UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB/A
(Amendment No. 1)
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g)
Of the Securities Exchange Act of 1934
Purchase Point Media Corporation
(Name of Small Business Issuer in its Charter)
Minnesota 41-1853993
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
141 Fifth Avenue, 10010
New York, New York (Zip Code)
(Address of principal executive offices)
Issuer's Telephone number: 212-539-6104
Securities to be registered pursuant to Section 12(b) of the Act: None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, No Par Value
(Title of Class)
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Item 1. Description of Business
Purchase Point Media Corporation ("PPMC" or the "Company"), with offices
located at 141 Fifth Avenue, New York, New York 10010, was organized under the
laws of the State of Minnesota on June 29, 1996. PPMC owns a patented grocery
cart advertising display device called "the last word"(R) that attaches to
supermarket shopping carts. At this time, patents have been granted in the
United States, Canada, France, Germany and the United Kingdom. "the last
word"(R) is a registered trademark owned by PPMC. The Company is still in the
development stage and is not an operating company. There can be no assurance
that the selling of advertising space to national advertisers will be developed
or that the Company will achieve a profitable level of operation.
"the last word"(R) is a clear plastic, weatherproof, highly durable, state
of the art, point-of-purchase ("POP") display panel that encloses a glossy color
photo insert. The panel is 1/4 inch thick, 7 inches high and 16 inches wide.
"the last word"(R) insert contains 10 three by three inch advertisement frames.
"the last word"(R) attaches to the back of the child's seat section in grocery
carts, so that it is directly in front of the shopper's eyes. Management
believes that "the last word"(R) has powerful advantages over competing POP
advertising media.
The development of "the last word"(R) began in 1991 when the inventor,
Albert Folsom, applied for patent protection. Subsequent to that, Amtel
Communications Inc. ("Amtel") invested over $1,000,000 in the development of
"the last word"(R), which included applying for and receiving the registered
trademark for "the last word"(R). In June 1994, a Nevada corporation also called
Purchase Point Media Corporation, acquired the patents and the exclusive
marketing rights and trademark. In April 1997, a public Minnesota corporation
acquired the assets of Purchase Point Media Corporation, leaving PPMC
(Minnesota) as the surviving company.
During the last five years, work has been ongoing in the development of
"the last word"(R). The development work consisted primarily of studying the
feasibility of "the last word"(R), seeking patent protection in additional
countries and setting the stage to launch a global point of purchase
advertisement company.
Marketing, Sales and Operations
PPMC will rent the child seat locations on grocery carts from supermarkets
for a rental rate equal to 10% of the gross advertising revenues that the
Company receives. PPMC will sell the advertising for each of the ten positions
on "the last word"(R) to manufacturers of leading national brand products sold
in supermarkets. Each position is priced at $2.25 per month per thousand
customer checkouts at the grocery store. Advertising agencies will receive a 15%
commission for all advertisements placed on behalf of their clients. This
advertising will be replaced in quarterly cycles to coincide with the seasons.
Marketing
PPMC has contracted with Culver Associates Ltd. ("Culver") for its
marketing program. Culver is a New York agency, which specializes in helping
companies achieve rapid growth. In addition to an advertising trade campaign,
Culver will create sales and marketing
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materials for presentation to grocery chains, advertisers and their ad agencies.
Based upon Culver's past success in the development of new and innovative media
sources, advertisers are expected to include some of the most recognizable brand
names in the world.
Advertisement Sales and Grocery Store Operations
PPMC has contracted with Last Word Management, Inc. ("LWM") to conduct its
sales and operations. For over two decades, LWM personnel have been active in
virtually all facets of the advertising industry. Based on their experience and
relationships, the Company believes that LWM will be able to sell all of the
advertisement space in "the last word"(R) and contract with the chain stores. In
addition they will be in charge of installing "the last word"(R) and changing
the advertisement inserts contained in the "the last word"(R).
The Point of Purchase (POP) Market
The following discussion of the Point of Purchase (POP) market is based
upon the "Supermarket Buying Habits Survey" published by The Point Of Purchase
Advertising Institute, Inc. (POPAI), based in Englewood, New Jersey. Point of
purchase advertising is the fastest growing segment of the advertising industry,
resulting in record sales of $15.7 billion in 1992 and over $17 billion in 1997.
The basis of the growth of POP advertising is its capacity to influence the
buying decisions of shoppers after they enter a store. POPAI has determined that
average shoppers make the decisions for choosing two thirds of their supermarket
purchases after they enter a store. Other marketing professionals concur with
these findings.
POPAI's research has shown that 70 manufacturer displays and 160 signs are
found in an average supermarket. In addition, advertisements are found on
product shelves and on shopping carts. According to research reported in
Marketing Magazine which covers marketing and sales promotion advertising, gross
sales are 12% higher in stores with advertisements on product shelves than in
stores without shelf advertisements. In addition, advertising panels on the
front of shopping carts increase the average sales of those products by 11.5%.
Other surveys show that a product advertised on a grocery cart will cause a
decrease in sales of the competing product equal to 50% of the increase of the
advertised product.
In-store POP advertising is effective because there are thousands of
competing products. The average supermarket carries over 15,000 items and larger
stores over 30,000. Each month a thousand new products fight for shelf space and
the customer's attention.
The majority of shoppers are impulse buyers. Every year fewer wives stay at
home and read newspaper ads to plan their grocery shopping. The increase of
two-household earners means considerably less time for planning. Consequently,
more and more people do their grocery shopping without a list and are more
susceptible to in-store advertising.
In 1986, grocery store sales topped $300 billion. By the year 2000,
supermarket customers will spend about half a trillion dollars. These figures
are based on a conservative 6% annual growth rate during the 1990's.
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Packaged food companies are now entering over one thousand new products
into the marketplace each month. In 1970, the average supermarket featured 7,800
items. By 1990, that number had reached approximately 15,000 and some carry more
than 30,000 items.
In 1965, the average trip to the grocery store lasted 28 minutes and the
average weekly spending in supermarkets was $28.49. By 1990, shoppers made
slightly more than two trips to the supermarket each week, spending more than
$72.00 per trip. The major shopping trip now lasts nearly 50 minutes as the
hurried shoppers are attempting to wrap up all of their required shopping in one
trip.
The majority of shoppers are working outside of the home and have little
time to plan their shopping trip, making them much more vulnerable to influence
and factors that promote their purchasing decisions while shopping.
Competition
A number of companies compete in the point of purchase grocery cart
advertising industry. The two most significant competitors are Actmedia Inc.
("Actmedia") and ADDvantage Media Group, Inc. ("ADDvantage").
Actmedia Inc. of Darien, Connecticut, is a large company which competes in
several categories of point of purchase supermarket advertising in North
America, including using grocery carts as the location for its advertising
message. Actmedia pioneered grocery cart advertising and has proven that a
single POP advertisement on a grocery cart can be effective and profitable. In
1993, Actmedia was acquired by Heritage Media Corp., which, in turn, was
acquired in 1997 by News Corp.
Actmedia attaches an 8 inch by 9 inch by 9 inch single advertisement panel
to the front inside and front outside of shopping carts. According to Actmedia
promotional literature, its clients have commissioned the research company A.C.
Nielsen to conduct over 600 independent surveys on Actmedia's ad program.
Nielsen's findings concluded that Actmedia's grocery cart advertising increases
average sales of the advertised products by 12.6%.
ADDvantage is a relatively new company headquartered in Tulsa, Oklahoma.
ADDvantage features a calculator bolted to the handle bar of a shopping cart and
having a single advertisement display directly adjacent which measures two by 2
and 7/8 inches.
In addition to Actmedia and ADDvantage, there are a number of other
competitors in the industry. VideOcart is a shopping cart equipped with a black
and white battery operated video screen which imparts information as well as
advertisements. Other competitors include shelf and aisle displays as well as a
number of newer hi-tech POP displays. Various electronic in-store displays and
coupon systems exist including: Aisle Vision to straddle the aisle; Market
Vision, an electronic message board crawl screen; POPNET, a computerized
in-store system displaying animated sequences and price promotions; Actmedia's
Instant Coupon Machine, an on-shelf electronic dispensing device; and Shelf
Vision, another electronic display system.
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In Store Advertising has a backlit display unit with an LED read out placed
above the aisle in grocery stores. Other displays include motion activated units
designed to heighten product visibility. Camtalker's sensory equipment triggers
a taped message whenever a customer comes within range. Soundtron also triggers
a message to potential customers as does Voice Vendor.
The Company believes that since "the last word"(R) will be in continuous
communication with each and every shopper in the store, it will be more
effective than the products of its competitors.
Patent
The patent invention is a waterproof advertising display device. Broadly
stated, the patent covers the combination of a telescopingly nestable shopping
cart of the standard type, having a top-hinged rear gate and a rear receptacle,
and an advertising holding mounted facing a user on the front wall of the rear
receptacle, including a rear display plate over the advertising and a watertight
seal such that liquids may not enter the advertising area.
Also protected is the above combination wherein the cover plate is attached
with a quick release hinge. It also includes an optional calculator assembly
supporting the calculator at an upward angle for viewing by the user.
Production and Manufacturing
The early stage manufacturing of "the last word"(R) has been undertaken by
Lesair, Inc. in San Diego, California. The manufacturer of the final production
runs has not been determined. Competitive bids are being tendered at this time.
Employees
As of December 31, 1998, PPMC had four full-time employees, all of whom are
members of management.
Item 2. Management's Discussion and Analysis or Plan of Operation
To finance operations, PPMC will attempt to pre-sell four of the 10 ad
spaces in "the last word"(R) at $6,308,000 each (an aggregate of approximately
$25 million) for a period of one year (representing a substantial discount).
There can be no assurance that PPMC will be successful in doing so.
For PPMC to launch a successful advertisement service program, there must
be eight areas of the business staffed by competent people to handle each of the
areas. In that PPMC does not have the resources or expertise at this time, PPMC
has elected to subcontract with parties that have either the expertise or
infrastructure in place to initiate and sustain a successful operation. The
eight areas are; (1) manufacturing "the last word"(R), (2) marketing, (3)
selling advertising, (4) selling stores on the program, (5) installing "the last
word"(R) (6) printing the advertisement inserts, (7) maintenance and changing
inserts and (8) administration. The above will be subcontracted out with the
exception of administration.
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Manufacturing will be handled by Jack Burnett through his company, Tynex
Consulting Ltd. Mr. Burnett has over 32 years of experience in all facets of
injection molding and extrusion processes. His responsibilities will include but
not be limited to R&D, tooling and subcontracting out the manufacturing (by
injection molding and extrusion processes) on a competitive bid basis.
Marketing will be handled by Chris Culver of Culver and Associates, an
advertising and marketing company. They had Actmedia's (PPMC's competitor)
account when Actmedia was bought out by News Corp. Culver and Associates'
responsibilities will include putting together media kits (for ad agencies,
packaged foods industry and grocery stores) and advertising PPMC's advantages in
the trade journals that reach the packaged foods industry, ad agencies and
grocery retailers.
Advertising sales and chain store operations will be handled by Last Word
Management. John Hall and Dal Brickenden have over 50 years of experience in
selling and managing advertising operations. LWM's responsibilities will include
selling the ads that go into "the last word"(R), installation and maintenance of
"the last word"(R) and the changing of the ad inserts.
Printing will be handled by established printing companies based on
competitive biding.
Administration will be handled in house by Mrs. E.V. (Ev) Arnold, CPA. Mrs.
Arnold has over 20 years of experience in administration in the government,
private and public sectors.
The primary administrative function will be to monitor, evaluate, supervise
and direct the subcontractors. "the last word"(R) will be warehoused at a
distribution center where the first ad inserts will be inserted into "the last
word"(R) prior to being shipped to ITG's people at the store level. The printing
company thereafter will ship the ad inserts directly to ITG's people at the
store level.
Item 3. Description of Property
At present, the Company does not own any real property. The Company leases
office space on a month-to-month basis at 85 East End Avenue, #9B, New York, New
York and 2832 Bellevue, West Vancouver, British Columbia, Canada.
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of December 31, 1998 by (a) each
person known by the Company to own beneficially more than 5% of the Company's
Common Stock, (b) each director of the Company who beneficially owns Common
Stock, (c) each of the persons named in the Summary Compensation Table who
beneficially owns Common Stock and (d) all officers and directors of the Company
as a group. Each named beneficial owner has sole voting and investment power
with respect to the shares owned.
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<TABLE>
<CAPTION>
Common Stock Percent of
Name and Address Beneficially Owned Common Stock
- ---------------- ------------------ ------------
<S> <C> <C>
John W. Hemmer 100,000 *
Jay Walker 50,000 *
Ethel W. Arnold 200,000 1.8%
Albert P. Folsom 3,337,500(1,2) 29.3%
Amtel Communications Inc. 3,337,500(3) 29.3%
All officers and directors as a group (4 persons) 3,687,500(2,4) 32.4%
</TABLE>
- ----------
* less than 1%
(1) Consists of shares held by Folsom Family Holdings. Mr. Folsom has a 10%
interest in such entity. Mr. Folsom's address is c/o the Company.
(2) Does not include 3,337,500 shares owned by Amtel. Mr. Folsom is an officer
of Amtel.
(3) The address of Amtel is c/o Martin and Associates, #2100-1066 West Hastings
Street, Vancouver, British Columbia, Canada V6E 3X2 and the principal
stockholder of Amtel is Rurik Trust (of which the beneficial owners are
members of the Thomas McKie family).
(4) Includes 3,337,500 shares owned by Folsom Family Holdings. See Footnote 1.
Item 5. Directors, Executive Officers, Promoters and Control Persons
The following sets forth certain information with respect to the directors
and executive officers of PPMC:
Name Age Position
- ---- --- --------
Albert P. Folsom 60 President and Director
John W. Hemmer 72 Director
Jay Walker 77 Director
Ethel V. Arnold 53 Controller
The Company's directors are elected at the annual meeting of stockholders
and hold office until their successors are elected and qualified. The Company's
officers are appointed annually by the Board of Directors and serve at the
pleasure of the Board. There is no family relationship among any of PPMC's
directors and executive officers.
The following is a brief summary of the business experience of each of the
directors and executive officers of PPMC:
Albert P. Folsom, President & Director
Mr. Folsom has been President and director of PPMC for over five years,
beginning with the predecessor company. His duties are: raising funds to
maintain operations,
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spearheading patenting of the Company's patent in other countries, setting the
plan of operations, bringing together people resources for the launching of
operations and negotiating contracts with out-source contractors.
John W. Hemmer, C.F.A., Director
Mr. Hemmer serves as a director of Paradigm Medical Industries, Inc., a
manufacturer and marketer of diagnostic and surgical equipment for the eye care
industry. Until June 1999 he was their Vice President of Finance, Treasurer and
CFO. He was President and Chief Executive Officer of John W. Hemmer, Inc., a
registered broker/dealer from May 1989 to May 1997, which subsequently changed
its name to Westfalia Investments, Inc.. He retained his registered
representative status there until March 1995. Prior thereto, he was Vice
President of Bankers Trust Company in charge of Venture Capital, Vice President
of Corporate Finance at Dempsey Tegler and Company, Inc., a senior securities
analyst at Lazard Freres & Company, Inc., and an investment officer of Chase
Manhattan Bank. He is a director of Sea Pride Industries, Inc., which developed
the first offshore marine production system licensed and permitted for use in
the Gulf of Mexico, and a director of the Gulf Marine Institute of Technology, a
nonprofit institute dedicated to performing mariculture research in the Gulf of
Mexico utilizing former oil and gas platforms. He is also a director and
Secretary of QMSI, Inc., a manufacturer and distributor of patented magnetic
technologies for cooling towers to eliminate scale, algae and bacteria without
using toxic, expensive and polluting chemicals. He received a BA degree in
Economics from Queens College in 1951 and a MS degree in banking and finance
from Columbia University Graduate School of Business in 1952. It is estimated
that he spends one percent of his time on PPMC affairs.
Jay Walker, Director
Since 1995, Mr. Walker has been President and director of US Medical
Research Corp., a medical research organization doing research on degenerative
disease. He has served as an outside director of National Youth Development
Foundation since 1974 and is a volunteer pilot for the Collingwood Foundation,
flying their B17 at air shows. It is estimated that he spends 1% of his time on
PPMC affairs.
Ethel V. Arnold CPA, Comptroller
Mrs. Arnold has maintained her accounting firm for the past five years.
From 1995 to 1999, half of her time was devoted to Valve Automation and Control
as CFO and head of administration. About one percent of her time over the last
five years was spent on PPMC. When PPMC goes operational, she will be a full
time officer of PPMC as controller and head of administration.
The following is a brief summary of the business experience of the key
personnel of Last Word Management Inc., which provides management services to
PPMC (see "Item 1. Description of Business--Marketing").
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John Hall, Director and President
Mr. Hall is originally from Indiana, where he attended Purdue University as
a Psychology Major. Immediately thereafter he spent four years of active duty in
the U.S. Army as a front-line Medical Technician. His professional life has
always revolved around the advertising industry in one facet or another. He
started with Columbia Broadcasting (CBS) Retail Division in 1976, having the
position of Vice-President, Director of Marketing. In 1983, he took on the
position of Vice-President/Director of Transit for New York Subways (until taken
over by Gannett Outdoor). Those responsibilities included community relations
and promoting advertiser interest in their various products, from the East Coast
to the West Coast. At Gannett, his responsibilities increased from senior
account executive/major accounts, to national accounts manager and then director
of transit. While there he developed and maintained national and local
advertiser interests for the ultimate purchase of all Gannett products. On a
personal level, he sits on various fund raising committees such as the Orange
County Chapter of the March of Dimes, L.A. County Museum of Art, Huntington
Memorial Hospital, National Child Abuse Prevention and others.
Roger Jung, Vice-President Operations
Mr. Jung is President of MBA Management Corp., a firm providing management,
financial and property consulting to a variety of clients. He obtained his
Masters of Business Administration from Simon Fraser University in British
Columbia. His experience over the years includes being President of a wholly
owned subsidiary of Bow Valley Industries in Alberta, President of a laser
manufacturing company and Engineering Manager for Canadian Westinghouse Co. Ltd.
John H. Mattice, Vice-President.
Mr. Mattice is the Owner and President of Comcor Industries, a company
specializing in backlit aisle marker display systems with electronic read outs
for point of purchase advertising in supermarkets and drug stores. Previously,
he managed the electronic billboard system for Bank of America.
Dal Brickenden, Vice-President, Sales
Mr. Brickenden has devoted twenty-five years to a successful career in
marketing, advertising, new product development and management. He was New
Product manager at Canada Starch Best Foods in Montreal, Quebec, an
international division of International Multifoods of Minneapolis, Minnesota. He
headed up the Colgate Palmolive account in Canada as Account Supervisor with the
ad agency now known as FCB/Ronalds Reynolds Ltd., Toronto. Mr. Brickenden moved
to Vancouver, British Columbia in the 1970's as Director of Marketing for a
coating company and then joined with two partners to build one of Vancouver's
top ad agencies.
Item 6. Executive Compensation
The following table sets forth information for the years ended December 31,
1999, 1998 and 1997 concerning the compensation paid or awarded to the Chief
Executive
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Officer of PPMC. None of PPMC's executive officers earned more than $100,000
during the years ended December 31, 1999, 1998 and 1997.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- ----------------------
All Other
Name and Principal Position Year Salary Bonus Other Awards Compensation
- --------------------------- ---- --------- ----- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Albert P. Folsom 1999 $72,000 0 0 0 0
President and Chief Executive Officer 1998 $72,000 0 0 0 0
1997 $72,000 0 0 0 0
</TABLE>
Item 7. Certain Relationships and Related Transactions
The Company has no stated policy towards entering into transactions with
related parties. However, the Company's intention is that any transactions with
related parties in the future will be on terms no less favorable to the Company
than those obtainable from unrelated parties.
The development activities of the Company are being financed through
advances by Amtel, which is a major shareholder. The Company owed Amtel
$508,407, $440,592 and $314, 093 at June 30, 1999, June 30, 1998 and June 30,
1997, respectively. Interest expense on these advances was $32,195, $24,455 and
$14,775 for the years ended June 30, 1999, June 30, 1998 and June 30, 1997,
respectively. All of such advances have been made on a demand loan basis. The
Company does not have a formal loan agreement with Amtel.
During the past two years, the Company has not entered into, and does not
propose to enter into, any other transaction with a value in excess of $60,000
with a director, executive officer, beneficial owner of 5% or more of the
Company's Common Stock, or members of any of such persons' immediate family.
Item 8. Legal Proceedings
PPMC is not a party to (nor is its property the subject of) any pending
legal proceeding.
Item 9. Market Price and Dividends on the Registrant's Common Equity and Other
Shareholder Matters
The Company's Common Stock trades on the OTC Bulletin Board of the National
Association of Securities Dealers, Inc. ("NASD") under the symbol "PPMC." As of
March 31, 1999, the Company had approximately 110 holders of record of its
Common Stock. These quotations represent prices between dealers, do not include
retail mark ups, mark downs or commissions and do not necessarily represent
actual transactions.
The following table sets forth for each period indicated the high and the
low bid prices per share for the Company's Common Stock. The Common Stock
commenced trading on June 9, 1998.
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Price
----------------------
Fiscal Year 2000 High Low
- ---------------- -------- --------
First Quarter Ended September 30 ................... $ 2.98 $ 2.00
Second Quarter Ended December 31 ................... 0.81 0.62
Fiscal Year 1999
- ----------------
First Quarter Ended September 30 ................... 5.75 1.50
Second Quarter Ended December 31 ................... 5.00 1.00
Third Quarter Ended March 31 ....................... 3.56 1.25
Fourth Quarter Ended June 30 ....................... 0.60 0.50
Fiscal Year 1998
- ----------------
Fourth Quarter Ended June 30 ....................... 5.25 4.50
The Company has never paid a cash dividend on its Common Stock and does not
anticipate paying dividends in the foreseeable future. It is the present policy
of the Company's Board of Directors to retain earnings, if any, to finance the
expansion of the Company's business. The payment of dividends in the future will
depend on the results of operations, financial condition, capital expenditure
plans and other cash obligations of the Company and will be at the sole
discretion of the Board of Directors.
Item 10. Recent Sales of Unregistered Securities
In July 1996, the Company (then known as Leghorn, Inc.) issued an aggregate
of 4,700,000 shares of Common Stock to 12 individuals for an aggregate
consideration of $10,000. The Company relied upon the exemption from
registration contained in Rule 504 of Regulation D under the Securities Act in
issuing all of the foregoing shares in that the aggregate offering price of the
shares of Common Stock issued did not exceed $1,000,000.
On July 16, 1997, the Company merged with Purchase Point Media Corporation,
a Nevada corporation ("PPMC (Nevada)"). In connection with such merger, the
Company issued 6,675,000 shares of Common Stock to the two stockholders of PPMC
(Nevada), both of whom were accredited investors as defined in Rule 501 of
Regulation D under the Securities Act of 1933, as amended (the "Securities
Act"). The shares issued in connection with such merger were valued at $8,500.
The Company relied upon the exemption contained in Rule 506 of Regulation D
under the Securities Act in issuing such shares in that there were only two
acquirors, both of whom were accredited investors.
On August 12, 1998, the Company entered into an agreement with Dorian
Capital Corp. ("Dorian") pursuant to which Dorian subscribed for 500,000 units,
each consisting of one share of Common Stock and one five-year warrant to
purchase Common Stock at an exercise price of $7.00 per share, for a
subscription price of $7.00 per unit. Dorian had a 90-day period to pay the
subscription price , which period was extended for an additional 90 days. By the
final expiration date, Dorian had purchased 41,143 units for approximately
$288,000. The Company relied upon the exemption contained in Rule 506 of
Regulation D under the Securities Act in issuing the foregoing securities to
Dorian in that there was only one purchaser, which was an accredited investor.
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12
Item 11. Description of Securities
The Company's authorized capital stock consists of 100,000,000 shares of
Common Stock, no par value, and 50,000,000 shares of Preferred Stock, no par
value. At December 31, 1999, there were 11,409,571 shares of Common Stock and
2,000 shares of Preferred Stock outstanding. In addition, as of such date, the
Company had the obligation to issue to Dorian 41,143 shares of Common Stock and
41,143 five-year warrants, each to purchase one share of Common Stock at an
exercise price of $7.00 per share.
The following description of certain matters relating to the Company's
Common Stock and Preferred Stock is a summary and reference should be made to
the Company's Articles of Incorporation and By-laws, copies of which have been
filed as exhibits to this Form 10-SB.
Each holder of record of Common Stock is entitled to one vote for each
outstanding share of Common Stock owned by such holder, and is not entitled to
cumulative voting for the election of directors and does not have preemptive
rights. The issued and outstanding shares of Common Stock are validly issued,
fully paid and nonassessable. All shares of Common Stock have equal rights and
are entitled to receive ratably such dividends, if any, as the Board of
Directors may declare from time to time out of funds legally available therefor.
Upon liquidation of the Company, and after payment or provision for payment of
all of the Company's debts and obligations, the holders of the Common Stock will
share ratably in the net assets, if any, available for distribution to holders
of Common Stock upon liquidation.
The transfer agent for the Common Stock is Signature Stock Transfer, Inc.,
Dallas, Texas.
The Company is governed by the provisions of Sections 302A.671 and 302A.673
of the Minnesota Business Corporation Act. These anti-takeover provisions may
eventually operate to deny stockholders the receipt of a premium for their
Common Stock. Section 302A.671 basically provides that shares of a corporation
acquired in a "control share acquisition" have no voting rights unless voting
rights are approved by the stockholders in a prescribed manner. A "control share
acquisition" is generally defined as an acquisition of beneficial ownership of
shares that would, when added to all other shares beneficially owned by the
acquiring person, entitle the acquiring person to have voting power of 20% or
more in the election of directors. Section 302A.673 prohibits a public
corporation from engaging in a "business combination" with an "interested
shareholder" for a period of four years after the date of the transaction in
which the person became an "interested shareholder," unless the "business
combination" is approved in a prescribed manner. A "business combination"
includes mergers, asset sales and other transactions. An "interested
shareholder" is a person who is the beneficial owner of 10% or more of the
corporation's voting stock. Reference is made to the detailed terms of Sections
302A.671 and 302A.673 of the Minnesota Business Corporation Act.
The outstanding Preferred Stock is non-voting and has a liquidation value
of $.085 per share (an aggregate of $170). Each share of such Preferred Stock
was originally convertible into 10 shares of Common Stock, but ceased to be
convertible on June 14, 1998.
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Item 12. Indemnification of Directors and Officers
Minnesota Statutes, Section 302A.521, contain an extensive indemnification
provision which requires mandatory indemnification by a corporation of any
officer, director and affiliated person who was or is a party, or who is
threatened to be made a party, to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a member, director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a member, director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses,
including attorneys' fees, and against judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted, or failed to act, in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. In some instances a court
must approve such indemnification.
<PAGE>
14
Item 13. Financial Statements
<PAGE>
PURCHASE POINT MEDIA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
JUNE 30, 1999
AND THE THREE MONTHS ENDED
SEPTEMBER 30, 1999
(UNAUDITED)
<PAGE>
PURCHASE POINT MEDIA CORPORATION
INDEX TO FINANCIAL STATEMENTS
PAGE
----
Independent Auditors' Report 1-2
Financial Statements:
Balance Sheets, June 30, 1999 and 1998 and
September 30, 1999 (unaudited) 3
Statement of Operations, Years Ended June 30,
1999, 1998 and 1997, Three Months Ended
September 30, 1999 and 1998 (unaudited) and
the Period June 38, 1996 (Date of Formation)
through September 30, 1999 4
Statement of Stockholders' Equity
(Deficiency) Period June 28, 1996
(Date of Formation) through
September 30, 1999 5 - 6
Statement of Cash Flows, Years Ended June 30,
1999, 1998 and 1997, Three Months Ended
September 30, 1999 and 1998 (unaudited) and
the Period June 30, 1996 (Date of Formation)
through September 30, 1999 7 - 8
Notes to Financial Statements 9 - 15
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Purchase Point Media Corporation
We have audited the accompanying balance sheet of Purchase Point Media
Corporation (a development stage company) (the "Company") as of June 30, 1999
and 1998, and the related statements of operations, stockholders' deficiency and
cash flows for each of the three years ended June 30, 1999 and for the period
June 28, 1996 (Date of Formation) through June 30, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An Audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements referred to above present fairly, in
all material respects, the financial position of Purchase Point Media
Corporation at June 30, 1999 and 1998, and the results of their operations and
their cash flows for each of the three years ended June 30, 1999 and for the
period June 28, 1996 (Date of Formation) through June 30, 1999, in conformity
with generally accepted accounting principles.
<PAGE>
2
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company is a development stage enterprise
engaged in the development and marketing of advertising space to national
advertisers to be displayed on grocery cart displays. As more fully explained in
Note 1 of the financial statements, the Company needs to obtain additional
financing to fulfill its developmental activities and achieve a level of sales
adequate to support its cost structure. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
are also described in Note 1. The accompanying financial statements do not
include any adjustments that might result from the outcome of these
uncertainties should the Company be unable to continue as a going concern.
WIENER, GOODMAN & COMPANY, P.C.
Certified Public Accountants
Eatontown, NJ 07724
December 21, 1999 except for Notes
3,4,6 and 7 which are as of
December 23, 1999
<PAGE>
3
PURCHASE POINT MEDIA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
September 30,
June 30, 1999
-------------------------- -----------
1999 1998 (Unaudited)
----------- ----------- -----------
<S> <C> <C> <C>
Current Assets:
Cash $ 97 $ -- $ 3,024
Prepaid expenses 18,487 11,305 17,333
----------- ----------- -----------
Total Current Assets 18,584 11,305 20,357
Equipment - net 2,810 -- 2,654
Patents and trademarks - net 27,159 28,439 26,689
----------- ----------- -----------
TOTAL ASSETS $ 48,553 $ 39,744 $ 49,700
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
Notes payable $ 46,903 $ -- $ 46,903
Accounts payable and
accrued expenses 163,014 81,687 164,123
Due to officer/shareholder 86,130 79,624 113,344
Due to related parties 508,407 440,592 527,141
----------- ----------- -----------
Total Current Liabilities 804,454 601,903 851,511
----------- ----------- -----------
Long-term debt -- -- 35,500
----------- ----------- -----------
Total Liabilities 804,454 601,903 887,011
----------- ----------- -----------
Stockholders' Deficiency:
Preferred stock; no par value -
authorized 50,000,000 shares
outstanding 2,000 shares, at
redemption value 170 170 170
Common stock, no par value -
authorized, 100,000,000 shares,
issued and outstanding 11,409,577
and 11,375,000 shares 260,497 18,500 260,497
Additional paid in capital 23,104 -- 23,104
Deficit accumulated during
development stage (1,039,672) (580,829) (1,121,082)
----------- ----------- -----------
Total Stockholders' Deficiency (755,901) (562,159) (837,311)
----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIENCY $ 48,553 $ 39,744 $ 49,700
=========== =========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
4
PURCHASE POINT MEDIA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Period
June 28, 1996
Three months (Date of
Ended Formation)
For the Years Ended June 30, September 30, through
--------------------------------------- ------------------------- September 30,
1999 1998 1997 1999 1998 1999
----------- ----------- ----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Costs and Expenses:
General and administrative
expenses $ 416,772 $ 110,389 $ 79,575 $ 67,815 $ 140,811 $ 1,007,311
Interest expense 39,879 29,226 19,775 12,969 9,304 107,849
Depreciation and
amortization 2,192 3,104 -- 626 776 5,922
----------- ----------- ----------- ----------- ----------- -----------
Net loss $ 458,843 $ 142,719 $ 99,350 $ 81,410 $ 150,891 $ 1,121,082
=========== =========== =========== =========== =========== ===========
Loss per common share -
basic and diluted $ .04 $ .01 $ .01 $ .01 $ .01 $ --
=========== =========== =========== =========== =========== ===========
Weighted average number of
common shares and
equivalents outstanding
- basic and diluted 11,400,563 11,375,000 11,375,000 11,409,571 11,375,000 --
=========== =========== =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
5
PURCHASE POINT MEDIA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIENCY
PERIOD JUNE 28, 1996 (DATE OF FORMATION) THROUGH SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
Additional Retained
Preferred Par Common Stated Paid-In Earnings
Stock Value Stock Value Capital (Deficit) Total
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance, June 28,
1996 (Date of
Formation) -- $ -- -- $ -- $ -- $ -- $ --
Sale of common
stock at June 28,
1996 (at $.009 per
share) -- -- 1,175,000 10,000 -- -- 10,000
Four-for-one stock split -- -- 3,525,000 -- -- -- --
Issuance of stock at
June 30, 1996 for
consulting services
(valued at $.09 per
share) 1,000 85 -- -- -- -- 85
Issuance of stock at
June 30, 1996 for
transfer agent
services valued at
$.09 per share 1,000 85 -- -- -- -- 85
Net loss, from June
28, 1996 (Date of
Formation) through
June 30, 1996 -- -- -- -- -- (338,760) (338,760)
--------- --------- --------- --------- --------- --------- ---------
Balance, June 30,
1996 2,000 170 4,700,000 10,000 -- (338,760) (328,590)
</TABLE>
See notes to financial statements.
<PAGE>
6
PURCHASE POINT MEDIA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIENCY
PERIOD JUNE 28, 1996 (DATE OF FORMATION) THROUGH SEPTEMBER 30, 1999 (Continued)
<TABLE>
<CAPTION>
Additional Retained
Preferred Par Common Stated Paid-In Earnings
Stock Value Stock Value Capital (Deficit) Total
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Recapitalization for
effect of reverse
acquisition -- -- 6,675,000 8,500 -- -- 8,500
Net loss year ended
June 30, 1997 -- -- -- -- -- (99,350) (99,350)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance, June 30,
1997 2,000 170 11,375,000 18,500 -- (438,110) (419,440)
Net loss, year ended
June 30, 1998v -- -- -- -- -- (142,719) (142,719)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance, June 30,
1998 2,000 170 11,375,000 18,500 -- (580,829) (562,159)
Sale of common stock
(at $7.00 per share) -- -- 34,571 241,997 -- -- 241,997
Issuance of warrants
for loan financing
(issued at $.67
per share) -- -- -- -- 23,104 -- 23,104
Net loss, year ended
June 30, 1999 -- -- -- -- -- (458,843) (458,843)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance, June 30,
1999 2,000 170 11,409,571 260,497 23,104 (1,039,672) (755,901)
Net loss for the period
ended September 30, 1999 -- -- -- -- -- (81,410) (81,410)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance, September 30,
1999 2,000 $ 170 11,409,571 $ 260,497 $ 23,104 $(1,121,082) $ (837,311)
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
7
PURCHASE POINT MEDIA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>
Period
June 28, 1996
Three months (Date of
Ended Formation)
For the Years Ended June 30, September 30, through
----------------------------------------- -------------------------- September 30,
1999 1998 1997 1999 1998 1999
----------- ----------- ----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net (loss) $ (458,843) $ (142,719) $ (99,350) $ (81,410) $ (150,891) $(1,121,082)
Adjustments to reconcile
net (loss) to net cash
(used in) operating
activities:
Depreciation and
amortization 2,192 3,104 -- 626 775 5,922
Forgiveness of debt
from related parties -- (25,000) -- -- -- (25,000)
Non cash compensation 15,922 13,695 -- 1,154 -- 30,941
Changes in operating assets and liabilities:
(Increase) decrease in
other assets (600) 10,000 (14,900) -- (5,143)
Increase in accounts
payable and accrued
expenses 81,327 13,071 5,000 1,109 2,536 164,123
----------- ----------- ----------- ----------- ----------- -----------
Net Cash (Used in )
Operating Activities (360,002) (127,849) (109,250) (78,521) (147,580) (950,239)
----------- ----------- ----------- ----------- ----------- -----------
Cash flows from investing activities:
Purchase of equipment (3,122) -- -- -- -- (3,122)
----------- ----------- ----------- ----------- ----------- -----------
Cash flows from financing activities:
Proceeds from related
party 308,377 126,499 117,170 37,704 78,592 768,173
Proceeds from note 46,903 -- -- 35,500 82,403
Proceeds from officer/
stockholder 44,957 1,210 -- 30,684 4,038 163,185
</TABLE>
See notes to financial statements
<PAGE>
8
PURCHASE POINT MEDIA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS (continued)
<TABLE>
<CAPTION>
Period
June 28, 1996
Three months (Date of
Ended Formation)
For the Years Ended June 30, September 30, through
----------------------------------- ---------------------- September 30,
1999 1998 1997 1999 1998 1999
--------- ---------- ---------- --------- --------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Payments to officer/
stockholder (38,451) -- (7,920) (4,840) -- (51,211)
Payments to related parties (240,562) -- -- (17,600) (48,500) (258,162)
Proceeds from sale of
common stock 241,997 -- -- -- -- 251,997
Deposit received for
issuance of shares -- -- -- -- 120,000 --
--------- ---------- ---------- --------- --------- ---------
Net Cash Provided by
Financing Activities 363,221 127,709 109,250 81,448 154,130 956,385
--------- ---------- ---------- --------- --------- ---------
Net increase (decrease)
in cash 97 (140) -- 2,927 6,550 3,024
Cash - beginning of period -- 140 140 97 -- --
--------- ---------- ---------- --------- --------- ---------
Cash - end of period $ 97 $ -- $ 140 $ 3,024 $ 6,550 $ 3,024
========= ========== ========== ========= ========= =========
Supplementary Information:
Cash paid during the year
for:
Interest $ 774 $ 259 $ -- $ 561 $ 259 $
========= ========== ========== ========= ========= =========
Income taxes $ -- $ -- $ -- $ -- $ -- $ --
========= ========== ========== ========= ========= =========
Non-cash investing activities:
Acquisition of business
Fair value of assets
acquired $ -- $ -- $ 8,500 $ -- $ 8,500 $ 8,500
========= ========== ========== ========= ========= =========
Forgiveness of related
party loan $ -- $ 25,000 $ -- $ -- $ -- $ 25,000
========= ========== ========== ========= ========= =========
Issuance of warrants in
connection with the sale
of common stock $ 23,104 $ -- $ -- $ -- $ -- $ 23,104
========= ========== ========== ========= ========= =========
</TABLE>
<PAGE>
9
PURCHASE POINT MEDIA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 1999, 1998 AND 1997
AND PERIOD JUNE 28, 1996 (DATE OF FORMATION)
THROUGH JUNE 30, 1999
(INFORMATION FOR SEPTEMBER 30, 1999
AND 1998 IS UNAUDITED)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Purchase Point Media Corporation (the "Company"), formerly
Leghorn, Inc., was incorporated on June 28,1996 in the State of Minnesota.
The Company's primary planned activities are the development and marketing
needed to create, produce and sell advertising space to national
advertisers to be displayed on grocery cart displays. At September 30,
1999, operations had not yet commenced and no revenue has been derived;
accordingly, the Company is considered a development stage enterprise.
There is no assurance that the selling of advertising space to national
advertisers will be developed or that the Company will achieve a profitable
level of operation.
In July 1997, Leghorn Inc. merged with Purchase Point Media Corporation, a
company which owns a patented grocery cart advertising display device that
plans to sell the advertising space to national advertisers. The Company
issued 6,675,000 of its common stock in exchange for all common shares of
Purchase Point Media Corporation.
The development activities of the Company are being financed through
advances by a major shareholder. The Company's continued existence is
dependent upon its ability to obtain needed working capital through
additional equity and/or debt financing and the commencement of its planned
principal operations. The Company entered into an agreement on August 12,
1998 for the private sale of its common stock and the Company raised
$241,997. Management is actively seeking additional capital to ensure the
continuation of its development activities. However, there is no assurance
that additional capital will be obtained. These uncertainties raise
substantial doubt about the ability of the Company to continue as a going
concern.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Depreciation - Equipment is stated at cost less accumulated depreciation.
Depreciation is calculated using the straight-line method over the
estimated useful lives.
<PAGE>
10
Amortization of Intangibles - Patent and trademark costs are stated at cost
less accumulated amortization and are amortized using the straight-line
method over their 17- and 10-year lives, respectively. If the patents or
trademarks are not obtained, the related costs are expensed. The carrying
value of intangible assets will be periodically reviewed by the Company to
ensure that impairments are recognized when the future operating cash flows
expected to be derived from such intangible assets are less than carrying
value.
Amortization expense was $470 and $776 for the three months ending
September 30, 1999 and 1998, respectively and $1,880, $3,104 and -0- for
the years ended June 30, 1999, 1998 and 1997, respectively and $5,454 for
the period June 28, 1996 (Date of Formation) through June 30, 1999
Development Costs - Development costs are expensed as incurred.
Stock-Based Compensation - Effective July 1, 1998 the Company adopted
Statement of Financial Accounting Standards No. 123 (SFAS No. 123),
"Accounting for Stock-Based Compensation." The standard encourages, but
does not require, companies to recognize compensation expense for grants of
stock, stock options and other equity instruments to employees based on
fair value accounting rules. The Company has adopted the disclosure-only
provision of SFAS No. 123.
Earnings Per Common Share - In February 1997, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards (SFAS)
No. 128 "Earnings Per Share," which requires companies to present basic
earnings per share (EPS) and diluted earnings per share, instead of the
primary and fully diluted EPS that was required. The new standard requires
additional informational disclosures and also makes certain modifications
to the currently applicable EPS calculations defined in Accounting
Principles Board No. 15.
Basic loss per common share is computed by dividing net earnings by the
weighted average number of common shares outstanding during the year.
Diluted earnings per common share are computed by dividing net earnings by
the weighted average number of common and potential common shares
outstanding during the year. The number of potential common shares
outstanding were 105,571 for the three months ended September 30, 1999 and
34,571 and -0- for the years ended June 30, 1999, 1998 and 1997,
respectively. For each of the years and the three months ended September
30, 1999 and 1998 the potential common shares would be excluded from the
loss per share calculation because their effect would be anti-dilutive.
Fair value of financial instruments - For financial instruments including
cash, accrued expenses and short-term debt, it was assumed that the
carrying amount approximated fair value because of the short maturities of
such instruments. It is not practical to estimate the fair values of
non-publicly traded long term debt.
<PAGE>
11
Unaudited Interim Financial Statements - The financial statements as of
September 30, 1999 and for the three months ended September 30, 1999 and
1998 include, in the opinion of management, all adjustments consisting only
of normal recurring adjustments, necessary for a fair presentation of the
financial position and results of operations for these periods. The results
for the interim period ended September 30, 1999 are not necessarily
indicative of the results that may be expected for the entire year.
Reclassifications - Certain reclassifications have been made to prior year
balances in order to conform with the current year's presentation.
2. REVERSE ACQUISITION
On July 16, 1997 Leghorn Inc. acquired all the outstanding common stock of
Purchase Point Media Corporation by issuing 6,675,000 shares of its common
stock. For accounting purposes, the acquisition has been treated as a
re-capitalization of Purchase Point Media Corporation with Purchase Point
as the acquirer (reverse acquisition). The historical financial statements
prior to July 16, 1997 are those of Purchase Point Media Corporation.
3. DEBT
September 30,
June 30, ------------------
1999 1998 1999
------- ------- -------
Short-term debt:
Demand note from Dorian
Capital Corp , interest
at 12% $46,903 $ -- $46,903
======= ======= =======
Long-term debt:
Vintage International Inc
interest at 10% due
February 29, 2001 (1) $ -- $ -- $35,500
======= ======= =======
(1) The loan shall not exceed $1,000,000 unless mutually agreed by both
parties. Vintage International, Inc. at its option may convert the balance
of the loan wholly or in part, at any time to common stock of the Company
at a price of $0.50 per share.
As of December 27, 1999 the Company has received $130,938.
4. INCOME TAXES
At September 30, 1999 the Company has a net operating loss ("NOL")
carryforward of approximately $1,121,000 for financial reporting purposes
and zero for tax purposes. The
<PAGE>
12
difference between financial reporting and tax purposes results from
temporary differences caused by capitalization of start-up expenditures for
tax purposes as required by the Internal Revenue Code Section 195. The
Company has not reflected any benefit of such net operating loss
carryforward in the accompanying financial statements in accordance with
Financial Accounting Standards Board Statement No. 109 as the realization
of this deferred tax benefit is not more than likely.
The Tax Reform Act of 1986 provided for a limitation on the use of NOL
carryforwards, following certain ownership changes. As a result of
transactions in the Company's common stock during 1997, a change in
ownership of greater than fifty (50%) percent as defined, may have
occurred. In addition, the Company is contemplating a proposed equity
financing of common stock. Under such circumstances, the potential benefits
from utilization of tax carryforward may be substantially limited or
reduced on an annual basis.
5. PREFERRED STOCK
The authorized number of preferred shares is 50,000,000 of which 2,000
shares are outstanding as of September 30, 1999, June 30, 1999 and 1998.
The preferred stock was issued on June 14, 1996, and is convertible into
ten shares of the Company's common stock. The conversion right expired on
June 14, 1998.
6. NOTE PAYABLE TO RELATED PARTY TRANSACTIONS
Note payable to related party comprises advances from Amtel Communications,
Inc. ("Amtel"). Amtel owns 29% of the common stock of the Company. The
Company owed Amtel $527,141, $508,407 and $440,592 at September 30, 1999
and June 30, 1999 and 1998, respectively. Interest expense on the note was
$8,978 and $7,498 for the three months ended September 30, 1999 and 1998,
and $32,195, $24,455 and $14,775 for the years ended June 30, 1999, 1998
and 1997, respectively, and $80,403 for the period June 28, 1996 (Date of
Formation) through September 30, 1999. All interest has been accrued.
The Company entered into an agreement with Albert Folsom ("Folsom"), the
Company's President and Chief Executive Officer, for consulting services to
be performed on behalf of the Company. Folsom received consulting fees in
the amount of $18,000 during the three months ended September 30, 1999 and
1998, respectively and $72,000 per year for the years ending June 30, 1999,
1998 and 1997 and $306,000 for the period June 28, 1996 (Date of Formation)
through September 30, 1999, respectively. The Company owed Folsom $98,180,
$79,966 and $79,624 at September 30, 1999 and at June 30, 1999 and 1998,
respectively. Interest expense was $ 1,794 and $1,495 for the three months
ended September 30, 1999 and 1998, respectively and $4,424, $5,000 and
$5,000 for the years ended June 30, 1999, 1998, and 1997, respectively, and
$23,218 for the period June 28, 1996 (Date of Formation) through September
30, 1999. All interest has been accrued.
The Company entered into an agreement with Roger Jung ("Jung") a
shareholder of the Company for consulting services to be performed on
behalf of the Company starting
<PAGE>
13
April 1, 1999 for $2,000 per month. The Company owed Jung $15,164, $6,164
and $-0- at September 30, 1999, June 30, 1999 and 1998, respectively.
Interest expense was $228 and $-0- for the three months ended September 30,
1999 and 1998, respectively and $65, $-0- and $-0- for the years ended June
30, 1999, 1998 and 1997, respectively and $293 for the period June 28, 1996
(Date of Formation) through September 30, 1999. All interest has been
accrued.
7. COMMON STOCK WARRANTS
The Company issued common stock warrants in connection with a private
placement debt offering during the year ended June 30, 1999. The Company
has adopted the disclosure-only provision of Statement of Financial
Accounting Standards No. 123 "Accounting for Stock-Based Compensation." The
Company valued the warrants issued to non-employees based on the fair value
at the grant date consistent with the provisions of SFAS No. 123.
Prepaid expense was $17,333, $18,487 and $-0- relating to the warrants at
September 30, 1999, June 30, 1999 and 1998, respectively. Interest expense
was $1,154, $-0- for the three months ended September 30, 1999 and 1998,
respectively and $4,617, $-0- and $-0- for the years June 30, 1999, 1998
and 1997, respectively and $5,771 for the period June 28, 1996 (Date of
Formation) through September 30, 1999.
The fair value of each warrant granted is estimated on the date of grant
using the Black-Scholes option-pricing model with the following
weighted-average assumptions used for warrants in 1999: dividend yield of
-0-, expected volatility of 250.7% risk free interest rate of 5.0% and
expected life of two and one-half (2 1/2) years.
Information regarding the Company's Warrants is as follows:
June 30, 1999 September 30, 1999
------------------- -------------------
Weighted- Weighted
Average Average
Exercise Exercise
Shares Price Shares Price
------- --------- ------- ---------
Warrants outstanding
beginning of year -- $ -- 34,571 $ 7.00
Warrants exercised -- -- -- --
Warrants granted 34,571 7.00 -- --
------- --------- ------- ---------
Warrants outstanding
end of year 34,571 $ 7.00 34,571 $ 7.00
======= ========= ======= =========
Warrants price range
at end of year $ 7.00 7.00
Warrant price range
for exercised shares $ -- --
Weighted-average fair
value of warrants
granted during the year $ .67 --
<PAGE>
14
The following table summarizes information about fixed-price stock warrants
outstanding at September 30, 1999:
<TABLE>
<CAPTION>
Weighted-
Average Weighted Number Weighted
Range of Number Out- Remaining Average Exercisable Average
Exercise standing at Contractual Exercise at Exercise
Price June 30, 1999 Life Price June 30, 1999 Price
----- ------------- --------------- --------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
$7.00 34,571 1 year 2 months $7.00 34,571 $7.00
====== ======
</TABLE>
8. COMMITMENTS AND CONTINGENCIES
Legal Retainer -
On July 1, 1997, (an officer/stockholder of the Company) exchanged 5,000
shares of Purchase Point Media Corporation common stock for legal service
to be provided on behalf of the Company valued at $25,000. If such shares
are sold for less than $25,000, Purchase Point Media Corporation will pay
any difference to the law firm, provided that such shares are sold through
Westminster Securities Corporation. The officer/stockholder of the Company
forgave the liability from the Company as of June 30, 1998 and the Company
recorded the transaction as forgiveness of debt income in the statement of
operations. The Company recorded legal expense for the year ended June 30,
1999 and 1998 in the amounts of $11,305 and $13,695, respectively.
Sales Agreements -
a.) On September 15, 1998, the Company entered into an agreement with
International Trade Group, L.L.C. ("ITG") to sell stores on the concept of
installing advertising on their grocery carts.
Compensation for services will be on a per cart basis. The Company will pay
ITG a sales commission of $1.00 per cart for each contract signed and
approved, an installation fee of $2.00 per cart and an advertising
maintenance fee of $0.50 per cart. On an annual basis, the Company will pay
ITG a sales maintenance commission of $.50 per cart.
The Company will issue ITG 300,000 shares of its common stock at $5.00 per
share upon the initial installation of advertising space. In addition, a
shareholder of the Company will issue an option to ITG to purchase 300,000
shares of the shareholder's common stock at $1.00 per share, exercisable
within a three (3) year period. Each of the options will be issued in three
equal 100,000 share blocks, with one block being exercisable in whole or in
part after each of the first, second and third years of this agreement,
subject to ITG
<PAGE>
15
having met its installation targets. Upon the issuance of the options the
Company will recognize an expense equal to the fair value of the option at
the various dates of grants. As of December 21, 1999 no shares have been
issued or options granted.
Commissions will be payable on all installed and serviced carts during the
duration of the contract. In the event of a premature termination, ITG is
entitled to receive a one (1) year termination fee which would be the
greater of (a) fees and commissions due for a year or (b) $1,000,000 as
full and final compensation.
The Company will be obligated for the payment of the quarterly rental to
the stores for the use of their carts. The amount payable to the stores
will be ten (10%) of gross advertising revenues received by the Company. To
date no gross advertising revenue has been received and no payments have
been made.
b.) On April 27, 1997 the Company entered into a sales agreement with a
shareholder ("contractor") of the Company to sell to advertisers each of
the advertisement frames which are displayed on shopping carts at grocery
stores. The Company will pay the contractor a commission of up to three
(3%) percent of gross advertising dollars less the advertising agency
commission of fifteen (15%) percent. The Company will also advance the
contractor expenses as agreed upon to a proforma budget. To date no
commissions have been paid or accrued.
In addition the Company will cause certain shareholders of the Company to
grant incentive stock options for up to one million (1,000,000) common
shares of the Company's common stock to the contractor. The options are
exercisable to $1.00 per share after certain levels of gross advertising
sales have been attained. The options expire five years from the date of
issuance. As of this date no options have been issued as the commencement
of operations has not begun. At the date of grant the options will be
valued at fair market value.
Marketing Agreement
On August 14, 1998, the Company entered into a one-year agreement with
Culver Associates, Ltd. ("Culver"). Culver is to study the Purchase Point
Media business opportunities, provide business plan and place advertising
and related materials needed to execute marketing plans. Compensation to
Culver is a monthly fee of $25,000 for the first three (3) months. Culver
also will receive the standard fifteen (15%) percent agency commission for
purchases of media time and space. The Company made (2) two $25,000
payments in August and September 1998. The Company and Culver have agreed
that no further payments will be made under the terms of the agreement
until the Company has commenced with the installation of advertising space
and Culver provides additional services, as defined.
Item 14. Changes in and Disagreements with Accountants
Not applicable.
<PAGE>
16
Item 15. Financial Statements and Exhibits
(a) The following financial statements are filed with this Form 10-SB/A:
Independent Auditors' Report
Balance Sheets, June 30, 1999 and 1998 and September 30, 1999
(Unaudited)
Statement of Operations, years ended June 30, 1999, 1998, 1997, the
Period June 28, 1996 (Date of Formation) through September 30,
1999 and the three months ended September 30, 1999 (Unaudited)
and 1998 (Unaudited)
Statement of Stockholders' Equity (Deficiency), the Period June 28,
1996 (Date of Formation) through September 30, 1999 (Unaudited)
Statement of Cash Flows, years ended June 30, 1999, 1998,
1997, the Period June 28, 1996 (Date of Formation)
through September 30, 1999 and the three months ended
September 30, 1999 (Unaudited) and 1998 (Unaudited)
Notes to Financial Statements
(b) The following exhibits are filed with this Form 10-SB/A:
3(a) Certificate of Incorporation*
3(b) By-laws*
10(a) Agreement dated September 15, 1998 between International
Trade Group, L.L.C. and the Registrant
10(b) Agreement dated August 14, 1998 between Culver Associates,
Ltd. and the Registrant*
10(c) Agreement dated August 12, 1998 between Dorian Capital Corp
and the Registrant*
10(d) Agreement dated April 25, 1997 between Roger Jung (assigned to
Last Word Management, Inc.) and the Registrant*
27 Financial Data Schedule
- ----------
* Previously filed.
<PAGE>
17
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: January 11, 2000
PURCHASE POINT MEDIA CORPORATION
By /s/ Albert P. Folsom
-------------------------------------
Albert P. Folsom
President and Chief Executive Officer
EXHIBIT 10(a)
AGREEMENT
AGREEMENT dated as of September 15, 1998 between (but effective upon the
first payment hereunder) Purchase Point Media Corporation, a Minnesota
corporation having its principal office at 2832 Bellevue Avenue, West Vancouver,
BC V7V 1E8, Canada (the "Company"), and ITG, LLC, an Oregon limited liability
company having its principal office at 6700 S.W. Sandburg Road, Tigard, Oregon,
97223, U.S.A. (the "Contractor").
W I T N E S S E T H
WHEREAS, the Company owns a patented grocery cart display unit ("display
unit") called "The Last Word"(R) and comprised of the Display panel and
Advertising insert (each as hereinafter defined) that attaches to the back of
the baby seat on store shopping carts, and it is the Company's intention to have
display units installed in store shopping carts nationwide as expeditiously as
possible; and
WHEREAS, the Contractor is a facilitator of direct and indirect services to
stores throughout the United States and is desirous of utilizing its existing
direct and indirect infrastructure to provide the services being sought by the
Company.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
1.01. The term "Display panel" means a patented, plastic, weatherproof,
highly durable, Point of Purchase (POP) assembly, consisting of a clear plastic
front and an opaque solid white back, which when assembled together, form a 7
inches high x 16 inches wide x 1/4 inch thick panel.
1.02. The term "Advertising insert" means a 15 inch by 6 inch four color
printing consisting of 10, 3 inch by 3 inch (approximately) advertisements
displayed in two rows of five, sized for fitting snugly inside the Display
panel.
1.03. The term "Store" refers to one of the 27,000 stores, supermarkets,
superstores, shopping clubs and the like capable of being serviced by the
Contractor on a direct and/or indirect basis.
1.04. The term "opener" means the proprietary hand tool fabricated for the
Company and required for the opening of the display units.
<PAGE>
2
1.05. The term "Phase One" refers to the first six months following the
date of this Agreement. During Phase One, the Company and the Contractor will
evaluate developmental, execution and financial requirements of the Company's
project. It is agreed that regular communication will be maintained between the
Company and the Contractor during Phase One. At the culmination of Phase One,
the Company and the Contractor agree to meet for the purpose of discussing all
relevant information pertaining to the results of Phase One, with the understood
goal being the development of mutually agreeable performance measuring criteria,
the purpose of which will be to establish all target data for the duration of
this Agreement based on known data.
1.06. The term "Carts per Store" is understood to mean an average of 200
carts per retail Store serviced. It is further understood that the nature of an
average is to fluctuate.
ARTICLE II
ACTIVITIES OF THE PARTIES
2.01. The Contractor shall, for an agreed upon incremental fee, survey all
Stores as promptly as reasonably practicable to determine whether a given
store's shopping carts are appropriate for the installation of the display
units. The Contractor, based upon predetermined and agreed to templates received
from the Company, for the purpose of securing any and all measurements and
whereby measurements will be secured, shall also provide the Company with the
measurements for each Store necessary to manufacture the components to attach
the display units to the baby seats of the shopping carts and to manufacture the
tools used to open the display units.
2.02. The Contractor will promptly assemble a sales organization and use
its best efforts to sell in as short a time as possible as many of the 27,000
Stores as practicable on the use of the display units. The Company shall prepare
and provide the Contractor with a standard form contract for the purpose of
obtaining installation approval from Stores. Such contract shall not be modified
or amended in any material respect by the Contractor without the prior written
consent of the Company (which consent shall not be unreasonably withheld).
Written approval authorizing the Company and the Contractor to proceed with the
installation and maintenance of the display units shall be obtained from the
chain, the original of which approval shall be forwarded to the Company. In the
case where approvals for installation and maintenance may have to be obtained
from individual Stores in a chain, the Contractor shall also obtain such written
approvals. The original of these approvals shall also be forwarded to the
Company.
2.03. The Company will deliver display units to the Contractor, f.o.b. the
Contractor's central warehouse and regional offices throughout the United
States, from where the Contractor will forward them to the Contractor's
individual Store installers, or directly to
<PAGE>
3
the Stores, as directed by the Contractor. This procedure shall be continued
until all Stores seeking installation of the display unit have been fitted out.
2.04. The Contractor shall carry out the installation of the display units
in compliance with the Company's installation procedures as notified by the
Company to the Contractor. All modifications to installation instructions will
be communicated to the Contractor by the Company at least 45 working days prior
to taking effect in the retail installation environment. The Contractor shall be
held harmless for any display unit failures.
2.05. On a quarterly basis, the Contractor shall receive from the Company a
supply of replacement advertising inserts. The Company will deliver the
advertising inserts, in palletized form, f.o.b. the Contractor's central
warehouse and regional offices throughout the United States, from where the
Contractor shall forward them to its individual Store installers, who shall
change the inserts, or directly to the Stores, as directed by the Contractor.
2.06. The Contractor will subcontract (at no additional charge to the
Company) the following services to its parent company, International Trade
Group, LLC: (i) electronic data interchange with stores (EDI), (ii) accounting
services, (iii) electronic links with field service representatives for instant
data transfer, (iv) design of computer systems to support field operations and
reporting and (v) West Coast operations office.
ARTICLE III
NON-COMPETE
The Company recognizes that among the Contractor's assets are its contacts
and ability to deliver national distribution quickly. To safeguard these assets
of the Contractor, the Company agrees to execute non-compete agreements
covering:
o non-circumvention agreement preventing the Company from doing business,
directly or indirectly, with any of the Contractor's installation service
companies, employees, agents or individuals including but not limited to in
the retail environment.
o A no-hiring agreement preventing the Company from hiring any of the
Contractor's services providers, employees, sales representatives or field
personnel for a period of three years after they have left the Contractor's
employ or terminated the Contractor's service contract for any reason.
ARTICLE IV
TERMS OF PAYMENT
The Company shall pay the Contractor for its work in both cash and stock
options as detailed below:
Cash Payments
<PAGE>
4
1) Monthly retainer. The Company will pay the Contractor a retainer of
$85,000 per month for the first six months of operations known as Phase One.
Following the execution of this Agreement, the Company shall cause to be placed
into an escrow account, designated by the Contractor, the full six-month
equivalent retainer value (i.e., $510,000). Starting the seventh month, the
Company may deduct up to, but no more than, $20,000 per month for the purpose of
the repayment of the Contractor's amortized start-up expenses during Phase One.
Such amortization will be applied up to a maximum of $5,000 against sales
commissions and $15,000 against installation fees.
2) Sales commission. The Company will pay the Contractor a sales commission
of $1.00 per cart for each Store contract signed and approved. The Company will
pay this commission ten days prior to the shipment of the units, provided that
the Contractor shall have submitted the following:
i. invoice
ii. a brief report covering the Contractor's survey of the chain or
the Store
iii. the original copy of the Store's executive officer's letter of
approval.
While the Company and the Contractor both recognize the benefit and need to make
sales presentations to as many food chains as possible in as short a period of
time as possible in order to neutralize competitor reaction, the amount of this
payment is open to review during Phase One as the Company's cash flow builds up.
Upon subsequent agreement between the parties, should sales commissions exceed
the Company's cash flow position during Phase One, then such sales commissions
may be accrued, in whole or in part, for no more than 30 days. Additional terms
of exclusions relative to payment to the Contractor for services rendered in
light of the Company's cash flow position may be discussed and modified during
Phase One at the discretion of the parties. This commission applies only to the
first year following installation of the display units in a given Store, at
which time the sales maintenance commission will become effective.
3) Sales maintenance commission. The Company will pay the Contractor a
sales maintenance commission of $0.50 per cart per annum (annuity) ten days
after each Store contract anniversary date.
4) Installation fee. The Company will pay the Contractor an installation
fee on of $2.00 per cart to cover the cost of the Contractor's installers (field
service representatives).
Terms: 60% of total projected carts ten days prior to the shipment of the
units
40% on receipt of the installation audit signed by the Contractor's
installer certifying the exact number of in-Store carts installed.
During Phase One as the Company's cash flow builds up, and upon subsequent
agreement between the parties, such installation fees may be accrued, in whole
or in part, for no more than 30 days. Additional terms or exclusions relative to
payment to the Contractor for services
<PAGE>
5
rendered in light of the Company's cash flow position may be discussed and
modified during Phase One at the discretion of the parties.
5) Advertising maintenance fee. The Company will pay the Contractor an
advertising maintenance fee of $0.50 per cart to cover the cost of the
Contractor's installers (field service representatives) changing advertising
inserts once every quarter or more frequently as agreed to between the Company
and the Contractor.
Terms: 50% payable ten days prior to the scheduled ad change date
50% within five working days following receipt of the audit
cards received from the Contractor's installers.
The Company will be fully responsible for the payment of the quarterly rental to
the Stores for the use of their carts. The amount payable to the Stores will be
10% of gross advertising revenues. Under no condition shall any transaction
occur which involves payment between the Stores and the Contractor or its
installers, in regard to the matters contemplated by this Agreement, without the
Company's written approval.
Stock Options
The Company will cause stock options to be issued in favor of the Contractor, or
individuals designated by the Contractor, as follows:
300,000 free trading shares of the Company's Common Stock at $5.00 per
share and 300,000 free trading shares at $1.00 per share, exercisable
within a three year period. Each of the options will be issued in
three equal 100,000 share blocks, with one block being exercisable in
whole or in part after each of the first, second and third year of
this Agreement, subject to the Contractor having met its installation
targets (inclusive of signed-up stores or accounts which may be
pending installation). Targets will be developed and agreed to based
on data derived from mutual information developed during the Phase One
initiative. In the event that the Contractor does not meet the
mutually agreed to target installations, the exercisability of such
options shall be reduced on a pro rata basis.
ARTICLE V
TERM AND MISCELLANEOUS
5.01. Subject to the Contractor meeting installation targets (inclusive of
signed-up stores or accounts which may be pending installation) developed and
agreed to based on data derived from mutual information developed during the
Phase One initiative, as well as satisfactory and timely handling of the
quarterly (or more frequent as agreed to by the Company and the Contractor)
advertising insert changes, the Company will give the Contractor an exclusive
contract for the services covered herein, in the United States for a ten year
period, renewable by mutual consent at least one year in advance.
Notwithstanding the foregoing, if the Company terminates this Agreement prior to
the expiration of the agreed to term of ten years for
<PAGE>
6
any reason whatsoever (except for a material breach by the Contractor of this
Agreement), the Company shall promptly pay the Contractor as liquidated damages
the greater of (a) fees and commissions due for one year based on the number of
installed carts then outstanding or (b) $1,000,000.
5.02. Notice of termination shall be given, by either party, one year in
advance. Since the Company will have become very dependant on the systems and
services provided by the Contractor, the Contractor agrees that it, and to the
extent necessary its parent company, immediately following notice of
termination, will, providing termination of this Agreement by the Contractor was
without cause, provide the Company with copies of all systems and software
programs and files pertinent thereto, to permit the Company to continue to
provide the service to the Stores, provided such systems, software and files are
not proprietary in nature to the Contractor, its parent company or independent
contractors.
5.03. Time is of the essence in order to neutralize any competitive
reaction to the Company entering the advertising market with its display unit.
To this end, the Company and the Contractor will hold regular monthly meetings
to review the efficiency of the previous month's work and also to examine the
possibility of increasing the monthly installation rate.
5.04. All information which either party designates as confidential will be
treated as confidential by the party receiving the information, unless (a) it is
rightfully possessed by the receiving party prior to disclosure from the other
party; (b) it is independently developed by the receiving party; (c) it was
furnished to others without restrictions similar to those imposed herein on the
right of the receiving party to use or disclose; (d) it becomes rightfully known
to the receiving party, without confidential restriction, from a source other
than the other party; or (e) disclosure to a third party is approved in writing.
Each party agrees (a) to exercise reasonable care not to divulge any
confidential information to any third party, such care to be commensurate with
the care exercised with respect to the protection of its own confidential
information; (b) to restrict the use of such information to matters related to
the parties' relationship as established by the terms and conditions of this
Agreement; and (c) to restrict access to such information to employees whose
access is necessary to the implementation of this Agreement and to the provision
of services in accordance with the terms and conditions of this Agreement.
5.05. Neither party shall be liable for any delay or failure in its
performance of any of the acts required by this Agreement when such delay or
failure arises beyond the control and without the fault or negligence of such
party. Such causes may include, without limitation, acts of God or public
enemies, labor disputes, material or component shortages, embargoes, rationing,
acts of local, state or national governments or public agencies, utility or
communication failures or delays, fire, flood, epidemics, riots or strikes. The
time for performance of any act delayed by such events shall be postponed for a
period equal to the delay.
5.06. Each of the parties represents and warrants to the other that its
computer systems and computer software are year 2000 compliant.
<PAGE>
7
5.07. The validity of this Agreement and of any of its terms or provisions,
as well as the rights and duties of the parties under this Agreement, shall be
construed pursuant to and in accordance with the laws of the State of Oregon,
without regard to its conflict of laws principles.
5.08. The Contractor reserves the right to transfer its rights and
obligations under this Agreement, in whole or in part, to a newly formed company
whose objective will be to provide the services set forth in this Agreement.
5.09. This Agreement supersedes all prior offers, proposals, written and
oral exchanges.
5.10. The Company agrees to service and provide the Contractor with
reasonable evidence of a product liability insurance policy in the amount of at
least $1,000,000 and furthermore agrees to hold the Contractor and any parent
company harmless from any and all liability, except for any such liability
arising from their gross negligence or willful misconduct.
5.11. The Company will develop target performance data related to the sale
of advertising space. With the sale of advertising space being the primary
source of the revenues from which the Contractor will be paid, it is appropriate
to develop "failure to perform" criteria for sales of advertising space with
such criteria being similar in nature to the target criteria developed for
display installations and advertising transfers performed by the Contractor.
5.12. The Company shall provide the necessary funds to facilitate any and
all "Uninstall" operations related to The Last Word advertising display panels.
These funds will be held in reserve for the sole purpose of facilitating the
removal of any and all advertising display panels as stipulated in agreements
with the retail customer. It is further understood that the "Uninstall" feature
may become a necessity to sales negotiations and closing of one or more
accounts.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
executed this Agreement.
PURCHASE POINT MEDIA CORPORATION
By /s/ Albert Folsom
------------------------------------
Albert Folsom
President
<PAGE>
8
ITG, LLC
By /s/ Alain de la Motte
------------------------------------
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM PURCHASE
POINT MEDIA CORPORATION FINANCIAL STATEMENTS AT SEPTEMBER 30, 1999 AND THE THREE
MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
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