps to 1,600,000 bps.
- Lower monthly operating costs for providers.
- Double transmit/receive range while reducing voltages by 75%.
- Microwave
- Enhance a single microwave channel to provide more than 150 T1 lines.
- Create a path for dramatically less expensive PSTN or Internet back-haul.
- Reduce the cost of cellular voice and data traffic.
8
Target Market
We will initially focus on commercializing our territories through the
joint venture and licensing agreements which were obtained pursuant to the
Agreement with Alphacom, while developing support technology to simplify the
implementation of our systems in a variety of applications. Commercialization
will be managed through licenses and strategic partnerships within each of the
targeted markets.
The target audience will initially consist of two key groups:
service/content providers and end users. The messaging for each will be
significantly different:
Service/Content Providers:
Service and content providers are seeking more sophisticated
delivery capabilities in the commercial market. Providers desperately
need communication networks that will integrate voice, data, and video
services over virtually any wire-line or wireless infrastructure at an
affordable price.
End Users:
Users that have already gravitated to existing broadband
technology have learned to live with some of the downsides. The
downsides have included: difficulties in setting up initial
connectivity, high monthly costs, limitations due to local
infrastructure (DSL), and limited responsiveness during peak usage
(Cable). In addition, content delivery is severely limited to cellular
users.
Competition
Competition in the bandwidth communications and/or telecommunications
market segment is extensive. We must take careful measures to ensure that the
intellectual property represented by our spectrum technology is protected. In
addition, competing bandwidth technologies may circumvent any sustainable
competitive advantage and prevent long-term broad acceptance for the spectrum
technology.
The markets for consumer and business Internet services and online
content are extremely competitive and highly fragmented. There are no
significant barriers to market entry. We expect that competition will intensify
in the future. Our direct competition in these markets are ISPs, national long
distance carriers, wireless service providers, OSP's, cable-based data services
and Internet content aggregators. Many of these competitors are offering (or may
soon offer) technologies that will attempt to compete with some or all of our
products and services. Such technologies include ISDN and XDSL. The basis of
competition in these markets include transmission speed, reliability of service,
ease of access, price/performance, ease-of-use, content quality, quality of
presentation, timeliness of content, customer support, operating experience and
revenue sharing.
Many of our competitors and potential competitors have substantially
larger subscriber bases, longer operating histories, greater name recognition,
and more established relationships with application providers than us. Such
competitors may be able to undertake more extensive marketing campaigns, adopt
more aggressive pricing policies and devote substantially more resources to
developing Internet services than us. There are no assurances that we will be
able to compete successfully against current or future competitors. Competitive
pressures may materially adversely affect our business, operating results, or
financial condition. Further, as a strategic response to changes in the
competitive environment, we may make certain pricing, service or marketing
decisions or enter into acquisitions or new ventures that could have a
materially adverse effect on our business, operating results or financial
condition.
9
Government Regulation
The adoption of new laws or the application of existing laws may
decrease the growth of spectrum technologies, which could in turn decrease the
demand for our services, increase the our cost of doing business or otherwise
have a material adverse effect on our business, results of operations and
financial condition.
There can be no assurance, however, that Federal, State or local
government will not attempt to impose regulations upon us in the future or that
such imposition will not have a material adverse effect on our business, results
of operations and financial condition.
Federal
We will provide Internet services, in part, through data transmissions
over public telephone lines. These transmissions are governed by regulatory
policies establishing charges and terms for wire line communications. We
currently are not subject to direct regulation by the FCC or other regulatory
agencies as a provider of basic telecommunication services.
The FCC regulates the licensing, construction, operation and
acquisition of wireless telecommunications systems in the U.S. pursuant to the
1934 Act, as amended, and the rules, regulations, and policies promulgated by
the FCC thereunder. Included in the regulations is the use of the
electromagnetic spectrum in the United States, including the frequency band
currently used by our radio products. Part 15 of the FCC regulation defines
frequency bands in which unlicensed operation of the radio equipment that meets
certain technical and operational requirements is permitted. We will utilize
CDPD for the majority of our wireless transmissions, which is currently under
FCC regulations.
In the international markets there are various categories of government
regulations. In those countries that have accepted certain worldwide standards,
such as the FCC rulings or those from the European Telecommunications Standards
Institute, we are not expecting to experience significant regulatory issues in
bringing our products to market. Approval in these markets involves retaining
local testing agencies to verify specific product compliance. However, many
developing countries, including India and China, have not fully developed or
have no frequency allocation, equipment certification, or telecommunications
regulatory standards. In these types of markets, we will actively work directly
with industry standard bodies to conform to worldwide standards regulations.
State and Local Regulation
The scope of the regulatory authority covers such matters as the terms
and conditions of interconnection between Local Exchange Carriers ("LECs") and
wireless carriers with respect to intrastate services, customer billing
information and practices, billing disputes, other consumer protection matters,
facilities construction issues, transfers of control, the bundling of services
and equipment and requirements relating to the availability of capacity on a
wholesale basis. In these areas particularly, the terms and conditions of
interconnection between LECs and wireless providers, the FCC and state
regulatory authorities share regulatory responsibilities with respect to
interstate and intrastate issues, respectively.
We may become an active participant in proceedings before the FCC and
before state regulatory authorities. Proceedings with respect to the foregoing
policy issues before the FCC and state regulatory authorities could have
significant impacts on the competitive market structure among wireless providers
and other carriers. We are unable at this point to predict the scope, pace, or
financial impact of policy changes which could be adopted in these proceedings.
To keep us apprised of developments in this area, we will retain special FCC
counsel in the event we deem it necessary.
Industry Conditions and Cyclical Nature
The communications and/or telecommunications industry is an inherently
volatile market segment. Technologies that dominate a market over a particular
period can be made obsolete by newer technologies from competing companies in a
relatively short timeframe. We are attempting to mitigate this risk by providing
open standards and licensing/royalty arrangements, which can create a new
industry standard for bandwidth spectrum.
10
Lack of Liability Coverage
We do not maintain any liability coverage. In the event of any claim
against us or any of our assets we may not have the resources to defend our
rights which could have a material adverse effect on our business and the future
prospects of the Company.
Pursuit of Strategic Acquisitions and Alliances
We believe there are numerous opportunities to acquire other businesses
with established bases, compatible operations, experience with additional
synergistic aspects, and experienced management. We believe, that these
acquisitions, if successful, will result in mutually beneficial opportunities,
and could lead to an increase in our revenue and income growth. We intend to
seek opportunities to acquire businesses, services and/or technologies that we
believe will complement our business operations. We plan to seek opportunistic
acquisitions that may provide complementary services, expertise or access to
certain markets. No specific acquisition candidates have been identified, and no
assurance can be given that any transactions will be effected, or if effected,
will be successful.
In addition, we may execute strategic alliances with partners who have
established operations. As part of these joint venture agreements, we may make
investments in or purchase a part ownership in these joint ventures. We believe
that joint venture relationships, if successful, will result in synergistic
opportunities, allowing us to gain additional insight, expertise and penetration
in markets where joint venture partners already operate, and may increase our
revenue and income growth. No specific joint venture agreements have been
signed, and no assurance can be given that any agreements will be effected, or
if effected, will be successful.
Employees
We currently have three employees. None of our employees is covered by
a collective bargaining agreement.
ITEM 2. DESCRIPTION OF PROPERTY.
Our corporate headquarters are located at 760 Killian Road, Akron, Ohio
44319; Telephone: 216-849-4934. The office space is currently provided by one
of our Directors at no cost to us.
ITEM 3. LEGAL PROCEEDINGS.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year ended December 31, 2002.
11
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Market Information
Our common stock was cleared for trading on the OTC Bulletin Board
system under the symbol OLRM on November 2, 1999. On November 22, 2002 our
symbol changed to MLTI. A very limited market exists for the trading of our
common stock. On October 25, 2002 a 14.525 for 1 reverse split of our common
stock was effected.
The table below sets forth the high and low bid prices of our common
stock for each quarter shown. Quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions.
Fiscal 2001 High Low
Quarter Ended September 30, 2001 .03 .01
Quarter Ended December 31, 2001 .025 .001
Fiscal 2002 High Low
Quarter Ended March 31, 2002 .14 .04
Quarter Ended June 30, 2002 .09 .01
Quarter Ended September 30, 2002 .03 .01
Quarter ended December 31, 2002 .025 .001
Holders
As of April 4, 2003, there were approximately 907 holders of record of
our common stock.
Dividends
Holders of common stock are entitled to receive such dividends as the
board of directors may from time to time declare out of funds legally available
for the payment of dividends. No dividends have been paid on our common stock,
and we do not anticipate paying any dividends on our common stock in the
foreseeable future.
Recent Sales of Unregistered Securities
In March 2000, we issued Three Million (3,000,000) restricted shares of
common stock for Thirty Thousand Dollars ($30,000) cash. From January 1, 2000 to
December 31, 2000, we issued Two Million Nine Hundred Ten Thousand (2,910,000)
shares of common stock for services to be rendered. These shares were registered
by S-8 filings and were valued at the market value at or near the time issued.
From January 1, 2000 to December 31, 2000, we issued Sixteen Million One Hundred
Twenty-Four Thousand and Seven Hundred and Twenty (16,124,720) shares of
restricted common stock for services rendered. From January 1, 2001 to December
31, 2001, we issued Thirty-Seven Million Fifteen Thousand (37,015,000) shares of
common stock for services to be rendered.
On November 20, 2002 we effected a 14.525 to 1 reverse stock split of
our common stock, after which there were six million five hundred thousand and
three hundred and eighty-two (6,500,382) common shares outstanding.
12
On November 20, 2002 we issued 30,320,552 shares of common stock to
Alphacom in connection with the Asset Purchase Agreement.
On December 9, 2002 we issued 3,087,000 shares of common stock.
On December 10, 2002 issued options to purchase 50,000 shares of common
stock at $1.00 per share, which expire on December 10, 2005, and options to
purchase 50,000 shares of common stock at $1.50 per share and has until December
10, 2005.
On December 12, 2002 we issued 1,000,000 shares of common stock.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
On November 15, 2002 the Board of Directors of BUCKTV, Inc. (Formerly
Oleramma, Inc.) approved the acquisition of all the assets of AlphaCom, Inc. in
exchange for a note in the amount of $4,319,000 and 30,320,552 common shares of
BUCKTV, Inc. BUCKTV, Inc. had no assets or liabilities at the time of
acquisition.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
us to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosures of contingent assets
and liabilities. On an ongoing basis, we evaluate our estimates. We base our
estimates on historical experience and on various other assumptions that we
believe to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions; however, we believe
that our estimates, including those for the above-described items, are
reasonable.
General
We will need to generate revenues to achieve profitability. To the
extent that operating expenses exceed or are not subsequently followed by
commensurate revenues, or if we are unable to adjust operating expense levels
accordingly, our business, results of operations and financial condition would
be materially and adversely affected. There can be no assurances that we can
achieve or sustain profitability or that our operating losses will not increase
in the future.
Results of Operations
We have not generated any revenues to date. We do not expect to
generate significant revenues over the next approximately to twelve (12) months.
During calendar year 2002 we had net losses before gain on settlement of debt of
$212,967 however a net gain on settlement of debt of $300,000 gave us a net
income from operations of $7,033 compared with net losses of $6,340,933
during fiscal 2001. The bulk of these expenses were caused by the issuance of
shares of our common stock to certain consultants. We do not have any material
commitments for capital expenditures except for our obligations under our
Agreement with Alphacom.
Operating expenses have been borne by the Directors and Officers. At
the time of acquisition the records of AlphaCom, Inc. reflected a license
receivable of $500,000 which current management believes should not be reflected
in our Balance Sheet, but instead, will be reported as income as collected.
Additionally, a note receivable of $406,300 was shown to be due Alphacom from
Quantum, a company in bankruptcy. This amount is not reflected in our Financial
Statements but rather will be reported as income in the event of any
collections. The remaining assets purchased from Alphacom consists of property
and equipment totaling $46,384 and is being carried such at cost. Alphacom's
investment in AMC, which was carried by AlphaCom in the amount of $103,095 was
written down to its current market value of $36,100. AlphaCom also carried a
deposit in the form of a $50,000 surety bond with a court in Florida. There are
costs of approximating $19,000 against that bond, if collected. We have written
this amount off and will report income in the event any of this is collected.
There is also a rent deposit of $3,800 which AlphaCom previously made and we
acquired under our agreement with Alphacom. This deposit is for the office space
occupied by AlphaCom which we acquired with the asset purchase.
14
Patents were acquired and were valued at the net difference of the
values of the other assets applied to the note payable of $4,319,000 and the
$60,640 of agreed value of the common stock. All of the write downs/offs of the
AlphaCom assets purchased have been applied to the value of the Patents.
Accounts Payable of $18,433 is a result of amounts paid on behalf of
the Company by a shareholder/consultant, which the Company has agreed to
reimburse, once we have available cash. Loans payable are a result of Officer
payments on behalf of the Company and which the Company has agreed to pay, once
it has available cash. The note payable of $4,301,776 represents the remaining
balance owed to Alphacom in connection with our Asset Purchase Agreement.
AlphaCom was paid certain amounts subsequent to the asset purchase, which amount
will be applied against the amount of our note to them.
Shareholders Equity reflects, after the 14.525 to 1 reverse split, the
40,907,934 shares at their par value of $0.001 per share. There have been no
preferred shares issued.
Liquidity and Capital Resources
As of December 31, 2002 we had no cash. The Board of BUCKTV, Inc.
resigned and appointed their replacements with John J. Craciun, III, as
Chairman, Steven Coutoumanos, Mark P. Wing, David F. Hostelley, and Dennis Byrne.
We have limited financial resources available, which has an adverse
impact on our liquidity, activities and operations. These limitations may
adversely affected our ability to obtain certain projects and pursue additional
business. There is no assurance that any proceeds that we will be able to raise
will be sufficient funding to enhance our financial resources sufficiently to
generate profits.
The Company is in discussion with several investment sources to provide
the capital required to fund operations over the next several years. The Company
will need to raise substantial capital over the next year to fund its growth
strategy. The continuation of the Company as a going concern is dependent upon
the successful implementation of its business plan, raising capital, and
ultimately achieving profitable operations. However, there can be no assurance
that the business plan will be successfully implemented. The inability of the
Company to implement the business plan successfully could adversely impact the
Company's business and prospects.
The Company's Officers are pursuing funding through equity methods
while pursuing the sale of various licenses of the technology, which would
supply funds for operations.
Plan of Operations
We are focused on developing and promoting spectrum technologies for
broad-based applications worldwide based upon the assets acquired from Alphacom.
The spectrum technologies product(s) Alphacom has developed provides far more
efficient use of bandwidth. Through the use of narrow band frequencies and
patented algorithms, these spectrum technologies will use existing
infrastructure with efficiencies greater than conventional technologies.
ITEM 7. FINANCIAL STATEMENTS.
MULTI-TECH INTERNATIONAL, CORP.
(A Development Stage Company)
Financial Statements
DECEMBER 31, 2002
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Multi-Tech International, Corp.
We have audited the accompanying balance sheet of Multi-Tech International,
Corp.. (A Development Stage Company) as of December 31, 2002 and 2001, and the
related statement of operations, cash flows, and changes in stockholders' equity
for the period September 21, 1998 (inception) to December 31, 2002. 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 generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Multi-Tech International,
Corp.. at December 31, 2002 and 2001, and the results of their operations and
their cash flows for the period, September 21, 1998 (inception) to December 31,
2002 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, conditions exist which raise substantial doubt about the
Company's ability to continue as a going concern unless it is able to generate
sufficient cash flows to meet its obligations and sustain its operations.
Management's plans in regard to these matters are also described in Note 5. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Michael Johnson & Co. LLC
Michael Johnson & Co., LLC
Denver, Colorado
April 14, 2003
F-1
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS AT DECEMBER 31, 2002
- --------------------------------------------------------------------------------
2002 2001
- --------------------------------------------------------------------------------
ASSETS
CURRENT
Cash $ - $ 368
Marketable securities 36,100 -
Prepaid assets and sundry assets 55,348 176,330
- --------------------------------------------------------------------------------
Total Current Assets 91,448 176,698
- --------------------------------------------------------------------------------
FIXED
Equipment 33,479 9,315
Office furniture 5,619 -
Leasehold improvements 5,959 -
Vehicle 1,328 -
- --------------------------------------------------------------------------------
Total Fixed Assets 46,385 9,315
- --------------------------------------------------------------------------------
OTHER
Patents 4,204,744 -
- --------------------------------------------------------------------------------
Total Other Assets 4,204,744 -
- --------------------------------------------------------------------------------
$4,342,577 $ 186,013
- --------------------------------------------------------------------------------
LIABILITIES
CURRENT
Accounts payable 18,434 -
Loans payable 10,826 -
Loan from a director - 300,000
Note payable 4,301,776 -
- --------------------------------------------------------------------------------
4,331,036 300,000
- --------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock, authorized 5,000,000
shares, par value $ .001 - issued and
outstanding - none - -
Common stock, authorized 100,000,000
shares, par value $ .001 - issued and
outstanding - 40,907,934 (2001 - 94,418,353) 40,908 94,418
Additional paid in capital 9,947,766 9,855,761
Donated capital 818,871 703,871
Deficit accumulated during development stage (10,796,004) (10,768,307)
- --------------------------------------------------------------------------------
Total Stockholders' Equity 11,541 (114,257)
- --------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $4,342,577 $ 185,743
- --------------------------------------------------------------------------------
F-2
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
FROM
INCEPTION
SEPTEMBER
YEAR YEAR 21, 1998
ENDED ENDED TO
DECEMBER DECEMBER DECEMBER
31, 2002 31, 2001 31, 2002
- --------------------------------------------------------------------------------
REVENUE $ 197 $ - $ 197
- --------------------------------------------------------------------------------
EXPENSES
Selling, general and administrative
expenses 213,164 6,455,933 11,096,201
- --------------------------------------------------------------------------------
Total Operating Expenses 213,164 6,455,933 11,096,201
- --------------------------------------------------------------------------------
NET LOSS BEFORE UNDERNOTED ITEM (212,967) (6,455,933) (11,096,004)
GAIN ON SETTLEMENT OF DEBT 300,000 - 300,000
- --------------------------------------------------------------------------------
NET INCOME(LOSS) FROM OPERATIONS $ 87,033 $ (6,455,933) $ (10,796,004)
- --------------------------------------------------------------------------------
Weighted average number of
shares outstanding 10,565,237 69,941,904
================================
Net income(loss) per share $ 0.01 $ (0.09)
================================
F-3
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FROM INCEPTION(SEPTEMBER 21, 1998) TO DECEMBER 31, 2002
- --------------------------------------------------------------------------------
Deficit
Accumulated
Common Additional During Total
Stock Paid-In Donated Development Stockholders'
Shares Amount Capital Capital Stage Equity
- ----------------------------------------------------------------------------------------------------------
September 21, 1998-
issued for cash 3,000,000 $ 3,000 $ 5,016 $ - $ - $ 8,016
Net loss for year ended
December 31, 1998 - - - - (6,841) (6,841)
- ----------------------------------------------------------------------------------------------------------
Balances as at
December 31, 1998 3,000,000 3,000 5,016 - (6,841) 1,175
February 28, 1999- issued
from sale of public
offering 767,000 767 37,591 - - 38,358
Net loss for year ended
December 31, 1999 - - - - (28,815) (28,815)
- ----------------------------------------------------------------------------------------------------------
Balances as at
December 31, 1999 3,767,000 3,767 42,607 - (35,656) 10,718
- ----------------------------------------------------------------------------------------------------------
FORWARD 3,767,000 3,767 42,607 - (35,656) 10,718
March 10, 2000- issued
for cash 3,000,000 3,000 27,000 - - 30,000
March 28, 2000- issued
for services 1,675,000 1,675 2,929,575 - - 2,931,250
April 24, 2000- issued
for advertising
services 1,000,000 1,000 1,199,000 - - 1,200,000
June 5, 2000- issued
for services 200,000 200 119,800 - - 120,000
June 15, 2000- issued
for services 944,220 944 376,744 - - 377,688
July 21, 2000- issued
for services 500,000 500 134,500 - - 135,000
July 21, 2000- issued
for services 2,000,000 2,000 538,000 - - 540,000
July 14, 2000- issued
for services 575,000 575 154,675 - - 155,250
August 7, 2000- issued
for services 660,000 660 184,140 - - 184,800
September 13, 2000-
issued for services 760,000 760 212,040 - - 212,800
November 9, 2000-
issued for services 5,000,000 5,000 1,395,000 - - 1,400,000
December 22, 2000-
issued for services 5,720,500 5,720 1,596,020 - - 1,601,740
Shareholder donated
capital - - - 730,936 - 730,936
- ----------------------------------------------------------------------------------------------------------
SUBTOTAL 25,801,720 25,801 8,909,101 730,936 (35,656) 9,630,182
- ----------------------------------------------------------------------------------------------------------
FORWARD 25,801,720 25,801 8,909,101 730,936 (35,656) 9,630,182
Net Loss for year ended
December 31, 2000 - - - - (4,391,448) (4,391,448)
- ----------------------------------------------------------------------------------------------------------
Balances as at
December 31, 2000 25,801,720 25,801 8,909,101 730,936 (4,427,104) 5,238,734
March 2, 2001- issued
for services 10,890,000 10,890 479,160 - - 490,050
April 11, 2001- issued
for services 22,625,000 22,625 181,000 - - 203,625
April 11, 2001- sold
shares to qualified
investor 12,500,000 12,500 57,500 - - 70,000
May 15, 2001- sold
shares to qualified
investor 12,500,000 12,500 57,500 - 70,000
June 1, 2001- issued
for services 3,500,000 3,500 171,500 - - 175,000
Shareholder paid
expenses of
business - - - 87,935 - 87,935
2001- issued restricted
shares 6,601,633 6,602 - - - 6,602
Net Loss for year ended
December 31, 2001 - - - - (6,455,933) (6,455,933)
- ----------------------------------------------------------------------------------------------------------
Balances as at
December 31, 2001 94,418,353 94,418 9,855,761 818,871 (10,883,037) (113,987)
- ----------------------------------------------------------------------------------------------------------
FORWARD 94,418,353 94,418 9,855,761 818,871 (10,883,037) (113,987)
November 15, 2002-
Reverse Stock
Split (14.525:1) (87,917,971) (87,918) 87,918 - - -
- ----------------------------------------------------------------------------------------------------------
Balances-post stock
split 6,500,382 6,500 9,943,679 818,871 (10,883,037) (113,987)
December 9, 2002- issued
for asset purchase 30,320,552 30,321 - - 30,321
December 9, 2002- issued
for services 4,087,000 4,087 4,087 - - 8,174
Net Income for year ended
December 31, 2002 - - - - 87,033 87,033
- ----------------------------------------------------------------------------------------------------------
Balances as at
December 31, 2002 40,907,934 $ 40,908 $9,947,766 $ 818,871 $(10,796,004) $ 11,541
- ----------------------------------------------------------------------------------------------------------
F-4
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
- --------------------------------------------------------------------------------
FROM
INCEPTION
SEPTEMBER
YEAR YEAR 21, 1998
ENDED ENDED TO
DECEMBER DECEMBER DECEMBER
31, 2002 31, 2001 31, 2002
- ---------------------------------------------------------------------------------
Cash Flow From Operating Activities
Net loss $ 87,033 $ (6,455,933) $ (10,796,004)
- ---------------------------------------------------------------------------------
Adjustments to reconcile net loss to net
cash used in operating activities:
Stock issued for services 8,174 875,277 9,741,279
Depreciation and amortization - 2,484 3,825
Changes in assets and liabilities
(Increase)Decrease in prepaid expenses 120,982 15,000 (55,348)
Increase in accounts payable 18,434 - 18,434
Decrease in deferred compensation costs - 5,335,576 -
- ---------------------------------------------------------------------------------
147,590 6,228,337 9,708,190
- ---------------------------------------------------------------------------------
Cash Used In Operating Activities 234,623 (227,596) (1,087,814)
- ---------------------------------------------------------------------------------
Cash Flow From Financing Activities
Increase in loans payable 10,826 - 10,826
Stock issued on account of purchase
of assets 30,321 - 30,321
Note payable on account of purchase
of assets 4,301,776 - 4,301,776
Issuance of common stock for cash - 140,000 216,374
Donated capital - 87,935 818,871
Decrease in loan to director (300,000) - -
- ---------------------------------------------------------------------------------
Cash Provided by Financing Activities 4,042,923 227,935 5,378,168
- ---------------------------------------------------------------------------------
Cash Flow From Investing Activities
Purchase of fixed assets (37,070) - (49,510)
Acquisition of marketable securities (36,100) - (36,100)
Acquisition of patents (4,204,744) - (4,204,744)
- ---------------------------------------------------------------------------------
Cash Used In Investing Activities (4,277,914) - (4,290,354)
- ---------------------------------------------------------------------------------
Increase(Decrease) In Cash (368) 339 -
Cash and Cash Equivalents - Beginning
of Period 368 29 -
- ---------------------------------------------------------------------------------
Cash and Cash Equivalents - End of Period $ - $ 368 $ -
- ---------------------------------------------------------------------------------
Supplementary Information
Interest paid $ - $ - $ -
Taxes paid $ - $ - $ -
======================================
F-5
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2002
1. ORGANIZATION AND BASIS OF PRESENTATION
Nature of Business
Multi-Tech International, Corp. (the "Company") was incorporated on
September 21, 1998 under the laws of the State of Nevada. The Company
was originally incorporated under the name of Oleramma Inc. On April
28, 1999, the Company changed its name to BuckTV,Com, Inc. on the basis
that the Company would market consumer products through an Interactive
Web site. The Company's primary business operations are to engage in
any lawful activity. The Company again changed its name in November
2002 to Multi-Tech International, Corp to more accurately describe the
direction in which the Company has taken which is more accurately
described below reflecting the acquisition made on November 15, 2002 as
set out in Note below. The Company trades on OTCBB as MLTI.
On November 15, 2002, the Company acquired all the assets of AlphaCom,
Inc., setting a new strategic direction for the Company. The Company's
principal business is now in the field of spectrum technologies for
communications.
The Company is focused on developing and promoting spectrum
technologies for broad-based applications worldwide. The spectrum
technologies product(s) MLTI has developed provides far more efficient
use of bandwidth. Through the use of narrow band frequencies and
patented algorithms, MLTI spectrum technologies will use existing
infrastructure with efficiencies exponentially greater than
conventional technologies.
Referred to as "MLTI spectrum technology", it solves the power and
noise problem through the use of filtration techniques and patented
modulation algorithms. The result is a signal that can be carried over
greater distances and with less power.
The Company's fiscal year end is December 31.
Development Stage Enterprise
The Company has no revenues and has just commenced operations. The
Company's activities are accounted for as those of a "Development Stage
Enterprise" as set forth in Financial Accounting Standards Board
Statement No. 7 ("SFAS 7"). Among the disclosures required by SFAS 7
development stage company, and that the statements of operations,
stockholders' equity(deficit) and cash flows disclose activity since
the date of the Company's inception.
F-6
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2002
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
These financial statements are presented on the accrual method of
accounting in accordance with generally accepted accounting principles.
Significant accounting principles followed by the Company and the
methods of applying those principles, which materially affect the
determination of financial position and cash flows, are summarized
below.
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 the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results may
differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments and
investments, purchased with an original maturity date of three months
or less, to be cash equivalents.
Fixed Assets
All fixed assets are recorded at their acquisition price. Since these
assets were acquired on November 15, 2002, management has determined
that as of the balance sheet date these assets have not been put to use
and therefore the Company has not taken any depreciation on these
assets as of December 31, 2002.
Income Taxes
The Company accounts for income taxes under SFAS No. 109, which
requires the asset and liability approach to accounting for income
taxes. Under this method, deferred assets and liabilities are measured
based on differences between financial reporting and tax bases of
assets and liabilities measured using enacted tax rates and laws that
are expected to be in effect when differences are expected to reverse.
F-7
MULTI-TECH INTERNATIONAL, CORP.
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2002
2. SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
Net earnings(loss) per share
Basic and diluted net loss per share information is presented under the
requirements of SFAS No. 128, Earnings per Share. Basic net loss per
share is computed by dividing net loss by the weighted average number
of shares of common stock outstanding for the period, less shares
subject to repurchase. Diluted net loss per share reflects the
potential dilution of securities by adding other common stock
equivalents, including stock options, shares subject to repurchase,
warrants and convertible preferred stock, in the weighted-average
number of common shares outstanding for a period, if dilutive. All
potentially dilutive securities have been excluded from this
computation, as their effect is anti-dilutive.
Fair Value of Financial Instruments
The carrying amount of cash, marketable securities, prepaid expenses
and sundry assets, accounts payable, loans payable, and notes payable
are considered to be representative of their respective fair values
because of the short-term nature of these financial instruments
Recently Issued Accounting Standards
In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations" and SFAS No. 142, "Goodwill and Other Intangible Assets"
effective for fiscal years beginning after December 15, 2001. SFAS No.
141 requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001 and also specifies
the criteria for the recognition of intangible assets separately from
goodwill. Under the new rules, goodwill will no longer be amortized but
will be subject to an impairment test at least annually. Separately
identified and recognized intangible assets resulting from business
combinations completed before July 1, 2001 that do not meet the new
criteria for separate recognition of intangible assets will be subsumed
in goodwill upon adoption. Other intangible assets that meet the new
criteria will continue to be amortized over their useful lives. The
Company adopted the new rules on accounting for goodwill and other
intangible assets on January 1, 2002. The adoption of SFAS Nos. 141 and
142 had no impact on the Company's financial statements at transition.
F-8
MULTI-TECH INTERNATIONAL, CORP.
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2002
2. SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
Recently Issued Accounting Standards(continued)
In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supersedes
SFAS No.121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of." The primary objectives of
SFAS No. 144 are to develop one accounting model based on the framework
established in SFAS No. 121 for long-lived assets to be disposed of by
sale, and to address significant implementation issues. The Company's
adoption of SFAS No. 144 on January 1, 2002 had no material impact on
our financial position and results of operations.
In November 2002, the FASB issued Interpretation, or FIN, No. 45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees,
including Indirect Guarantees of Indebtedness of Others." FIN 45
elaborates on the existing disclosure requirements for most guarantees,
including residual value guarantees issued in conjunction with
operating lease agreements. It also clarifies that at the time a
company issues a guarantee, the company must recognize an initial
liability for the fair value of the obligation it assumes under the
guarantee and must disclose that information in its interim and annual
financial statements. The initial recognition and measurement
provisions apply on a prospective basis to guarantees issued or
modified after December 31, 2002 The disclosure requirements are
effective for the financial statements of interim or annual periods
ending after December 15, 2002. Our adoption of FIN 45 will not have a
material impact on our results of operations and financial position.
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-
Based Compensation -- Transition and Disclosure." This statement amends
SFAS 123, "Accounting for Stock-Based Compensation," to provide
alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation.
In addition, this statement amends the disclosure requirements of SFAS
123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based
accounting for employee compensation and the effect of the method used
on reported results. The Company is currently evaluating whether to
adopt the fair value based method.
F-9
MULTI-TECH INTERNATIONAL, CORP.
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2002
2. SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
Recently Issued Accounting Standards(continued)
In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable
Interest Entities." FIN No. 46 requires that unconsolidated variabl
interest entities be consolidated by their primary beneficiaries. A
primary beneficiary is the party that absorbs a majority of the
entity's expected losses or residual benefits. FIN No. 46 applies
immediately to variable interest entities created after January 31,
2003 and to existing variable interest entities in the periods
beginning after June 15, 2003. Our adoption of FIN No. 46 will not have
a material impact on our results of operations and financial position.
3. MARKETABLE SECURITIES
Management determines the appropriate classification of investments in
debt and equity securities at the time of purchase and re-evaluates
such designation as of each subsequent balance sheet date. Securities
for which the Company has the ability and intent to hold to maturity
are classified as "held to maturity". Securities classified as "trading
securities" are recorded at fair value. Gains and losses on trading
securities, realized and unrealized, are included in earnings and are
calculated using the specific identification method. Any other
securities are classified as "available for sale." At December 31, 2002
all securities were classified as trading securities.
As part of the purchase price of the assets of Alphacom, Inc as more
particularly described in Note , the Company received 277,698 shares of
American Millenium Corporation trading on OTCBB under the symbol of
AMCI. This Company has approximately 45 million shares outstanding to
date. The current market value of the stock is $ 0.13 per share or
$36,100.
F-10
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2002
4. CAPITAL STOCK TRANSACTIONS
On September 22, 1998, the Company issued 3,000,000 shares of its
$0.001 par value common stock for cash of $8,016.
On February 28, 1999, the Company completed a public offering that was
registered with the State of Nevada pursuant to N.R.S. 90.490 and was
exempt from federal registration pursuant to Regulation D, Rule 504 of
the Securities Act of 1933 as amended. The Company sold 767,000 shares
of Common Stock at a price of $0.05 per share for a total amount raised
of $38,360.
On March 10, 2000, the Company issued 3,000,000 shares of its $0.001
par value common stock for cash of $30,000.
On March 28, 2000, the Company filed Form S-8 with the U.S. Securities
and Exchange Commission and issued an additional 1,675,000 shares of
its $0.001 par value common stock for services to the Company for a
total consideration of $ 2,931,250.
On April 24, 2000, by Board Resolution the company issued 1,000,000
restricted 144 shares to BuckBuilders.com, Inc., for advertising the
Company's website and auction partners plan for a total consideration
of $ 1,200,000.
On June 5, 2000, by Board Resolution the Company issued 200,000
restricted 144 shares to OTC Live, Inc for services for a total
consideration of $ 120,000.
On June 15, 2000, by Board Resolution the Company issued 944,220
restricted 144 shares to Myfreestore.com for services rendered for a
total consideration of $ 377,688.
On July 14, 2000, the Company filed Form S-8 with the U.S. Securities
and Exchange Commission and issued an additional 575,000 shares of its
$0.001 par value common stock for services to the Company for a total
consideration of $ 155,250.
On July 21, 2000, by Board Resolution the company issued 500,000
restricted 144 shares to Rodney Schoemann, Sr. for services rendered
for a total consideration of $ 135,000.
F-11
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2002
4. CAPITAL STOCK TRANSACTIONS(CONTINUED)
On July 21, 2000, by Board Resolution the company issued 2,000,000
restricted shares to BuckBuilders.com, Inc. for services rendered for a
total consideration of $ 540,000.
On August 17, 2000 the Company filed Form S-8 with the U.S. Securities
and Exchange Commission and issued an additional 660,000 shares of its
$0.001 par value common stock for services to the Company for a total
consideration of $ 184,800.
On September 13, 2000, by Board Resolution, the Company issued 760,000
restricted 144 shares to Washington Hamilton Group, for services to the
Company for a total consideration $ 212,800.
On November 9, 2000, by Board Resolution, the Company issued 5,000,000
shares of restricted 144 shares to Bry Behrmann and Larry E Hunter for
services rendered for a total consideration of $ 1,400,000.
On December 22, 2000, the Company issued 5,720,500 shares of restricted
144 shares to Stephen Bishop for services rendered for a total
consideration of $ 1,601,740.
On March 2, 2001, the Company filed Form S-8 with the U.S. Securities
and Exchange Commission and issued an additional 10,890,000 shares of
its $0.001 par value common stock for services to the Company.
On April 11, 2001, the Company filed Form S-8 with the U.S. Securities
and Exchange Commission and issued an additional 22,625,000 shares of
its $0.001 par value common stock for services to the Company.
On April 11, 2001 the Company issued 12,500,000 shares of its $0.001
par value common stock for $70,000 cash, to a qualified investor.
On May 15, 2001 the Company issued 12,500,000 shares of its $0.001 par
value common stock for $70,000 cash, to a qualified investor.
On June 1, 2001, the Company filed Form S-8 with the U.S. Securities
and Exchange Commission and issued an additional 3,500,000 shares of
its $0.001 par value common stock for services to the Company for a
total consideration of $ 175,000.
F-12
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2002
4. CAPITAL STOCK TRANSACTIONS(CONTINUED)
During various times of the year 2001, the Company issued a total of
6,601,633 shares of its $0.001 par value common stock for services to
the Company.
On November 20, 2002 the Company filed Form 8-K with the U.S.
ecurities and Exchange Commission indicating that at a Board Of
Directors' meeting held on October 25, 2002 the Board announced a
14.525 to 1 reverse stock split, after which there were six million
five hundred thousand and three hundred and eighty-two (6,500,382)
common shares outstanding.
On November 20, 2002 the Company filed Form 8-K with the U.S.
Securities and Exchange Commission indicating that the Company had
acquired all of the assets of AlphaCom, Inc. in exchange for 30,320,552
of its $0.001 par value of common stock and a note for $4,319,000.
On December 9, 2002 the Company issued 3,087,000 of its $0.001 par
value common stock in exchange for services to the Company for a total
consideration of $6,174.
On December 12, 2002 the Company filed Form S-8 with the U.S.
Securities and Exchange Commission and issued one million (1,000,000)
of its $0.001 par value common stock in exchange for services to the
Company for a total consideration of $2,000.
5. GOING CONCERN
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplates
continuation of the Company as a going concern.
The future success of the Company is likely dependent on its ability to
attain additional capital to develop its proposed technologies and
ultimately, upon its ability to attain future profitable operations.
There can be no assurance that the Company will be successful in
obtaining financing, or that it will attain positive cash flow from
operations.
F-13
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2002
6. INCOME TAXES
There has been no provision for U.S. federal, state, or foreign income
taxes for any period because the Company has incurred losses in all
periods and for all jurisdictions.
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes. Significant components of deferred tax assets are as follows:
Deferred tax assets
Net operating loss carry forwards $10,796,004
Valuation allowance for deferred tax assets (10,796,004)
Net deferred tax assets $ -
Realization of deferred tax assets is dependent upon future earnings,
if any, the timing and amount of which are uncertain. Accordingly, the
net deferred tax assets have been fully offset by a valuation
allowance. As of DECEMBER 31, 2002, the Company had net operating loss
carry forwards of approximately $10,796,004 for federal and state
income tax purposes. These carry forwards, if not utilized to offset
taxable income begin to expire in 2013. Utilization of the net
operating loss may be subject to substantial annual limitation due to
the ownership change limitations provided by the Internal Revenue Code
and similar state provisions. The annual limitation could result in the
expiration of the net operating loss before utilization.
F-14
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2002
7. COMMITMENTS
Contracts
On the purchase of assets from Alphacom, Inc. as set out in Note the
Company has the following licenses and/or joint venture agreements in
place.
UNT, INC.
The Company has entered into a licensing agreement with UNT, Inc., a
Pennsylvania company on July 29, 2002 which supercedes the original
agreement entered into by Alphacom, Inc. in March 1999. The new
agreement covers the territories of Israel and the Ukraine and calls
for UNT, Inc. to remit to Alphacom 50% of any sublicense fees and to
receive an ongoing royalty of $2.00 per Subscriber per month whether
such Subscriber is being billed for services or not. This agreement
expires in July 2012.
E:GO SYSTEMS.COM PLC
On March 6, 2000, Alphacom, Inc. entered into an exclusive license
arrangement with E:Go Systems.com PLC which covers most of the European
Union Countries. The initial license fee was $ 500,000 cash and
$ 500,000 of equivalent value in the shares of E:Go. The Company is to
receive an ongoing royalty of $ 2.00 per Subscriber per month whether
such Subscriber is being billed for services or not. Additional license
fees will be payable totaling 50% of such license fees payable by
sublicensees introduced by E:Go, or 70% if such sublicensees are
introduced by the Company.
ITM
There is also an existing Joint Venture Master License agreement with
ITM Group which covers the countries of Asia, Eastern Europe and South
America. ITM and Alphacom have established a joint venture under the
name of Alphacom International, Ltd. of which Alphacom owns 5%. The
Joint Venture has agreed to pay to Alphacom 50% of any sublicensing
fees earned up until such payments equal $ 37,500,000 and in addition
Alphacom shall receive an ongoing royalty of $ 2.00 per Subscriber per
month whether such Subscriber is being billed for services or not.
F-15
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2002
8. ACQUISITION OF ASSETS OF ALPHACOM, INC.
On November 14, 2002, the Company acquired a significant amount of
assets in a non-cash transaction of AlphaCom, Inc. a Nevada
Corporation. The assets generally consist of physical and intellectual
property. The value of the assets is approximately 4.4 million dollars,
based on the results of an examination of the seller's audited and
unaudited financial statements. The Company believes that this
valuation is the current fair market value of the assets. The Company
acquired the assets in exchange for 30,320,552 shares of its common
stock and a promissory note in the amount of $4,319,000. For the
purposes of this transaction the stock of the Company was valued at
$0.002/share, the company's average market share price for the past
week. The purchase price may be adjusted downward regarding the
issuance common stock to the seller if the Company does not secure
equity funding and/or licensed revenue in the amount of $10,000,000
during the next twelve months. The adjustment would be a based on a
percentage of the amount actually raised to the total agreed upon of
$10,000,000. There is no material relationship between AlphaCom, Inc.,
and the registrant or any of its affiliates, any director or officer of
the registrant, or any associate of any such director or officer. The
shares used to accomplish the acquisition were derived from the Company
treasury and are deemed to be restricted, illiquid shares pursuant to
Rule 144 of Regulation D of the Securities Act.
9. COMPARATIVE FIGURES
The comparative figures for the year ended December 31, 2001 which were
prepared by another accountant have been restated and reclassified to
agree with the current year's figures.
F-16
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Effective May 1, 2002 James E. Slayton resigned as our independent
auditor. This resignation was not due to any disagreement with Mr. Slayton and
Mr. Slayton's reports did not contain an adverse opinion or disclaimer of
opinion, nor were the reports qualified or modified as to uncertainty, audit
scope or accounting principles, except for our ability to continue as a going
concern. There were no disagreements with Mr. Slayton on any matter of
accounting principles or practices, financial statements disclosure, or auditing
scope procedure, which disagreements, if not resolved to the satisfaction of Mr.
Slayton would have caused such firm to make reference to the subject matter of
the disagreements in connection with its report on our financial statements. In
addition, there were no such events as described under Item 304 of Regulation
S-B through May 1, 2002.
On March 1, 2003 we retained the accounting firm of Michael Johnson &
Co., LLC to act as our independent auditor and conduct our audit for fiscal 2002.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The following table sets forth our executive officers and directors:
Name Age Position(s)
John J. "Jack" Craciun III 57 Chairman of the Board & President
Steven G. Coutoumanos 33 Board member, CEO
Dr. David F. Hostelley 63 Board member, Secretary, Treasurer
Mark P. Wing 55 Board member
Dr. Dennis Byrne 55 Board member
Mr. John J. "Jack" Craciun III, Chairman of the Board and President - Mr. Jack
Craciun III has 20 years of experience as a US broadcast media, production and
marketing executive. Additionally, he has 20 years experience as the Chairman/CEO
of ITM Ltd, an international corporation specializing in a wide range of
Communication, Trading and Capital funding projects throughout Asia, Eastern
Europe and the US.
Mr. Steven G. Coutoumanos, Board member, CEO - Mr. Coutoumanos has over 10 years
of senior management, consulting, and executive related expertise with financial
and IT sector companies in the areas of finance, operations, business
development, and business planning.
Dr. David F. Hostelley, CPA, Board member, Secretary, Treasurer - Dr. Hostelley
has over 35 years experience in financial management with expertise in mergers,
acquisitions, and project management. He also has taught at the university
level in all areas of accounting, finance, and management.
Mr. Mark P. Wing, Board member - Mr. Wing's career spans 30 years and includes a
wide range of experience including national sales manager for a
telecommunications company, president of a public relations firm, and president
of his own financial planning firm.
Dr. Dennis Byrne, Board member - Dr. Byrne is President of the Economic
Evaluation Group, which specializes in assisting the legal profession to
evaluate the worth of businesses and technology. Formerly, he served as
Professor of Economics with the University of Akron for 27 years.
15
David Boon was elected to serve as Chief Operating Officer of the
Company but declined to accept such position.
Potential Conflicts of Interest
Potential conflicts of interest may arise between the Company and its
officers and directors. Although each of our officers and directors is committed
to devote full working time to our business, they also may be engaged in other
business activities. If these business activities are of the same type as those
engaged in or contemplated by us, conflicts of interest will arise in the area
of corporate opportunities or in the area of conflicting time commitments with
respect to our officers and directors.
Conflicts of interest also will develop with respect to any contractual
relationships that may be entered into between us and any of our officers and
directors. We have established a policy pursuant to which the Board of Directors
will consider transactions with our officers, directors, and shareholders and
their respective affiliates.
Pursuant to this policy, the Board of Directors will not approve any
transaction unless it determines that the terms of the transaction are no less
favorable to us than those available from unaffiliated parties. Because this
policy is not contained in the our Articles of Incorporation or Bylaws, the
policy is subject to change by the Board of Directors, although it currently is
not contemplated that the policy will be changed.
In addition, in the event any conflicts of interest arise with respect
to any officer or director of the Company, we anticipate that our officers and
directors will exercise their judgment consistent with their fiduciary duties
arising under the applicable state laws. There can be no assurance that all
conflicts of interest will be resolved in our favor.
Committees
We do not have any standing audit, nominating, or compensation
committees of our board of directors. The board of directors as a whole has
been performing similar functions. This is due to the fact that new management
has been in place a short period of time. Management anticipates creating such
committees.
Section 16(a) Beneficial Ownership Reporting Compliance.
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers, and persons who beneficially own more than ten
percent of a registered class of our equity securities (referred to as
"reporting persons"), to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of common stock
and other Company equity securities. Reporting persons are required by
Commission regulations to furnish us with copies of all Section 16(a) forms they
file.
Mr. Craciun, Dr. Hostelley and Dr. Byrne are delinquent in the filing
requirements under Section 16(a).
16
ITEM 10. EXECUTIVE COMPENSATION.
No officer or director received compensation during the fiscal year
ended December 31, 2002. We intend to pay salaries when cash flow permits. There
have been no grants of stock options, stock appreciation rights, benefits under
long-term incentive plans or other forms of compensation involving our officers,
through December 31, 2002. We do not have employment agreements in place with
any of our officers.
We reimburse our officers and directors for reasonable expenses
incurred during the course of their performance. We have not paid our outside
directors fees for their services. However, we propose to pay them in the future.
Stock Option Plan
We do not have a formal option plan for employees. In December 2002 our
Board of Directors approved a stock option plan covering 1,000,000 shares of our
common stock and named it the Multi-Tech Consultant and Employee Stock Option
Plan. In December 2002 we issued all 1,000,000 options under this plan to
certain consultants. In December 2002 we filed a registration statement on Form
S-8 registering the shares of common stock underlying the option described
above.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth certain information concerning the
beneficial ownership of our outstanding common stock as of April 4, 2003, by
each person known by us to own beneficially more than 5% of the outstanding
common stock, by each of our directors and officer and by all of our directors
and officers as a group. Unless otherwise indicated below, to our knowledge all
persons listed below have sole voting and investment power with respect to their
shares of common stock except to the extent that authority is shared by spouses
under applicable law.
Name and Address Amount and Nature of
of Beneficial Owner (1) Beneficial Ownership Percent of Class (2)
John J. "Jack" Craciun III 800,000(3) 2%
Steven G. Coutoumanos 0 0
Dr. David F. Hostelley 200,000(4) *
Mark P. Wing 0 0
Dr. Dennis Byrne 15,000 *
Alphacom, Inc. 30,320,552(5) 74.1
All officers and directors
as a group (3 persons) 1,015,000 2.5
___________________
* less than two percent.
(1) To our knowledge, except as set forth in the footnotes to this table and
subject to applicable community property laws, each person named in the
table has sole voting and investment power with respect to the shares set
forth opposite such person's name. The address for each of the individuals
listed in this table is care of the Company at 760 Killian Road, Akron, Ohio
44319.
(2) This table is based on 40,907,934 shares of Common Stock outstanding as of
April 4, 2003. If a person listed on this table has the right to obtain
additional shares of Common Stock within sixty (60) days from April 4, 2003,
the additional shares are deemed to be outstanding for the purpose of
computing the percentage of class owned by such person, but are not deemed
to be outstanding for the purpose of computing the percentage of any other
person.
(3) These shares are held in the name ITM Ltd. a company controlled by Mr.
Craciun our President and Chairman of the Board of Directors.
(4) These shares are held in the name Margaret Hostelley who is the wife of Dr.
David F. Hostelley
(5) These shares are held in escrow pursuant to the Asset Purchase Agreement
entered into with Alphacom, Inc. The address for Alphacom, Inc. is 1035
Rosemary Boulevard, Akron, Ohio.
17
Changes in Control
There are no agreements known to management that may result in a change
of control of our company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
John J. Craciun III, our Chairman of the Board and President is a
majority shareholder in ITM, Ltd. (a Hong Kong Corporation) that is the
ninety-five percent partner in the joint venture for the territories of Asia,
Romania, and Venezuela and other Eastern Block countries. Dr. David Hostelley, a
member of our board of directors and our Secretary and Treasurer also serves as
the Chief Operating Officer of ITM, Ltd. (a Hong Kong Corporation). Steven G.
Coutoumanos, our Chief Executive Officer also serves as Chief Financial Officer
of a technology company that is developing the boards necessary for a digital
application of the technology we purchased from Alphacom. To date, no monies
have been paid to these individuals.
Our officers and directors are involved in other business activities
and may, in the future, become involved in other business opportunities. Thus
conflicts of interest may arise (See section entitled Potential Conflicts of
Interest above).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
The following documents are included or incorporated by reference as
exhibits to this report:
EXHIBIT
NO. DOCUMENT DESCRIPTION
2.1 Asset Purchase Agreement dated as of November 15, 2002 by
and between BUCK TV.com, Inc. and Alphacom, Inc.(1)
3.1 Articles of Incorporation (2)
3.2 By-Laws (2)
3.3 Certificate of Amendment to Articles of Incorporation
10.1 Promissory Note dated November 14, 2002, in the amount of
$4,319,000 payable to Alphacom, Inc.
23.1 Letter of Consent from Michael Johnson & Co. LLC.
99.1 Certification of Principal Executive Officer Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
99.2 Certification of Principal Financial Officer Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
_________________
(1) Previously filed as an exhibit to the registrant's current report on Form
8-K dated November 20, 2002.
(2) Previously filed as an exhibit to our registration statement on Form 10-SB
(the "Registration Statement"), which was filed on April 29, 1999, and
incorporated herein by reference.
(b) REPORTS ON FORM 8-K
A report on Form 8-K dated November 20, 2003 was filed on November 20,
2003 reporting under Item 5, no financial statements were filed with this report.
A report on Form 8-K dated November 20, 2003 was filed on November 20,
2003 reporting under Items 2 and 6, no financial statements were filed with this
report.
A report on Form 8-K dated December 4, 2002 was filed on December 4,
2002 reporting under Item 5, no financial statements were filed with this report.
18
ITEM 14. CONTROLS AND PROCEDURES.
Under the supervision and with the participation of our management,
including our Chief Executive Officer and principal Financial Officer, we
conducted an evaluation of the effectiveness of our disclosure controls and
procedures as defined in Rule 13a-14(c) promulgated under the Securities
Exchange Act of 1934 within 90 days of the filing date of this report. Based on
their evaluation, our Chief Executive Officer and principal Financial Officer
concluded that the design and operation of our disclosure controls and
procedures were effective as of the date of the evaluation.
There have been no significant changes (including corrective actions
with regard to significant deficiencies or material weaknesses) in our internal
controls or in other factors that could significantly affect these controls
subsequent to the date of the evaluation referenced in the preceding paragraph.
19
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: April 14, 2003 Multi-Tech International, Corp.
By: /s/ John J. Craciun
John J. "Jack" Craciun III
Chairman of the Board, President
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
Signature Title Date
/s/ John J. Craciun III President, and Chairman of the Board April 14, 2003
John J. Craciun III
/s/ Dr. David F. Hostelley Secretary, Treasurer and Director April 14, 2003
Dr. David F. Hostelley (Principal Financial and Accounting Officer)
/s/ Steven G. Coutoumanos Chief Executive Officer, Director April 14, 2003
Steven G. Coutoumanos (Principal Executive Officer)
/s/ Mark P. Wing Director April 14, 2003
Mark P. Wing
20
CERTIFICATION
I, Steven G. Coutoumanos, certify that:
1. I have reviewed this annual report on Form 10-KSB of Multi-Tech
International, Corp.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: April 14, 2003
/s/ Steven G. Coutoumanos
Steven G. Coutoumanos, CEO
(principal executive officer)
21
CERTIFICATION
I, Dr. David F. Hostelley, certify that:
1. I have reviewed this annual report on Form 10-KSB of Multi-Tech
International, Corp.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: April 14, 2003
/s/ Dr. David F. Hostelley
Dr. David F. Hostelley
Principal Financial Officer