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ROBERT ADAMS - CLAIM FOR STOCK OPTIONS
We have received correspondence from counsel representing Mr. Robert Adams
indicating that Mr. Adams alleges he is entitled to certain stock options of
which seventy-five percent (75%) of the option price is already deemed paid in
exchange for services rendered. Such allegations are based on an alleged
agreement between us and Mr. Adams. Mr. Adams is attempting to exercise such
options for the purchase of a certain number of shares Adams claims he is
entitled to pursuant to his agreement. We intend to analyze Mr. Adams' claims
and pursue resolution of this situation. To date, there have been minimal
actions taken by Adams' counsel and no litigation is pending.
MICHAEL HORN - THREAT OF BREACH OF CONTRACT
We have received correspondence from counsel representing Mr. Michael Horn
claiming that he is entitled to monies owed to him and that we have breached
certain provisions of an agreement between us and Mr. Horn. We have responded in
written communications as well as discussions with Horn's counsel indicating our
counterclaims involving alleged actions by Horn which may or may not represent
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material breaches of an agreement between us and Horn. We are working towards
resolution of this situation and no threatened arbitration or litigation is
currently pending.
SHAWN HACKMAN, ESQ. LITIGATION
On August 5, 1999, we filed a Complaint in the Los Angeles Superior Court - West
District (KANAKARIS COMMUNICATIONS, INC. V. SHAWN F. HACKMAN, AND DOES 1 THROUGH
20 - Case No. _____) against Mr. Shawn Hackman, Esq. as an individual along with
20 Doe (unnamed) Defendants claiming damages for breach of contract, conversion,
fraud and deceit and negligence. This Complaint arises out of the alleged
transfer of certain funds without our authorization to an unknown entity by
named and possible unnamed defendants. We intend to vigorously pursue this
action until its resolution either through a jury trial or by fashioning an
appropriate settlement agreement.
FUTURE LITIGATION INVOLVING THE COMPANY
From time to time, we may be involved in litigation matters relating to claims
arising out of the ordinary course of business. If a court or jury rules against
us and the ruling is ultimately sustained on appeal and damages are awarded that
include punitive damages, such ruling could have a material and adverse effect
on our business, results of our operations and overall financial condition.
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DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
The names, ages, and respective positions of our directors, officers, and
significant employees are given below. There are no other persons which can be
classified as a promoter or controlling person of the Company.
Alex Kanakaris CEO and President
Mr. Kanakaris creates the business vision of Kanakaris Communications, Inc. and
leads all aspects of its development, including strategic alliances and
invention of proprietary Internet business concepts and technologies. Mr.
Kanakaris is an Internet pioneer who has been interviewed about his vision for
the Internet on television, radio and on the World Wide Web. Mr. Kanakaris was
editor-in-chief of such publications as Video Swapper, Video Entertainment, New
Talent Streetscene and L.A.>POP. He was involved in marketing for a large
consumer electronics company and the world's largest costume jewelry company. He
became a stockbroker for Dean Witter to enhance his business knowledge in
preparation for leading a public company. Mr. Kanakaris created innovative Web
sites including www.cyberpop.com and www.NetBooks.com, and has been an early
user of streaming audio and video technology. Among his other achievements at
Kanakaris Communications have been the delivery of the first full-length motion
picture over the Internet with no download time, in December 1995 (in
conjunction with XING Technology) and the acquisition of the Desience
Corporation. Mr. Kanakaris is the host of World Web Watch, a program focusing on
Internet issues, and has interviewed such executives as Dick Brass, Vice
President, Technology, Microsoft Corporation.
Branch Lotspeich, Director and Vice Chairman of the Board
Branch Lotspeich is the President of the Kanakaris Desience division, designers
and providers of command and control environments for Internet and intranet
applications. Mr. Lotspeich directs the Kanakaris Desience relationship with
such
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clients as NASA, where Mr. Lotspeich has overseen the design and
implementation of Desience's OPCON Module System for the Goddard Space Flight
Center. Mr. Lotspeich has worked directly with AT&T, IBM, IRS, Ford Motor Co.
and other clients to develop data and networking centers. He is the top
advisor to the CEO on major Internet technology issues and is involved in all
aspects of the Corporation's managerial development. Mr. Lotspeich worked as
an independent consultant in telecommunications acquiring accounts including
Proctor & Gamble and Cincinnati Bell Telephone. His work encompassed site
design, broadband communications, world-wide group project communications,
and telephony. For 10 years Mr. Lotspeich was the manager of the Medical
Media Center at the University of Cincinnati. He designed and oversaw the
building of the first Medical Media Center in Hangchou, China. Mr. Lotspeich
has an expertise in computer programming, including Internet applications of
HTML, CGI and Java. For 6 years, he served as an appointment of the mayor of
Cincinnati to the Citizens Cable Regulatory Board. Mr. Lotspeich is a Summa
Cum Laude graduate of the University of Cincinnati, Bachelor of Fine Arts in
Television Broadcasting.
John McKay, Director and Webmaster
John McKay has been a Webmaster since 1995 and has worked both full-time and
as a consultant to CEO Alex Kanakaris since 1994. Mr. McKay has a background
in Advertising, Marketing, and Graphics. He has held such positions as
advertising manager for Kelly-Moore Paint Co. and Sales Promotion Manager for
ORA Electronics/Alliance Corporation, an international consumer electronics
company. He has extensive experience in developing marketing and corporate
identity programs, advertising campaigns, and creating an online presence for
corporations. He is a graduate of San Francisco State University with a
Bachelor of Science in Marketing.
David Shomaker, Acting Chief Financial Officer
David Shomaker is a partner of Haynie & Company, Certified Public Accountants,
based in Orange County, California and Salt Lake City, Utah. His management
consulting services include forecasts and projections, as well as business
valuations. He is a specialist in financial statement reporting, including
audit, review and compilation services, as well as agreed-upon procedures
reports. His areas of emphasis include management, manufacturing, and finance.
Mr. Shomaker is qualified to perform peer review and quality review services on
behalf of both the American Institute of Certified Public Accountants and the
California Society of CPAs as a team captain. He has been Certified by the
Association of Certified Fraud Examiners and the National Association of
Certified Valuation Analysts as an Examiner and Analyst in their respective
fields. He is a member of: American Institute of Certified Public Accountants,
California Society of Certified Public Accountants, Utah Association of
Certified Public Accountants, Construction Financial Management Association and
other organizations. Mr. Shomaker is a Graduate in Accounting, Brigham Young
University, Provo, Utah.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the date of this Prospectus, the
outstanding Shares of our common stock which were owned of record or
beneficially by each person who owned of record, or was known by us to own
beneficially, more than 5% of our Common Stock, and the name and share
holdings of each officer and director and all officers and directors as a
group.
Title of Class: Common Stock
Name of Beneficial Owner: Alex F. Kanakaris - CEO, Director
Amount and Nature of Beneficial Owner: 1,173,381
Percent of Class before Offering: 5.1%
Title of Class: Preferred Stock
Name of Beneficial Owner: Alex F. Kanakaris - CEO, Director
Amount and Nature of Beneficial Owner: 1,000,000
Percent of Class before Offering: 100%
Title of Class: Common Stock
Name of Beneficial Owner: Branch Lotspeich - President Desience Division,
Director
Amount and Nature of Beneficial Owner: 1,323,381
Percent of Class before Offering: 5.75% |
