Of course the defendants' own misconduct and mismanagement during the Class Period made it increasingly unlikely that WWWC would ever be in a position to "go public". As a result of the company's poorly maintained and steadily decaying financials, WWWC was twice unable to complete and audit and, without audited financial statements, was unable to go public. Thus, in March 1997, WWWC announced that it had signed a letter of intent to merge with a NASDAQ/OTC company named USA Growth, Inc. ("USAG"), and promised shareholders that the company would go "public" within a few months. In early 1998, however, after repeated delays and almost a year of discussions, USAG pulled out of the proposed merger due to WWWC's inability to present it with audited financial statements.
The mismanagement of WWWC's financial affairs had dramatically affected, and will continue to affect, the business of the company in other respects. For example, on April 2, 1998, Rangestar Telecommunications, Ltd. a Canadian company ("Rangestar"), entered into a software license and operation agreement that would have resulted in the infusion of much-needed capital to WWWC -- $1-$2 million over the next 90-120 days and at least $3-$6 million over the next five years. However, after months of delays, the defendants were unable to provide RANGESTAR with audited financial statemtns, as required. Instead, the defendants demanded a $300,000 cash payment to be made by May 5, 1998 and, when the requested payment was not made, defendants caused WWWC to "rescind" the agreement with RANGESTAR , to WWWC's detriment.
Apparently, the RANGESTAR transaction was also impacted by that company's refusal to agree to defendant MICHAELS' demand that he personally be provided with 3 million or more shares of common stock in RANGESTAR -- surreptitiously and "under the table" -- prior to the completion of any agreement with WWWC.
As alleged hereinabove, during the Class Period, the true facts about WWWC have been concealed from plaintiffs and the other member sof the Class. For example, whereas the vaious written materials distributed to investors in WWWC indicated that the company would realize about 90% of the proceeds raised from investors, net of commissions to broker-dealers ("if any") and offering expenses, in fact, about 30% of the moneys raised from investors have been paid out in commisions to participating broker-dealers such as TRI STAR. A substantial portion of these funds was eventually paid to defendants WOODS, BORETZ and MICHAELS himself.
Not only have the true facts about WWWC been concealed from plaintiffs and the other member sof the Class but, at times, the defendants have fabricated "good news" about WWWC's business prospects in order to deceive investors and pre-condition the market for any potential offering of securities on a public securities exchange. For example, earlier this year, the defendants announced a "$2 million" transaciton between WWWC and "Internet Progressive Gaming, a South African business." However, this was a phantom business arrangement. Internet Progressive Gaming is an entity owned and controlled by defendant MICHAELS, and no money actually changed hands in connection with this purported transaction.
Defendants have been aware that a shareholder lawsuit is forthcoming. Since at least 1997, they have been regularly changing bank accounts utilized by WWWC and its affiliated companies, in order to avoid creditors. These accounts have been changed several times during the past year, pursuant to instructions issued by MICHAELS.
Defendant MICHAELS has also indicated that he is considering various plans which would license the company's casino gaming software to an Australian company and/or to yet another Nevada corporation -- with the objective of "circumventing" WWWC, escaping liability to WWWC's shareholder and/or "transferring" everything out to off-shore companies.
end of allegtions....Causes of action and Affadavits to be entered here tomorrow.... WE ARE NOT GOING TO LET MICHAELS GET AWAY WITH THIS |
