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):
MAY 25, 2005
GOLFGEAR INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Nevada 0-28007 43-1627555
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(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification Number)
Incorporation)
11562 Knott St., Ste 9, Garden Grove, California 92841
(Address of principal executive offices)
(714) 892-8889
(Registrant's telephone number, including area code)
5285 Industrial Drive, Huntington Beach, California 92649
(Former name or former address, if changed since last report)
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS.
On October 12, 2004, John Pierandozzi resigned from the Company's Board of
Directors. Mr. Pierandozzi was not a member of any committee of the Board of
Directors at the time of his resignation. A copy of Mr. Pierandozzi's letter of
resignation, which sets forth in greater detail his reasons for resigning from
the Company's Board, is attached as Exhibit 17.1 The Company believes Mr.
Pierandozzi allegations are specious, without any basis in law or fact, and an
attempt to interfere with the Company's business and operations.
With respect to Mr. Pierandozzi's letter, the Company would like to clarify the
following points:
Wyngate Limited had satisfied the terms of its purchase note on or before
September 30, 2003 through cash payments, the conversion of monies owed to it
and assumption of certain debts owed by the Company. This transaction was
reviewed and approved by a SEC attorney hired by the board in June of 2003 -
prior to Mr. Pierandozzi joining the Board. The actual transaction was reported
in the Company's Form 10-Q for the quarter ended September 30, 2003, which was
signed by Mr. Pierandozzi. Subsequent to the filing of the September 30, 2003,
10-Q Mr. Wright became concerned that the Company had not received all of the
appropriate documentation regarding the debt assumptions. It was Mr. Wright that
brought this matter to the attention of both the Board, Management and the
Company's outside auditors. It was the Company's outside auditors that recommend
that the Company hire a different SEC attorney to review this matter. Following
the auditors advice the Company hired new SEC counsel. Wyngate Limited has
subsequently provide the Company with additional documentation, and SEC
counsel's review is on-going. In the event that it is determined that a
violation of Section 402 of the Sarbanes-Oxley Act of 2002 has occurred, the
Company will take appropriate measures to remedy the situation. At this point,
SEC counsel is working with prior company counsel to obtain additional
information surrounding the transactions in question.
In response to various allegations contained in Mr. Pierandozzi's resignation
letter, the Company notes the following:
In January of 2004 the Company ordered product from it main supplier despite the
fact that the Company had open terms, did not owe any money to the supplier ,
and that supplier had reported to have inventory ready for shipment no product
was ever shipped. Mr. Pierandozzi who set himself out to be the only point of
contact for this supplier has never offered an explanation for the lack
shipment. The ensuing inventory shortage has had a significant adverse affect on
the Company's operations
In June of 2004 Mr. Pierandozzi presented to the Board of Directors "potential
financing". This financing would have required a bankruptcy and liquidation of
the existing Company and the creation of a new company. The proposal had Mr.
Pierandozzi owning 20% to 30% of the new company, with the financiers would own
60% to 70% and select secured creditors would own 10%. There was no provision
for existing shareholders to retain any equity interest in the Company. The
Board of Directors rejected this proposal.
In June of 2004 the Company sold to Quincy Corporation with a buy back agreement
the rights to the Companies infomercial for monies received by the Company from
Quincy in June of 2004.
There has never been a license agreement signed for the brand name Players.
Though the Company is investigating many different ways to increase revenues
including licensing of brand names that it is not currently using.
In addition, prior to December 2003 Quincy Company and MC Corporation owned
greater then 50% of the Companies issued and outstanding stock. In December of
2003 they invested another $1,000,000 between the two of them to prevent the
Company from going into foreclosure. The terms were similar to the dilution that
Wyngate had received for its $1,150,000 investment in May of 2002. The deal was
reviewed by and unanimously approved by the Board (including Mr. Pierandozzi) at
that time.
Finally, the Company has an audit committee but Mr. Pierandozzi was not a member
of it.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
Set forth below is a list of Exhibits included as part of this Current Report.
17.1 Resignation Letter, dated October 12, 2004, from John Pierandozzi to the
Company.
Peter Pocklington
GolfGear International, Inc.
October 12, 2004
This is notice of my resignation as a member of the Board of Directors of
GolfGear International, Inc. effective immediately.
I am resigning as a result of disagreements with actions taken by the Company,
Board of Directors and members of the Board of Directors. These include breach
of contract, breach of fiduciary duties and violations of SEC regulations
outlined as follows:
Breach of Contract
On October 8th 2003, the purchase note from Wyngate Limited (a Company
controlled by Mr. Pocklington) to the Company due and payable in full. On that
date, the note was not paid in full and became in default. This default was not
immediately brought to my attention as president and as a Member of the Board of
Directors nor was it disclosed to the Board of Directors by Mr. Wright, the CFO
for the Company. Upon becoming aware of the default, I took action to enforce
the rights of the Company including hiring an SEC attorney to make a demand that
Mr. Pocklington cure his default according to the terms and conditions of the
original agreement.
Because of the actions that I took regarding this default, Mr. Pocklington, Mr.
Wright and Mr. Kinoshita voted to have the Board of Directors breach my
employment contract and dismiss me from my duties as President/COO of GolfGear
International, Inc.
To this day, this default has not been discussed by the Board of Directors
despite repeated attempts to initiate discussions. In fact at the Meeting of the
Board of Directors on October, 1 2004, Mr. Wright refused to answer questions
regarding the disposition of Mr. Pocklington's default.
The Company had a very poor credit rating and payment history with many Chinese
foundries. Because of this poor credit rating and payment history, the Company
could not get any form of credit or payment terms. The Company was required to
have some form of prepayment to order products.
The Company asked me to use my long-standing relationships with Chinese
manufacturers to create terms and conditions for payment that would allow the
Company to order products without a payment in advance. In the March of 2004,
Mr. Pocklington stated that he would "personally guarantee the payment" of the
issuance of a purchase order to a Chinese manufacturer based on the terms and
conditions that were negotiated by virtue of my long standing good relationship
with that major Chinese manufacture. Under the terms and conditions the Chinese
manufacture would produce product for the Company without a payment in advance
and would give the Company a 30-day billing cycle. The products were produced as
agreed and the Company and Mr. Pocklington have not paid for the product as
agreed. This breach of contract has caused irreparable harm to my reputation
with a major supplier from China.
Breach of Fiduciary Duty
In June of 2004 in a conversation with a potential source of financing for the
Company, Mr. Pocklington was quoted as saying "if there is nothing in this deal
for me then there is not deal" and "forget the Board of Directors, I am the
Board of Directors".
In a meeting of the Board of Directors on June 28th, 2004 Mr. Pocklington and
Mr. Wright refused to consider background material critical to complete
understanding of the potential financing that was being considered by the Board.
At a meeting of the Board of Directors on June 28th, 2004, Mr. Pocklington, Mr.
Wright, and Mr. Kinoshita reprioritized an old insider loan from Quincy (a
Company controlled by Mr. Pocklington) to the Company by securing it with the
sale of infomercial asset of the Company to Quincy.
At a meeting of the Board of Directors on July 9th, 2004, Mr. Pocklington, Mr.
Wright and Mr. Kinoshita refused to explore other financing to the Company on a
timely basis.
Mr. Wright acting in his capacity as President, signed a license agreement for
the brand name Players (one of the trademarks owned by the Company and securing
the debenture agreements) at a below market rate without seeking the approval of
The Board of Directors.
In a meeting of the Board of Directors on September 22nd, 2004 Mr. Pocklington
refused to answer questions whether he pledged the royalty payment from Nike to
repay a loan to an outside agency that was used as part of the debenture that he
was making with the Company and would benefit from. Further, the Board extended
terms and conditions for this debenture that were below any trading average and
not in the best interest of the Shareholders.
Violations of SEC Regulations
In November of 2002, Mr. Pocklington participated in a material modification of
his original loan agreement in violation of Section 402 of the Sarbanes-Oxley
Act of 2002, by materially changing the security provided for in the agreement.
In September of 2003, Mr. Pocklington participated in a further material
modification of his original loan agreement in violation of Section 402 of the
Sarbanes-Oxley Act of 2002, by reducing the amount due under the note extending
the due date of the note.
In December of 2003, Mr. Pocklington and Mr. Kinoshita participated in a quid
pro quote (sic) whereby they created convertible debenture agreements for each
other that were dramatically below market rate at the time and was referred to
as a "super dilution" rate. This would allow Mr. Pocklington and Mr. Kinoshita
to take control of 90% of the shares of the Company. The company has not
disclosed these debentures to the public as required.
The Company is currently operation without an Audit Committee and has not had an
Annual General meeting at in the past 18 months at a minimum.
I hereby request that this letter be publicly disclosed pursuant to the rules
and regulations of the Securities and Exchange Commission.
Sincerely,
John Pierandozzi
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 thereunto duly authorized.
GOLFGEAR INTERNATIONAL, INC.
(Registrant)
Date: May 25, 2005 By: /s/Daniel Wright
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Name: Daniel Wright
Its: Chief Financial Officer