================================================================================
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
April 17, 2000
Date of Report
---------------------------------
(Date of Earliest Event Reported)
IVP TECHNOLOGY CORPORATION
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
54 Village Centre Place
Mississauga, Ontario, L4Z 1V9 Canada
----------------------------------------
(Address of principal executive offices)
(905) 306-9343
-------------------------------
(Registrant's telephone number)
Erebus Corporation
1504 R Street, N.W.
Washington, D.C. 20009
--------------------------------
(Former name and former address)
Nevada 0-26419 65-6998896
------------------------------ ------------ -------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of incorporation) File Number) Identification No.)
================================================================================
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to an Agreement and Plan of Reorganization (the
"Acquisition Agreement"), IVP Technology Corporation ("IVP" or the "Company"), a
Nevada corporation, has acquired all the outstanding shares of common stock of
Erebus Corporation ("Erebus"), a Delaware corporation, from the shareholders
thereof in an exchange for an aggregate of 350,000 shares of common stock of IVP
(the "Acquisition"). As a result, Erebus has become a wholly-owned subsidiary of
IVP.
The Acquisition was approved by the unanimous consent of the Board of
Directors of IVP on March 21, 2000. The Acquisition was effective April 17,
2000. The Acquisition is intended to qualify as a reorganization within the
meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended.
IVP had 36,490,848 shares of common stock issued and outstanding prior
to the Acquisition and 36,840,848 shares issued and outstanding following the
Acquisition.
Pursuant to Rule 12g-3(a) of the General Rules and Regulations of the
Securities and Exchange Commission, IVP is the successor issuer to Erebus for
reporting purposes under the Securities Exchange Act of 1934, as amended (the
"Act").
2
<PAGE>
A copy of the Acquisition Agreement is filed as an exhibit to this
Current Report and is incorporated in its entirety herein. The foregoing
description is modified by such reference.
(b) The following table contains information regarding the
shareholdings of IVP's current directors and executive officers and those
persons or entities who beneficially own more than 5% of its common stock
(giving effect to the exercise of any warrants held by each such person or
entity which are exercisable within 60 days of the date of this Current Report):
<TABLE>
<CAPTION>
Number of Shares of Percent of
Common Stock Beneficially Common Stock
Name Owned (1) Beneficially Owned (2)
<S> <C> <C>
John Maxwell 200,000(3) *
President, Director
54 Village Centre Place, Suite 300
Mississauga, Ontario,
L4Z 1V9 Canada
Edgar R. Clarke 200,000(3) *
Secretary, Director
363 Yonge Street,
Toronto, Ontario,
Canada
Clarino Investment International 3,500,000(3) 9.50%
Victoria House, The Valley
Anguila, British West Indies
All executive officers and directors
of the Company as a group (2 persons) 400,000 1.08%
</TABLE>
*Less than 1%
(1) Includes any options and warrants which are exercisable within 60 days of
the date of this Current Report.
(2) Based upon 36,840,848 shares outstanding following the Acquisition.
(3) As of April 17, 2000, the Company agreed to issue 300,000 additional shares
of its common stock to Clarino Investment International.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the Acquisition Agreement
was negotiated between Erebus and IVP. In evaluating the Acquisition, Erebus
used criteria such as the value of assets of IVP, IVP's ability to compete in
the marketplace, IVP's current and anticipated business operations, and IVP
management's experience and business plan. In evaluating Erebus, IVP placed a
primary emphasis on Erebus' status as a reporting company under Section 12(g) of
the Securities Exchange Act of 1934, as amended, and Erebus' facilitation of
IVP's becoming a reporting company under the Act.
(b) The Company intends to enter and establish its brand name in the
software market by identifying, acquiring and managing nascent information
technology businesses that meet the Company's investment criteria. The Company's
first activity was its agreement to acquire distribution rights for PowerAudit
software ("PowerAudit").
3
<PAGE>
BUSINESS
Company
Mountain Chef, Inc. was incorporated in the State of Nevada on February
11, 1994. This name was changed on November 16, 1994 to IVP Technology
Corporation ("IVP" or the "Company"). IVP was established with the purpose of
identifying and acquiring private companies and/or their technologies in the
high technology field. The Company's shares of common stock are currently traded
on the NASD OTC Bulletin Board under the symbol "TALL."
The Company's sole asset consists of the right to market and distribute
PowerAudit software developed by Orchestral Corporation ("Orchestral"), a
privately held Canadian software and systems developer. On March 30, 1999, the
Company acquired this right as a result of entering into a software distribution
agreement with Orchestral. More specifically, the Company was granted exclusive
rights to market and distribute Orchestral's PowerAudit software in the United
States. In September 1999, the distribution agreement was expanded to include
the European Economic Community.
The Company has limited finances and requires additional funding in
order to accomplish its growth objectives and marketing of its products and
services. Since its inception, the Company has not sold any products or services
and has had no revenues to date. There is no assurance that the Company will be
able to secure any or all funding necessary for its future growth and expansion.
There is also no assurance that even if the Company manages to obtain adequate
funding to complete any contemplated acquisition, such acquisition will succeed
in enhancing the Company's business and will not ultimately have an adverse
effect on the Company's business and operations.
Product
PowerAudit is a software product designed to provide a platform for
remote data collection and market survey purposes. PowerAudit software utilizes
the Internet in its communication and delivery infrastructure, and Microsoft
Windows CE operating system on handheld computers ("HPCs") to facilitate remote
data collection and delivery of data via the Internet to a central server.
PowerAudit software is intended for use by companies that have many products in
the marketplace, and that need to obtain expedient market research and
positioning data.
The Company intends to place a running copy of this software on the
Company's Web site, allowing prospective customers to see PowerAudit in action.
PowerAudit is currently in use in Canada by two multinational
processors and distributors of consumer packaged goods. PowerAudit has been
licensed to these companies by a third-party unaffiliated with the Company.
There is no assurance that the Company's product will perform as
intended. There is no assurance that the Company's product will be able to
withstand direct and indirect competition present in the information technology
marketplace.
Key Agreements and Terms
Software Distribution Agreement
On March 30, 1999, IVP entered into a fourteen month software
distribution with Orchestral through May, 2000. Under the terms of this software
distribution agreement with Orchestral, IVP was granted the exclusive right to
market and distribute Orchestral's PowerAudit software in the United States. In
September, 1999, the software distribution agreement was amended to include
within the territory covered thereby the European Economic Community (the
software distribution agreement with Orchestral, as amended is herein referred
to as the "Distribution Agreement"). The Distribution Agreement provides that
Orchestral shall (i) furnish to the Company draft marketing materials and a user
manuals for use in marketing, installing, and operating PowerAudit; (ii)
undertake, after the receipt of the initial $50,000 license fee described below,
a patent search in the United States relating to PowerAudit, and defend or
settle any claim made or suit or proceeding brought against the Company alleging
that the PowerAudit software infringes upon another's proprietary or
intellectual property rights or indemnify the Company from any and all such
claims and pay all damages and costs incurred by the Company paid in settlement
of any such claim or proceeding; (iii) use all commercially reasonable efforts
to correct, at no charge to the Company, all errors, defects and malfunctions in
the Power Audit software; (iv) for a fee, train the Company's staff regarding
use of the PowerAudit software; (v) attend, at the Company's expense, trade
shows and meetings with prospective clients to assist in sales of the PowerAudit
software; and (vi) provide demonstration copies of the PowerAudit software for
potential end-users. The Distribution Agreement obligates the Company to (i) use
its
4
<PAGE>
commercially reasonable efforts to market the PowerAudit software; (ii) provide
installation assistance, technical training and certain support and maintenance
services to end-users of the PowerAudit software; (iii) furnish to Orchestral
quarterly reports detailing sales and problems relating to the PowerAudit
software. In consideration for obtaining the rights granted under the
Distribution Agreement, IVP (a) paid the sum of $50,000 for use by Orchestral in
the development of other software; (b) issued to Orchestral 500,000 shares of
the Company's common stock, (c) agreed to pay to Orchestral a royalty equal to
20% of the first $500,000 of gross revenues generated from the sale or license
of PowerAudit, 12% of gross revenues between $500,000 and $1 million and 5% on
all revenues beyond $1 million, and (d) agreed to pay to Orchsetral the sum of
$4,200 for each month (commencing with September, 1999) that Orchestral provides
the support and services described in the Distribution Agreement.
IVP has agreed to establish and maintain a software development pool
whereby it will segregate 2 1/2% of all gross revenues in excess of $1 million
generated from sales of PowerAudit software which may be used by Orchestral,
subject to the approval of IVP's Board of Directors, to develop other software
products. Orchestral has agreed to allocate to IVP all or some mutually agreed
upon portion of the marketing rights to the software it develops using the funds
from the development pool. The Distribution Agreement further provides that in
the event that if IVP achieves a minimum of one million dollars ($1,000,000) of
gross revenues attributable to sales of PowerAudit within the term of the
agreement, then the agreement shall be automatically extended for a further
period of one (1) year. Thereafter, the Distribution Agreement shall be
terminable on six (6) months notice by either party. As of the date hereof, IVP
has not commenced sales of PowerAudit nor paid any royalties to Orchestral,
which could result in the loss of the license. Orchestral has agreed orally to
accept from IVP a payment equal to the minimum royalty for the first year (equal
to $162,500), and will extend the Distribution Agreement for a one-year period.
IVP is seeking to secure funds to make such payment but can provide no
assurances that it will obtain the funds prior to the expiration of the
Distribution Agreement.
Current Operations
Since its license of PowerAudit software and the inception of its
current line of operations, the Company has not sold any products. The Company
requires significant funds in order to complete testing and marketing of its
products. To date, the Company has not generated any revenues from sales of its
product and is operating at a loss. The Company's management expects losses to
continue for the foreseeable future. The Company requires additional funding to
achieve its growth objectives. If the Company does not receive additional
funding, it will not be able to pursue the intended marketing plan and, in such
case, may not be able to successfully conduct its operations. There is no
assurance that the Company will be successful in development or marketing of its
product or in generating any meaningful revenues from operations.
The Company intends to acquire other high technology businesses in
exchange for cash or the issuance of securities. To date, no acquisitions have
been consummated and there can be no assurance that any future acquisitions will
be consummated. Furthermore, no assurance can be given that the Company will be
able to effect any aspects of its business plan or to maintain the operations
that it has currently established. The Company will need additional capital
either through financing or through operations to meet its business goals. There
is no assurance that the Company can reverse its operating losses or that it can
raise additional capital to allow it to expand its planned operations.
Marketing and Distribution
The Company intends to market PowerAudit to HPC original equipment
manufacturers and systems integrators. Concurrently with the those marketing
plans, the Company also intends to market its product directly to end-users. In
that respect, the Company intends to target the following entities:
(I) Database Management Services Providers ("DMSPs"). The Company
intends to provide faster market-intelligence reporting capability than that
offered by existing DMSPs. The Company intends to enter into strategic alliances
with companies in this field. No such alliances have been established as of the
date of this Current Report. There is no assurance that the Company will be
successful in entering into and maintaining such alliances in the future.
(II) Sales and Marketing Companies. Such companies' field
representatives may benefit from PowerAudit's speed and productivity enhancing
features such as customizable task management.
(III) Pharmaceutical and Healthcare Product Companies. These are
companies with large sales field forces. PowerAudit may allow supervisors to
monitor reporting and market research activities. The Company sees possibilities
in the area of clinical trials where large numbers of patients are being
monitored or tested.
5
<PAGE>
Currently, the Company has no customer base and has not begun to market
PowerAudit. There is no assurance that the Company will be able to successfully
market and distribute its product to any of its intended customers.
Employees
The Company has 2 part time employees.
Patents and Trademarks
PowerAudit has not been patented by its original developer, Orchestral.
The Company has not trademarked the name PowerAudit. As a result, there is no
assurance that the Company will be able to prevent competitors from using its
software concepts or appearances or that it will have the financial resources
necessary to protect its product against competitors' use or imitation.
Property
The Company's principal office is located at 54 Village Centre Place,
Suite 300, Mississauga, Ontario, L4Z 1V9 Canada, which consists of approximately
1,200 square feet of office space. The Company has a co-user agreement for the
premises occupied by Jarvis Ryan Associates, the Company's auditors. Currently,
the Company is using this space free of charge.
The Company's mailing address is 54 Village Centre Place, Suite 300,
Mississauga, Ontario, L4Z 1V9 Canada. Its telephone number is 905/306-9343 and
its facsimile number is 905/277-9506. Its e-mail address is
[email protected]. The Company maintains an Internet Web site located at
http://www.ivptechnology.com.
Legal Proceedings
There is no outstanding litigation in which the Company is involved and
the Company is unaware of any pending actions or claims against it.
Description of Securities
The authorized capitalization of the Company consists of 50,000,000
shares of common stock, $.001 par value per share, and no shares of preferred
stock. The Company has 36,840,848 shares of its common stock issued and
outstanding.
Market for the Company's Securities
The common stock of IVP is traded on the OTC Bulletin Board under the
symbol "TALL." The market for OTC securities is characterized generally by low
volume and broad price and volume volatility. The Company cannot give any
assurance that a stable trading market will develop for its stock or that an
active trading market will be sustained. Moreover, the trading price of IVP's
common stock could be subject to wide fluctuations due to such factors as
quarterly variations in operating results, competition, announcements of new
products by IVP or its competitors, product enhancements by IVP or its
competitors, regulatory changes, differences in actual results from those
expected by investors and analysts, changes in financial estimates by securities
analysts, and other events or factors.
The Company has been a non-reporting publicly traded company with
certain of its securities exempt from registration under the Securities Act of
1933. The NASD Stock Market has implemented a change in its rules requiring all
companies trading securities on the NASD OTC Bulletin Board to become reporting
companies under the Securities Exchange Act of 1934.
IVP acquired all the outstanding shares of Erebus to become the
successor issuer to it pursuant to Rule 12g-3(a) in order to comply with the
Eligibility Rule for the OTC Bulletin Board.
The following is the trading history for the Company's common stock:
Date High Low Volume
March, 1999 0.062 0.025 5,719,900
April, 1999 0.500 0.055 36,499,500
May, 1999 0.420 0.200 10,152,300
June, 1999 0.370 0.180 9,020,900
July, 1999 0.290 0.130 43,927,800
August, 1999 0.340 0.029 96,308,500
September, 1999 0.170 0.090 6,067,600
October, 1999 0.130 0.065 3,499,500
6
<PAGE>
November, 1999 0.187 0.062 4,304,600
December, 1999 0.200 0.076 8,049,000
January, 1999 0.245 0.125 8,298,800
February, 2000 0.400 0.120 22,196,800
March, 2000 5.125 0.305 129,661,200
April, 2000* 1.760 0.440 8,676,300
- -------------
*As of April 17, 2000
The market price of the Company's common stock over the last 52 weeks
has ranged from $.025 to $5.125. On April 17th, 2000, the high was $.750 and the
low was $.440 with a volume of 1,308,000 shares.
Transfer Agent
The Company's transfer agent is Pacific Stock Transfer Inc., located at
5844 South Pecos Road, Las Vegas, Nevada, 89210.
Management
Name Age Position
- ---- --- --------
John Maxwell 56 President, Director
Edgar Clarke 34 Secretary, Director
All directors hold office until the next annual meeting of shareholders
or until their successors are duly elected and qualified. Officers serve at the
pleasure of the Board of Directors. Set forth below is a summary description of
the business experience of each director and officer of the Company.
John Maxwell has been President and Director of the Company since 1999.
From 1990 to 1999, Mr. Maxwell was employed as Manager at Copyright Printing
Company, Toronto, Ontario, Canada. Mr. Maxwell received a diploma from Cedarbrae
College, Toronto, Ontario, Canada, in 1963.
Edgar Clarke has been Secretary and Director of the Company since 1998.
From 1998 to present, Mr. Clarke has been employed as Manager at Lou Mykes
Designstore, Toronto, Ontario, Canada. From 1995 to 1998, Mr. Clarke was
employed as Manager at Lupa Osteria restaurant, Toronto, Ontario, Canada. Mr.
Clarke received a diploma from East York College, Toronto, Ontario, Canada, in
1985.
Executive Compensation
The Company has no audit, compensation or executive committees. No
officers of the Company earned more than $100,000 a year during any of the last
three fiscal years. There is no key man life insurance on any director, officer,
or control person. During March, 2000, the Company issued 200,000 shares of its
common stock to each of five persons, including its two current officers and
directors and three past officers and directors.
Summary of Financial Information
The Company incurred a net loss for the year ended December 31, 1997 of
($406,921) with no sales for the same fiscal period. The Company incurred a net
loss for the year ended December 31, 1998 of ($7,086,094) with no sales for the
same fiscal period. The Company incurred a net loss for the year ended December
31, 1999 of ($1,820,255) with no sales for the same fiscal period. The Company's
accumulated deficit is $8,906,349 and $7,086,094 in 1999 and 1998, respectively.
7
<PAGE>
RISK FACTORS
Uncertainty as to the Continuation of the Company as a Going Concern.
The audited financial statements of the Company show that the Company incurred a
net loss for the year ended December 31, 1997 of ($406,921) with no sales for
the same fiscal period; a net loss for the year ended December 31, 1998 of
($7,086,094) with no sales for the same fiscal period; and a net loss for the
year ended December 31, 1999 of ($1,820,255) with no sales for the same fiscal
period. These conditions raise substantial doubt about the Company's ability to
continue as a going concern and if substantial additional funding is not
acquired or alternative sources developed to meet the Company's working capital
needs, management will be required to curtail its operations.
The Company is Currently Operating at a Loss. The Company has
historically operated at a loss. If losses continue, the Company may need to
raise additional capital through the sale of its securities or from debt or
equity financing. If the Company is not able to raise such financing or obtain
alternative sources of funding, management will be required to curtail
operations. The Company's operations are subject to the risks and competition
inherent in the establishment of a business enterprise in the competitive field
of high technology companies. There can be no assurance that future operations
will be profitable. Revenues and profits, if any, will depend upon various
factors, including market acceptance of its concepts, market awareness, its
ability to expand its network of participating distributors and customers,
dependability of its advertising and recruiting network, and general economic
conditions. There is no assurance that the Company will achieve its expansion
goals and the failure to achieve such goals would have an adverse impact on it.
Limited History of Operations. IVP has only a limited history of
operations. Its operations are subject to the risks and competition inherent in
the establishment of a relatively new business enterprise in a highly
competitive field of high technology and software distribution. There can be no
assurance that future operations will be profitable. Revenues and profits, if
any, will depend upon various factors. There is no assurance that the Company
will achieve its expansion goals and the failure to achieve such goals would
have an adverse impact on it.
The Company May Need Additional Financing. Future events, including the
problems, delays, expenses and difficulties frequently encountered by companies
may lead to cost increases that could make the Company's funds insufficient to
fund the Company's proposed operations. The Company may seek additional capital,
including an offering of its equity securities, an offering of debt securities
or obtaining financing through a bank or other entity. The Company has not
established a limit as to the amount of debt it may incur nor has it adopted a
ratio of its equity to a debt allowance. If the Company needs to obtain
additional financing, there is no assurance that financing will be available
from any source, or that it will be available on terms acceptable to the
Company, or that any future offering of securities will be successful. The
Company could suffer adverse consequences if it is unable to obtain additional
capital when needed.
Failure to Attract or Retain Qualified Personnel. A change in labor
market conditions that either further reduces the availability of employees or
increases significantly the cost of labor could have a material adverse effect
on the Company's business, financial condition and results of operations. IVP's
business is dependent upon its ability to attract and retain highly
sophisticated research and development personnel, business administrators and
corporate management. There is no assurance that it will be able to employ a
sufficient number of such personnel in order to accomplish its growth
objectives.
The Company Has Entered into Certain Agreements Which Have Payment
Obligations. IVP has entered into a license agreement with Orchestral
Corporation to distribute PowerAudit software. The compensation to Orchestral
Corporation is related to the Company's sales, and may interfere with the
Company's ability to make a profit even if it establishes a significant customer
base.
Dependence on Continued Growth of and Demand for HPCs; Development of
Technological Alternatives. HPCs were introduced in 1995 and represent a
relatively new technology. HPCs have experienced substantial growth
8
<PAGE>
in sales in each year since their introduction. However, no assurance can be
given that HPCs will continue to experience growth at rates as those experienced
since their introduction. In addition, it is possible that other hardware or
operating systems could be developed which supplant HPCs and the Windows CE and
Palm operating systems, which make obsolete HPCs or the operating systems upon
which they currently operate. In the event that new, more powerful hardware
devices are developed which make existing HPCs obsolete or new more advanced
operating systems are introduced that are not compatible with Windows CE or that
HPCs do not continue to experience sales growth as in past years, PowerAudit may
never gain widespread market acceptance which would have a material adverse
impact on IVP's business and results of operations.
No Assurance of Acceptance of Poweraudit Software
Currently PowerAudit is in use by two large corporations in Canada,
through an unaffiliated Canadian distributor of PowerAudit, and is not used by
any entity within IVP's territory. No assurance can be given that IVP will be
successful in marketing PowerAudit or that PowerAudit will gain widespread
acceptance among end-users of HPCs. If IVP does not implement a successful
marketing plan that results in significant sales of the product and generates
significant revenues or if potential end-users of PowerAudit do not like the
software, IVP's results of operations will be materially adversely effected.
Establishment of Windows CE as a Widespread Operating System for HPCs
PowerAudit runs on the Windows CE operating system. The Windows CE
operating system competes against HPC operating systems developed by Palm and
used on all Palm devices and by Symbian (the EPOC operating system), used
primarily in Europe. Currently, devices employing the Palm operating system
represent, by far, the most widely distributed HPCs. In order for PowerAudit to
gain widespread market acceptance, HPC users will have to adopt and embrace the
Windows CE operating system. Establishing Windows CE as a widespread operating
system for HPCs is outside of IVP's control and IVP will have to rely on
Microsoft to successfully develop this market. No assurance can be given that
Windows CE will gain the widespread acceptance among end-users of HPCs that
management believes is necessary to permit IVP to effectively market and
generate revenues from sales of PowerAudit.
IVP'S Reputation May be Adversely Affected by Software Defects
IVP's operations depend on complex software developed by Orchestral.
Software often contains defects, particularly when first introduced or when new
versions are released. These defects could cause service interruptions that
damage IVP's reputation, increase its service costs, cause it to lose revenue,
delay market acceptance or divert its development resources, any of which could
materially adversely affect its business, operating results and financial
condition. IVP may not discover software defects that affect its products until
widespread deployment of PowerAudit.
If IVP Fails to Keep Pace With Rapid Technological Change and Evolving Industry
Standards, Its Products Could Become Less Competitive or Obsolete
The market for HPC's and the software applications that run on them,
such as PowerAudit, is characterized by rapidly changing technology, evolving
industry standards, changes in customer needs, heavy competition and frequent
new product introductions. If IVP, in conjunction with Orchestral, fails to
modify or improve its products in response to changes in technology or industry
standards, its products could rapidly become less competitive or obsolete.
IVP Depends Heavily Upon Its License From Orchestral Corporation to Distribute
Poweraudit and for Technical Support and Any Failure to Maintain This License
Could Seriously Harm Its Business; IVP Will be in Default Under the Software
Agreement If Certain Payments are Not Made by May 31, 2000 and the Distribution
Agreement Will Terminate.
IVP is a licensee of PowerAudit software from Orchestral Corporation by way of a
Software Distribution Agreement dated March 30, 1999which expires on May 31,
2000. The Software Distribution Agreement is critical to its success. In
addition to serving as the agreement by which IVP is permitted to distribute
PowerAudit, this agreement defines the terms and conditions of the technical
support and service which Orchestral will furnish to IVP. The Software
Distribution Agreement provides that IVP if achieves a minimum of one million
dollars ($1,000,000) of gross revenues attributable to sales of PowerAudit
within the term of the agreement, then the agreement shall be automatically
extended for a further period of one (1) year. Thereafter the Distribution
Agreement shall be terminable on six (6) months notice by either party. As of
9
<PAGE>
the date hereof, IVP has not commenced sales of PowerAudit nor paid any
royalties to Orchestral, which would result in the loss of the license.
Orchestral has agreed orally to accept from IVP a payment equal to the minimum
royalty for the first year (equal to $162,500) to extend the Distribution
Agreement for a one-year period. IVP is seeking to secure funds to make said
payment but can provide no assurances that it will obtain the funds prior to the
expiration of the Distribution Agreement.
In the event that the license is terminated for any reason or is not
renewed by Orchestral, IVP would be required to license a substitute remote data
collection software application that runs on the Microsoft CE operating system,
which could be less desirable and could be costly in terms of cash and other
resources and which may not be available on terms and conditions acceptable to
IVP, if at all. In the alternative, IVP could develop its own remote data
collection software application, which would take considerable time, resources
and expense, would divert management's attention from day-to-day business
activities. Moreover, any interruption in the service component of the
distribution agreement could cause users to of PowerAudit to abandon the
software and sue IVP for damages. Any failure to maintain the software
distribution agreement with Orchestral would have a material adverse effect on
IVP's business and results of operations.
Competition from Larger and More Established Companies May Hamper
Marketability. The competition in the software distribution and electronic
commerce industry is intense. Large and highly fragmented, these industries host
a number of well-established competitors, including national, regional and local
companies possessing greater financial, marketing, personnel and other resources
than the Company. There is no assurance that the Company will be able to market
or sell its product if faced with direct product and services competition from
these larger and more established companies.
The Company's Technology May Become Obsolete. The software which the
Company intends to distribute could become obsolete as a result of a superior
piece of software developed by a third-party software designer or by discovering
a more efficient and speedy way of communicating data that the Company's
software promises to deliver. Either or both of those events, upon occurrence,
could lead to an erosion in the Company's ability to market its product as well
as an erosion of potential customer base.
Issuance of Future Shares May Dilute Investors Share Value. The Company
is authorized to issue 50,000,000 shares of common stock. The future issuance of
all or part of the remaining authorized common stock may result in substantial
dilution in the percentage of the Company's common stock held by the its then
existing shareholders. Moreover, any common stock issued in the future may be
valued on an arbitrary basis by the Company. The issuance of the Company's
shares for future services or acquisitions or other corporate actions may have
the effect of diluting the value of the shares held by investors, and might have
an adverse effect on any trading market, should a trading market for the
Company's common stock develop.
Shares Available For Future Sale May Affect Market Price. The market
price of IVP common stock could drop if substantial amounts of shares are sold
in the public market or if the market perceives that such sales could occur. A
drop in the market price could adversely affect holders of the stock and could
also harm IVP's ability to raise additional capital by selling equity
securities.
Adverse Economic Conditions or a Change in General Market Patterns. A
weak economic environment could adversely affect the Company sales and
promotional efforts. General economic conditions impact Internet-based and
related commerce and demand and interest for the Company's services may decline
at any time, especially during recessionary periods. Many factors beyond the
Company's control may decrease overall demand for its services including, among
other things, decrease in the entry costs by other similarly situated companies,
increase in the overall unemployment rate, and additional government regulation.
There can be no assurance that the general market demand for the Company's
services and products will remain the same or will not decrease in the future.
The Company Could Be Subject to Claims of Infringement of Third-party
Intellectual Property, which Could Result in Significant Expense and Loss of
Intellectual Property Rights. From time to time, third parties may assert
patent, copyright, trademark and other intellectual property rights to
technologies that are important to the Company's business. Any litigation to
determine the validity of these claims, regardless of their merit or resolution,
would likely be costly and time consuming and divert the efforts and attention
of the Company's management and technical personnel. There is no assurance that
the Company would prevail in any such litigation given the complex technical
issues and inherent uncertainties in intellectual property litigation. Any
determination that PowerAudit infringes upon another company's or inventor's
proprietary intellectual property rights will have a material negative impact on
the Company's business and results of operations.
10
<PAGE>
Loss of Key Employees May Adversely Affect Growth Objectives. The
Company's success in achieving its growth objectives depends upon the efforts of
John Maxwell, President of the Company, as well as other key management
personnel. The loss of the services of these individuals could have a material
adverse effect on the Company's business, financial condition and results of
operations. There is no assurance that the Company will be able to maintain and
achieve its growth objectives should it lose any of its key management members'
services.
Third-party Market Price Manipulations. The shares of the Company's
common stock are traded on the OTC Bulletin Board. Share price quotations for
the Company's stock may reflect inter-dealer prices, without retail mark-up,
mark-down or commissions, and may not represent actual transactions. In
addition, from time to time, persons not affiliated with the Company may seek to
manipulate the market price of the Company's common stock in a manner unknown to
the Company, which may cause a drastic change in the price of the Company's
common stock unrelated to any activity by the Company. Any rapid change in the
Company's stock price should be viewed with caution.
Penny Stock Regulation. Penny stocks generally are equity securities
with a price of less than $5.00 per share other than securities registered on
certain national securities exchanges or quoted on the NASD Stock Market,
provided that current price and volume information with respect to transactions
in such securities is provided by the exchange or system. The Company's
securities may be subject to "penny stock rules" that impose additional sales
practice requirements on broker-dealers who sell such securities to persons
other than established customers and accredited investors (generally those with
assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000
together with their spouse). For transactions covered by these rules, the
broker-dealer must make a special suitability determination for the purchase of
such securities and have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the "penny stock rules" require the delivery, prior
to the transaction, of a disclosure schedule prescribed by the Commission
relating to the penny stock market. The broker-dealer also must disclose the
commissions payable to both the broker-dealer and the registered representative
and current quotations for the securities. Finally, monthly statements must be
sent disclosing recent price information on the limited market in penny stocks.
Consequently, the "penny stock rules" may restrict the ability of broker-dealers
to sell the Company's securities. The foregoing required penny stock
restrictions will not apply to the Company's securities if such securities
maintain a market price of $5.00 or greater. There can be no assurance that the
price of the Company's securities will maintain such a level.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Successor Issuer.
Pursuant to Rule 12g-3(a) of the General Rules and Regulations of the
Securities and Exchange Commission, the Company is the successor issuer to
Erebus for reporting purposes under the Securities Exchange Act of 1934.
ITEM 6 RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The sole officer and director of Erebus resigned effective upon
completion of the Acquisition.
ITEM 7. FINANCIAL STATEMENTS
The audited financial statements for IVP Technology Corporation are
filed herewith.
11
<PAGE>
IVP TECHNOLOGY CORPORATION
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999 AND 1998
<PAGE>
IVP TECHNOLOGY CORPORATION
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE 1 INDEPENDENT AUDITORS' REPORT
PAGE 2 CONSOLIDATED BALANCE SHEETS AS OF
DECEMBER 31, 1999 AND 1998
PAGE 3 CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999
AND 1998 AND FOR THE PERIOD FROM
JANUARY 1, 1998 (INCEPTION OF DEVELOPMENT
STAGE) TO DECEMBER 31,1999
PAGE 4 CONSOLIDATED STATEMENTS OF CHANGES OF
STOCKHOLDERS' DEFICIENCY FOR THE YEARS
ENDED DECEMBER 31, 1999 AND 1998
PAGE 5 CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999
AND 1998 AND FOR THE PERIOD FROM
JANUARY 1, 1998 (INCEPTION OF DEVELOPMENT
STAGE) TO DECEMBER 31, 1999
PAGES 6 - 12 NOTES TO CONSOLIDATED FINANCIAL STATEMENT
AS OF DECEMBER 31, 1999 AND 1998
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
IVP Technology Corporation
(a development stage company)
We have audited the accompanying consolidated balance sheets of IVP Technology
Corporation and Subsidiary (a development stage company) as of December 31, 1999
and 1998 and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for the years then ended and for the period
from January 1, 1998 (inception of development stage) to December 31, 1999.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of IVP Technology
Corporation and Subsidiary as of December 31, 1999 and 1998 and the results of
their operations and their cash flows for the years then ended and for the
period from January 1, 1998 (inception of development stage) to December 31,
1999 in conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 8 to the
consolidated financial statements, the Company's recurring losses from
operations, working capital deficiency and stockholders' deficiency raise
substantial doubt about its ability to continue as a going concern. Management's
Plan in regards to these matters is also described in Note 8. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
April 5, 2000 (Except for Note 2 as to
Which the date is April 14, 2000.)
1
<PAGE>
IVP TECHNOLOGY CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
ASSETS 1999 1998
- ------ ------------- --------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 281 $ -
------------- --------------
OTHER ASSETS
License agreement 114,000 -
Other 872 872
------------- --------------
TOTAL ASSETS $ 115,153 $ 872
============= ==============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 233,412 $ 320,738
Customer deposits - 80,000
Management fees payable 450,000 -
Due to shareholders - 31,300
Notes payable - 177,768
------------- ---------------
TOTAL CURRENT LIABILITIES 683,412 609,806
------------- ---------------
STOCKHOLDERS' DEFICIENCY
Common stock, $.001 par value 50,000,000 authorized,
27,490,848 and 16,353,848 issued and outstanding in
1999 and 1998, respectively 27,491 16,354
Additional paid-in capital 9,423,115 7,795,972
Accumulated deficit (accumulated in development stage
$8,906,349 and $7,086,094 in 1999 and 1998,
respectively) (9,882,515) (8,062,260)
------------- ---------------
(431,909) (249,934)
Less subscriptions receivable (136,350) (359,000)
------------- ---------------
TOTAL STOCKHOLDERS' DEFICIENCY (568,259) (608,934)
------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIENCY $ 115,153 $ 872
============= ===============
</TABLE>
See accompanying notes to financial statements
2
<PAGE>
IVP TECHNOLOGY CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
CUMULATIVE FROM
JANUARY 1, 1998
(INCEPTION OF
DEVELOPMENT
YEAR ENDED YEAR ENDED STAGE) TO
DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1999
----------------- ----------------- -----------------
<S> <C> <C> <C>
REVENUE $ - $ - $ -
---------------- ---------------- ----------------
OPERATING EXPENSES
Amortization 106,000 - 106,000
Bad debts - 25,000 25,000
Bank charges 364 63 427
Foreign exchange (gain) (12,626) 9,584 (3,042)
Interest 13,126 14,335 27,461
Legal and accounting 191,850 18,830 210,680
Management fees 450,000 - 450,000
Office and general 27,180 17,982 45,162
Development fees and software
support 60,305 - 60,305
Consulting fees 221,078 3,000,300 3,221,378
Travel and promotion 30,808 - 30,808
---------------- ---------------- ----------------
Total Operating Expenses 1,088,085 3,086,094 4,174,179
---------------- ---------------- ----------------
LOSS FROM OPERATIONS (1,088,085) (3,086,094) (4,174,179)
OTHER EXPENSE
Write-off of goodwill and other
costs - (4,000,000) (4,000,000)
---------------- ---------------- ----------------
LOSS BEFORE EXTRA-ORDINARY ITEM (1,088,085) (7,086,094) (8,174,179)
---------------- ---------------- ----------------
EXTRAORDINARY ITEM
Loss on extinguishment of debt 732,170 - 732,170
---------------- ---------------- ----------------
NET LOSS $ (1,820,255) $ (7,086,094) $ (8,906,349)
================ ================ ================
LOSS PER SHARE $ (0.08) $ (0.43) $ (.46)
================ ================ ================
WEIGHTED AVERAGE NUMBER OF
OUTSTANDING COMMON SHARES
22,409,210 16,298,903 19,354,132
================ ================ ================
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE>
IVP TECHNOLOGY CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
ADDITIONAL
COMMON STOCK PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT
------ ------ ------- -------
<S> <C> <C> <C> <C>
Balance, December 31,
1997 5,990,848 $ 5,991 $ 4,407,725 $ (976,166)
Stock issued for cash and
subscriptions 8,363,000 8,363 390,247 -
Stock issued for services 2,000,000 2,000 2,998,000 -
Net loss 1998 - - - (7,086,094)
---------- ----------- -------------- -------------
Balance, December 31,
1998 16,353,848 16,354 7,795,972 (8,062,260)
Stock issued for cash 3,650,000 3,650 189,360 -
Cash collected - - - -
Stock issued for services 200,000 200 9,800 -
Stock issued for debt 5,787,000 5,787 1,209,483 -
Stock issued for license 1,500,000 1,500 218,500 -
Net loss 1999 - - - (1,820,255)
---------- ----------- -------------- -------------
BALANCE, DECEMBER
31, 1999 27,490,848 $ 27,491 $ 9,423,115 $ (9,882,515)
========== =========== ============== =============
</TABLE>
SUBSCRIPTION
RECEIVABLE TOTAL
---------- -----
Balance, December 31,
1997 $ - $ 3,437,550
Stock issued for cash and
subscriptions (359,000) 39,610
Stock issued for services - 3,000,000
Net loss 1998 - (7,086,094)
------------- --------------
Balance, December 31,
1998 (359,000) (608,934)
Stock issued for cash (136,350) 56,660
Cash collected 359,000 359,000
Stock issued for services - 10,000
Stock issued for debt - 1,215,270
Stock issued for license - 220,000
Net loss 1999 - (1,820,255)
------------- --------------
BALANCE, DECEMBER
31, 1999 $ (136,350) $ (568,259)
============= ==============
See accompanying notes to financial statement
4
<PAGE>
IVP TECHNOLOGY CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
CUMULATIVE FROM
JANUARY 1, 1998
(INCEPTION OF
DEVELOPMENT
YEAR ENDED YEAR ENDED STAGE) TO
DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1999
----------------- ----------------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ (1,820,255) $ (7,086,094) $ (8,906,349)
------------- ---------------- ----------------
Adjustments to reconcile net loss to net
cash (used in) operating activities:
Loss on extinguishment of debt 732,170 - 732,170
Write-off of goodwill and other costs - 4,000,000 4,000,000
Stock issued for services 10,000 3,000,000 3,010,000
Amortization 106,000 - 106,000
Changes in operating assets and liabilities:
Increase (decrease)
Accounts payable and accrued expenses 138,006 24,278 162,284
Management fees payable 450,000 - 450,000
------------- ---------------- ----------------
TOTAL ADJUSTMENTS 1,436,176 7,024,278 8,460,454
------------- ---------------- ----------------
Net cash used in operating activities (384,079) (61,816) (445,895)
------------- ---------------- ----------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Minority interest - 400 400
Other - 400 400
------------- ---------------- ----------------
Net cash used in investing activities - 800 800
------------- ---------------- ----------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance of common stock,
net of subscriptions 384,360 39,610 423,970
Proceeds from loans - 14,335 14,335
Proceeds from stockholders - 6,618 6,618
------------- ---------------- ----------------
Net cash provided by financing activities 384,360 60,563 444,923
------------- ---------------- ----------------
Net Increase (decrease) in cash 281 (453) (172)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD - 453 453
------------- ---------------- ----------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 281 $ - $ 281
============= ================ ================
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE>
IVP TECHNOLOGY CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999 AND 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(A) Organization
Mountain Chef, Inc. (the "Company") was incorporated in the State
of Nevada on February 11, 1994. This name was changed on November
16, 1994 to IVP Technology Corporation. The Company was granted an
extra-provincial license by the Province of Ontario on June 20,
1995 and operates its main offices there. Prior to 1998, the
Company was involved with various unsuccessful activities. It
became inactive in 1997. The Company began negotiations with a
third party in 1998 to become an exclusive distributor of software
and therefore is considered to have re-entered the development
stage on January 1, 1998. Activities from inception of the
development stage include raising of capital and negotiations and
acquisition of software distribution licenses. (See Note 7)
(B) Basis of Presentation
The Company maintains its financial records in United States
dollars. The consolidated financial statements are expressed in
United States dollars and have been prepared in accordance with
United States generally accepted accounting principles (GAAP).
(C) Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its inactive subsidiary, Lanvoice Corporation. All
significant inter-company transactions and balances have been
eliminated.
(D) Foreign Currency Transactions
Transactions conducted in Canadian dollars have been translated
into United States dollars using the average exchange rate for the
month in which the transactions occurred. Gains or losses are
recognized in the statement of operations.
(E) Use of Estimates
In preparing financial statements in conformity with generally
accepted accounting principles, management is required to make
estimates and
6
<PAGE>
IVP TECHNOLOGY CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999 AND 1998
assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and revenues
and expenses during the reported period. Actual results could
differ from those estimates.
(F) Cash and Cash Equivalents
For purposes of the cash flow statements, the Company considers
all highly liquid investments with original maturities of three
months or less at the time of purchase to be cash equivalents.
(G) Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107, "Disclosures
about Fair Value of Financial Instruments", requires disclosures
of information about the fair value of certain financial
instruments for which it is practicable to estimate the value. For
purposes of this disclosure, the fair value of a financial
instrument is the amount at which the instrument could be
exchanged in a current transaction between willing parties other
than in a forced sale or liquidation.
The carrying amounts of the Company's accounts payable, customer
deposits and management fees payable approximates fair value due
to the relatively short period to maturity for these instruments.
(H) Income Taxes
The Company accounts for income taxes under the Financial
Accounting Standards Board Statement of Financial Accounting
Standards No. 109 "Accounting for Income Taxes" ("Statement 109").
Under Statement 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or
settled. Under Statement 109, the effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date.
7
<PAGE>
IVP TECHNOLOGY CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999 AND 1998
(I) Concentration of Credit Risk
The Company maintains its cash in bank deposit accounts, which, at
times, may exceed federally insured limits. The Company has not
experienced any losses in such accounts and believes it is not
exposed to any significant credit risk on cash and cash
equivalents.
(J) Loss Per Share
Basic and diluted net loss per common share is computed based upon
the weighted average common shares outstanding as defined by
Financial Accounting Standards No. 128, "Earnings Per Share".
There were no common stock equivalents at December 31, 1999 and
1998.
(K) Business Segments
The Company applies Statement of Financial Accounting Standards
No. 131 "Disclosures about Segments of an Enterprise and Related
Information". The Company operates in one segment and therefore
segment information is not presented.
NOTE 2 - MANAGEMENT FEES PAYABLE
During April 2000, the Company settled disputes with three former
directors relating to services performed through December 31, 1999
by issuing 600,000 common shares. (See Note 9) The stock was
valued at its quoted trading price on the settlement date and the
resulting management fees were expensed and accrued through
December 31, 1999.
NOTE 3 - NOTE PAYABLE
Notes payable at December 31, 1998 represents principal and
accrued interest at 10%. In June 1999, the Company settled the
then current balance of $187,500 by issuing 1,875,000 shares of
its common stock valued at the quoted trading price at the
settlement date. The difference between the note payable balance
at the settlement date and the value of the stock issued is
included in loss on extinguishment. (See Note 4)
8
<PAGE>
IVP TECHNOLOGY CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999 AND 1998
NOTE 4 - EQUITY
During 1998 the Company issued 8,363,000 common shares for cash of
$39,610 and a related subscription receivable of $359,000 which
was satisfied with $327,700 in cash and the offset of $31,300 due
to stockholder in 1999.
During 1998 the Company issued 2,000,000 common shares for past
services. For financial reporting purposes, the stock was valued
at its quoted trading price on the grant date resulting in an
aggregate consulting expense of $3,000,000 recorded in 1998.
During 1999 the Company issued 3,650,000 common shares for cash of
$56,660 and a related subscription receivable of $136,350 which
was collected in March 2000.
During 1999 the Company issued 5,787,000 common shares in exchange
for $483,100 of debt, customer deposits and accounts payable to
unrelated parties. For financial reporting purposes the stock was
valued at its quoted trading price on the settlement date. The
Company recognized a $732,170 loss on extinguishment.
During 1999 the Company issued 200,000 common shares for services.
For financial reporting purposes the stock was valued at its
quoted trading price on the grant dates resulting in expense of
$10,000.
NOTE 5 - INCOME TAXES
The Company had no income tax expense in 1999 and 1998 due to its
operating losses. Any deferred tax asset at December 31, 1999 and
1998 has been fully offset by a valuation allowance.
The tax effects of temporary differences that gave rise to
significant portions of deferred tax assets and liabilities at
December 31 are as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforward $ 3,346,000 $ 2,741,000
----------- -----------
Total gross deferred tax assets 3,346,000 2,741,000
Less valuation allowance (3,346,000) (2,741,000)
</TABLE>
9
<PAGE>
IVP TECHNOLOGY CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999 AND 1998
---------------- ----------------
Net deferred tax assets $ - $ -
================ ================
At December 31, 1999, the Company had net operating loss
carryforwards of approximately $9,841,000 for U.S. Federal income
tax purposes available to offset future taxable income expiring on
various dates beginning in 2016 through 2019. There is no current
Canadian tax effect.
NOTE 6 - WRITE-OFF OF GOODWILL
During 1998 the Company wrote-off its investment in an 80% owned
subsidiary, Skynet Worldwide, Inc. due to the permanent impairment
of the value of this investment as a result of proposed
legislative changes governing internet gambling by United States
citizens. The subsidiary was then dissolved.
The write-off is as follows:
Goodwill $ 3,998,400
Other costs 1,600
-----------------
Total $ 4,000,000
=================
NOTE 7 - AGREEMENTS
(A) Software Distribution Agreements
On March 30, 1999, the Company entered into a software
distributing agreement, granting the Company an exclusive right to
distribute a software product known as "Power Audit" throughout
the United States of America. (See below for subsequent
amendment.) The significant terms and conditions governing the
agreement are as follows:
1. Payment by the Company of $50,000 in development funds.
2. Issuance of 500,000 in common shares of the Company to
the owners and developers of the software upon its
delivery which occurred in October 1999.
3. The Company is to pay royalties at 20% on the first
$500,000 of sales. Between $500,000 and $1,000,000 the
Company will pay 12.5% on sales and 5% on sales over
$1,000,000.
10
<PAGE>
IVP TECHNOLOGY CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999 AND 1998
The agreement has a term of fourteen months and can be terminated
on six-month notice by either party. It can be extended on a year
to year basis, provided the gross annual sales exceed $1,000,000
and all other terms are observed by the parties.
In September 1999, for a consideration of the Company's issuance
of an additional 1,000,000 common shares, the agreement was
amended to include the European Economic Community in its
distribution territory. The 1,500,000 common shares were issued in
1999 and were valued on the agreement and amendment dates based on
the quoted trading price. The resulting $220,000 value is
presented as a license agreement, net of $106,000 accumulated
amortization. The license fees are amortized over the contract
life.
(4) Consulting Agreement
On November 1, 1999 ("Agreement Date") the Company entered into
a consulting agreement whereby the consultant agrees to assist
the Company in raising stipulated minimum equity capital and
perform other consulting services. Payment of 3,500,000 common
shares has been placed in escrow and the issuance is
contingent on raising the equity capital. The escrowed shares
are not considered outstanding until released and therefore no
value has been assigned to them in the accompanying
consolidated financial statements. Upon any future release of
these shares, the shares will be valued at the quoted trading
price on the Agreement Date and charged to equity as an
offering cost.
NOTE 8 - GOING CONCERN
As reflected in the accompanying financial statements, the
Company's recurring losses, and its working capital deficiency
of $683,131 and stockholders' deficiency of $568,259, raise
substantial doubt about its ability to continue as a going
concern. The Company has not generated any revenues as of the
date of the accompanying audit report. The ability of the
Company to continue as a going concern is dependent on the
Company's ability to raise additional capital and implement
its business plan. The financial statements do not include any
adjustments that might be necessary if the Company is unable
to continue as a going concern.
The Company has entered into a software distribution agreement
(See Note 7 (A)), has raised equity capital, collected the
subscription receivable (See
11
<PAGE>
IVP TECHNOLOGY CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999 AND 1998
Note 9), and intends to raise additional equity capital in order
to implement its business plan and marketing efforts. In addition,
the Company has settled its $450,000 management fee payable
through the issuance of common stock. (See Note 2 and 9)
Management believes that actions presently being taken to obtain
additional funding and implement its strategic plans provide the
opportunity for the Company to continue as a going concern.
NOTE 9 - SUBSEQUENT EVENTS
Subsequent to December 31, 1999 the Company acquired all of the
issued and outstanding capital stock of Erebus Corporation, an
inactive reporting shell for the issuance of 350,000 common
shares.
The Company entered into an agreement with the principal
stockholder of Erebus Corporation whereby the principal
stockholder will provide certain stipulated services with
regard to the Company's becoming a United States S.E.C.
reporting company. The consideration to be paid to the
stockholder is $200,000.
Subsequent to December 31, 1999, the directors of the Company
authorized the issuance of 4,500,000 common shares of the
Company at $0.15 per share to raise additional capital of
$675,000.
The Company issued, subsequent to December 31, 1999 600,000 common
shares in satisfaction of the legal obligation of $450,000
arising out of a legal settlement reached with three former
officers of the Company.
In March 2000, the subscription receivable of $136,350 was
collected.
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
EXHIBITS
2.1. Agreement and Plan of Reorganization between IVP Technology Corporation and
Erebus Corporation.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned hereunto duly authorized.
IVP TECHNOLOGY CORPORATION
By /s/ John Maxwell
President
Date: April 18, 2000.
13
Exhibit 2.1
AGREEMENT AND PLAN OF REORGANIZATION among IVP TECHNOLOGY
CORPORATION, a Nevada corporation ("IVP"), EREBUS CORPORATION, a Delaware
corporation ("Erebus") and the persons listed in Exhibit A hereof (collectively
the "Shareholders"), being the owners of record of all the issued and
outstanding stock of Erebus.
Whereas, IVP wishes to acquire and the Shareholders wish to transfer
all of the issued and outstanding securities of Erebus in a transaction intended
to qualify as a reorganization within the meaning of ss.368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended (the "Exchange").
Now, therefore, IVP, Erebus, and the Shareholders adopt this plan of
reorganization and agree as follows:
1. Exchange of Stock
1.1. Number of Shares. The Shareholders agree to transfer to IVP at the
Closing (defined below) the number of shares of common stock of Erebus, $.0001
par value per share, shown opposite their names in Exhibit A, in exchange for an
aggregate of 350,000 shares of voting common stock of IVP, $.001 par value per
share.
1.2. Exchange of Certificates. Each holder of an outstanding
certificate or certificates theretofore representing shares of Erebus common
stock shall surrender such certificate(s) for cancellation to IVP, and shall
receive in exchange a certificate or certificates representing the number of
full shares of IVP common stock into which the shares of Erebus common stock
represented by the certificate or certificates so surrendered shall have been
converted. The transfer of Erebus shares by the Shareholders shall be effected
by the delivery to IVP at the Closing of certificates representing the
transferred shares endorsed in blank or accompanied by stock powers executed in
blank.
1.3. Fractional Shares. Fractional shares of IVP common stock shall not
be issued, but in lieu thereof IVP shall round up fractional shares to the next
highest whole number.
1.4. Further Assurances. At the Closing and from time to time
thereafter, the Shareholders shall execute such additional instruments and take
such other action as IVP may request in order more effectively to sell,
transfer, and assign the transferred stock to IVP and to confirm IVP's title
thereto.
2. Closing
2.1. Date and Place. The Closing contemplated herein shall be held at
the offices of the Exchange Agent provided for herein without requiring the
meeting of the parties hereof. All proceedings to be taken and all documents to
be executed at the Closing shall be deemed to have been taken, delivered and
executed simultaneously, and no proceeding shall be deemed taken nor documents
deemed executed or delivered until all have been taken, delivered and executed.
The date of Closing may be accelerated or extended by agreement of the parties.
2.2. Execution of Documents. Any copy, facsimile telecommunication or
other reliable reproduction of the writing or transmission required by this
agreement or any signature required
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION PAGE NUMBER 2
- --------------------------------------------------------------------------------
thereon may be used in lieu of an original writing or transmission or signature
for any and all purposes for which the original could be used, provided that
such copy, facsimile telecommunication or other reproduction shall be a complete
reproduction of the entire original writing or transmission or original
signature.
3. Unexchanged Certificates. Until surrendered, each outstanding
certificate that prior to the Closing represented Erebus common stock shall be
deemed for all purposes, other than the payment of dividends or other
distributions, to evidence ownership of the number of shares of IVP common stock
into which it was converted. No dividend or other distribution shall be paid to
the holders of certificates of Erebus common stock until presented for exchange
at which time any outstanding dividends or other distributions shall be paid.
4. Representations and Warranties of Erebus
Erebus represents and warrants as follows:
4.1. Corporate Organization and Good Standing. Erebus is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware, and is qualified to do business as a foreign corporation in
each jurisdiction, if any, in which its property or business requires such
qualification.
4.2. Reporting Company Status. Erebus has filed with the Securities and
Exchange Commission a registration statement on Form 10-SB which became
effective pursuant to the Securities Exchange Act of 1934 and is a reporting
company pursuant to ss.12(g) thereunder.
4.3. Reporting Company Filings. Erebus has timely filed and is current
on all reports required to be filed by it pursuant to ss.13 of the Securities
Exchange Act of 1934.
4.4. Capitalization. Erebus's authorized capital stock consists of
100,000,000 shares of common stock, $.0001 par value, of which 5,000,000 shares
are issued and outstanding, and 20,000,000 shares of non-designated preferred
stock of which no shares are designated or issued.
4.5. Issued Stock. All the outstanding shares of its common stock are
duly authorized and validly issued, fully paid and non-assessable.
4.6. Stock Rights. Except as may be set out by attached schedule, there
are no stock grants, options, rights, warrants or other rights to purchase or
obtain Erebus Common or Preferred Stock issued or committed to be issued.
4.7. Corporate Authority. Erebus has all requisite corporate power and
authority to own, operate and lease its properties, to carry on its business as
it is now being conducted and to execute, deliver, perform and conclude the
transactions contemplated by this agreement and all other agreements and
instruments related to this agreement.
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION PAGE NUMBER 3
- --------------------------------------------------------------------------------
4.8. Authorization. Execution of this agreement has been duly
authorized and approved by Erebus's board of directors.
4.9. Subsidiaries. Except as may be set out by attached schedule,
Erebus has no subsidiaries.
4.10. Financial Statements. Erebus's financial statements dated October
31, 1999, copies of which will have been delivered by Erebus to IVP prior to the
Closing (the "Erebus Financial Statements"), fairly present the financial
condition of Erebus as of the date therein and the results of its operations for
the periods then ended in conformity with generally accepted accounting
principles consistently applied.
4.11. Absence of Undisclosed Liabilities. Except to the extent
reflected or reserved against in the Erebus Financial Statements, Erebus did not
have at that date any liabilities or obligations (secured, unsecured,
contingent, or otherwise) of a nature customarily reflected in a corporate
balance sheet prepared in accordance with generally accepted accounting
principles.
4.12. No Material Changes. Except as may be set out by attached
schedule, there has been no material adverse change in the business, properties,
or financial condition of Erebus since the date of the Erebus Financial
Statements.
4.13. Litigation. Except as may be set out by attached schedule, there
is not, to the knowledge of Erebus, any pending, threatened, or existing
litigation, bankruptcy, criminal, civil, or regulatory proceeding or
investigation, threatened or contemplated against Erebus or against any of its
officers.
4.14. Contracts. Except as may be set out by attached schedule, Erebus
is not a party to any material contract not in the ordinary course of business
that is to be performed in whole or in part at or after the date of this
agreement.
4.15. Title. Except as may be set out by attached schedule, Erebus has
good and marketable title to all the real property and good and valid title to
all other property included in the Erebus Financial Statements. Except as set
out in the balance sheet thereof, the properties of Erebus are not subject to
any mortgage, encumbrance, or lien of any kind except minor encumbrances that do
not materially interfere with the use of the property in the conduct of the
business of Erebus.
4.16. Tax Returns. Except as may be set out by attached schedule, all
required tax returns for federal, state, county, municipal, local, foreign and
other taxes and assessments have been properly prepared and filed by Erebus for
all years for which such returns are due unless an extension for filing any such
return has been filed. Any and all federal, state, county, municipal, local,
foreign and other taxes and assessments, including any and all interest,
penalties and additions imposed with respect to such amounts have been paid or
provided for. The provisions for federal and state taxes reflected in the Erebus
Financial Statements are adequate to cover any such taxes that may be assessed
against Erebus in respect of its business and its operations during the periods
covered by the Erebus Financial Statements and all prior periods.
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION PAGE NUMBER 4
- --------------------------------------------------------------------------------
4.17. No Violation. Consummation of the Exchange will not constitute or
result in a breach or default under any provision of any charter, bylaw,
indenture, mortgage, lease, or agreement, or any order, judgment, decree, law,
or regulation to which any property of Erebus is subject or by which Erebus is
bound.
5. Representations and Warranties of the Shareholders
The Shareholders, individually and separately, represent and warrant as
follows:
5.1. Title to Shares. The Shareholders, and each of them, are the
owners, free and clear of any liens and encumbrances, of the number of Erebus
shares which are listed in the attached Exhibit A and which they have contracted
to exchange.
5.2. Litigation. There is no litigation or proceeding pending, or to
each Shareholder's knowledge threatened, against or relating to shares of Erebus
held by the Shareholders.
6. Representations and Warranties of IVP
IVP represents and warrants as follows:
6.1. Corporate Organization and Good Standing. IVP is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Nevada and is qualified to do business as a foreign corporation in each
jurisdiction, if any, in which its property or business requires such
qualification.
6.2. Capitalization. IVP's authorized capital stock consists of
50,000,000 shares of common stock, $.001 par value per share, of which
______________ shares are issued and outstanding, and no shares of preferred
stock.
6.3. Issued Stock. All the outstanding shares of its common stock are
duly authorized and validly issued, fully paid and non-assessable.
6.4. Stock Rights. Except as may be set out by attached schedule, there
are no stock grants, options, rights, warrants or other rights to purchase or
obtain IVP common or preferred stock issued or committed to be issued.
6.5. Corporate Authority. IVP has all requisite corporate power and
authority to own, operate and lease its properties, to carry on its business as
it is now being conducted and to execute, deliver, perform and conclude the
transactions contemplated by this agreement and all other agreements and
instruments related to this agreement.
6.6. Authorization. Execution of this agreement has been duly
authorized and approved by IVP's board of directors.
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION PAGE NUMBER 5
- --------------------------------------------------------------------------------
6.7. Subsidiaries. Except as may be set out by attached schedule, IVP
has no subsidiaries.
6.8. Financial Statements. IVP's financial statements dated as of
September 30, 1999, copies of which will have been delivered by IVP to Erebus
prior to the Exchange Date (the "IVP Financial Statements"), fairly present the
financial condition of IVP as of the date therein and the results of its
operations for the periods then ended in conformity with generally accepted
accounting principles consistently applied.
6.9. Absence of Undisclosed Liabilities. Except to the extent reflected
or reserved against in the IVP Financial Statements, IVP did not have at that
date any liabilities or obligations (secured, unsecured, contingent, or
otherwise) of a nature customarily reflected in a corporate balance sheet
prepared in accordance with generally accepted accounting principles.
6.10. No Material Changes. Except as may be set out by attached
schedule, there has been no material adverse change in the business, properties,
or financial condition of IVP since the date of the IVP Financial Statements.
6.11. Litigation. Except as may be set out by attached schedule, there
is not, to the knowledge of IVP, any pending, threatened, or existing
litigation, bankruptcy, criminal, civil, or regulatory proceeding or
investigation, threatened or contemplated against IVP or against any of its
officers.
6.12. Contracts. Except as may be set out by attached schedule, IVP is
not a party to any material contract not in the ordinary course of business that
is to be performed in whole or in part at or after the date of this agreement.
6.13. Title. Except as may be set out by attached schedule, IVP has
good and marketable title to all the real property and good and valid title to
all other property included in the IVP Financial Statements. Except as set out
in the balance sheet thereof, the properties of IVP are not subject to any
mortgage, encumbrance, or lien of any kind except minor encumbrances that do not
materially interfere with the use of the property in the conduct of the business
of IVP.
6.14. Tax Returns. Except as may be set out by attached schedule, all
required tax returns for federal, state, county, municipal, local, foreign and
other taxes and assessments have been properly prepared and filed by IVP for all
years for which such returns are due unless an extension for filing any such
return has been filed. Any and all federal, state, county, municipal, local,
foreign and other taxes and assessments, including any and all interest,
penalties and additions imposed with respect to such amounts have been paid or
provided for. The provisions for federal and state taxes reflected in the IVP
Financial Statements are adequate to cover any such taxes that may be assessed
against IVP in respect of its business and its operations during the periods
covered by the IVP Financial Statements and all prior periods.
6.15. No Violation. Consummation of the Exchange will not constitute or
result in a breach or default under any provision of any charter, bylaw,
indenture, mortgage, lease, or agreement, or any
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION PAGE NUMBER 6
- --------------------------------------------------------------------------------
order, judgment, decree, law, or regulation to which any property of IVP is
subject or by which IVP is bound.
7. Conduct of Erebus Pending the Closing. Erebus covenants that between
the date of this agreement and the Closing:
7.1. No change will be made in Erebus's certificate of incorporation or
bylaws.
7.2. Erebus will not make any change in its authorized or issued
capital stock, declare or pay any dividend or other distribution or issue,
encumber, purchase, or otherwise acquire any of its capital stock other than as
provided herein.
7.3. Erebus will use its best efforts to maintain and preserve its
business organization, employee relationships, and goodwill intact, and will not
enter into any material commitment except in the ordinary course of business.
8. Conduct Pending the Closing
IVP, Erebus and the Shareholders covenant that between the date of this
agreement and the Closing as to each of them:
8.1. No change will be made in the charter documents, by-laws, or other
corporate documents of IVP or Erebus.
8.2. Erebus and IVP will use their best efforts to maintain and
preserve their business organization, employee relationships, and goodwill
intact, and will not enter into any material commitment except in the ordinary
course of business.
8.3. None of the Shareholders will sell, transfer, assign, hypothecate,
lien, or otherwise dispose or encumber the Erebus shares of common stock owned
by them.
9. Conditions Precedent to Obligation of Erebus and the Shareholders
Erebus's and the Shareholders' obligation to consummate the Exchange
shall be subject to fulfillment on or before the Closing of each of the
following conditions, unless waived in writing or by acceptance of IVP's shares
by the Shareholders:
9.1. IVP's Representations and Warranties. The representations and
warranties of IVP set forth herein shall be true and correct at the Closing as
though made at and as of that date, except as affected by transactions
contemplated hereby.
9.2. IVP's Covenants. IVP shall have performed all covenants required
by this agreement to be performed by it on or before the Closing.
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION PAGE NUMBER 7
- --------------------------------------------------------------------------------
9.3. Board of Director Approval. This Agreement shall have been
approved by the Board of Directors of IVP.
9.4. Supporting Documents of IVP. IVP shall have delivered to Erebus
and the Shareholders supporting documents in form and substance reasonably
satisfactory to Erebus and the Shareholders, to the effect that:
(a) IVP is a corporation duly organized, validly existing, and in good
standing;
(b) IVP's authorized capital stock is as set forth herein;
(c) Certified copies of the resolutions of the board of directors of
IVP authorizing the execution of this agreement and the consummation hereof;
(d) Secretary's certificate of incumbency of the officers and directors
of IVP;
(e) IVP's Financial Statements and unaudited financial statement from
the date of IVP's Financial Statements to close of most recent fiscal quarter;
and
(f) Any document as may be specified herein or required to satisfy the
conditions, representations and warranties enumerated elsewhere herein.
10. Conditions Precedent to Obligation of IVP
IVP's obligation to consummate the Exchange shall be subject to
fulfillment on or before the Closing of each of the following conditions, unless
waived in writing or by acceptance of Erebus's shares by IVP:
10.1. Erebus's and the Shareholders' Representations and Warranties.
The representations and warranties of Erebus and the Shareholders set forth
herein shall be true and correct at the Closing as though made at and as of that
date, except as affected by transactions contemplated hereby.
10.2. Erebus's and the Shareholders' Covenants. Erebus and the
Shareholders shall have performed all covenants required by this agreement to be
performed by them on or before the Closing.
10.3. Board of Director Approval. This Agreement shall have been
approved by the Board of Directors of Erebus.
10.4. Shareholder Execution. This Agreement shall have been executed by
the required number of shareholders of Erebus.
10.5. Supporting Documents of Erebus. Erebus shall have delivered to
IVP supporting documents in form and substance reasonably satisfactory to IVP to
the effect that:
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION PAGE NUMBER 8
- --------------------------------------------------------------------------------
(a) Erebus is a corporation duly organized, validly existing, and in
good standing;
(b) Erebus's capital stock is as set forth herein;
(c) Certified copies of the resolutions of the board of directors of
Erebus authorizing the execution of this agreement and the consummation hereof;
(d) Secretary's certificate of incumbency of the officers and directors
of Erebus;
(e) Erebus's Financial Statements and unaudited financial statements
for the period from the date of the Erebus's Financial Statements to the close
of the most recent fiscal quarter; and
(f) Any document as may be specified herein or required to satisfy the
conditions, representations and warranties enumerated elsewhere herein.
11. Shareholders' Representative. The Shareholders hereby irrevocably
designate and appoint Cassidy & Associates, Washington, D.C. as their agent and
attorney in fact ("Shareholders' Representative") with full power and authority
until the Closing to execute, deliver, and receive on their behalf all notices,
requests, and other communications hereunder; to fix and alter on their behalf
the date, time, and place of the Closing; to waive, amend, or modify any
provisions of this agreement, and to take such other action on their behalf in
connection with this agreement, the Closing, and the transactions contemplated
hereby as such agent or agents deem appropriate; provided, however, that no such
waiver, amendment, or modification may be made if it would decrease the number
of shares to be issued to the Shareholders hereunder or increase the extent of
their obligation to indemnify IVP hereunder.
12. Survival of Representations and Warranties. The representations and
warranties of Erebus, the Shareholders and IVP set out herein shall survive the
Closing.
13. Arbitration
13.1. Scope. The parties hereby agree that any and all claims (except
only for requests for injunctive or other equitable relief) whether existing
now, in the past or in the future as to which the parties or any affiliates may
be adverse parties, and whether arising out of this agreement or from any other
cause, will be resolved by arbitration before the American Arbitration
Association within the District of Columbia.
13.2. Consent to Jurisdiction, Situs and Judgement. The parties hereby
irrevocably consent to the jurisdiction of the American Arbitration Association
and the situs of the arbitration (and any requests for injunctive or other
equitable relief) within the District of Columbia. Any award in arbitration may
be entered in any domestic or foreign court having jurisdiction over the
enforcement of such awards.
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION PAGE NUMBER 9
- --------------------------------------------------------------------------------
13.3. Applicable Law. The law applicable to the arbitration and this
agreement shall be that of the State of Delaware, determined without regard to
its provisions which would otherwise apply to a question of conflict of laws.
13.4. Disclosure and Discovery. The arbitrator may, in its discretion,
allow the parties to make reasonable disclosure and discovery in regard to any
matters which are the subject of the arbitration and to compel compliance with
such disclosure and discovery order. The arbitrator may order the parties to
comply with all or any of the disclosure and discovery provisions of the Federal
Rules of Civil Procedure, as they then exist, as may be modified by the
arbitrator consistent with the desire to simplify the conduct and minimize the
expense of the arbitration.
13.5. Rules of Law. Regardless of any practices of arbitration to the
contrary, the arbitrator will apply the rules of contract and other law of the
jurisdiction whose law applies to the arbitration so that the decision of the
arbitrator will be, as much as possible, the same as if the dispute had been
determined by a court of competent jurisdiction.
13.6. Finality and Fees. Any award or decision by the American
Arbitration Association shall be final, binding and non-appealable except as to
errors of law or the failure of the arbitrator to adhere to the arbitration
provisions contained in this agreement. Each party to the arbitration shall pay
its own costs and counsel fees except as specifically provided otherwise in this
agreement.
13.7. Measure of Damages. In any adverse action, the parties shall
restrict themselves to claims for compensatory damages and\or securities issued
or to be issued and no claims shall be made by any party or affiliate for lost
profits, punitive or multiple damages.
13.8. Covenant Not to Sue. The parties covenant that under no
conditions will any party or any affiliate file any action against the other
(except only requests for injunctive or other equitable relief) in any forum
other than before the American Arbitration Association, and the parties agree
that any such action, if filed, shall be dismissed upon application and shall be
referred for arbitration hereunder with costs and attorney's fees to the
prevailing party.
13.9. Intention. It is the intention of the parties and their
affiliates that all disputes of any nature between them, whenever arising,
whether in regard to this agreement or any other matter, from whatever cause,
based on whatever law, rule or regulation, whether statutory or common law, and
however characterized, be decided by arbitration as provided herein and that no
party or affiliate be required to litigate in any other forum any disputes or
other matters except for requests for injunctive or equitable relief. This
agreement shall be interpreted in conformance with this stated intent of the
parties and their affiliates.
13.10. Survival. The provisions for arbitration contained herein shall
survive the termination of this agreement for any reason.
14. General Provisions.
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION PAGE NUMBER 10
- --------------------------------------------------------------------------------
14.1. Further Assurances. From time to time, each party will execute
such additional instruments and take such actions as may be reasonably required
to carry out the intent and purposes of this agreement.
14.2. Waiver. Any failure on the part of either party hereto to comply
with any of its obligations, agreements, or conditions hereunder may be waived
in writing by the party to whom such compliance is owed.
14.3. Brokers. Each party agrees to indemnify and hold harmless the
other party against any fee, loss, or expense arising out of claims by brokers
or finders employed or alleged to have been employed by the indemnifying party.
14.4. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given if delivered in person or sent
by prepaid first-class certified mail, return receipt requested, or recognized
commercial courier service, as follows:
If to IVP, to:
IVP Technology Corporation
54 Village Center Place
Mississauga, Ontario L4Z 1V9
If to Erebus, to:
Erebus Corporation
1504 R Street, N.W.
Washington, D.C. 20009
If to the Shareholders, to:
Cassidy & Associates
1504 R Street N.W.
Washington, D.C. 20009
14.5. Governing Law. This agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware.
14.6. Assignment. This agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and assigns; provided,
however, that any assignment by either party of its rights under this agreement
without the written consent of the other party shall be void.
14.7. Counterparts. This agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Signatures sent by
facsimile transmission shall be deemed to be evidence of the original execution
thereof.
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION PAGE NUMBER 11
- --------------------------------------------------------------------------------
14.8. Exchange Agent and Closing Date. The Exchange Agent shall be
Cassidy & Associates, Washington, D.C. The Closing shall take place upon the
fulfillment by each party of all the conditions of the Closing required herein,
but not later than 15 days following execution of this agreement unless extended
by mutual consent of the parties.
14.9. Review of Agreement. Each party acknowledges that it has had time
to review this agreement and, as desired, consult with counsel. In the
interpretation of this agreement, no adverse presumption shall be made against
any party on the basis that it has prepared, or participated in the preparation
of, this agreement.
14.10. Schedules. All schedules attached hereto, if any, shall be
acknowledged by each party by signature or initials thereon.
14.11. Effective Date. This effective date of this agreement shall be
March 21, 2000.
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION PAGE NUMBER 12
- --------------------------------------------------------------------------------
Signature Page to Agreement and Plan of Reorganization
among IVP, Erebus and the Shareholders of Erebus
IN WITNESS WHEREOF, the parties have executed this agreement.
