First Canadian American Holding Corp – ‘8-K’ for 2/14/01

On:  Wednesday, 2/21/01, at 12:47pm ET   ·   For:  2/14/01   ·   Accession #:  1019687-1-239   ·   File #:  0-22947

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Adatom.Com, Inc.                                       7     34K 
 2: EX-2        Agreement                                              3     17K 
 3: EX-16       Letter re: Change in Certifying Accountant             1      6K 
 4: EX-99       Press Release                                          1      8K 

8-K   —   Adatom.Com, Inc.
Document Table of Contents

8-K
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 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

Date of Report (Date of earliest reported) February 14, 2001

ADATOM.COM, INC.
(Exact name of registrant as specified in charter)

    Delaware                      0-22947                   43-1771999
(State or other jurisdiction         (Commission               (IRS Employer    
     of incorporation)               File Number)            Identification No.)

              9800 S. Sepulveda Blvd., Suite 625              90802-4322
           (Address of principal executive offices)           (Zip Code)

Registrant's telephone number, including area code (310) 342-0760 

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ITEM 1.     CHANGES IN CONTROL OF REGISTRANT                                    

On November 28, 2000 Dr. Sridhar Jagannathan resigned as Chief technology       
Officer and from the Board of Directors of Adatom.com, Inc. (the "Company" or   
"Adatom").                                                                      

On December 26, 2000 Richard Barton resigned as Chief Executive Officer and     
President of the Company.                                                       

On December 26, 2000, the entire Board of Directors consisting of Richard       
Barton, Victor Nee, Ralph Frasier, Debra Shaw appointed Gordon Lee Chief        
Executive Officer, President and Director of the Company prior to resigning from
the Board of Directors themselves. Presently, Gordon Lee is the Company's sole  
Director. Under Delaware corporate law a corporation may have as few as one     
director.                                                                       

On January 11, 2001, the Company issued 10,000,000 shares of common stock in a  
private placement to Gordon Lee for a purchase price of $0.01 per share,        
pursuant to Section 4(2) of the Securities Act of 1933, as amended. The number  
of common shares issued and outstanding rose from 18,428,877 shares to          
28,428,877 shares. The 10,000,000 shares issued to Gordon Lee represents 35.18% 
of the Company's current issued and outstanding voting common stock. The        
issuance does not affect the public float as the securities were not registered 
and therefore are restricted from trading.                                      

ITEM 4.     CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT                        

On February 14, 2001, the Company dismissed its certifying accountant, Richard  
A. Eisner & Company, LLP("Eisner"). Eisner's report on the financial statements 
for the year ended December 31, 1999 did not contain an adverse opinion or      
disclaimer of opinion, and was not qualified or modified as to uncertainty,     
audit scope or accounting principles, except that their report for the year     
ended December 31, 1999 contained an explanatory paragraph regarding the        
substantial doubt about the Company's ability to continue as a going concern.   
The decision to dismiss Eisner was approved by the Company's Board of Directors.
During the year ended December 31, 1999, and the subsequent interim period      
through February 14, 2001, the Company has not had any disagreements with Eisner
on any matter of accounting principles or practices, financial statement        
disclosure or auditing scope or procedure. The Company has engaged Stefanou &   
Company LLP ("Stefanou") as its certifying accountant as of February 14, 2001   
for the Company's fiscal year ending December 31, 2000.                         

The Company has not consulted Stefanou previously. Eisner's' letter, which is   
required pursuant to Item 304(a)(3) of Regulation S-B, is attached.             

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ITEM 5.     OTHER EVENTS                                                        

Change of Address                                                               
-----------------                                                               

As of December 26, 2000, the Company changed its principal business address to  
Suite 625, 9800 S. Sepulveda Blvd., Los Angeles, CA 90045. The Company's new    
telephone number is (310) 342-0760.                                             

Contract Cancellations                                                          
----------------------                                                          

On January 2, 2001 the agreement with Yangling Agricultural Hi-Tech             
Demonstration Zone ("Yangline") was cancelled by Yangling due to the Company's  
failure to deposit $200,000 into the joint venture, as required by the          
Cooperation Memorandum between the Company and Yangling. The Company's decision 
not to fund the joint venture is part of the general debt reduction and         
financial restructuring being implemented by the Company's new President.       

The Letter of Authorization establishing the Company as its exclusive agent for 
the procurement of a fiber optics plant was withdrawn by the China Product Trade
Net Center on January 2, 2001. No reason was given, however, the Company        
believes that the decision was made in connection with the Company's de-listing 
from the Nasdaq National Market.                                                

Stock Issued to Settle Debts                                                    
----------------------------                                                    

On December 21, 2000, Common Stock was given as full payment of a $345,000 loan 
by Richard S. Barton in the amount of 690,000 unregistered shares in the name of
Richard S. Barton, with piggy-back registration rights.                         

On December 21, 2000, 385,000 shares of unregistered Common Stock with          
piggy-back registration rights were granted to Dr. Victor Nee as full payment   
for $192,500 owed to him by Adatom for consulting services and travel expenses. 

On December 21, 2000, 355,240 shares of unregistered Common Stock with          
piggy-back registration rights were given as full payment of a $177,620 loan    
given by US Clearing C/F Michele Ware (IRA Account).                            

On December 21, 2000, 18,000 shares of unregistered Common Stock with piggy-back
registration rights were given as full payment of a $9,000 loan given by Dr.    
Sridhar Jagannathan.                                                            

On December 21, 2000, 970,750 unregistered warrants with piggy-back registration
rights at a strike price of $0.03 were authorized to be issued to the employees 
as a group as full payment in lieu of cash compensation for their total past due
wages. As of yet this has not been administered or offered to the former        
employees.                                                                      

On December 21, 2000, 30,000 shares of unregistered Common Stock without        
piggy-back registration rights were given as full payment of a $1,400 debt for  
services rendered to National Internet Radio.                                   

On December 21, 2000, 100,000 shares of unregistered Common Stock with          
piggy-back registration rights were given as full payment of a $50,000 debt for 
services rendered to Accountants Only!.                                         

On December 21, 2000, 50,000 shares of unregistered Common Stock with piggy-back
registration rights were given as payment to Jay Bidwell for services rendered  
in the form of administrative support to the Board of Directors.                

                                                                               3

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Employee Lay-offs                                                               
-----------------                                                               

On December 4, 2000, all remaining former employees of the Company were laid    
off. The Company's Milpitas, California head office was closed shortly          
thereafter on December 26, 2000, and moved to its new location in Los Angeles.  

An unknown number of former employees may have, or have actually, filed         
complaints with the California Labor Commission for unpaid salary. The Company  
believes that its potential legal liability for two months of salary owed to    
Employees may have a material affect on the financial viability of the Company. 
At this time, the extent of the Company's financial liability with respect to   
former employees is unknown. The Company's new management hopes to negotiate a  
settlement with any former employees who may be owed back-pay as part of        
management's general efforts to restructure the Company's debts and finances.   

Other Material Transactions                                                     
---------------------------                                                     

On December 1, 2000, Sherman Leland gave a loan for $42,000 to the company to   
pay Directors and Officers liability insurance. On September 7, 2000, Ralph     
Frasier purchased 105,504 unregistered shares of Common Stock for $100,000.     
Under the terms of the purchase, Mr. Frasier had piggy-back registration rights.
These shares have not been issued yet.                                          

On September 1, 2000, David Cannon was granted 100,000 shares of unregistered   
Common Stock as payment of a debt owed to him as a result of the merger with Web
Media Masters and Adatom.com, Inc. In addition, David Cannon was granted 25,000 
non-transferable warrants at a strike price of $3.00. These shares and warrants 
have piggy-back registration rights. These shares and warrants have not been    
issued yet.                                                                     

Jessup and Lamont purchased 150,00 shares of Common Stock. This stock has not   
yet been registered and has piggy-back registration rights.                     

Frank Madkins purchased 100,000 shares of Common Stock. This stock has not yet  
been registered and has piggy-back registration rights.                         

Preferred Shares Converted                                                      
--------------------------                                                      

On December 12, 2000, 5 shares of Series B Preferred Stock were converted into  
41,695 shares of registered Common Stock by Alborz Select Opportunities Fund.   

On December 12, 2000, 15 shares of Series B Preferred Stock were converted into 
61,645 shares of registered Common Stock by IIG Equity Opportunities Fund.      

                                                                               4

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On December 12, 2000, 65 shares of Series B Preferred Stock were converted into 
291,047 shares of registered Common Stock by Target Growth Fund, Ltd.           

On December 14, 2000, 56.8 shares of Series B Preferred Stock were converted    
into 222,720 shares of registered Common Stock by Alain Salem and 6,359 shares  
of unregistered restricted Common Stock.                                        

On December 14, 2000, 36.4 shares of Series B Preferred Stock were converted    
into 146,804 shares of registered Common Stock by Magnolia Drive Investment     
Corp.                                                                           

On December 14, 2000, 484.5 shares of Series B Preferred Stock were converted   
into 1,954,032 shares of registered Common Stock by Alborz Select Opportunities 
Fund.                                                                           

Warrants Repriced                                                               
-----------------                                                               

On December 13, 2000, 6,250 warrants were repriced from $2.295 to $0.50 per     
share for Pietro Gattini and which were then executed and thereby issued 6,250  
shares of registered Common Stock.                                              

On December 13, 2000, 6,250 warrants were repriced from $2.119 to $0.50 per     
share for Pietro Gattini and which were then executed and thereby issued 6,250  
shares of registered Common Stock.                                              

On November 14, 2000, 81,250 warrants were repriced from $2.119 to $0.50 per    
share for Alborz Select Opportunities Fund and which were exercised and thereby 
issued 81,250 shares of registered Common Stock.                                

On November 14, 2000, 81,250 warrants were repriced from $2.295 to $0.50 per    
share for Alborz Select Opportunities Fund and which were exercised and thereby 
issued 81,250 shares of registered Common Stock.                                

On November 16, 2000, 27,500 warrants were repriced from $2.119 to $0.50 per    
share for Alborz Select Opportunities Fund and which were exercised and thereby 
issued 27,500 shares of registered Common Stock.                                

Litigation                                                                      
----------                                                                      

On October 10, 2000, mySimon, Inc., a California corporation filed suit against 
Adatom.com, Inc. for breach of contract alleging damages of $58,325.20. The suit
alleges breach of contract. The Company has filed a defense denying the         
plaintiff's claim. Management believes that the outcome of the litigation is    
unlikely to have a material effect on the operations of the Company.            

On or about August 19, 2000, Wallop Marketing Group Inc., a California          
corporation, filed suit against the Company for breach of contract alleging     
damages of $85,609.19. The Company has filed a defense denying the plaintiff's  
claim. Management believes that the outcome of the litigation is unlikely to    
have a material effect on the operations of the Company.                        

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While an unfavorable outcome in either of the two above noted disputes is not   
expected to have a negative material impact on the Company's operations,        
management believes that an adverse ruling in both cases would have a combined  
effect that would have a material adverse affect on the Company's finances. If  
the Company's new management cannot successfully negotiate a restructuring of   
its debts with its creditors, then management anticipates that several more     
lawsuits for breach of contract may be filed against it in the coming months.   
The cumulative effect of such litigation would likely result in the Company's   
insolvency.                                                                     

ITEM 6.     RESIGNATIONS OF REGISTRANTS' DIRECTORS                              

On November 28, 2000 Dr. Sridhar Jagannathan resigned as Chief technology       
Officer and from the Board of Directors of Adatom.com, Inc. (the "Company" or   
"Adatom").                                                                      

On December 26, 2000 Richard Barton resigned as Chief Executive Officer and     
President of the Company.                                                       

On December 26, 2000, the entire Board of Directors consisting of Richard       
Barton, Victor Nee, Ralph Frasier, Debra Shaw appointed Gordon Lee Chief        
Executive Officer, President and Director of the Company prior to resigning from
the Board of Directors themselves. Presently, Gordon Lee is the Company's sole  
Director. Under Delaware corporate law a corporation may have as few as one     
director.                                                                       

There are no disagreements with former directors to report, and there are no    
letters of resignation to file as exhibits that would explain their reasons for 
resignation. The change in control was effected pursuant to an agreement between
the departing Board of Directors and Gordon Lee whereby Mr. Lee has agreed to   
attempt a restructuring of the company's debts and a general corporate          
reorganization in the wake of the Company's de-listing from the Nasdaq National 
Market.                                                                         

ITEM 7.     FINANCIAL  STATEMENTS, PRO FORMA FINANCIAL  INFORMATION             
AND EXHIBITS                                            

(c)         Exhibits                                                            

   2         The plan of reorganization between Gordon Lee and
Adatom.com, Inc.                    

16        Letter on change in certifying accountant     

99        Press Release dated January 2, 2001           

                                                                               6

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SIGNATURES                                                                      

Pursuant to the requirements of the Securities Exchange Act of 1934, the        
registrant has duly caused this report to be signed on its behalf by the        
undersigned hereunto authorized                                                 

Date:  February 14, 2001                   Adatom.com, Inc.                     

                    /s/ Gordon Lee
                                           -------------------------------------
                   Gordon F. Lee
               President

Dates Referenced Herein   and   Documents Incorporated by Reference

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