Item 7. Certain Relationships and Related Transactions.
The current Board of Directors of the Company has adopted a policy that
Company affairs will be conducted in all respects by standards applicable to
publicly-held corporations and that the Company will not enter into any
transactions and/or loans between the Company and its officers, directors and 5%
stockholders, unless the terms are no less favorable than could be obtained from
independent third parties and unless such transactions are approved by a
majority of the independent disinterested directors of the Company.
In November, 1998, the Company issued 10,000,000 shares of common stock
to Atlas Marketing Association, Inc. for cash consideration of $950,000 pursuant
to an exemption under Rule 504 of Regulation D of the Act. Atlas was an
accredited investor. The Company believes that Atlas had knowledge and
experience in financial and business matters which allowed it to evaluate the
merits and risk of the purchase of these securities of the Company, and that it
was knowledgeable about the Company's operations and financial condition. The
terms and conditions of this financing were determined by the parties through
arms length negotiations and the Company believes the terms are no less
favorable to the Company than terms attainable from unaffiliated third parties.
In November, 1998 the Company issued 7,500,000 shares of common stock
to Eric W. Deckinger in exchange for the assumption by Mr. Deckinger, a Director
and President of the Company of $750,000 of the Company's debt to third parties.
The Company believes that Mr. Deckinger had knowledge and experience in
financial and business matters which allowed him to evaluate the merits and risk
of the receipt of these securities of the Company, and that he was knowledgeable
about the Company's operations and financial condition. The terms and conditions
of this financing were determined by the parties through arms length
negotiations and the Company believes the terms are no less favorable to the
Company than terms attainable from unaffiliated third parties.
In May, 1999, the Company issued 862,158 shares of nonvoting preferred
stock to MJ Shulman, Inc. in exchange for $862,158 of the Company's debt held by
and loaned by MJ Shulman, Inc.. The Company believes that MJ Shulman, Inc. had
knowledge and experience in financial and business matters which allowed it to
evaluate the merits and risk of the purchase of these securities of the Company.
The Company believes that MJ Shulman, Inc. was knowledgeable about the Company's
operations and financial condition. The terms and conditions of this financing
were determined by the parties through arms length negotiations and the Company
believes the terms are no less favorable to the Company than terms attainable
from unaffiliated third parties.
Item 8. Description of Securities.
The authorized capital stock of the Company consists of 50,000,000
shares of common stock, $0.001 par value and 10,000,000 Series A nonvoting
preferred stock, $.001 par value. As of July 15, 1999, the Company had issued
and outstanding 18,115,000 shares of common stock and 862,158 nonvoting
preferred stock.
The following summary description of the securities of the Company is
qualified in its entirety by reference to the Articles of Incorporation
("Articles") and the Bylaws of the Company, copies of which are filed as
exhibits to this Form 10-SB.
Common Stock
The holders of common stock are entitled to one vote per share with
respect to all matters required by law to be submitted to stockholders of the
Company. The holders of common stock have the sole right to vote, except as
otherwise provided by law or by the Articles of Incorporation. The common stock
does not have any cumulative voting, preemptive, subscription or conversion
rights. The election of directors and other general stockholder action requires
the affirmative vote of a majority of shares represented at a meeting in which a
quorum is represented.
<PAGE>
The holders of common stock are entitled to receive dividends when, as
and if declared by the Board of Directors out of funds legally available
therefor only after accrued dividends are paid to holders of preferred stock and
other senior securities. In the event of liquidation, dissolution or winding up
of the affairs of the Company, the holders of common stock are entitled to share
ratably in all assets remaining available for distribution to them subject to
the rights of holders of preferred stock and other senior securities.
Preferred Stock
There have been designated 1,000,000 shares of Series A Preferred Stock
(the "Preferred Stock"). The Preferred Stock has a stated value of $1.00 per
share. The holders of Preferred Stock are entitled to receive dividends at the
rate of 5% per annum payable semi-annually, in arrears. At the sole discretion
of the Company, the dividends may be paid in cash, or by the in-kind payment of
common stock. A cash dividend shall only be made out of funds legally available
therefor. If dividends are paid in common stock, the value of the in-kind common
stock shall be the Current Market Price (as defined below). In the event the
Company fixes a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution with respect to the Common
Stock payable in (i) securities of the Company other than shares of Common Stock
or (ii) assets, then and in each such event the holders of Preferred Stock shall
receive, at the same time such distribution is made with respect to Common
Stock, the number of securities or such other assets of the Company which they
would have received had their Preferred Stock been converted into Common Stock
immediately prior to the record date for determining holders of Common Stock
entitled to receive such distribution.
The Preferred Stock is not convertible into any security of the
Company. The Preferred Stock shall have no voting rights. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of shares of Preferred Stock then outstanding shall be
entitled to receive out of assets of the Corporation available for distribution
to stockholders, before any distribution of assets is made to holders of any
other class of capital stock of the Corporation, an amount equal to $1.00 per
share, plus accumulated and unpaid dividends thereon to the date fixed for
distribution.
At or before May 31, 2004, if there is a transaction resulting in any
person or group acquiring beneficial or pecuniary ownership of 50% or more of
the common equity of the Corporation, then the Corporation, at its sole
discretion, may redeem any and/or all of the shares of Series A Preferred Stock
as may be outstanding, upon thirty days written notice to holders. In such
event, the Redemption Price for each share of Series A Preferred Stock shall be
$3.00, plus cash payment for accumulated and unpaid dividends thereon to the
date fixed for redemption. At any time after May 31, 2004, the Corporation, at
its sole discretion, may redeem any and/or all of the shares of Series A
Preferred Stock as may be outstanding, upon thirty days written notice to
holders. The Redemption Price for each share of Series A Preferred Stock shall
be $1.40, plus cash payment for accumulated and unpaid dividends thereon to the
date fixed for redemption. The Company has issued and outstanding 862,158 shares
of Preferred Stock.
<PAGE>
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Stock and
Other Shareholder Matters.
The Company's common stock is currently traded on the over-the-counter
bulletin board ("OTCBB") under the symbol "MOSS." The following table sets
forth, for the periods indicated, the reported high and low closing bid
quotations for the common stock of the Company as reported on the OTCBB . The
bid prices reflect inter-dealer quotations, do not include retail markups,
markdowns or commissions and do not necessarily reflect actual transactions.
To the best of the Company's knowledge, from March 31, 1997 to May 31,
1998, no broker-dealer made an active market or regularly submitted quotations
for the Company's stock, and that during this period, there was only a de
minimis and infrequent number of trades and de minimis trading volume.
HIGH LOW
QUARTER ENDED BID BID
------------------ ----- -----
August 31, 1997 $ (*) $ (*)
November 30, 1997 $ (*) $ (*)
February 28, 1998 $ (*) $ (*)
May 31, 1998 $ (*) $ (*)
August 31, 1998 (**) $ 2.50 $ .125
November 30, 1998 (**) $ .187 $ .04
February 28, 1999 $ 6.00 $ 3-7/8
May 31, 1999 $ 4-1/8 $ 3.00
August 31, 1999 $ 3-3/8 $ 2.00
-----------
(*) During this period, there were only a de minimis and infrequent number of
trades and a de minimis trading volume.
(**) Pre-reverse split. On December 21, 1998 The Company executed a 10 to 1
reverse split of its Common Stock and all the share amounts in this Form
10SB are post reverse split amounts.
The bid price on the Company's common stock was $.625 per share on
October 25, 1999.
As of October 25, 1999, there were approximately 675 holders of record
of the Company's common stock.
The Company's transfer agent is Silverado Stock Transfer, Inc., 8170
Southeastern Avenue, #4-236, Las Vegas, Nevada 89123, (702) 263-0920.
Dividend Policy
The Company has not paid, and the Company does not currently intend to
pay cash dividends on its common stock in the foreseeable future. The current
policy of the Company's Board of Directors is for the Company to retain all
earnings, if any, to provide funds for operation and expansion of the Company's
business. The declaration of dividends, if any, will be subject to the
discretion of the Board of Directors, which may consider such factors as the
Company's results of operations, financial condition, capital needs and
acquisition strategy, among others.
Item 2. Legal Proceedings.
None.
<PAGE>
Item 3. Changes in and Disagreements With Accountants.
Mr. Kurt D. Saliger, C.P.A. ("Saliger"), conducted the audits of the
Company for the years ended December 31, 1997 and 1996. Saliger was dismissed on
December 21, 1998. There were no disagreements on accounting matters or
financial disclosures. Kurt D. Saliger, C.P.A. has provided the Company with a
letter pursuant to Rule 304 of Regulation S-B.
(a) On December 21, 1998, the Company engaged Sweeney, Gates &
Co.("Sweeney, Gates") as its independent accountant. The
decision to engage Sweeney, Gates as the Company's independent
accountant was approved by the President of the Company. The
decision to change auditors was based on the Company's
relocation of its executive offices to Florida.
(b) In a report dated March 2, 1998 Saliger reported on the
Company's financial statements as of December 31, 1997, and
the related statements of operations, stockholders' equity and
cash flows for the year then ended. The report did not contain
an adverse opinion or disclaimer of opinion, nor was such
report qualified or modified as to uncertainty, audit scope,
or accounting principles.
(c) Since December 31, 1997 and through the present, there were no
reportable events requiring disclosure pursuant to Item 304 of
Regulation S-B.
(d) Effective December 21, 1998, the Company engaged Sweeney,
Gates as its independent accountant. During the two calendar
years ended December 31, 1997, and through December 21, 1998,
neither the Company nor anyone on its behalf consulted
Sweeney, Gates regarding either the application of accounting
principles to a specified transaction, either completed or
proposed, or the type of audit opinion that might be rendered
on the Company's financial statements, nor has Sweeney, Gates
provided to the Company a written report or oral advice
regarding such principles or audit opinion. |
