SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) DECEMBER 11, 2002
INVESTMENT AGENTS, INC.
(Exact name of Registrant as Specified in its Charter Post-merger)
NEVADA 333-61286 88-0467944
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation pre-merger) File Number) Identification No. pre-merger)
#13F., NO. 77, HSIN TAI WU ROAD, SEC. 1, HIS-CHIH, TAIPEI COUNTY, TAIWAN ROC
(New Address)
Registrant's telephone number, including area code (011) 886-2-2698-8588
ITEM 1. CHANGES IN CONTROL OF THE REGISTRANT.
On December 11, 2002, Investment Agents, Inc. (d/b/a City Network, Inc.)
acquired all of the issued and outstanding stock of City Network Technology,
Inc. (formerly Gelchrest Investments Limited), a BVI company ("CNT") pursuant to
an Amended Exchange Agreement dated as of December 11, 2002, by and among CNT,
the shareholders of CNT, Pamela Ray Stinson, Raymond Robert Acha, Joseph H.
Panganiban and Investment Agents (the "Exchange Agreement"). CNT based in the
British Virgin Islands, is the parent company of City Network Inc. (Taiwan).
Pursuant to the Exchange Agreement, CNT became a wholly-owned subsidiary
of Investment Agents, and in exchange for the CNT shares, Investment Agents
issued 12,000,000 shares of its common stock to the shareholders of CNT,
representing 49% of Investment Agents' outstanding stock at that time. In
connection with the exchange and change in control, the current officers and
directors of Investment Agents resigned and the following five persons were
appointed as officers and directors: Tiao-Tsan Lai, Hsin-Nan Lin, Alice Chen,
Chin Yuan Liao and I-Min Ou.
OVERVIEW
Investment Agents, Inc. (together with its operating subsidiary, "City
Network") is a provider of internet broadband and wireless infrastructure
equipment and services for the rapidly expanding broadband marketplace. We are
dedicated to delivering the most user-friendly, cost-effective, and
customer-tailored, high-speed internet broadband access equipment to meet the
growing business needs of the hospitality, residential property,
telecommunication and SME (Small & Medium Enterprises) marketplace worldwide.
With the continuous expansion of the internet worldwide, we believe that
City Network is uniquely positioned to capitalize on what we believe to be vast
underdeveloped and overlooked new and emerging growth internet markets. Together
with a combination of superior technical, sales, design and manufacturing
experience, our company is poised to tap the potential of countless new clients
throughout the globe. For the first time, our customers have the choice to
source one of the most convenient, low-cost and diverse product packages
combined with the best personal service to make up a truly comprehensive
business solution.
Founded in Taipei, Taiwan in 1994, City Network designs, manufactures and
markets a comprehensive line of broadband and wireless internet access
solutions. The company's product line ranges from the City Network HPNA device
for the blooming worldwide residential building and hospitality market to the
simple DSL bridge/modem for the home and small business user. All City Network
broadband access equipment includes easy-to-use GUI-based remote management and
sophisticated routing technology software packages for simplified setup,
extensive network management and global network connectivity capabilities.
Currently, City Network Home PNA and xDSL broadband access equipment is widely
deployed by major telecommunication carriers, ISPs, and System Integrators
worldwide.
With the development and production of the company's complete series of
internet
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products, City Network is able to provide a `total solution' for any customers
needs. In addition, we believe that key advantages in price, flexibility and
core market sales experience make City Network a truly superior competitor. From
Home PNA, high-speed xDSL communications, to wireless networking products, City
Network can take the broadband super-highway to wherever you are.
PRODUCT AREAS
The City Network product repertoire contains items compatible with all
major distribution platforms. This gives clients a one-stop shop for all their
broadband internet needs.
ADSL/VDSL ACCESS DEVICES
City Network ADSL/VDSL devices provide broadband access based on the
world's leading internet technologies. The 20Mbps VDSL over Ethernet equipment
will allow both developing businesses as well as home users to meet their media
and communication needs quickly and in a cost-effective manner. It can also
provide high speed internet without influencing quality over a larger distance
for a cost-effective and efficient method of broadband access. We believe that
the low level of maintenance required and high level of connectivity should be
able to meet market demand for many years into the future.
HPNA ACCESS DEVICES
HPNA is a broadband network access system based on the HomePNA technology
originally invented in the U.S. This system can provide 1M/10Mbps broadband data
access through existing telephone lines. This technology allows both voice and
data to be shared by the same telephone line. Furthermore, City Network HPNA
technology extends internet transmission distance, allows for multiple
single-line users (up to 25), and is compatible with cable, fiber, wireless and
xDSL. Combined with City Network ADSL of VDSL access devices, HomePNA is a great
solution to "the last mile problem." We believe that the quality and
affordability makes the product ideal for residences, schools, cafes and hotel
resorts.
WIRELESS COMMUNICATION PRODUCTS
City Network wireless networking products allow computers and appliances
to communicate through radio signals, providing added mobility and convenience.
With the development of the City Network IEEE802.11 and IEEE802.1x wireless
solutions, both individual and corporate clients can enjoy work environments
free of cords and wires. Furthermore, customers can enjoy the stability and
security of the City Network LAN products. All wireless solutions are equipped
with a user verification function to maximize security and reduce outside
interference.
FIBER AND OTHER IMPORTANT ACCESS EQUIPMENT
With City Network's access equipment, bandwidth can be distributed
efficiently to multiple end users. For developing countries such as China, the
City Network solution of integrating wireless with existing telephone lines or
cable is often much more attractive than
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building new infrastructure. From routers and hubs, to PCMCIA cards and USB
adapters, City Network provides customers with a wide range of networking
products to meet all customer needs.
CORPORATE PROFILE
City Network simplifies how people access the internet through easy-to-use
broadband connectivity products and solutions. Its' product offerings and
development efforts are focused on increasing the speed and efficiency of the
`last mile' portion of communications networks. Through a combination of
fixed-wire and wireless products, the company's network equipment connects
internet service providers to their end users.
A fast growing, leading technology developer of broadband and wireless
networking products, City Network has gained industry recognition for developing
high performance broadband access solutions. The company's range of products
provide a complete solution for providing high speed broadband internet access
in homes, airports, convention centers, hotels and other public establishments.
Simplicity of use, ease of implementation and cost-effectiveness are the
cornerstones of the City Network solution.
We believe that City Network delivers the most comprehensive solution in
the market for broadband qualification, installation and support. Since its
inception, City Network has operated with the vision of "bringing the broadband
superhighway to you, anytime and anywhere." The company has quickly evolved into
a global company with rapid expansion of its' distribution network and marketing
offices in North and South America, Europe, Japan and the entire Asia Pacific
region.
KEY SUCCESS FACTOR: QUALITY CONTROL
City Network's goal is to provide customers with superior quality,
defect-free products. Working with primary manufacturers and manufacturers of
component parts, the company has instituted quality control measures at all
stages throughout the manufacturing process. At the first stage, the company
works with its' primary manufacturers to institute a general quality control
check upon the entry of the various component parts into the primary
manufacturer's factory (a.k.a., the incoming inspection). At the second stage,
the primary manufacturer checks to ensure that the contacts which are being
fitted with connectors function properly. The third and fourth stages of quality
control occur after each molding process, with the final product being subject
to quality control upon shipment to City Network. Finally, City Network performs
tests on a certain percentage of each shipment it receives to ensure the
products meet total quality standards.
PRODUCTS
At the core of today's communications networks are components that enhance
the speed, bandwidth and quality of internet/data, video and voice
transmissions. City Network's fiber, copper, and wireless connectivity
components serve as the critical junction and connection points that link one
network to another.
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We have both the agility and depth to deliver tailored and exact solutions
to meet customers' needs. City Network offers products for several technology
platforms. Combined we have the capability of delivering high speed broadband
access to the end user whether they are at home, in the office or on the road.
Cable/Optical Networking Products
- City Network's cable and optical products multiplexes bandwidth
among all users over tree-based topology coax or optical cables.
- Custom designs to meet large systems integrators and
telecommunications companies' needs.
- Ease of set-up, integration and maintenance allow City Network to
meet the needs of multi-dwelling unit buildings and large office
complexes quickly and thoroughly.
xDSL Products
- xDSL is an alternate and lower cost technology to connect to the
internet. xDSL is substantially cheaper than a T1 line which can
cost from $1,500 to $3,000 for installation and equipment.
- xDSL does not require a high-level technical support structure. xDSL
can often cost under $500 to install and implement making it most
suitable to small businesses and telecommuters who cannot afford a
T1 line.
- City Network is positioned to take advantage of the impending growth
in the broadband xDSL industry due to the superior quality and
affordability of the Company's xDSL equipment and service packages.
The product offerings are on the cutting-edge of xDSL technology and
we believe will meet market requirements for many years to come.
Home Phone Line Wiring (HPNA)
- City Network's HPNA products allow for networking a home using the
existing phone wiring.
- City Network's HPNA 2.0 standard can achieve 10-16Mbps and higher
rates of data transfer.
- HPNA technology allows up to twenty-five computers to connect
simultaneously using the same internet source.
- Compatible with POTS telephony and ADSL signaling on the same wire.
Wireless
- Wireless broadband eliminates the need for phone lines, cables and
electrical outlets.
- Supports bandwidth-intensive applications such as graphic rich
media, animation, internet phone calls and video conferencing
(without breaking up), sending and receiving of large email messages
or files, online banking, investing or online shopping. City
Network's family of wireless access devices allow users to access
their LAN or VPN, as if the remote office was connected directly to
the company's backbone network. It also lets business customers
raise the level of worker
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productivity and allow companies to offer highly efficient
work-at-home programs to their employees.
- Using authentication and verification technology, City Network is
able to ensure the security of a wireless network. Multi-national
businesses in information sensitive industries such as insurance and
financial services have been convinced that with City Network's
wireless products their information is safe.
MARKET OVERVIEW
Information is proliferating worldwide, and demand for that information,
by businesses, governments, universities and individuals is exploding, driven
primarily by the exponential increase in use of the internet for communications,
information gathering and electronic commerce.
As business becomes more complex and geographically diverse, the demand
for information, delivered to the "transaction point," wherever in the world
that point might be, has fueled the increase in networks and computer
connectivity systems. These trends have created an ever-increasing demand for
bandwidth, to accommodate both internet and network traffic. However, the growth
and technological advancement of the hardware backbone for networking and
computer connectivity has not kept pace with that demand. The worldwide struggle
to bring networking and computer connectivity hardware up to the level of demand
represents a business opportunity for City Network. The company's strategic
objective is to become a leading designer and manufacturer in the networking and
computer connectivity equipment industry.
BUSINESS STRATEGY
The networking and computer connectivity industry is characterized by
rapid technological change. To maintain and enhance the company's competitive
position, City Network constantly adapts to technological changes, upgrading and
expanding its' product line, and eliminating obsolete products within that line.
The networking and computer connectivity industry is also characterized by
inevitable price erosion across the life cycle of products and technologies. To
maintain profitability in the face of constantly shrinking gross margins, City
Network's strategy is to seek out low cost producers without sacrificing quality
and to develop and maintain efficient internal operations allowing the company
to control its' expenses.
The company is constantly expanding and changing product lines to increase
the total number of products offered to attract new customers, to penetrate new
geographic and vertical markets and to increase gross sales. By expanding the
product line to include products for different technologies, frequencies and
connection configuration, City Network has successfully expanded sales
activities into a number of new markets.
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INDUSTRY GROWTH DRIVERS
GROWING NEED FOR ADDITIONAL BANDWIDTH
The computer networking industry is witnessing a growing demand for
additional bandwidth as a result of the popularity of the internet and global
need for rapid, current information. Many people who use the internet cannot
access information/download pages quickly because their ISP's hardware is
out-dated or low-quality and therefore unable to process hundreds of thousands
of requests simultaneously. This is a particularly acute problem during peak
hours and in markets with little infrastructure. Therefore, City Network is
focused on improving the quality of internet connectivity in systems worldwide.
IN-HOME NETWORKING SYSTEMS
An emerging market opportunity exists in connecting household appliances
and computers in homes. With City Network's HPNA networking products, numerous
applications can be developed to program, control and interact with home
heating, lighting, security, and appliances. Advances such as these will
undoubtedly spur growth and encourage innovation worldwide and City Network will
help to make these technologies accessible.
PROLIFERATION OF HANDHELD/COMMUNICATION DEVICES
The cornerstone on which the new economy is built is the timely delivery
and access to information at any location. The growth and productivity of
today's business economy is reliant upon the accuracy, efficiency and
accessibility to data and communication. With the growth in popularity of
handheld/communication devices and their great functional complexity, consumers
will be able to access a wide array of multimedia content wherever they may be
located. In the future, mobile phones and PDA's will enjoy unhindered access to
rich multimedia content via the internet and City Network will play a role in
this transaction.
EXPANSION OF PC'S INTO DEVELOPING COUNTRIES
As PC's become ubiquitous throughout the world's emerging economies, we
believe the number of high capacity PC's with added features and better
voice/image quality will increase exponentially. The spread of the information
economy will continue to drive and enable developing countries to utilize
internet technology. Throughout the world, countries previously without even
phone lines can access the internet via City Network's wireless networks on
their notebook computers.
GROWTH OF THE INTERNET
The growth of the internet has forced many telecommunication service
providers to replace their voice networks with more efficient, data-oriented
packet networks. The increased demand for services and data over the internet
will require companies to upgrade their infrastructure to meet demand. City
Network has worked tirelessly partnering with local telecommunications companies
in developing new, cost effective and complete solutions for
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broadband internet access in new markets. No matter how and where the internet
moves, City Network will have a solution to the problem.
GROWTH/EXPANSION STRATEGY
City Network's strategic objective is to become a leader in the computer
and network connectivity equipment market, and to make the City Network name
synonymous with excellence and state-of-the-art hardware in this segment.
PROVIDING INTEGRATED SOLUTIONS
Convergences of voice, data and internet into one seamless IP-based
communications network to cost effectively connect an unlimited variety of
applications and services, enabling broader choice of devices for customer
services provided over a common platform. Choice and freedom have long been the
foremost in the City Network business development strategy.
EXPLORE ADDITIONAL REVENUE GENERATING SERVICES
Unlocking content (voice, data, video, text, commerce, etc.) so it can
flow unfettered among applications will present significant potential as a
future revenue source. The creation of content and the precision delivery to
targeted clients and markets will also become increasingly important. Some
examples include news, online shopping, gaming, video, security and other
relevant content. This can create unprecedented new revenue and client sources
for City Network.
BUILDING INTERNATIONAL PRESENCE
The low penetration rate of broadband internet in developing countries has
created an enormous opportunity for City Network. The demand for internet
throughout the world creates opportunity in otherwise unexpected venues.
Particularly in new and emerging growth markets, City Network will continue to
partner with individuals, companies and governments in these areas as part of
the company's growth strategy.
PARTNERING, ACQUIRING AND COOPERATING WITH THIRD PARTIES
City Network's success has been largely due to the fact that the company
has established long term relationships with system integrators, electronics
manufacturers and telecommunication companies. Joint ventures and cooperative
efforts have been the hallmark of City Network's development into new areas. In
the future, City Network will continue to expand through mergers and other
cooperative synergies. The blending of manufacturing expertise, market savvy and
local know-how will continue to be a winning combination for City Network.
EMPLOYEES
As of December 11, 2002, we employed thirty-four (34) persons. Of these,
7 are in administration, 4 are in finance, fourteen (14) are in research and
development and 9 are in sales
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and marketing. None of our employees are covered by any collective bargaining
agreement. We generally consider our relationship with our employees to be
satisfactory and have never experienced a work stoppage.
REGULATION
We have not been materially impacted by existing government regulation and
are not aware of any potential government regulation that would materially
effect our operations.
INTELLECTUAL PROPERTY AND PROPERTY RIGHTS
Our copyrights, trademarks, service marks, trade secrets, proprietary
technology and other intellectual property rights distinguish our products and
services from those of our competitors, and contribute to our competitive
advantage in our target markets. To protect our brand, products and services and
the systems that deliver those products and services to our customers we rely on
a combination of copyright, trademark and trade secret laws as well as
confidentiality agreements and licensing arrangements with our employees,
customers, independent contractors, sponsors and others.
We strategically pursue the registration of our intellectual property
rights. However, effective patent, trademark, service mark, copyright and trade
secret protection may not always be available. Existing laws do not provide
complete protection, and monitoring the unauthorized use of our intellectual
property requires significant resources. We cannot be sure that our efforts to
protect our intellectual property rights will be adequate or that third parties
will not infringe or misappropriate these rights. In addition, there can be no
assurance that competitors will not independently develop similar intellectual
property. If others are able to copy and use our products and delivery systems,
we may not be able to maintain our competitive position. If litigation is
necessary to enforce our intellectual property rights or determine the scope of
the proprietary rights of others, we may have to incur substantial costs or
divert other resources, which could harm our business.
In addition, competitors and others may claim that we have infringed their
intellectual property rights. Defending any such lawsuit, whether with or
without merit, could be time-consuming, result in costly litigation or prevent
us from offering our products and services, which could harm our business. If a
lawsuit against us is successful, we may lose the rights to use our products or
be required to modify them, or we may have to pay financial damages.
In order to develop, improve, market and deliver new products and
services, we may be required to obtain licenses from others. There can be no
assurance that we will be able to obtain licenses on commercially reasonable
terms or at all or that rights granted under any licenses will be valid and
enforceable.
MANAGEMENT
Our directors, executive officers and other significant employees and
their ages and positions are as follows:
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Name of Individual Age Position with company and subsidiaries
------------------ --- --------------------------------------
Andy Lai 40 President, Director and Chief Executive Officer
Hsin Nan Lin 42 Chief Financial Officer and Director
Alice Chen 39 Vice President and Director
Chin-Yuan Liao 30 Manager and Director
I-Min Ou 33 Director
Set forth below is a description of the backgrounds of each of the
officers and directors of the Company:
ANDY T.T. LAI holds an MBA degree from St. Thomas University in Minnesota,
USA. Mr. Lai has been Chairman, President and Director of City Network since
October 2002. Mr. Lai has been Chairman, President and Director of City Network
(Taiwan) since June, 1997. As a pioneer in the network equipment market he was
the first entrepreneur to bring the Home PNA solution to Taiwan, China and Asia.
With Mr. Lai's guidance, City Network implemented Home PNA in a winning design
for an Internet Service Model for the Taipei city government in 1998. In 1999,
Mr. Lai also procured an open tender for a Home PNA project with Korea Telecom.
From 1999 to the present, under Mr. Lai's capable management, City Network has
had its products approved for purchase and sale by China Telecom, Taiwan's
HiNet, Japan OCC and Finland Telecom. In addition, Mr. Lai established business
projects with Shanghai Telecom, Fujian Telecom and Guang Dong Telecom. In
October, 2000, Mr. Lai was presented the "Excellent Manager" industry award in
Taiwan for outstanding service as Chairman of City Network. In June, 2002, Mr.
Lai was also awarded the "The Excellent Alumnus" award for his success in
business beyond graduation from the Taiwan National Military Academy.
HSIN NAN LIN holds an EMBA degree from Chiai University in the Republic of
China. He has been Vice President and a Director of City Network since October
2002. He has been Vice President and a Director of City Network (Taiwan) since
June, 2002. In addition, he serves on the board of directors for a large
Taiwanese investment company called Chief Financial Consultants, Inc. Before
joining these groups, Mr. Lin served ten years as the general manager of
manufacturing for a company with gross sales of over 3.5 million US dollars per
year. From 1990 through to the present, Mr. Lin has had twelve years service as
financial consultant for several public companies in Asia and has served as Vice
President of Chei-Hwa Financial and Investment Consulting Co., Ltd.
ALICE CHEN possesses a degree in Legal Policy from a government university
in the Republic of China. Ms. Chen has been Vice President and a Director of
City Network since October 2002. Ms. Chen has been Vice General Manager of Sales
and Marketing and a Director of City Network (Taiwan) since January, 1999. Ms.
Chen's duty is to implement and develop the company's worldwide sales and
marketing plan. Before joining the company, Ms. Chen had ten years experience
working for the Taiwanese National Security Agency as a national policy analyst.
Additionally, Ms. Chen spent three years working as head of sales and marketing
for a Taiwanese public company.
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I-MIN OU has been Manager of the Technology Department and a Director of
City Network since October 2002. From February 2001 to October 2002, Mr. Ou
served as a Manager of the Tongnan Technology Company. From June 1999 to January
2001, he served as a Manager of the Gulite Technology Company. From February
1998 to May 1999, Mr. Ou was a Manager for the Hueng Kwuo Technology Company.
From 1991 to 1997, he served as a Manager of the Ikuani Technology Company.
Since graduating from Tongnan Industry Technology College in July 1991, I-Min
Ou has been primarily engaged in electronic engineering and computer automation
industry. He has 11 years of experience in engineering.
CHIN-YUAN, LIAO has been a Director and Manager of the Engineering
Department since October 2002. From January 2000 to October 2002, Mr. Liao
served as Manager of the Engineering Department for City Network (Taiwan). From
February 1997 to November 2001, he served as Manager of Ikuan Engineering, Inc.
From 1990 to 1996, Mr. Liao served as Manager of Taiwuang Engineering, Inc.
The directors named above will serve until the next annual meeting of the
Company's stockholders or until their successors are duly elected and have
qualified. Directors will be elected for one-year terms at the annual
stockholders meeting. Officers will hold their positions at the pleasure of the
board of directors, absent any employment agreement, of which none currently
exists. There is no arrangement or understanding between any of the directors or
officers of the Company and any other person pursuant to which any director or
officer was or is to be selected as a director or officer, and there is no
arrangement, plan or understanding as to whether non-management shareholders
will exercise their voting rights to continue to elect the current directors to
the Company's board. There are also no arrangements, agreements or
understandings between non-management shareholders that may directly or
indirectly participate in or influence the management of the Company's affairs.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCK
HOLDER MATTERS
(a) The following table sets forth as of January 10, 2002, the
number and percentage of the 24,500,000 outstanding shares of common stock that
were beneficially owned by (i) each person who is currently a director, (ii)
each executive officer, (iii) all current directors and executive officers as a
group and (iv) each person who, to the knowledge of the Company is the
beneficial owner of more than 5% of the outstanding common stock.
Name and Address Common Shares Percent of Class
---------------- ------------- ----------------
Tiao-Tsan Lai 2,000,000 8%
13 F, No. 77, Hsin Tai Wu Road, Sec. 1 His-Chih
Taipei, Taiwan, R.O.C.
Hsin-Nan Lin 0 0%
13 F, No. 77, Hsin Tai Wu Road, Sec. 1 His-Chih,
Taipei, Taiwan, R.O.C.
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Name and Address Common Shares Percent of Class
---------------- ------------- ----------------
Alice Chen 61,000 *%
13 F, No. 77, Hsin Tai Wu Road, Sec. 1 His-Chih
Taipei, Taiwan, R.O.C.
I-Min Ou 20,000 *%
13 F, No. 77, Hsin Tai Wu Road, Sec. 1 His-Chih,
Taipei, Taiwan, R.O.C.
Chin-Yuan Liao 45,000 *%
13 F, No. 77, Hsin Tai Wu Road, Sec. 1 His-Chih
Chang Hua Hsien, Taiwan
All officers and directors as a Group (5 persons) 2,126,000 8.67%
* Less than 1%.
RISK FACTORS
Prospective investors should carefully consider the following risk
factors, in evaluating us and our business. The factors listed below represent
certain important factors which we believe could cause such results to differ.
These factors are not intended to represent a complete list of the general or
specific risks that may affect us. It should be recognized that other risks may
be significant, presently or in the future, and the risks set forth below may
affect us to a greater extent than indicated.
LIMITED OPERATING HISTORY
City Network has a limited operating history upon which potential
investors may base an evaluation of its prospects and there can be no assurance
that City Network will achieve its objectives. City Network's prospects must be
considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stages of development, particularly
companies in a rapidly evolving market such as the market for internet broadband
and wireless infrastructure equipment and services. Such risks include, but are
not limited to: City Network's ability to obtain and retain customers and
attract a significant number of new customers, the growth of the satellite,
wireless, broadband and Internet markets, City Network's ability to implement
its growth strategy, especially the sales and marketing efforts, and the
introduction of new devices and computer networks technologies in broadband and
Internet services by City Network's competitors and by City Network.
FUTURE CAPITAL NEEDS, UNCERTAINTY OF FUTURE ADDITIONAL FINANCING
City Network currently anticipates that its available funds and resources,
including product sales will be sufficient to meet its anticipated needs for
working capital and capital expenditures for the next twelve months. City
Network will need to raise additional funds in the
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future in order to fund more aggressive brand promotion and more rapid
expansion, to develop new or enhanced products, to respond to competitive
pressures or to acquire complementary businesses or technologies. If additional
funds are raised through the issuance of equity or convertible debt securities,
the current stockholders may experience dilution and any such securities may
have rights, preferences or privileges senior to those of the rights of City
Network's Common Stock. There can be no assurance that additional financing will
be available on terms favorable to City Network, or at all. If adequate funds
are not available or not available on acceptable terms, City Network may not be
able to fund its expansion, promote its brand names as City Network desires,
take advantage of unanticipated acquisition opportunities, develop or enhance
products or respond to competitive pressures. Any such inability could have a
material adverse effect on City Network's business, results of operations and
financial condition.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
City Network expects to experience significant fluctuations in future
quarterly operating results that may be caused by many factors, including, among
others: delays in introduction of products or product enhancements by City
Network, its competitors or other providers of broadband and wireless internet
access and equipment; costs associated with product or technology acquisitions;
the size and timing of individual orders; competition and pricing in the
broadband internet access industry; seasonality of revenues; customer order
deferrals in anticipation of new products; market acceptance of new products;
reductions in demand for existing products and shortening of product life cycles
as a result of new product introductions; changes in operating expenses; changes
in City Network's personnel; changes in regulatory requirements; mix of products
sold; and general economic conditions. As a result, City Network believes that
period-to-period comparisons of its results of operations are not necessarily
meaningful and should not be relied upon as indications of future performance.
FAILURE TO MANAGE GROWTH WILL ADVERSELY AFFECT OPERATIONS
City Network plans to significantly expand its sales, marketing, research
and development activities, hire a number of additional employees, expand
internal information, accounting and billing systems and establish additional
distribution outlets throughout the world. In addition, City Network plans to
expand its infrastructure by investing in additional research and development
talent. In order to successfully manage growth, management must identify,
attract, motivate, train and retain highly skilled managerial, financial,
engineering, business development, sales and marketing and other personnel.
Competition for this type of personnel is intense. If management fails to
effectively manage City Network's growth, City Network's business and viability
will be materially and adversely impacted.
CITY NETWORK MAY FAIL TO KEEP PACE WITH RAPIDLY CHANGING TECHNOLOGIES
The market segments City Network is targeting are characterized by rapidly
changing technology, evolving industry standards and frequent new product and
service introductions. These factors require management to continually improve
the performance, features and reliability of the array of City Network products.
Management may not successfully respond quickly enough or on a cost-effective
basis to these developments. City Network may not
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achieve widespread acceptance of its services before its competitors offer
products and services with speed, performance, features and quality similar to
or better than City Network products or that are more cost-effective than City
Network's services.
WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY
The market for internet broadband and wireless infrastructure equipment
and services is rapidly evolving and highly competitive. Many of City Network's
competitors and potential competitors have substantially greater financial,
technical, and managerial and marketing resources, longer operating histories,
greater name recognition and more established relationships than City Network.
Since City Network's business is partially dependent on the overall success of
the Internet as a communication medium, it also competes with traditional
hardware based access and equipment providers. Management expects competition
from these and other types of competitors to increase significantly.
CITY NETWORK MAY EXPERIENCE DIFFICULTIES IN INTEGRATING BUSINESSES, PRODUCTS AND
TECHNOLOGIES IT MAY ACQUIRE INTO ITS BUSINESS
City Network may acquire businesses, products and technologies and enter
into joint ventures and strategic relationships with other companies. Any of
these transactions exposes City Network to additional risks, including: the
difficulty of assimilating and integrating the operations of the combined
companies; retaining key personnel; the potential disruption of City Network's
core business; and the potential additional expenses associated with
amortization of acquired intangible assets, integration costs and unanticipated
liabilities or contingencies.
LOSS OF KEY PERSONNEL COULD HARM OUR BUSINESS
Given the early stage of development of City Network's business, it
depends highly on the performance and efforts of its CEO, Mr. Andy Lai, its CFO,
Mr. Hsin-Nan Lin, staff and the Board of Directors. If City Network should
lose the service of any members of its management team or other key personnel,
its business prospects will be materially impacted.
ENACTMENT OF NEW LAWS OR CHANGES IN GOVERNMENT REGULATIONS COULD ADVERSELY
AFFECT CITY NETWORK'S BUSINESS
City Network is not currently required to comply with direct regulation by
any domestic or foreign governmental agency, other than regulations applicable
to businesses generally and laws or regulations directly applicable to the
Internet. However, due to the increasing popularity of the Internet, it is
possible that additional laws may be adopted regarding the Internet, any of
which could materially harm our business. The adoption of any additional laws
may decrease the growth of Internet use, which could lead to a decrease in the
demand for our services or increase the cost of doing business.
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THE INABILITY TO OBTAIN PATENT AND COPYRIGHT PROTECTION FOR CITY NETWORK'S
TECHNOLOGY OR MISAPPROPRIATION OF CITY NETWORK'S INTELLECTUAL PROPERTY COULD
ADVERSELY AFFECT CITY NETWORK'S COMPETITIVE POSITION
City Network's success depends on internally developed technologies,
know-how, trademarks and related intellectual properties. Management regards the
technology as proprietary and will attempt to protect it by seeking patents,
copyrights or trademarks, and by invoking trade secret laws and confidentiality
and nondisclosure agreements. Despite these precautions, it may be possible for
a third party to obtain and use our services or technology without
authorization.
City Network intends to apply for registration of certain copyrights and a
number of key trademarks and service marks and intends to introduce new
trademarks and service marks. Management may not be successful in obtaining
registration for one or more of these trademarks. Management may need to resort
to litigation in the future to enforce or to protect intellectual property
rights, including patent and trademark rights. In addition, City Network's
technologies and trademarks may be claimed to conflict with or infringe upon the
patent, trademark or other proprietary rights of third parties. If this
occurred, City Network would have to defend itself against such challenges,
which could result in substantial costs and the diversion of resources. Any of
these events could materially harm City Network's business.
ITEM 5. OTHER EVENTS.
On August 15, 2002, the Board of Directors of Investment Agents approved a
reverse split of Investment Agents' common stock of one share for every fifty
issued and outstanding shares. The reverse split was effectuated on August 22,
2002.
On December 10, 2002, we filed a fictitious business name statement in
Clark County, Nevada for use of the name City Network, Inc.
On December 18, 2002, the OTCBB began quoting our common stock under the
new ticker symbol "CYNW".
ITEM 7. FINANCIAL STATEMENTS, PRO FORM FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements
The audited financial statements of Investment Agents for the fiscal years
ended February 28, 2002 and 2001 and the interim period ending November 30, 2002
will be filed by amendment to this Report within 60 days after the date this
Report must be filed.
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(b) Exhibits
Exhibit No. Description
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10.1 Exchange Agreement
[ SIGNATURE PAGE FOLLOWS ]
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SIGNATURE
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 duly authorized.
INVESTMENT AGENTS, INC.
d/b/a CITY NETWORK INC.
Date: January 14, 2003 By: /s/ Tiao-Tsan Lai
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Tiao-Tsan Lai
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