AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 11, 2003
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
TELECOM COMMUNICATIONS, INC.
(Exact name of registration as specified in its charter)
Indiana 35-2089848
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
827 South Broadway
Los Angeles, CA 90014
(310) 515-6728
(Address and Telephone Number of Principal Executive Offices)
TELECOM COMMUNICATIONS, INC.
2002 Stock Option Plan
(Full Title of the Plan)
Copies to:
Tak Hiromoto James M. Schneider, Esq.
Chief Executive Officer Schneider Weinberger LLP
Telecom Communications, Inc. 2499 Glades Road, Suite 108
827 South Broadway Boca Raton, FL 33431
Los Angeles, CA 90014 (561) 362-9595
(213) 489-3486
CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum maximum
offering aggregate Amount of
Title of securities Amount to be price per offering registration
to be registered registered share price fee
--------------------------------------------------------------------------------
Common Stock, $.001
par value per share (1) 2,500,000 $.40 $1,000,000 $80.90
(1) This calculation is made solely for the purpose of determining the
registration fee pursuant to the provisions of Rule 457(h) under the
Securities Act, and is calculated upon the average of the bid and asked
price of the securities on the Over-the-Counter-Bulletin Board on June
3, 2003.
PROSPECTUS
TELECOM COMMUNICATIONS, INC.
2,500,000 Shares of Common Stock
($.001 par value)
This prospectus forms a part of a registration statement, which
registers an aggregate of 2,500,000 shares of common stock issued or issuable
from time-to-time under the Telecom Communications, Inc. 2002 Stock Option Plan.
Telecom Communications, Inc. is referred to in this prospectus as
"Telecom," the "Company," "we," "us" or "our." The 2,500,000 shares covered by
this prospectus are referred to as the "shares." Persons who are issued shares
are sometimes referred to as the "selling security holders."
This prospectus also covers the resale of shares by persons who are our
"affiliates" within the meaning of federal securities laws. Affiliated selling
security holders may sell all or a portion of the shares from time to time in
the over-the-counter market, in negotiated transactions, directly or through
brokers or otherwise, and at market prices prevailing at the time of such sales
or at negotiated prices, but which may not exceed 1% of our outstanding common
stock..
We will not receive any proceeds from sales of shares by selling
security holders.
These securities have not been approved or disapproved by the
Securities and Exchange Commission nor has the Commission passed on the accuracy
or adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
This prospectus does not constitute an offer to sell securities in any
state to any person to whom it is unlawful to make such offer in such state.
The date of this prospectus is June 5, 2003.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and, in accordance therewith, we file reports,
proxy statements and other information with the Securities and Exchange
Commission. Reports, proxy statements and other information filed with the
Commission can be inspected and copied at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of this
material can also be obtained at prescribed rates from the Public Reference
Section of the Commission at its principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission also maintains a website on the Internet
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission at
http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by us with the Commission are
incorporated herein by reference and made a part hereof:
- Quarterly Report on Form 10-QSB filed on May 22, 2003
- Quarterly report on Form 10-QSB filed on February 21, 2003, as
subsequently amended - Annual Report on Form 10-KSB filed on
January 15, 2003, as subsequently amended.
All reports and documents filed by us pursuant to Section 13, 14 or
15(d) of the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this prospectus to
the extent that a statement contained herein or in any other subsequently filed
document, which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any statement modified or superseded
shall not be deemed, except as so modified or superseded, to constitute part of
this prospectus.
We hereby undertake to provide without charge to each person, including
any beneficial owner, to whom a copy of the prospectus has been delivered, on
the written request of any such person, a copy of any or all of the documents
referred to above which have been or may be incorporated by reference in this
prospectus, other than exhibits to such documents. Written requests for such
copies should be directed to Corporate Secretary, Telecom Communications, Inc.,
827 South Broadway, Los Angeles, California 90014.
THE COMPANY
Introduction
This prospectus contains forward-looking statements that involve risks
and uncertainties. Our actual results may differ materially from the results
discussed in the forward-looking statements. You are urged to read this
prospectus carefully and in its entirety.
Telecom Communications, Inc. was incorporated on January 6, 1997 in the
State of Indiana under the corporate name MAS Acquisition XXI Corp. Prior to
December 21, 2000, we were a blank check company seeking a business combination
with an unidentified business. On December 21, 2000, we acquired Telecom
Communications of America, which was a sole proprietorship doing business in Los
Angeles, California since August 15, 1995, and changed our name to Telecom
Communications, Inc. We issued 9,000,000 shares of our common stock or 90% of
our total outstanding common shared after giving effect to the acquisition. MAS
Capital Inc. returned 7,272,400 shares of common stock for cancellation without
any consideration.
Our main business is to provide low cost telephone calls over the
Internet to individuals and businesses. Our services enable our customers to
make low cost telephone calls over the Internet using the traditional telephone.
In September 1999, we introduced a service that enables international and
domestic calls to be made over the Internet using traditional telephones. Long
distance calls made using our services are often substantially less expensive
than long distance calls routed over traditional voice network. In summary, our
cost is 9.5 cents per minute compared with 17 cents per minute using traditional
phones, taking into consideration the monthly basic service charges for the
traditional phone services.
We hope to expand our business through acquisitions. Currently, we have
one telephone call center with one server located in Los Angeles, California.
A total of 71% of our revenue has been generated from the sale of Lotto
Tickets, Bus Tokens, Bus Passes, Check Cashing and Money Gram products and 29%
for telecommunications business.
Telecom is intended for people of all ages and income levels who are
interested in quality telephone service at low rates. Typically, however, Latin
immigrants who are interested in contacting their friends and relatives in their
countries outside of the United States are the primary target audience.
Industry Background
The Internet is experiencing unprecedented growth as a global medium
for communications and commerce. Internet telephony has emerged as a low cost
alternative to traditional long distance calls. Internet telephone calls are
less expensive than traditional domestic and international long distance calls
primarily because these calls are carried over the Internet and therefore bypass
a significant portion of local and international long distance tariffs. The fees
and tariffs that are eliminated for our services can be itemized as follows:
- Calling Plans Charge
- Carrier Access Charge
- Federal Excise Tax
- State and local Tax
- Federal, State and local surcharge
- Federal Universal Service fee
- California High Cost Fund-B surcharge
- California Universal Lifeline Telephone Service surcharge
- California Relay Service and Common Device fund
- California 911 Local charge
The technology by which Internet phone calls are made is also more
cost-effective than the technology by which traditional long distance calls are
made. The growth of Internet telephony has been limited to date due to poor
sound quality attributable to technological issues such as delays in packet
transmission and network capacity limitations. However, recent improvements in
packet-switching technology, new software algorithms and improved hardware have
substantially reduced delays in packet transmissions.
Products and Services
Presently, we have one telephone calling center located in Los Angeles,
California. This center has six phone booths each with its own traditional
telephone set, table and chair. Phone calls made from these booths are routed
through our computer server and Internet connection to a third party server,
which provides the interconnection to their established network which enables
telecommunications over Internet Protocol (IP) data networks using their
software, hardware and related components. The third party providing this
service is Inter-Telnet, Inc. with whom Telecom has a contractual agreement.
We do not rely solely on customers visiting our telephone calling
center. We also have 24 phone lines attached to our server which enables
customers accessing our services using telephones away form our location by
calling into our telephone calling center. The 24 phone lines attached to our
server allow 24 customers to call in at a given time. When one completes a call,
the phone line frees up for another caller. In addition, the following products
and services are also offered at our telephone calling center:
- Money wiring service
- Check cashing
- Sales of Lotto tickets
- Automatic Telling Machine (ATM), Faxing services, Sales of
telephone cards
Business Strategies
We hope to grow rapidly through franchising our existing operations and
through acquisitions. We have not made any specific business plan for
franchising our existing operations and we have no prior experience in
franchising. Currently, we do not have prospective franchisees or acquisition
targets that are targeted for acquisitions.
Key elements of the company's business strategy are:
- Acquiring and consolidating geographically disparate and usually
smaller independent Internet Telephone Service Providers.
- Developing and offering additional value-added products and
services to customers. For example, offering long distance
international calls over the Internet using cellular phones.
- Selling franchises of our telephone calling center concept
throughout the West Coast and in other areas of high concentration
of immigrants.
- Building customer loyalty and gaining market share through brand
recognition.
- Expansion of our sales and marketing operation.
Marketing Strategy
We currently market our products in several areas. Our marketing
efforts include newspaper advertisements and advertisements in publications that
potential customers from Latin American countries are likely to see. Other
advertising such as flyers targeting a particular market segment are developed
to complement and expand the impact of our marketing program.
Our marketing strategy for the future will consist of using medias
designed to reach mass audiences such as audio spot advertisements, video clips
and banner advertising on the Internet as well as advertising targeted toward
specific markets using radio, television and other publications.
RISK FACTORS AFFECTING OUR FUTURE RESULTS OF OPERATIONS
Our future results of operations involve a number of risks and
uncertainties. The following paragraphs discuss a number of risks that could
impact the company's financial condition and results of operations.
We have only recently commenced revenue-producing operations, and the limited
information available about us makes an evaluation of us difficult
We have conducted limited operations, and we have little operating
history that permits you to evaluate our business and our prospects based on
prior performance. You must consider your investment in light of the risks,
uncertainties, expenses and difficulties that are usually encountered by
companies in their early stages of development, particularly those engaged in
Internet commerce. There can be no assurance that we will successfully address
such risks, and the failure to do so could have a material adverse effect on our
business, financial condition and results of operations.
Telecom is a development state company with substantial capital needs.
Telecom is a development stage company with a limited operating history
and no substantial revenues from inception through March 31, 2003. In addition,
as of March 31, 2003, the Company had insufficient cash available to satisfy its
cash requirements prospectively over the next twelve months. The Company will
continue to need additional cash infusions in order for it to continue to carry
on business and implement its business plan. Even if the Company acquires
short-term cash resources, it will likely need further debt or equity funding in
order to bring its products to market. However, there are no agreements or
understandings for such financing as of this time.
There is substantial doubt as to our ability to continue as a going concern.
The Company's ability to continue as a going concern is dependent on
its ability to raise funds to implement its development and business plan. The
Company's poor financial condition could inhibit its ability to achieve its
business plan, due to current operations that are reflecting substantial losses.
The future prospect of profitability is severely in doubt. Because of these
difficulties, our independent accountant has expressed substantial doubt as to
our ability to continue as a going concern.
Lack of funding will adversely affect our ability to generate revenues.
The Company's goals are all contingent upon raising debt or equity funding.
Currently there are no sources for such funding. There are significant risks,
difficulties, delays and unforeseen expenses related to development stage
companies with little or no operating history. Constraints we face due to a lack
of funding include:
- Inability to generate necessary revenue to operate for the next
12 months or thereafter;
- Advertising and marketing costs that may exceed our current
estimates;
- Unanticipated development expenses; and
- The Company's ability to generate sufficient revenues to offset the
substantial costs of operating our business.
Start-up expenses and future losses will adversely affect our operations.
Because of significant up-front expenses, including inventory, website
development and operations, and other expenses required to develop our business,
the Company anticipates that it may incur losses until revenues are sufficient
to cover its operating costs. Future losses are likely before our operations
become profitable. As a result of the Company's lack of operating history, you
will have no basis upon which to accurately forecast the Company's:
- Total assets, liabilities, and equity;
- Total revenues;
- Gross and operating margins; and
- Labor costs.
Accordingly, our proposed business plans may not either materialize or prove
successful, and the Company may never be profitable. Telecom's failure to
acquire, integrate and operate new technology could harm their competitive
position.
The telecommunications industry is characterized by rapid and significant
technological advancements and the related introduction of new products and
services. Telecom does not possess significant intellectual property rights with
respect to the technologies we use, and we are dependent on third parties for
the development of and access to new technology. The effect of technological
changes on Telecom's business plan cannot be predicted. In addition, it is
impossible for Telecom to predict with any certainty whether demand for Voice
Over Internet Protocol services in the future markets will develop or will prove
to be an economical and efficient technology that is capable of attracting
customer usage. Failure by Telecom to obtain and adapt to new technology in the
future markets could have a material adverse effect on our business and plan of
operations.
We do not expect to pay dividends in the foreseeable future.
Telecom does not presently intend to pay dividends on our common stock. Telecom
has never paid dividends on our common stock and does not presently intend to
pay cash dividends on our common stock. Any future decisions as to the payment
of dividends will be at the discretion of Telecom's Board of Directors, subject
to applicable law.
Telecommunications related stock prices have been especially volatile, and this
volatility may depress Telecom's stock price.
The stock market has from time to time experienced significant price and volume
fluctuations which have particularly affected the market prices of the stocks of
high technology and telecommunications-related companies, including companies
like Telecom, and which may be unrelated or disproportionate to the operating
performance of other companies. Factors such as quarterly variations in actual
or anticipated operating results, changes in earnings estimates by analysts,
market conditions in the industry, analysts' reports, announcements by
competitors, regulatory actions or other events or factors, including the risk
factors described in this report, and general economic conditions may have a
significant effect on the market price of Telecom's common stock. This broad
market and industry volatility may reduce the value of Telecom's common stock,
regardless of Telecom's operating performance. Due to this volatility, the value
of Telecom's common stock could decrease.
We depend on the continued services of our executive officers and on our ability
to attract and maintain other qualified employees
Our future success depends on the continued services of Tak Hiromoto,
our Chief Executive Officer and President, and Elizabeth Hiromoto, our
Secretary, Treasurer and Director. The loss of any of their services would be
detrimental to us and could have a material adverse effect on our business,
financial condition and results of operations. We do not currently maintain
key-man insurance on their lives. Our future success is also dependent on our
ability to identify, hire, train and retain other qualified managerial and other
employees. Competition for these individuals is intense and increasing. We may
not be able to attract, assimilate, or retain qualified technical and managerial
personnel and our failure to do so could have a material adverse effect on our
business, financial condition and results of operations.
Our common stock is thinly traded and an active and visible trading market for
our common stock may not develop
Our common stock is currently traded on a limited basis on the
Over-the-Counter Bulletin Board under the symbol "TCOM." The quotation of our
common stock on the OTCBB does not assure that a meaningful, consistent and
liquid trading market currently exists. We cannot predict whether a more active
market for our common stock will develop in the future. In the absence of an
active trading market:
- investors may have difficulty buying and selling or obtaining
market quotations;
- market visibility for our common stock may be limited; and
- a lack of visibility for our common stock may have a depressive
effect on the market price for our common stock.
The sale of shares eligible for future sale could have a depressive effect on
the market price for our common stock
As of the date of this prospectus, there are 10,050,000 shares of
common stock issued and outstanding.
Of the currently issued and outstanding shares, in excess of 9,000,000
restricted shares of common stock have been held for in excess of one year and
are currently available for public resale pursuant to Rule 144 promulgated under
the Securities Act ("Rule 144"). Unless registered on a form other than Form
S-8, the resale of our shares of Common Stock owned by officers, directors and
affiliates is subject to the volume limitations of Rule 144. In general, Rule
144 permits our shareholders who have beneficially owned restricted shares of
common stock for at least one year to sell without registration, within a
three-month period, a number of shares not exceeding one percent of the then
outstanding shares of common stock. Furthermore, if such shares are held for at
least two years by a person not affiliated with us (in general, a person who is
not one of our executive officers, directors or principal shareholders during
the three-month period prior to resale), such restricted shares can be sold
without any volume limitation.
Sales of our common stock under Rule 144 or pursuant to such
registration statement may have a depressive effect on the market price for our
common stock.
It is not possible to foresee all risks which may affect us. Moreover,
we cannot predict whether we will successfully effectuate our current business
plan. Each prospective purchaser is encouraged to carefully analyze the risks
and merits of an investment in the shares and should take into consideration
when making such analysis, among others, the Risk Factors discussed above.
TELECOM COMMUNICATIONS, INC.
2002 STOCK OPTION PLAN
Introduction
The following descriptions summarize certain provisions of our Telecom
Communications, Inc. 2002 Stock Option Plan. This summary is not complete and is
qualified by reference to the full text of the Plan. A copy of the Plan has been
filed as an exhibit to the registration statement of which this prospectus is a
part. Each person receiving a Plan option or stock award under the Plan should
read the Plan in its entirety.
On December 18, 2002, our Board of Directors authorized, and holders of
a majority of our outstanding common stock approved and adopted, the Plan
covering 2,500,000 shares of common stock. As of April 30, 2003, no options had
been granted under the Plan. f
The purpose of the Plan is to encourage stock ownership by our
officers, directors, key employees and consultants, and to give such persons a
greater personal interest in the success of our business and an added incentive
to continue to advance and contribute to us. Our Board of Directors, or a
committee of the Board, will administer the Plan including, without limitation,
the selection of the persons who will be awarded stock grants and granted
options, the type of options to be granted, the number of shares subject to each
Option and the exercise price.
Plan options may either be options qualifying as incentive stock
options under Section 422 of the Internal Revenue Code of 1986, as amended, or
non-qualified options. In addition, the Plan allows for the inclusion of a
reload option provision, which permits an eligible person to pay the exercise
price of the option with shares of common stock owned by the eligible person and
receive a new option to purchase shares of common stock equal in number to the
tendered shares. Furthermore, compensatory stock amounts may also be issued. Any
incentive option granted under the Plan must provide for an exercise price of
not less than 100% of the fair market value of the underlying shares on the date
of grant, but the exercise price of any incentive option granted to an eligible
employee owning more than 10% of our outstanding common stock must not be less
than 110% of fair market value on the date of the grant. The term of each Plan
option and the manner in which it may be exercised is determined by the Board of
Directors or the committee, provided that no option may be exercisable more than
ten years after the date of its grant and, in the case of an incentive option
granted to an eligible employee owning more than 10% of the common stock, no
more than five years after the date of the grant.
Eligibility
Our officers, directors, key employees and consultants are eligible to
receive stock grants and non-qualified options under the Plan. Only our
employees are eligible to receive incentive options.
Administration
The Plan will be administered by our Board of Directors or an
underlying committee (the "Committee"). The Board of Directors or the Committee
determines from time to time those of our officers, directors, key employees and
consultants to whom stock grants or Plan options are to be granted, the terms
and provisions of the respective option agreements, the time or times at which
such options shall be granted, the type of options to be granted, the dates such
Plan options become exercisable, the number of shares subject to each option,
the purchase price of such shares and the form of payment of such purchase
price. All other questions relating to the administration of the Plan, and the
interpretation of the provisions thereof and of the related option agreements,
are resolved by the Board or Committee.
Shares Subject to Awards
We have currently reserved 2,500,000 of our authorized but unissued
shares of common stock for issuance under the Plan, and a maximum of 2,500,000
shares may be issued, unless the Plan is subsequently amended (subject to
adjustment in the event of certain changes in our capitalization), without
further action by our Board of Directors and shareholders, as required. Subject
to the limitation on the aggregate number of shares issuable under the Plan,
there is no maximum or minimum number of shares as to which a stock grant or
Plan option may be granted to any person. Shares used for stock grants and Plan
options may be authorized and unissued shares or shares reacquired by us,
including shares purchased in the open market. Shares covered by Plan options
which terminate unexercised will again become available for grant as additional
options, without decreasing the maximum number of shares issuable under the
Plan, although such shares may also be used by us for other purposes.
The Plan provides that, if our outstanding shares are increased,
decreased, exchanged or otherwise adjusted due to a share dividend, forward or
reverse share split, recapitalization, reorganization, merger, consolidation,
combination or exchange of shares, an appropriate and proportionate adjustment
shall be made in the number or kind of shares subject to the Plan or subject to
unexercised options and in the purchase price per share under such options. Any
adjustment, however, does not change the total purchase price payable for the
shares subject to outstanding options. In the event of our proposed dissolution
or liquidation, a proposed sale of all or substantially all of our assets, a
merger or tender offer for our shares of common stock, the Board of Directors
may declare that each option granted under the Plan shall terminate as of a date
to be fixed by the Board of Directors; provided that not less than 30 days
written notice of the date so fixed shall be given to each participant holding
an option, and each such participant shall have the right, during the period of
30 days preceding such termination, to exercise the participant's option, in
whole or in part, including as to options not otherwise exercisable.
Terms of Exercise
The Plan provides that the options granted thereunder shall be
exercisable from time to time in whole or in part, unless otherwise specified by
the Committee or by the Board of Directors.
The Plan provides that, with respect to incentive stock options, the
aggregate fair market value (determined as of the time the option is granted) of
the shares of common stock, with respect to which incentive stock options are
first exercisable by any option holder during any calendar year shall not exceed
$100,000.
Exercise Price
The purchase price for shares subject to incentive stock options must
be at least 100% of the fair market value of our common stock on the date the
option is granted, except that the purchase price must be at least 110% of the
fair market value in the case of an incentive option granted to a person who is
a "10% stockholder." A "10% stockholder" is a person who owns (within the
meaning of Section 422(b)(6) of the Internal Revenue Code of 1986) at the time
the incentive option is granted, shares possessing more than 10% of the total
combined voting power of all classes of our outstanding shares. The Plan
provides that fair market value shall be determined by the Board or the
Committee in accordance with procedures which it may from time to time
establish. If the purchase price is paid with consideration other than cash, the
Board or the Committee shall determine the fair value of such consideration to
us in monetary terms.
The exercise price of non-qualified options shall be determined by the
Board of Directors or the Committee, but shall not be less than the par value of
our common stock on the date the option is granted.
The per share purchase price of shares issuable upon exercise of a Plan
option may be adjusted in the event of certain changes in our capitalization,
but no such adjustment shall change the total purchase price payable upon the
exercise in full of options granted under the Plan.
Manner of Exercise
Plan options are exercisable by delivery of written notice to us
stating the number of shares with respect to which the option is being
exercised, together with full payment of the purchase price therefor. Payment
shall be in cash, checks, certified or bank cashier's checks, promissory notes
secured by the shares issued through exercise of the related options, shares of
common stock or in such other form or combination of forms which shall be
acceptable to the Board of Directors or the Committee, provided that any loan or
guarantee by us of the purchase price may only be made upon resolution of the
Board or Committee that such loan or guarantee is reasonably expected to benefit
us.
Option Period
All incentive stock options shall expire on or before the tenth
anniversary of the date the option is granted except as limited above. However,
in the case of incentive stock options granted to an eligible employee owning
more than 10% of the common stock, these options will expire no later than five
years after the date of the grant. Non-qualified options shall expire ten years
and one day from the date of grant unless otherwise provided under the terms of
the option grant.
Termination
All Plan options are nonassignable and nontransferable, except by will
or by the laws of descent and distribution, and during the lifetime of the
optionee, may be exercised only by such optionee. If an optionee shall die (a)
while our employee or (b) within three months after termination of employment by
us because of disability, or retirement or otherwise, such options may be
exercised, to the extent that the optionee shall have been entitled to do so on
the date of death or termination of employment, by the person or persons to whom
the optionee's right under the option pass by will or applicable law, or if no
such person has such right, by his executors or administrators.
In the event of termination of employment because of death while an
employee or because of disability, the optionee's options may be exercised not
later than the expiration date specified in the option or one year after the
optionee's death, whichever date is earlier, or in the event of termination of
employment because of retirement or otherwise, not later than the expiration
date specified in the option or one year after the optionee's death, whichever
date is earlier.
If an optionee's employment by us terminates because of disability and
such optionee has not died within the following three months, the options may be
exercised, to the extent that the optionee shall have been entitled to do so at
the date of the termination of employment, at any time, or from time to time,
but not later than the expiration date specified in the option or one year after
termination of employment, whichever date is earlier.
If an optionee's employment shall terminate for any reason other than
death or disability, optionee may exercise the options to the same extent that
the options were exercisable on the date of termination, for up to three months
following such termination, or on or before the expiration date of the options,
whichever occurs first. In the event that the optionee was not entitled to
exercise the options at the date of termination or if the optionee does not
exercise such options (which were then exercisable) within the time specified
herein, the options shall terminate.
If an optionee's employment shall terminate for any reason other than
death, disability or retirement, all right to exercise the option shall
terminate not later than 90 days following the date of such termination of
employment.
Modification and Termination of Plans
The Board of Directors or Committee may amend, suspend or terminate the
Plan at any time. However, no such action may prejudice the rights of any holder
of a stock grant or optionee who has prior thereto been granted options under
the Plan. Further, no amendment to this Plan which has the effect of (a)
increasing the aggregate number of shares subject to this Plan (except for
adjustments due to changes in our capitalization), or (b) changing the
definition of "Eligible Person" under the Plan, may be effective unless and
until approved by our shareholders in the same manner as approval of this Plan
is required. Any such termination of the Plan shall not affect the validity of
any stock grants or options previously granted thereunder. Unless the Plan shall
theretofore have been suspended or terminated by the Board of Directors, the
Plan shall terminate on December 18, 2012.
Federal Income Tax Effects
The following discussion applies to the Plan and is based on federal
income tax laws and regulations in effect on September 30, 2002. It does not
purport to be a complete description of the federal income tax consequences of
the Plan, nor does it describe the consequences of state, local or foreign tax
laws which may be applicable. Accordingly, any person receiving a grant under
the Plan should consult with his own tax adviser.
The Plan is not subject to the provisions of the Employee Retirement
Income Security Act of 1974 and is not qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
An employee granted an incentive stock option does not recognize
taxable income either at the date of grant or at the date of its timely
exercise. However, the excess of the fair market value of common stock received
upon exercise of the incentive stock option over the exercise price is an item
of tax preference under Section 57(a)(3) of the Code and may be subject to the
alternative minimum tax imposed by Section 55 of the Code. Upon disposition of
stock acquired on exercise of an incentive stock option, long-term capital gain
or loss is recognized in an amount equal to the difference between the sales
price and the incentive option exercise price, provided that the option holder
has not disposed of the stock within two years from the date of grant and within
one year from the date of exercise. If the incentive option holder disposes of
the acquired stock (including the transfer of acquired stock in payment of the
exercise price of an incentive stock option) without complying with both of
these holding period requirements ("Disqualifying Disposition"), the option
holder will recognize ordinary income at the time of such Disqualifying
Disposition to the extent of the difference between the exercise price and the
lesser of the fair market value of the stock on the date the incentive option is
exercised (the value six months after the date of exercise may govern in the
case of an employee whose sale of stock at a profit could subject him to suit
under Section 16(b) of the Securities Exchange Act of 1934) or the amount
realized on such Disqualifying Disposition. Any remaining gain or loss is
treated as a short-term or long-term capital gain or loss, depending on how long
the shares are held. In the event of a Disqualifying Disposition, the incentive
stock option tax preference described above may not apply (although, where the
Disqualifying Disposition occurs subsequent to the year the incentive stock
option is exercised, it may be necessary for the employee to amend his return to
eliminate the tax preference item previously reported). We are not entitled to a
tax deduction upon either exercise of an incentive option or disposition of
stock acquired pursuant to such an exercise, except to the extent that the
option holder recognized ordinary income in a Disqualifying Disposition.
If the holder of an incentive stock option pays the exercise price, in
full or in part, with shares of previously acquired common stock, the exchange
should not affect the incentive stock option tax treatment of the exercise. No
gain or loss should be recognized on the exchange, and the shares received by
the employee, equal in number to the previously acquired shares exchanged
therefor, will have the same basis and holding period for long-term capital gain
purposes as the previously acquired shares. The employee will not, however, be
able to utilize the old holding period for the purpose of satisfying the
incentive stock option statutory holding period requirements. Shares received in
excess of the number of previously acquired shares will have a basis of zero and
a holding period which commences as of the date the common stock is issued to
the employee upon exercise of the incentive option. If an exercise is effected
using shares previously acquired through the exercise of an incentive stock
option, the exchange of the previously acquired shares will be considered a
disposition of such shares for the purpose of determining whether a
Disqualifying Disposition has occurred.
In respect to the holder of non-qualified options, the option holder
does not recognize taxable income on the date of the grant of the non-qualified
option, but recognizes ordinary income generally at the date of exercise in the
amount of the difference between the option exercise price and the fair market
value of the common stock on the date of exercise. However, if the holder of
non-qualified options is subject to the restrictions on resale of common stock
under Section 16 of the Securities Exchange Act of 1944, such person generally
recognizes ordinary income at the end of the six-month period following the date
of exercise in the amount of the difference between the option exercise price
and the fair market value of the common stock at the end of the six-month
period. Nevertheless, such holder may elect within 30 days after the date of
exercise to recognize ordinary income as of the date of exercise. The amount of
ordinary income recognized by the option holder is deductible by us in the year
that income is recognized.
In connection with the issuance of stock grants as compensation, the
recipient must include in gross income the excess of the fair market value of
the property received over the amount, if any, paid for the property in the
first taxable year in which beneficial interest in the property either is
"transferable" or is not subject to a "substantial risk of forfeiture." A
substantial risk of forfeiture exists where rights and property that have been
transferred are conditioned, directly or indirectly, upon the future performance
(or refraining from performance) of substantial services by any person, or the
occurrence of a condition related to the purpose of the transfer, and the
possibility of forfeiture is substantial if such condition is not satisfied.
Stock grants received by a person who is subject to the short swing profit
recovery rule of Section 16(b) of the Securities Exchange Act of 1934 is
considered subject to a substantial risk of forfeiture so long as the sale of
such property at a profit could subject the stockholder to suit under that
section. The rights of the recipient are treated as transferable if and when the
recipient can sell, assign, pledge or otherwise transfer any interest in the
stock grant to any person. Inasmuch as the recipient would not be subject to the
short swing profit recovery rule of Section 16(b) of the Securities Exchange Act
of 1934 and the stock grant, upon receipt following satisfaction of condition
prerequisites to receipt, will be presently transferable and not subject to a
substantial risk of forfeiture, the recipient would be obligated to include in
gross income the fair market value of the stock grant received once the
conditions to receipt of the stock grant are satisfied.
Restrictions Under Securities Laws
The sale of all shares issued under the Plan must be made in compliance
with federal and state securities laws. Our officers, directors and 10% or
greater shareholders, as well as certain other persons or parties who may be
deemed to be "affiliates" of ours under federal securities laws, should be aware
that resales by affiliates can only be made pursuant to an effective
registration statement, Rule 144 or other applicable exemption. Our officers,
directors and 10% and greater stockholders may also become subject to the "short
swing" profit rule of Section 16(b) of the Securities Exchange Act of 1934.
SALES BY SELLING SECURITY HOLDERS
The information under this heading relates to resales of shares covered
by this prospectus by persons who are our "affiliates" as that term in defined
under federal securities laws. Shares issued pursuant to this prospectus to our
affiliates are "control" shares under federal securities laws.
The following table sets forth:
- the name of each affiliated selling security holder,
- the amount of common stock owned beneficially, directly or
indirectly, by each affiliated selling security holder,
- the maximum amount of shares to be offered by the affiliated
selling security holders pursuant to this prospectus,
- the amount of common stock to be owned by each affiliated
selling security holder following sale of the shares, and
- the percentage of our common stock to be owned by the affiliated
selling security holder following completion of such offering
(based on 10,050,000 shares of common stock of Telecom
outstanding as of the date of this prospectus), and adjusted to
give effect to the issuance of shares upon the exercise of the
named selling security holder's options or warrants, but no
other person's options or warrants.
Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to securities
and includes any securities, which the person has the right to acquire within 60
days through the conversion or exercise of any security or other right. The
information as to the number of shares of our common stock owned by each
affiliated selling security holder is based upon our books and records and the
information provided by our transfer agent.
We may amend or supplement this prospectus from time to time to update
the disclosure set forth in the table. Because the selling security holders
identified in the table may sell some or all of the shares owned by them which
are included in this prospectus, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the shares, no
estimate can be given as to the number of shares available for resale hereby
that will be held by the affiliated selling security holders upon termination of
the offering made hereby. We have therefore assumed, for the purposes of the
following table, that the affiliated selling security holders will sell all of
the shares owned by them which are being offered hereby, but will not sell any
other shares of our common stock that they presently own.
Percentage
Shares to be to be Owned
Name of Selling Number of Shares to Owned After After
Security Holder Shares Owned be Offered Offering Offering
--------------- ------------ ---------- ------------ -----------
Elizabeth Hiromoto 350,000 350,000 -0- 0%
Michelle Hiromoto 750,000 750,000 -0- 0%
------------------
Elizabeth Hiromoto is an officer and director of the Company. Her daughter,
Michelle, was the founder of the Company's predecessor, although she is no
longer affiliated with the Company.
PLAN OF DISTRIBUTION
The information under this heading includes resales of shares covered
by this prospectus by persons who are our "affiliates" as that term in defined
under federal securities laws.
The shares covered by this prospectus may be resold and distributed
from time to time by the selling security holders in one or more transactions,
including ordinary broker's transactions, privately-negotiated transactions or
through sales to one or more broker-dealers for resale of these shares as
principals, at market prices existing at the time of sale, at prices related to
existing market prices, through Rule 144 transactions or at negotiated prices.
Usual and customary or specifically negotiated brokerage fees or commissions may
be paid by the selling security holders in connection with sales of securities.
The selling security holders may sell shares in one or more of the
following methods, which may include crosses or block transactions:
- through he "pink sheets", on the over-the-counter Bulletin Board,
or on such exchanges or over-the-counter markets on which
our shares may be listed from time-to-time, in transactions which
may include special offerings, exchange distributions and/or
secondary distributions, pursuant to and in accordance with the
rules of such exchanges;
- in transactions other than on such exchanges or in the
over-the-counter market, or a combination of such transactions,
including sales through brokers, acting as principal or agent,
sales in privately negotiated transactions, or dispositions for
value, subject to rules relating to sales by affiliates; or
- through the writing of options on our shares, whether or not such
options are listed on an exchange, or other transactions requiring
delivery of our shares, or the delivery of our shares to close out
a short position.
Any such transactions may be effected at market prices prevailing at
the time of sale, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices.
In making sales, brokers or dealers used by the selling security
holders may arrange for other brokers or dealers to participate. The selling
security holders who are affiliates of Telecom and others through whom such
securities are sold may be "underwriters" within the meaning of the Securities
Act for the securities offered, and any profits realized or commission received
may be considered underwriting compensation. Information as to whether an
underwriter(s) who may be selected by the selling security holders, or any other
broker-dealer, is acting as principal or agent for the selling security holders,
the compensation to be received by underwriters who may be selected by the
selling security holders, or any broker-dealer, acting as principal or agent for
the selling security holders and the compensation to be received by other
broker-dealers, in the event the compensation of other broker-dealers is in
excess of usual and customary commissions, will, to the extent required, be set
forth in a supplement to this prospectus. Any dealer or broker participating in
any distribution of the shares may be required to deliver a copy of this
prospectus, including the supplement, if any, to any person who purchases any of
the shares from or through a dealer or broker.
We have advised the selling security holders that, at the time a resale
of the shares is made by or on behalf of a selling security holder, a copy of
this prospectus is to be delivered.
We have also advised the selling security holders that during the time
as they may be engaged in a distribution of the shares included herein they are
required to comply with Regulation M of the Exchange Act. With certain
exceptions, Regulation M precludes any selling security holders, any affiliated
purchasers and any broker-dealer or other person who participates in the
distribution from bidding for or purchasing, or attempting to induce any person
to bid for or purchase any security which is the subject of the distribution
until the entire distribution is complete. Regulation M also prohibits any bids
or purchase made in order to stabilize the price of a security in connection
with the distribution of that security.
Sales of securities by us and the selling security holders or even the
potential of these sales may have an adverse effect on the market price for
shares of our common stock.
DESCRIPTION OF SECURITIES
General
The following description of our capital stock and provisions of our
Articles of Incorporation is a summary thereof and is qualified by reference to
our Articles of Incorporation, copies of which may be obtained upon request. Our
authorized capital consists of 80,000,000 shares of common stock, par value
$.001 per share, of which 10,050,000 shares are issued and outstanding. We are
authorized to issue 20,000,000 shares of preferred stock, of which no shares are
issued or outstanding.
Common Stock
Holders of shares of common stock are entitled to share, on a ratable
basis, such dividends as may be declared by the board of directors out of funds,
legally available therefor. Upon our liquidation, dissolution or winding up,
after payment to creditors, our assets will be divided pro rata on a per share
basis among the holders of our common stock.
Each share of common stock entitles the holders thereof to one vote.
Holders of common stock do not have cumulative voting rights which means that
the holders of more than 50% of the shares voting for the election of directors
can elect all of the directors if they choose to do so, and, in such event, the
holders of the remaining shares will not be able to elect any directors. Our
By-Laws require that only a majority of our issued and outstanding shares need
be represented to constitute a quorum and to transact business at a
stockholders' meeting. Our common stock has no preemptive, subscription or
conversion rights and is not redeemable by us.
Preferred Stock
Our articles of incorporation authorizes our board of directors to
create and issue series of preferred stock from time to time, with such
designations, preferences, conversion rights, cumulative, relative,
participating, optional or other rights, including voting rights,
qualifications, limitations or restrictions thereof as permitted under Indiana
law.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Olympia Trust
Company, 2600, 700-9th Avenue SW, Western Canadian Place, South Tower, Calgary,
AB T2P 3V4, Canada. The telephone number is (403) 261-0900.
EXPERTS
The consolidated financial statements of Telecom Communications, Inc.
as of September 30, 2002, and for the years then ended, appearing in our Annual
Report on Form 10-KSB for the year ended September 30, 2002 have been audited by
Robert G. Ercek, Certified Public Accountant, as set forth in their report
thereon and are incorporated by reference in reliance upon the authority of such
firm as experts in auditing and accounting.
INDEMNIFICATION
The Indiana Business Corporation Law allows us to indemnify each of our
officers and directors who are made a party to a proceeding if:
(1) the individual's conduct was in good faith;
(2) the individual reasonably believed:
(A) in the case of conduct in the individual's official capacity
with the corporation, that the individual's conduct was in its
best interests; and
(B) in all other cases, that the individual's conduct was at least
not opposed to its best interests;
(3) in the case of any criminal proceeding, the individual either:
(A) had reasonable cause to believe the individual's conduct was
lawful; or (B) had no reasonable cause to believe the
individual's conduct was unlawful;
(4) a director's conduct with respect to an employee benefit plan
for a purpose the director reasonably believed to be in the
interests of the participants in and beneficiaries of the plan
is conduct that satisfies the requirement of subsection
(a)(2)(B); and
(5) the termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or
its equivalent is not, of itself, determinative that the
director did not meet the standard of conduct described in
this section.
Unless limited by its articles of incorporation, a corporation shall
indemnify a director who was wholly successful, on the merits or otherwise, in
the defense of any proceeding to which the director was a party because the
director is, or was, a director of the corporation against reasonable expenses
incurred by the director in connection with the proceeding.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, we will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The documents listed below are incorporated by reference in the
Registration Statement. All documents subsequently filed by the Registrant
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in the Registration Statement and to be part thereof
from the date of filing of such documents.
- Quarterly Report on Form 10-QSB filed on May 22, 2003
- Quarterly Report on Form 10-QSB filed on February 21, 2003, as
subsequently amended - Annual Report on Form 10-KSB filed on
January 15, 2003, as subsequently amended.
All reports and documents filed by us pursuant to Section 13, 14 or
15(d) of the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this prospectus to
the extent that a statement contained herein or in any other subsequently filed
document, which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any statement modified or superseded
shall not be deemed, except as so modified or superseded, to constitute part of
this prospectus.
We hereby undertake to provide without charge to each person, including
any beneficial owner, to whom a copy of the prospectus has been delivered, on
the written request of any such person, a copy of any or all of the documents
referred to above which have been or may be incorporated by reference in this
prospectus, other than exhibits to such documents. Written requests for such
copies should be directed to Corporate Secretary, Telecom Communications, Inc.,
827 South Broadway, Los Angeles, California 90014.
Item 4. Description of Securities
A description of the Registrant's securities is set forth in the
Prospectus incorporated as a part of this Registration Statement.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
The Indiana Business Corporation Law allows us to indemnify each of our
officers and directors who are made a party to a proceeding if
(1) the individual's conduct was in good faith;
(2) the individual reasonably believed:
(A) in the case of conduct in the individual's official capacity
with the corporation, that the individual's conduct was in its
best interests; and
(B) in all other cases, that the individual's conduct was at least
not opposed to its best interests;
(3) in the case of any criminal proceeding, the individual either:
(A) had reasonable cause to believe the individual's conduct was
lawful; or (B) had no reasonable cause to believe the
individual's conduct was unlawful;
(4) a director's conduct with respect to an employee benefit plan
for a purpose the director reasonably believed to be in the
interests of the participants in and beneficiaries of the plan
is conduct that satisfies the requirement of subsection
(a)(2)(B); and
(5) the termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or
its equivalent is not, of itself, determinative that the
director did not meet the standard of conduct described in
this section.
Unless limited by its articles of incorporation, a corporation shall
indemnify a director who was wholly successful, on the merits or otherwise, in
the defense of any proceeding to which the director was a party because the
director is, or was, a director of the corporation against reasonable expenses
incurred by the director in connection with the proceeding.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, we will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
Item 7. Exemption From Registration Claimed
Persons eligible to receive grants under the Plan will have an existing
relationship with us and will have access to comprehensive information about us
to enable them to make an informed investment decision. The recipient must
express an investment intent and, in the absence of registration under the Act,
consent to the imprinting of a legend on the securities restricting their
transferability except in compliance with applicable securities laws.
Item 8. Exhibits
10.1 Telecom Communications, Inc. 2002 Stock Option Plan.*
23.1 Consent of Independent Certified Public Accountants.*
--------------------
* Filed herewith.
Item 9. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(a) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(b) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,represent
a fundamental change in the information set forth
in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the
effective registration statement;
(c) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 against such liabilities (other than the payment by the
registrant in the successful defense of an action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel, the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on June 5, 2003.
TELECOM COMMUNICATIONS, INC.
By: /s/ Tak Hiromoto
-----------------------
Tak Hiromoto, CEO and
Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Tak Hiromoto Chairman of the Board,
------------------ CEO, President and June 5, 2003
Tak Hiromoto Principal Executive Officer
/s/ Elizabeth Hiromoto Secretary, Treasurer, Director
---------------------- And Principal Financial and June 5, 2003
Elizabeth Hiromoto Accounting Officer