"PART 5" of 8K
Systems of Excellence, Inc.
September 20, 1996
Page 2
3. The Company may have failed to comply with requirements of the
Florida's Business Corporation Act by failing to hold shareholders'
meetings and elections and that certain acts of the Company which
required votes of the Company's shareholders were approved only by the
Company's Board of Directors.
4. The Company may have failed to notify its transfer agent of all of its
authorized and issued shares of common stock. Although the Company's
records indicate that in August, 1996 approximately 80,000,000 shares
of the Company's common stock were authorized and approximately
58,000,000 shares of its common stock were issued and outstanding, the
Company's transfer agent, American Securities Transfer & Trust, Inc.,
was only aware of 30,000,000 authorized common shares of the Company
and 23,702,270 issued and outstanding shares.
5. The Company may have issued shares of the Company's common stock to
members of the public pursuant to S-8 registration statements under
the Securities Act of 1933 which may not have been filed with the SEC
as required by federal regulations and statutes. In certain of those
instances, registration of shares on an S-8 Registration Statement may
not have been permissible because the Company may not have been
current in its filings with the SEC at the time such statements were
allegedly filed.
6. Through June 1996, the Company apparently issued a significant number
of shares of its common stock to various individuals and companies for
services provided by such persons and entities. Serious questions
exist concerning the compensation paid, and the consideration
received, by the Company for these services.
7. The Company also issued shares of its common stock to members of the
public pursuant to a private placement memorandum. The investors who
received such shares also received promissory notes signed by the
Company. Serious questions exist concerning this private placement.
8. The Company may also have issued shares of its common stock to certain
of its officers and directors without shareholder approval. Serious
questions exist concerning the issuance of such shares.
Systems of Excellence, Inc.
September 20, 1996
Page 3
PLEASE ADVISE US, AS SOON AS PRACTICABLE, WHAT REMEDIAL ACTIONS THE COMPANY
WILL TAKE WITH RESPECT TO EACH OF THE ABOVE NUMBERED PARAGRAPHS.
You should be aware that, pursuant to Section 10A of the 1934 Act, if we
conclude that (i) any or all of the above possible illegal acts has a material
effect on the financial statements of the Company, (ii) the senior management
has not taken, and the board of directors has not caused senior management to
take, timely and appropriate remedial actions with respect to the detected
possibly illegal acts, and (iii) the failure to take remedial action is
reasonably expected to warrant a departure from a standard report of ours, when
made, or warrants resignation from this engagement, under Section 10A of the
1934 Act, we must, as soon as practicable, directly report our conclusions to
the Company's board of directors. Pursuant to Section 10A of the 1934 Act, the
Company must then inform the Securities & Exchange Commission ("SEC") within
one business day after receipt of our report and provide us with a copy of the
Company's notice to the SEC. If we do not receive a copy of such notice before
the expiration of the one day period, we are required to furnish the SEC with a
copy of our report no later than one business day following the business day we
fail to receive a copy of the Company's notice to the SEC.
Your prompt reply to this letter is requested.
Sincerely,
WEINBERG, PERSHES & COMPANY, P.A.
EXHIBIT 99.2
UNITED STATES DISTRICT COURT
DISTRICT OF COLUMBIA
___________________________________________________
:
SECURITIES AND EXCHANGE COMMISSION, :
450 FIFTH STREET, N.W. :
WASHINGTON, D.C. 20549, :
:
PLAINTIFF, : CIVIL ACTION NO. 96-
:
:
V. :
:
CHARLES O. HUTTOE, HUTTOE & :
ASSOCIATES, INC., WORD CORPORATION, :
NATIONAL TRADING SERVICES, INC., :
KAREN PURVIS, TAMMY JO PERKINS, :
JOSEPHINE BROOKS, SGA GOLDSTAR :
RESEARCH INC., THEODORE R. :
MELCHER, JR., SHANNON B. TERRY, :
SYSTEMS OF EXCELLENCE, INC., :
ALPHA SECURITIES LTD., AND :
DUNBAR HOLDINGS LTD., :
:
DEFENDANTS. :
:
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