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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS
ISSUERS PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE
ACT OF 1934
INTERNATIONAL BARTER CORP.
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(Name of Small Business Issuer in its charter)
Nevada, USA 91-1739746
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(State of Incorporation) (IRS Employer Identification No.)
21400 International Blvd. #207, Seattle, Washington 98198
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(Address of principal executive offices)
Issuer's Telephone Number, (206) 870-9290)
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Securities to be registered pursuant to Section 12(b) of the Act:
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None
Securities to be registered pursuant to Section 12(g) of the Act:
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Common Shares, with par value of $0.001
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(Common Stock)
Page 1 of 139
Index to Exhibits on Page 43
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INTERNATIONAL BARTER CORP.
FORM 10-SB
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Item 1. Description of Business.............................. 3
Item 2. Management's Discussion and Analysis
or Plan of Operation................................ 18
Item 3. Description of Property............................. 28
Item 4. Security Ownership of Certain Beneficial Owners
and Management..................................... 29
Item 5. Directors, Executive Officers, Promoters
and Control Persons................................. 31
Item 6. Executive Compensation.............................. 34
Item 7. Certain Relationships and Related Transactions...... 36
Item 8. Legal Proceedings................................... 36
Item 9. Market Price for Common Equity
and Related Stockholder Matters..................... 37
Item 10. Recent Sales of Unregistered Securities............ 38
Item 11. Description of Securities.......................... 39
Item 12. Indemnification of Directors and Officers.......... 40
Item 13. Financial Statements............................... 41
Item 14. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure............. 41
Item 15. Financial Statements and Exhibits.................. 42
</TABLE>
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ITEM 1. DESCRIPTION OF BUSINESS
INTRODUCTION
International Barter Corp. (hereinafter is also referred to as the "Company"
and/or the "Registrant") offers barter services for retail, professional and
corporate clients. The Company provides a centralized barter currency, expansive
purchasing power, centralized data processing, standardized marketing and
support materials, co-op advertising, and ongoing training and promotion and
support to expand its client base.
The Company's head office is located at 21400 International Blvd. #207, Seattle,
Washington 98128. The contact person is Steven White,
Chairman/President/CEO/Treasurer/Director. The telephone number is (206)
870-9290; the facsimile number is (206) 878-7224. The e-mail address is
[email protected] and the Internet website address is: www.ibinc.com.
The Company's authorized capital includes 25,000,000 shares of common stock with
a par value of $0.001; at 3/31/97, the end of the most recent fiscal year,
1,550,000 shares of common stock were outstanding; at 3/26/98, 1,727,800 shares
were outstanding.
The Company's common stock trades on the NASD Electronic Bulletin Board with the
symbol "IBCX-BB".
The information in this Registration Statement is current as of 3/26/98, unless
otherwise indicated.
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HISTORICAL CORPORATE DEVELOPMENT
Incorporation and Merger
The Company was incorporated in Nevada, USA on 9/18/96. The purpose was to be
offered for sale and sold in its shell form prior to the issuance or sale of any
of the corporation's capital stock and/or election of permanent Directors or
Executive Officers and without further organizational procedures or the further
conduct of any business, internal or otherwise; any and all such matters,
privileges and responsibilities being deferred in favor of the new owners.
On 11/15/96, the Company merged with Cascade Trade Association ("CTA"), a
private company incorporated in Washington, USA. The Company was the "surviving
corporation" and obtained 100% of the ownership and debt of CTA through the
purchase of CTA's outstanding common stock through the issuance of 1,000,000
shares of the Company's common stock. CTA shareholders, Steven White and Norma
Fetz received 900,000 and 100,000 shares of the Company, respectively.
Presumably, the shareholders of CTA effected this merger to gain access to a
corporate shell with which to pursue public financing and a public market for
its common stock. The Company's strategic plans include using its common stock
to acquire other firms in the barter business.
CTA was in the barter business at the time of the merger, which became the
continuing business of the Company. CTA reported revenue of $452,673 and
$297,843 for fiscal years ended 3/31/97 and 3/31/96; and $247,574 and $288,545
for its fiscal years ended 12/31/95 and 12/31/94; Net Income (losses) was
($62,672) and $21,250; and ($8,607) and $5,651 for its fiscal years ended
12/31/95 and 12/31/94. Prior to the merger, the assets of CTA were $290,307,
$136,046, $185,741 and $162,910 at 3/31/97, 3/31/96, 12/31/95 and 12/31/94.
The merger was recorded as reverse takeover and the financial statements of CTA
became the historical financial statements of the Company.
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Financings during Fiscal 1997 and through Fiscal 1998-to-date
During January-March 1997, the Company issued 250,000 shares of common stock for
consulting services (deemed value of $125,000), pursuant to a private placement
in the United States under Section 4.2. The recipients were: Master Media Corp.
(an unrelated closely-held private company)(126,000 shares); Neal & Associates,
LLC (an unrelated closely-held private company (62,000 shares); and Dr. Mary
Martin (an unrelated person)(62,000 shares).
During March 1997, the Company completed, pursuant to a private placement in the
United States under Section 504 of Regulation D, a private placement of its
common stock to which 300,000 units were subscribed for $150,000 by 58
investors. Under the terms of the private placement, one "A" warrant and one "B"
warrant was issued with each one share of common stock issued. The warrants are
immediately exercisable and tradable after the closing of the private placement.
Each "A" warrant entitles the holder to purchase one additional share at a price
of $0.75 per share until 9-30-97 (extended to 3-31-98 by corporate resolution).
Each "B" warrant entitles the holder to purchase one additional share at a price
of $1.00 per share until 12/31/97 (extended to 5-31-98 by corporate resolution).
The warrants may be extended upon appropriate notice being given by the Company.
During February 1998, the Company completed, pursuant to a private placement in
the United States under Section 504 of Regulation D, a private placement of its
common stock to which 120,000 shares were subscribed for $72,000 by five
investors. Under the terms of the private placement, one "C" warrant and one "D"
warrant was issued with each one share of common stock issued. The warrants are
immediately exercisable and tradable after the closing of the private placement.
Each "C" warrant entitles the holder to purchase one additional share at a price
of $0.80 per share until 6/30/98. Each "D" warrant entitles the holder to
purchase one additional share at a price of $1.10 per share until 6-30-98. The
warrants may be extended upon appropriate notice being given by the Company.
Also, during February 1998, 57,800 "A" warrants from the March 1997 private
placement were exercised, raising $43,350.
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Proposed Acquisitions
The Company has signed a preliminary acquisition agreement whereby it will
acquire R&B Corporation Inc., a Texas corporation, which reported $825,000 in
revenue during its last year. Compensation is to be 250,000 shares of common
stock. There are several contingencies pending that need to be resolved and
there can be no assurance that this acquisition will be consummated.
The Company has signed a preliminary agreement whereby it will open offices in
Yakima, Washington and Spokane, Washington. The Company has an experienced
manager to run these offices and anticipates that the two locations will be
self-funding and require minimal capital investment by the Company. There are
several contingencies pending that need to be resolved and there can be no
assurance that this offices will be opened.
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BUSINESS
DESCRIPTION OF THE BARTER BUSINESS
Conventional barter is the oldest form of commerce; historically involved a
direct person-to-person exchange of goods and services. Thus, conventional
barter was limited to a transaction between two parties. The development of
modern commercial barter was dependent on the development of an index of
valuation for establishing barter credits and debits. This index of valuation is
the industry-accepted "trade dollar". The trade dollar is a ledger entry by
which goods and services can be bought and sold. *Trade dollars are credited and
debited to each business's trade account, similar to a bank account. Exchange
clientele are serviced by trade brokers who operate in a manner similar to that
of a stock broker. In addition, barter clients can make transactions between
themselves without the services of a trade broker.
Retail trade exchanges are classified as third-party record keepers, having the
same fiduciary obligations as banks and stockbrokers under the Tax Equity and
Fiscal Responsibility Act of 1982. For tax purposes, trade dollars are taxable
in the year earned and reported on 1099B forms to the IRS.
Organized commercial barter is one of the fastest growing industries on the
1990s. The International Reciprocal Trade Association ("IRTA"), a trade group
that prepares annual estimates of commercial bartering in the United States and
Canada, estimates that the total value of products and services bartered by
corporate trade companies and trade exchanges rose to $9 billion during 1996.
Trade exchanges provide a marketplace offering a range of products and services,
such as media, travel, hotels, printing, and business equipment that may be
purchased with trade credits, which are dollar denominated units. The general
premise of retail barter is to generate new business to those that participate
and them to provide avenues to conserve cash flow.
IRTA estimates that trade exchange networks served over 400,000 trade clients in
1996. The average amount of trading by each trade exchange also rose, boosting
barter dollars by trade exchanges to $1.4 billion in 1996 compared with $1.2
billion in 1995 and $1.1 billion in 1994. However, IRTA estimates that less than
5% of the companies in the United States currently use the services of a barter
trade exchange. This virtually untapped market presents growth opportunities for
the barter industry.
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IRTA estimates that there are approximately 400 independent trade exchanges in
the United States and two national companies, ITEX Corporation ("ITEX"), a
public company, and BX International Inc. ("BXI"). The independent trade
exchanges for the most part are local or regional organizations with
approximately 500 clients, five employees, and gross revenue in the $100,000 to
$400,000 range. Significant time and energy is devoted to accounting and
bookkeeping, marketing and sales, and customer service. Most independent barter
exchanges have difficulty expanding beyond this level and tend to stagnate in a
"maintenance" mode of operation. It is difficult to make a great living as an
independent barter exchange owner, whereas a number of brokers in the national
barter exchanges do very well. Therefore, the Company believes that there will
be a tendency toward the creation of more national barter exchanges.
The advent of a global barter marketplace on the Internet will further encourage
firms to incorporate bartering into their business plans to reach new outlets,
ensure against unsold inventory, and finance larger advertising campaigns.
IRTA expects that the number of business engaged in barter in North American
will triple over the next decade. IRTA also expects that the number of clients
of barter companies to grow at 15% during the next decade, the same rate as over
the last decade. This still would represent only a 25% penetration rate of the
over six million businesses that have employees.
Therefore, IRTA anticipates expansion of existing barter exchanges and strong
growth in new start-ups. Independent barter companies account for about half of
the industry's growth. The Company believes that the barter industry would be
stimulated by the emergence of more public barter companies.
The two national companies have experienced significant growth over the last
five years, with ITEX revenue doubling to $29.2 million in their Fiscal 1997
from $14.8 million in Fiscal 1994, although revenue fell in 1997, according to
ITEX's Form 10-K. BXI does not publicly report its revenue.
The Company anticipates that beyond participating in the growth of the industry,
the capturing of market share will require barter companies to expand beyond
single office operations into regional/national organizations with the ability
to service a more diverse and dispersed clientele and the access to growth
capital. In that light the Company has taken the strategic tact of becoming a
public company trading on the NASD Electronic Bulletin Board and registered with
the SEC under the 1934 Act. The Company anticipates the use of its common stock
as a medium of exchange to acquire other barter exchange companies to facilitate
growth.
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BUSINESS
The Company offers barter services for retail, professional and corporate
clients through Area Offices. Currently the Company owns one Area Office
although it plans to acquire more. The Company provides Area Offices a
centralized barter currency, expansive purchasing power, centralized data
processing, standardized marketing and support and materials, co-op advertising,
and ongoing training and promotion and support to expand the Area Offices client
base.
The Company markets the Area Office's clients' products and services to other
clients through directories, newsletters, trade brokers and other means. When
Area Office's clients make barter purchases, the Company (through its software
and relationship with DWW Software) debits "trade dollars from the buyer's
account and credits the seller's account, similar to an ordinary bank account.
Generally, sales are at prevailing retail price and 100% barter. Monthly, Area
Office clients receive an account statement showing all activity for that
period.
The Company charges a 10%-12% cash commission when the client purchases and
monthly fees of $15 cash and $15 trade dollars.
The Company estimates that about 90% of its Area Office transactions reflect
actions of small business, especially those companies broadly defined as retail.
The remaining transactions usually involve corporate barter with companies with
gross sales over $10 million; corporate barter transactions are considerably
larger and more complex than retail barter transactions involving significantly
more time, negotiation and risk to complete.
The Company may effect barter transaction for its own account through its barter
exchange, earning and or paying trade dollars. Also, for corporate barters the
Company usually is acting as a principal party. Such transactions can result in
substantial variability in the Company's reported results; refer to ITEM #2.
Trade Dollars
The Company acts as a third-party record-keeper of client barter transactions
and account balances, which are denominated in trade dollars. A trade dollar is
an accounting unit used by the Company to record the value of barter trades as
established by the parties to the transactions. Trade dollars reflect the right
to receive and/or to provide goods/services available from other exchange
members. The Company does not redeem trade dollars for cash.
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Client Profile
Barter is especially useful to those retail establishments where the variable
costs of its products/services are low; for example, hotels, media, and other
travel-related businesses. The hotel which does not fill its rooms by the end of
the day has lost revenue but still has incurred the large overhead associated
with owning/maintaining its facility. The radio station or newspaper that did
not fill an available advertising space has lost the opportunity to generate
revenue but still experienced virtually the same costs. Similarly, the tradesman
who provides construction services, or haircutting services, or massage
services, or professional services has his time to sell; failure to obtain
customers results in lower profitability.
A typical barter transaction might involve: a dentist needs to have his office
remodeled and through the Company's barter exchange hires a contractor who
agrees to perform the remodeling work for $500 in trade dollars; the dentist has
these trade dollars in his account because he provided dental work to the owner
of a vacation resort in exchange for $500 in trade dollars; and the resort owner
has these trade dollars because the contractor (or any other member of the
barter exchange) stayed at his vacation resort for $500 in trade dollars.
Each of these barter exchange clients probably expanded his revenue and business
through the offering of his services for trade dollars rather than just for
cash. Each of these barter exchange clients has facilitated his lifestyle and
business without the need for cash expenditures.
Each of these barter exchange clients will get at the end of the year, a copy of
the 1099-B form filed with the IRS detailing his transactions.
Broker Licensing and Training
The Company is desirous of opening offices to service clients in cities
throughout the United States. When a qualified operator has been found, he/she
is provided with the necessary materials and information to properly maintain
the new and/or existing accounts. Further, letterhead, envelopes, business
cards, contracts, sales drafts, press kits, and other business-related inventory
is provided to the new office/licensee.
The Company will provide tradebroker training and guidance, as required, in
order to maintain a high broker/client repoire. Systems are explained and a
sales presentation is provided. A proactive approach with the broker is
anticipated to insure the success of his/her operation.
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Company Cost Structure
The Company's operations are substantially fixed cost, related to the expenses
of office space, computers and other equipment, and personnel costs. The Company
estimates that its variable costs associated with each barter account is about
$2; while, the commission are 10%-12% of the value.
The trade brokers receive 25% of their total compensation related to the volume
of barter transactions they complete; however, the Company does incur certain
fixed costs related to their activities.
Profitability for the Company is associated with its ability to generate
sufficient commissions on barter transactions and monthly fees on each account
to cover its costs.
The Company is operating profitably at the present time; however, the nature of
its business is that improved profitability is tied to the Company's ability to
acquire and integrate additional barter exchanges into its current structure.
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Growth Plan
The Company currently owns and operates one Area Office, located in its
headquarters facilities. The Company plans to aggressively acquire select
independent and national franchise barter exchanges to form a national client
base, expanding barter purchasing power, creating a centralized currency,
standardizing marketing and support materials, and providing ongoing training
and promotion to support and expand the Company's client base.
The Company anticipates that some of the acquired barter exchanges will be
company-owned and operated and other will be "licensed" and that both types will
be operated as Area Offices. The Company's management will approach select
independent and national franchise barter exchanges on joining the Company and
becoming an Area Office. The key sell points to become an Area Office are:
data processing;
transactions authorizations, and billing will be centralized;
centralized currency;
expanded trade dollar purchasing power;
equity ownership in a public company;
standardized marketing and support materials; and
a barter board of governors.
The Company anticipates a combination of cash and Company common stock will be
used to acquire barter exchanges.
The Company has announced the preliminary agreement to acquire a barter
exchanges; however, there are contingencies and the acquisition, if completed,
would not close before fiscal yearend, 3/31/98. Further, the Company hopes to
acquire or open 10-15 Area Offices during Fiscal 1999 and an additional fifty
during Fiscal 2000.
Advertising and Promotion
The Company's advertising and promotion strategy is to focus on Area Office
client base development, positioning the Company as a leading barter company
across the country.
The Company anticipates utilizing the following media and methods to drive its
message home to potential barter clients:
industry publications;
local, regional and national print advertising;
direct mail;
Internet; and
radio talk shows.
The Company anticipates that it will budget 2.5% of total sales on its
advertising programs.
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COMPETITION
The Company competes: with about 400 independent barter exchanges each with only
one-to-three barter offices; and with large national barter companies, ITEX
Corporation ("ITEX") and BX International Inc. ("BXI"), each with over 100
barter offices.
All companies charge competitive prices, ranging from 10% to 15% commissions on
purchases/sales and monthly/quarterly or annual fees.
Major cities, like the Seattle metroplex, can have several barter offices;
however, most smaller cities only have one or two barter offices. Most clients
are local and do not require the national barter opportunities offered by the
two large companies. Nevertheless, clients demands for wider availability of
products/ services locally and nationally, strong customer service, and better
computer servicing technology have resulted in a very competitive industry.
STRATEGIC ALLIANCES
The Company is a member of the National Association of Trade Exchanges (NATE)
and Barter Association National Currency (BANC).
Through these relationships the Company gathers information on its business,
fosters increased cooperation between the Company and other barter exchanges,
improves the Company visibility to the barter industry, and facilitates the
Company's competitiveness.
SIGNIFICANT SUPPLIER
The Company relies on DWW Software to supply the software necessary for each
Area Office and the centralized processing of transactions and new client
processing along with a toll-free authorization line. DWW supplies its software
as a stand-alone product to other barter companies for their use on their
computers. However, the Company is the only barter company for whom DWW is
providing centralized processing. This service relieves the Company from the
requirement of having an in-house staff and equipment to process transactions,
keep client records, and supply reports to clients.
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PATENTS/TRADEMARKS/PROPRIETARY PROTECTION
The Company has developed its only client servicing software, BarterServe(R), a
copyrighted and trademarked Windows-based network base of travel information,
providing the Company's clients with a nationwide access to barter
opportunities.
The Company has also copyrighted and trademarked IBC(R) and International Barter
Corp.(R).
The Company has licensing agreements with its Area Office for directories,
newsletters, software, business lists, and corporate policies.
The Company uses TradeWorks(R) and TradeWorks Online(R), products and services
of DWW Software, to provide centralized processing client transactions. The
outsourcing of this service allows the Company to focus its efforts on expanding
its client base and the servicing of existing clients.
Client servicing and the ability to offer an ever expanding variety of barter
product/services is the source of the Company's growth and competitiveness. The
Company anticipates that it will acquire additional barter companies during the
next several years and that this expansion will have the effect of multiplying
the Company's competitiveness.
SEASONALITY
The Company is not aware of any significant seasonal influences on its business.
Rather, the nature of products/services shift modestly with shifts in weather
with no material impact on the totals. The Company has observed a modest upturn
in business during weaker economic times as clients tend to use barter more when
cash business is weaker.
EMPLOYEES
At 3/6/98 the Company operated with the services of its Directors, Executive
Officers, and eight additional employees and consultants, six of which are
full-time. There is no collective bargaining agreement in place. The Company
estimates that successful implementation of its growth plan would result in four
additional employees by the end of Fiscal 1999.
NEED FOR GOVERNMENT APPROVAL OF PRINCIPAL SERVICES. Not Applicable
SPENDING ON RESEARCH AND DEVELOPMENT ACTIVITIES. Not Applicable
COMPLIANCE COSTS/EFFECTS RE: ENVIRONMENTAL LAWS. Not Applicable
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RISK FACTORS
Competition
The Company will continue to attempt, without assurance, to find a niche in the
barter industry. However, there are established entities in this industry which
have greater financial resources and experience than the Company. Accordingly,
the Company will encounter competition in its efforts to expand its barter
business. Another barter company may begin actively acquiring independent trade
exchanges and could acquire the most desirable exchanges. In addition, there can
be no assurance that a group of independent barter exchanges will not join
forces to create another national barter company.
Funds May Be Insufficient to Complete Plans for Growth
The Company believes the proceeds from its recent units offering, existing
working capital, and cash flow from operations will be sufficient to allow the
Company to meet the expected growth in demand for their services. However, there
is no guarantee that this will happen. There is no assurance that the Company
will be able to expand as projected. If market acceptance of there services
slows, margins and profitability may suffer. There is no assurance that the
Company will be able to utilize its common stock as the primary medium of
exchange in its attempt to acquire other barter exchange.
No Guarantee of Future Acquisitions
The Company may fail to acquire a sufficient number of exchanges to develop a
substantial market share of the retail barter exchange industry.
No Guarantee of Continued Growth in Barter Industry
There is no guarantee that the retail barter industry will continue to grow at
the rapid rates of the last several years. In this case, the Company might face
heightened competition with resultant weaken profitability.
Financing Risks
The Company has no history of significant earnings, and due to the nature of its
business, there can be no assurance that the Company will continue to be
profitable. The Company has paid no dividends on its common shares since
incorporation and does not anticipate doing so in the foreseeable future. The
only present source of funds to finance expansion available to the Company is
through the issuance of its equity shares. While the Company may generate
additional working capital through further equity offerings, there is no
assurance that such funds will be available. If available, future equity
financing may result in substantial dilution to purchasers under such offerings.
At present, it is impossible to determine what amounts of additional funds, if
any, may be required.
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Shares Eligible for Future Sale
Sales of a substantial number of shares of the Company's common stock in the
public market could adversely affect the market price. Of the 1,727,800 shares
outstanding at 3/6/98, 477,000 are freely tradable. 1,250,000 shares are
eligible for sale in the public market, subject to compliance with Rule 144
under the Securities Act of 1933, as amended (the "Securities Act"). Rule 144
generally provides that beneficial owners of shares who have held such shares
for one year may sell within a three-month period a number of shares not
exceeding the greater of 1% of the total outstanding shares or the average
trading volume of the share during the four calendar weeks preceding such sale.
The outstanding 1,000,000 shares of restricted common stock held by Executive
Officers and Directors could be sold in accordance with Rule 144 commencing
11/15/97 and at various times thereafter. The 250,000 shares of restricted
common stock issued in stock-for-services transactions could be sold in
accordance with Rule 144 commencing 7/2/98 and at various times thereafter.
300,000 "A" warrants issued in the March 1997 initial public offering are
expected to be exercised before their 3/31/98 expiration date (57,800 "A"
warrants exercised in February 1998); 300,000 "B" warrants issued in the March
1997 initial public offering are expected to be exercised before their 5/31/98
expiration date; the common shares into which these warrants are exercisable
will be freely tradable. 120,000 "C" warrants and 120,000 "D" warrants issued in
the February 1998, secondary public offering are exercisable 6/30/98; the common
shares into which these warrants are exercisable will be freely tradable.
Increased Regulation
The barter industry is a self-regulated industry. The Company is required by the
Federal government to file 1099-B forms for each client transaction on an annual
basis. The Company has obtained all required federal and state/local permits,
licenses, and bonds to operate its facilities. There can be no assurance that
the Company's operations will not be subject to more restrictive government
regulations or that the Company's profitability will not be subject to increased
taxation by federal and state/local agencies.
Key Employees
The success of the Company and its ability to continue to carry on operations is
dependent upon its ability to retain the services of certain key employees and
members of its board of directors. The Company does not have any written
employment agreements in place with its key employees nor its directors and the
loss of their services to the Company may have a material adverse effect on the
Company. The Company's chief executive officer and its corporate secretary are
material shareholders. However, the other two executive officers do not own any
shares. It the Company's intention to initiate a stock option plan for
management and employees as a method of motivation and retaining key employees.
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Penny Stock Reform Act:
Possible Inability to Sell in the Secondary Market
In October 1990, Congress enacted the "Penny Stock Reform Act of 1990" (the
"1990 Act") to counter fraudulent practices common in penny stock transactions.
Rule 3a51-1 of the Exchange Act defines a "penny stock" as an equity that is
not, among other things: a) a reported security; b) a security registered or
approved for registration and traded on a national securities exchange that
meets certain guidelines, where the trade is effected through the facilities of
that national exchange; c) a security listed on NASDAQ (does not include the
NASD Electronic Bulletin Board); d) a security of an issuer that meets certain
minimum financial requirements ("net tangible assets" in excess of $2 million or
$5 million, respectively, depending upon whether the issuer has been
continuously operating for more or less than three years, or "average revenue"
of at least $6 million for the last year); or e) a security with a price of at
least $5.00 per share in the transaction in question or that has a bid quotation
(as defined by the Rule) of at least $5.00 per share. The common stock of the
Company fall within the definition of "penny stock" under Rule 3151-1. Pursuant
to the 1990 Act, brokers provide investors with written disclosure documents
containing information concerning various aspects involved in the market for
penny stocks as well as specific information about the penny stock and the
transaction involving the purchase and sale of that stock (e.g. price quotes and
broker-dealer and associated person compensation). Subsequent to the
transaction, the broker will be required to deliver monthly or quarterly
statements containing specific information about the penny stock. These added
disclosure requirements negatively affect the ability of the purchasers of the
Company's common stock to sell their securities in the secondary market.
Dividends
The Company has not, since the date of its incorporation, declared or paid any
dividends on its common shares and does not currently intend to pay dividends.
Earnings, if any, will be retained to finance further growth and development of
the business of the Company.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
SELECTED FINANCIAL DATA
The selected financial data in Table No. 1 for Fiscal 1997/1996 ended March 31st
was derived from the financial statements of the Company which were audited by
Andersen Andersen & Strong L.C., independent Certified Public Accountants, as
indicated in their report which is included elsewhere in this Registration
Statement. The selected financial data for Fiscal 1995/1994/1993 was derived
from unaudited financial statements of the Company, not included herein.
The selected financial data as at and for the nine month periods ended 12/31/97
and 12/31/96 have been derived from the unaudited financial statements of the
Company, included herein and, in the opinion of management include all
adjustments (consisting solely of normally recurring adjustments) necessary to
present fairly the information set forth therein.
The selected financial data was extracted from the more detailed financial
statements and related notes included herein and should be read in conjunction
with such financial statements and with the information appearing under the
heading, "Management's Discussion and Analysis of Financial Condition and
Results of Operations".
Table No. 1
Selected Financial Data
($ in 000, expect per share data)
<TABLE>
<CAPTION>
Nine Months Year Year Year Year
Ended Ended Ended Ended Ended
12/31/97 3/31/97 3/31/96 12/31/95 12/31/94
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue $515 $453 $298 $248 $289
Net Income (Loss) ($6) ($63) $21 ($9) $6
(Loss) per Share: ($0.01) ($0.04) $2.13 ($0.86) $0.57
Dividends Per Share $0.00 $0.00 $0.00 $0.00 $0.00
Wtg. Avg. Shares (000) 1550 1550 10 10 10
Working Capital $68 $107 ($98) ($6) ($5)
Long-Term Debt 21 33 49 41 56
Shareholders' Equity 133 139 (73) 2 14
Total Assets 228 290 136 186 163
</TABLE>
18
<PAGE> 19
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion of the financial condition, changes in financial
condition and results of operations of the Company for the nine months ended
12/31/97 and the fiscal years ended 3/31/97 and 3/31/96 should be read in
conjunction with the financial statements of the Company and related notes
included therein.
Incorporated on 9/18/96 as a shell company, until the merger noted below, the
Company issued no shares and conducted no business.
On 11/15/96, the Company merged with Cascade Trade Association ("CTA"). The
Company was the "surviving corporation" and obtained 100% of the ownership and
debt of CTA through the purchase of CTA's outstanding common stock through the
issuance of 1,000,000 shares of the Company's common stock.
CTA was in the barter business at the time of the merger, which became the
continuing business of the Company. The merger was recorded as reverse takeover
and the financial statements of CTA became the historical financial statements
of the Company.
CTA, as a corporation, was dissolved during January 1998 with the business of
this formerly wholly-owned subsidiary being absorbed by the Company.
Prior to the merger, CTA financed its activities through internal cash flow.
Since the merger, the Company has financed its activities through the
distribution of equity capital, including the issuance of 250,000 shares for
$125,000 of consulting services, a private placement of 300,000 units for
$150,000; and a private placement of 215,000 units for $129,000 (February 1998 =
Fiscal 1998).
The Company anticipates having to raise additional funds by equity issuance in
the next several years, as the Company expects to grow at rates that will
require more funds than will be generated by profitable operations which the
Company expects to report during Fiscal 1998 and Fiscal 1999. The Company has
had preliminary discussions with various parties regarding the sale of equity
capital; however, there are no definitive agreements and there can be no
assurance that additional equity capital sales can be completed.
19
<PAGE> 20
The barter business creates unique financial reporting because of transactions
being effected in trade dollars as well as cash.
The Company uses the ratio of one trade dollar to one US Dollar in measuring and
recording purchases/sales. This one-to-one ratio is the standard within the
barter industry.
The Company occasionally engages in barter trading for its own account and has a
blended cash-trade purchasing program in which it spends trade dollars and US
Dollars have been earned by the Company to pay for goods and services used by
the Company in its operations.
Any negative trade dollar balance of the Company is shown as a liability in the
balance sheet. The contractual relationship between the Company and clients of
its barter exchange permit the Company to "borrow" trade dollars through the
issuance of trade dollars in excess of the amount specifically earned by the
Company, within certain specified limitations. This provides the Company with
additional liquidity and the opportunity to complete advantageous purchase
transactions that benefit the Company and barter exchange clients. The Company
would be ultimately obligated to provide goods/services to barter exchange
clients to offset any amounts of trade dollars expended in excess of earned.
This could be accomplished by the sale for trade dollars of the assets or offset
against fees charged in trade dollars. At 3/31/96, 3/31/97 and 12/31/97, the
Company had expended $137,823, $98,274 and $46,743 trade dollars in excess of
the amount of trade dollars earned by the Company. The Company has been reducing
this trade dollar liability and considers the current level manageable.
At each balance sheet date, in accordance with generally accepted accounting
principles, any positive trade balance of the Company would be evaluated for net
realizable value. The Company would adjust the carrying value of the trade
dollars if the fair market value of the trade dollars is less than the carrying
value or it is probable that not all trade dollars will be used.
20
<PAGE> 21
Trade Broker Commissions. Trade brokers associated with the Area Office service
the Company's clients. These trade brokers are entitled to a portion of the
commissions collected by the Company from clients of the Company/broker. This
compensation, which is payable within 30 days, typically represents 25% of the
commission collected by the Company.
Stock-based compensation. The Company adopted FASB Statement No. 123,
"Accounting for Stock-Based Compensation" as of 3/31/97. Through 12/31/97, the
Company had no stock option plan or other compensation program that would have
resulted in any reportable data under Statement 123.
Statement 123 also applies to transactions in which a company issues its own
common stock to acquire goods/services from non-employees. Because the Statement
123 method of accounting has not been applied to common stock issued during
Fiscal 1997 for services, the resulting pro forma compensation costs may not be
representative of that to be expected in future years. The implementation of
Statement 123 may have a material effect on the Company's financial statements
and the pro forma disclosures in the notes thereto in future periods; however,
the impact on future years is not known or reasonably estimable.
Revenue Recognition: Cash vs. Trade Dollars
During Fiscal 1995 ended 12/31/95, Fiscal 1996 ended 3/31/96, Fiscal 1997 ended
3/31/97 and the Nine Months Ended 12/31/97, the Company reported $191,467,
$202,349, $301,114 and $221,313 of its revenue as cash and the remaining revenue
in trade dollars.
Business Concentration
No customers accounted for more than 10% of Company trading revenue for Fiscal
1997/1996/1995.
Cash Balances
The Company maintains its major cash balances at one financial institution
located in Las Vegas, Nevada. The balances are insured by the Federal Deposit
Insurance Corporation up to $100,000. At 12/31/97, there were no uninsured cash
balances.
Commitments and Contingencies
The Company leases its office facility in Seattle, Washington. Future minimum
rental commitments pursuant to this lease are $22,200 for Fiscal 1999. Of the
minimal rental commitment due in Fiscal 1999: $15,600 is payable in cash and
$6,600 is payable in trade dollars.
21
<PAGE> 22
LIQUIDITY AND CAPITAL RESOURCES
Fiscal 1998 to Date
Cash Used In Nine Months Ended 12/31/97 Operating Activities totaled ($39,841),
including the ($6,438) Net Loss; the primary adjusting item was ($65,266) net
trade revenue earned over trade costs and $25,161 in net changes in non-cash
operating working capital.
Cash Used in Nine Months Ended 12/31/97 Investing Activities totaled ($13,915).
Cash Used by Nine Months Ended 12/31/97 Financing Activities totaled ($14,855)
which primarily reflected repayment of notes payable.
During February 1998, the Company completed, pursuant to a private placement in
the United States under Section 504 of Regulation D, a private placement of its
common stock to which 120,000 units were subscribed for $72,000 by five
investors. Under the terms of the private placement, one "C" warrant and one "D"
warrant was issued with each one share of common stock issued. The warrants are
immediately exercisable and tradable after the closing of the private placement.
Each "C" warrant entitles the holder to purchase one additional share at a price
of $0.80 per share until 6/30/98. Each "D" warrant entitles the holder to
purchase one additional share at a price of $1.10 per share until 6/30/98. The
warrants may be extended upon appropriate notice being given by the Company.
Also, during February 1998, 57,800 "A" warrants from the March 1997 private
placement were exercised, raising $43,350.
During February 1998, the Company entered into an agreement whereby two Area
Offices would be opened in Spokane, Washington and Yakima, Washington.
Finally, during February 1998, the Company entered into negotiations to acquire
a barter exchange company. The preliminary agreement is subject to numerous
contingencies and there is no assurance that the acquisition will be
consummated.
22
<PAGE> 23
The 300,000 "A" warrants issued in the March 1997 initial public offering are
expected to be exercised before their 3/31/98 expiration date (57,800 exercised
in February 1998), given that the current stock price exceeds the exercise
price. Such exercise is expected to result in the issuance of 300,000 common
shares and the raising of $225,000. The 300,000 "B" warrants issued in the March
1997 initial public offering are expected to be exercised before their 5/31/98
expiration date, given that the current stock price exceeds the exercise price.
Such exercise is expected to result in the issuance of 300,000 common shares and
the raising of $300,000.
The 120,000 "C" warrants and 120,000 "D" warrants issued in the February 1998
secondary unit offering are expected to be exercised before their 6/30/98
expiration date given that the current stock price exceeds the exercise price.
Such exercises are expected to result in the issuance, during Fiscal 1999, of
240,000 common shares and the raising of $228,000.
During Fiscal 1998, the Company anticipates generating about $700,000 in revenue
and $550,000 in gross profits. The Company expects to spend over $500,000 on
selling, general and administrative expenses; the Company expects to report
positive Net Income. Approximately $16,000 is expected to be expended on capital
assets.
With the completion of the February 1998 units offering and the anticipated
exercise of the "A", "B", "C" and "D" warrants, the Company believes that it
will have sufficient working capital to fund all operations through at least
Fiscal 1999.
The Company anticipates that it will acquire and/or open up to a dozen barter
exchanges prior to the end of Fiscal 1999. Such acquisitions are not likely to
result in the Company becoming liable for lease/rent expenses associated with
the facilities of these acquired barter exchanges. Such acquisitions are likely
to result in the Company employing additional employees associated with the
operation of each acquired/opened barter exchange.
The Company is yet unaware of the details of the cash requirements associated
with any possible future acquisitions of other barter exchanges; however, the
Company believes that with the anticipated exercise of the warrants from the
March 1997 units offering and the exercise of the warrants from the February
1998 units offering, sufficient funds will be available to consummate all
planned acquisitions through Fiscal 1999.
If the warrants are not exercised and if existing funds prove insufficient and
if the Company is unsuccessful in raising additional equity capital, the Company
anticipates it will continue to grow, however at a slower pace than presently
planned.
23
<PAGE> 24
Fiscal 1997 Ended 12/31/97 and Fiscal 1996/1995/1994/1993
Cash Used In 1997 Operating Activities totaled $21,768, including the ($62,672)
Net Loss; the primary adjusting items were $125,000 of common stock issued for
services, ($39,549) net trade revenue earned over trade costs, $9,080 in
depreciation, and ($10,221) net changes in non-cash operating working capital.
Cash Used in 1997 Investing Activities totaled zero. Cash provided by 1997
Financing Activities totaled $135,540, which primarily came from the sale of
common stock detailed above and ($14,460) in repayment of notes payable.
Cash Used In 1996 Operating Activities totaled ($36,871), including the $21,250
Net Income; the primary adjusting items were $40,649 net trade revenue earned
over trade costs, $7,395 in depreciation, and ($45,294) net changes in non-cash
operating working capital. Cash Used in 1995 Investing Activities totaled zero.
Cash Used by 1996 Financing Activities totaled ($12,722) which came from the
repayment of notes payable.
24
<PAGE> 25
RESULTS OF OPERATIONS
Fiscal 1998-To-Date and Nine Months Ended 12/31/97
For the Nine Months Ended 12/31/97, revenue increased to $460,615 as a result of
increased fees, an increase in the number and quality of clients, and increases
in corporate trade. Another factor in increased revenue is the maturing client
base; the more a client used the system, the more barter relationships they make
which in turn generates more repeat business.
Gross Profit totaled $334,374, or 73% of revenue. Management attributes the
continued high gross profit margin to investments in new technology, outsourcing
data processing, and centralizing accounts receivable.
Corporate expenses were $408,594 for the first nine months of Fiscal 1998, a
large increase reflecting expanded broker staff, legal/accounting fees related
to the now public company reporting requirements, and additional personnel for
administrative staff. Payroll was the largest category consuming $143,419
compared to $124,841. Taxes were $50,462 and commissions were $26,473.
The Company reported a loss before other income of ($80,919). Other income of
$74,481 reduced the loss.
Net Loss was ($6,438) for the first nine months of Fiscal 1998. Earnings Per
Share was ($0.00).
The weighted average number of shares used in the calculation of Earnings Per
Share was 1,550,000 for the first nine months of Fiscal 1998.
25
<PAGE> 26
Fiscal 1997 Ended March 31, 1997 and Fiscal 1996/1995/1994
The Company has experienced significant revenue growth in the last several
years: $452,673 and $297,843 for fiscal years ended 3/31/97 and 3/31/96; and
$247,574 and $288,545 for fiscal years ended 12/31/95 and 12/31/94,
respectively.
Management attributes this growth to growing awareness by the public of the
advantages of using barter in their daily lives and by businesses in fueling
growth through attracting new customers who use barter.
Gross Profit margins have expanded: 73%, 74%, 70% and 69%. Management attributes
this increased profitability to investments in technology and economies of
scale.
Selling, General and Administrative expenses have risen rapidly:
$395,306 and $184,560 for fiscal years ended 3/31/97 and 3/31/96; and $165,860
and $192,739 for fiscal year ended 12/31/95 and 12/31/94. Management attributes
the Fiscal 1997 to increased preparation for becoming a public company and in
anticipation of an even greater revenue stream; other factors in the rise of
costs include additional personnel and investments in technology.
For Fiscal 1997, the Company reported a loss from Operations of ($60,560)
compared with $20,601. Fiscal 1997 Net Income was ($62,672) compared with
$21,250. Fiscal 1997 Earnings Per Share was ($0.04) compared with $2.13. The
weighted average number of shares used in the calculation of Earnings Per Share
was 1,550,000 for Fiscal 1997 compared with 10,000 for Fiscal 1996; the increase
related to the November 1996 merger between the Company and CTA with the initial
issuance of 1,000,000 shares, the January-March 1997 issuance of 250,000 shares
for services and the March 1997 private placement of 300,000 units of common
stock and warrants.
Fiscal 1996 Ended 3/31/96 Net Income (loss) was $21,250 and Fiscal 1995 Ended
12/31/95 Net Loss was ($8,607). Earning (loss) per Share was $2.13 and ($0.86),
respectively. The weighted average number of shares used in the calculation of
EPS was 10,000 for Fiscal 1996 and Fiscal 1995.
Inflation
The Company's results of operations have not been affected by inflation and
management does not expect inflation to have a material impact on its operations
in the future.
26
<PAGE> 27
FORWARD-LOOKING STATEMENTS
From time-to-time, the Company or its representatives may have made or may make
forward-looking statements, orally or in writing. Such forward-looking
statements may be included in, but not limited to, press releases, oral
statements made with the approval of an authorized executive officer or in
various filing made by the Company with the Securities and Exchange Commission
or other regulatory agencies. Words or phrases "will likely result", "are
expected to", "will continue", " is anticipated", "estimate", "project or
projected", or similar expressions are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 (the "Reform Act"). The Company wishes to ensure that such statements
are accompanied by meaningful cautionary statements, so as to maximize to the
fullest extent possible the protections of the safe harbor established in the
Reform Act. Accordingly, such statements are qualified in their entirety by
reference to and are accompanied by the following discussion of certain
important factors that could cause actual results to differ materially from such
forward-looking statements.
Management is currently unaware of any trends or conditions that could have a
material adverse effect on the Company's financial position, future results of
operations, or liquidity.
However, investors should also be aware of factors that could have a negative
impact on the Company's prospects and the consistency of progress in the areas
of revenue generation, liquidity, and generation of capital resources. These
include: (i) variations in the mix of corporate trade and trade exchange
revenue; (ii) possible inability of the Company to attract investors for its
equity securities or otherwise raise adequate funds from any source, (iii)
increased governmental regulation of the barter business, (iv) a decrease in the
cash fees and commission realized by the Company based on a material decrease in
corporate or retail barter transactions and (v) the inability of the Company to
acquire additional barter exchanges in a timely manner and the inability to
integrate these acquisitions in a profitable manner.
The risks identified here are not inclusive. Furthermore, reference is also made
to other sections of this Registration Statement that include additional factors
that could adversely impact the Company's business and financial performance.
Also, the Company operates in a very competitive and rapidly changing
environment. New risk factors emerge from time to time and it is not possible
for management to predict all such risk factors, nor can it access the impact of
all such risk factors on the Company's business or the extent to which any
factor or combination of factors may cause actual results to differ
significantly from those contained in any forward-looking statements.
Accordingly, forward-looking statements should not be relied upon as a
prediction of actual results.
27
<PAGE> 28
ITEM 3. DESCRIPTION OF PROPERTY
The Company has rented approximately 1,800 square feet of office space at 21400
International Blvd. #207, Seattle, Washington 98198 for administrative efforts
since October 1994. The Company's lease runs through September 1999. The Company
considers the facility adequate for current purposes.
Real Estate Activities
The Company may from time to time invest in real estate as part of its barter
activities for its own account. The Company has no formal policy regarding its
possible investment in real estate, including the percentage of assets which may
be invested in any one investment or the type of real estate, and its
Articles/By-Laws do not require shareholder approval for such investment
activities. Similarly, the Company has no formal policy regarding whether it is
the Company's policy to acquire assets primarily for possible capital gain or
primarily for income. The Company does not expect that real estate investment
will form a substantial portion of its future business activities.
During July 1991, the Company acquired six 10-acre parcels located in Spokane,
Washington for $120,000. The property was sold during August 1991 - November
1994; compensation included ten-year and fifteen-year notes receivables totaling
$37,700 earning interest at rates from 10% to 10.75%, respectively. These notes
receivables (secured by the property) totaled $35,505, $35,072 and $34,333 at
12/31/97, 3/31/97 and 3/31/96, respectively. It was not the Company's intention
to invest capital in real estate mortgages; rather, the terms of the sale were
advantageous and the Company did not expect that such notes receivables would
represent a material portion of the Company's total assets as it implements its
growth plan. The Company's purpose of this investment was primarily for possible
capital gain.
28
<PAGE> 29
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The Registrant is a publicly-owned corporation, the shares of which are owned by
United States residents and Canadian residents. The Registrant is not controlled
directly or indirectly by another corporation or any foreign government. There
are no arrangements which may result in a change of control of the Registrant.
Table No. 2 lists as of 3/26/98 all persons/companies the Registrant is aware of
as being the beneficial owner of more than five percent (5%) of the common stock
of the Registrant.
Table No. 2
5% Shareholders
<TABLE>
<CAPTION>
Title Amount and Nature Percent
of of Beneficial of
Class Name/Address of Beneficial Owner Ownership Class #
- ---------------------------------------------------------------------
<S> <C> <C> <C>
Common Steven M. White (1)(2) 712,500 41.2%
Common New Horizons LP (3) 375,000 19.0%
Common Master Media Corp. (4) 126,000 7.3%
Common Norma K. Fetz (1) 100,000 5.8%
TOTAL 1,313,500 73.3%
</TABLE>
(1) Addresses: c/o International Barter Corp.
21400 International Blvd. #207, Seattle, WA 98198
(2) Excludes 90,000 shares owned by members of Mr. White's family where he does
not have voting power, exercise disposition control, or have any beneficial
interest.
(3) Address: 248 West Park Avenue, Long Beach, NY 11561
Includes 100,000 "A" warrants exercisable before 3/31/98;
Includes 100,000 "B" warrants exercisable before 5/31/98;
Includes 25,000 "C" warrants exercisable before 6/30/98; and
Included 25,000 "D" warrants exercisable before 6/30/98.
(4) Address: 3160 East Desert Road #3542, Las Vegas, Nevada 89121
# Based on 1,727,800 shares outstanding as of 3/26/98 and warrants exercisable
within sixty days held by each individual beneficial owner.
29
<PAGE> 30
Table No. 3 lists as of 3/26/98 all Directors and Executive Officers who
beneficially own the Registrant's voting securities and the amount of the
Registrant's voting securities owned by the Directors and Executive Officers as
a group.
Table No. 3
Shareholdings of Directors and Executive Officers
<TABLE>
<CAPTION>
Title Amount and Nature Percent
of of Beneficial of
Class Name of Beneficial Owner Ownership Class #
- -----------------------------------------------------------------
<S> <C> <C> <C>
Common Steven M. White (1) 712,500 41.2%
Common Norma K. Fetz 100,000 5.8%
TOTAL 812,500 47.0%
</TABLE>
(1) Excludes 90,000 shares owned by members of Mr. White's family where he does
not have voting power, exercise disposition control, or have any beneficial
interest.
# Based on 1,727,800 shares outstanding as of 3/26/98.
30
<PAGE> 31
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS
Table No. 4 lists as of 3/26/98 the names of the Directors of the Company. The
Directors have served in their respective capacities since their election at the
9/30/97 Annual Meeting of Shareholders and will serve until the next Annual
Shareholders' Meeting or until a successor is duly elected, unless the office is
vacated in accordance with the Articles/By-Laws of the Company. All Directors
are residents and citizens of the USA.
Table No. 4
Directors
<TABLE>
<CAPTION>
Date First Elected
Name Age or Appointed
- -----------------------------------------------------------------
<S> <C> <C>
Richard Mayer 58 September 1996
Glen T. White 43 November 1997
Steven M. White 39 September 1996
Alan Zimmelman 53 November 1997
(1) Member of Audit Committee.
</TABLE>
Table No. 5 lists, as of 3/26/98, the names of the Executive Officers and
certain significant employees of the Company. The Executive Officers serve at
the pleasure of the Board of Directors. All Executive Officers are
residents/citizens of the United States.
Table No. 5
Executive Officers/Significant Employees
<TABLE>
<CAPTION>
Name Position Date of Board Approval
- -----------------------------------------------------------------------
<S> <C> <C>
Steven M. White Chairman/President/CEO/Treasurer September 1996
Norma K. Fetz Corporate Secretary September 1996
Richard Mayer VP Marketing/Sales Director September 1996
Alan Zimmelman VP Operations September 1997
</TABLE>
31
<PAGE> 32
Business Experience
Norma K. Fetz, age 42, has over xxxxxx years in sales, management and corporate
operations, including over thirteen years affiliated with companies involved in
the barter business. From April 1984 until the merger with the Company, she was
Vice President of Cascade Trade Association, a private company involved in the
barter business. She spends less than one-fourth of her time on the affairs of
the Company.
Richard Mayer has over thirty years experience in sales and management,
including over six years affiliated with companies involved in the barter
business. From 1960 until 1989, he was with General Electric Capital Corp. From
April 1989 until November 1995, he was the owner of Money Mailer of the Sound, a
private company involved in direct mail. From November 1995 until the merger
with the Company, he was Vice President Marketing of Cascade Trade Association,
a private company involved in the barter business. He spends full time on the
affairs of the Company.
Glen T. White has over twenty years experience in management. Since June 1977,
he has been in the US Navy and currently holds the rank of Commander. He spends
less than 10% of his time on the affairs of the Company.
Steven M. White has over nineteen years experience in sales and management,
including over fifteen years affiliated with companies involved in the barter
business. From July 1983 until the merger with the Company, he was President of
Cascade Trade Association, a private company involved in the barter business. He
has been on the Board of Directors of the National Association of Trade
Exchanges ("NATE") since 1995 and is President for 1998-1999; he also serves on
the Board of Directors of BANC (Barter Association National Currency). He spends
full time on the affairs of the Company.
Alan Zimmelman has over twenty-six years experience in sales and management,
including over ten years affiliated with companies involved in the barter
business, twelve years affiliated with companies in the hotel industry and five
years affiliated with companies in hospital administration. From November 1987
until August 1996, he was President of BXI West Los Angeles, a private company
involved in the barter business. He joined the Company in September 1996 and was
appointed VP Operations in September 1997. He spends full time on the affairs of
the Company.
32
<PAGE> 33
Involvement in Certain Legal Proceedings
There have been no events during the last five years that are material to an
evaluation of the ability or integrity of any director, person nominated to
become a director, executive officer, promoter or control person including: a)
any bankruptcy petition filed by or against any business of which such person
was a general partner or executive officer either at the time of the bankruptcy
or within two years prior to that time; b) any conviction in a criminal
proceeding or being subject to a pending criminal proceeding (excluding traffic
violations and other minor offenses); c) being subject to any order, judgment,
or decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently enjoining, barring, suspending or otherwise
limiting his/her involvement in any type of business, securities or banking
activities; and d) being found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the judgment has
not been reversed, suspended, or vacated.
Family Relationships
Glen T. White is the brother of Steven M. White.
Other Relationships/Arrangements
There are no arrangements or understandings between any two or more Directors or
Executive Officers, pursuant to which he/she was selected as a Director or
Executive Officer. There are no material arrangements or understandings between
any two or more Directors or Executive Officers.
33
<PAGE> 34
ITEM 6. EXECUTIVE COMPENSATION
The Company has no standard or any other arrangements pursuant to which
Directors are compensated for any services provided as a director, including any
additional amounts payable for committee participation or special assignments.
During the last completed fiscal year, no Director received and/or accrued any
compensation for his services as a Director, including committee participation
and/or special assignments.
Directors are entitled to reimbursement for reasonable travel and other
out-of-pocket expenses incurred in connection with attendance at meetings of the
Board of Directors.
The Company has no material bonus or profit sharing plans pursuant to which cash
or non-cash compensation is or may be paid to the Company's Directors or
Executive Officers.
The Company has no compensatory plan or arrangements, including payments to be
received from the Registrant, with respect to any Executive Officer or Director,
where such plan or arrangement would result in any compensation or remuneration
being paid resulting from the resignation, retirement or any other termination
of such Executive Officer's employment with the Registrant or from a
change-in-control of the Registrant or a change in such Executive Officer's
responsibilities following a change-in-control and the amount, including all
periodic payments or installments, where the value of such compensation or
remuneration exceeds $100,000 per Executive Officer.
During the last completed fiscal year, no funds were set aside or accrued by the
Company to provide pension, retirement or similar benefits for Directors or
Executive Officers.
The Company has no stock option plan, long-term incentive plan, or other
long-term compensation program and no stock options/SARs have been granted in
the last three years and no stock options/SARs are outstanding.
The Company has no written employment agreements.
34
<PAGE> 35
Table No. 6 details compensation paid during Fiscal 1997 Ended 3/31/97 to the
Chief Executive Officer and the next four highly paid Executive Officers, to the
extent they were compensated in excess of $100,000. The table also lists
aggregate compensation paid to all Executive Officers to the extent they were
not compensated in excess of $100,000 and aggregate compensation to all
Executive Officers. Compensation paid prior to the Registrant's 11/15/96 merger
with CTA reflects compensation paid by CTA. CTA had a December 31st fiscal year
prior to the merger.
Table No. 6
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
Name and ------------------------------ All
Principal Fiscal Other Annual Other
Position Year Salary Bonus Compensation Compensation
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Steven White, CEO 1997 $73,000 $0 $0 $0
1996 $20,000 0 0 0
Calendar 1995 $32,000 0 0 0
Other Officers/Directors 1997 $32,319 $0 $0 $0
1996 $11,484 0 0 0
Calendar 1995 $14,749 0 0 0
</TABLE>
35
<PAGE> 36
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Steven White/Richard Mayer/Norma K. Fetz and CTA Prior to Merger Mr. White and
Mr. Mayer were appointed Directors of the Company and Mr. White and Ms. Fetz
were appointed Executive Officers of the Company prior to the merger with CTA
where they were Executive Officers and/or shareholders.
Other than discussed above, there have been no transactions since 3/31/95, or
proposed transactions, which have materially affected or will materially affect
the Company in which any Director, Executive Officer, or beneficial holder of
more that 10% of the outstanding common stock, or any of their respective
relatives, spouses, associates or affiliates has had or will have any direct or
material indirect interest. Management believes the tran-sactions referenced
above were on terms at least as favorable to the Company as the Company could
have obtained from unaffiliated parties.
ITEM 8. LEGAL PROCEEDINGS
The Company knows of no material, active or pending legal proceedings against
them; nor is the Company involved as a plaintiff in any material proceeding or
pending litigation.
The Company knows of no active or pending proceedings against anyone that might
materially adversely affect an interest of the Company.
36
<PAGE> 37
ITEM 9. MARKET PRICE FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
The Company's common stock trades on the NASD Electronic Bulletin Board in the
United States, having the trading symbol "IBCX" and CUSIP# 459108-10-6. The
common stock commenced public trading on 2/12/98.
Trading volume and high/low/closing prices from 2/12/98 through 3/20/98 was
203,100 shares and $2.00/$1.125/$1.25, respectively. These quotations reflect
may reflect inter-dealer prices, without retail mark-up/mark-down/commission,
and may not reflect actual transactions.
The Company's common stock is issued in registered form. Securities Transfer
Corporation (located in Dallas, Texas) is the registrar and transfer agent for
the common stock.
On 3/4/98, the shareholders' list for the Company's common shares showed 89
registered shareholders and 1,727,800 shares outstanding, including 79
registered holders in the United States holding 1,456,300 shares and six non-USA
registered holders holding 120,200 shares.
As of 3/4/98, the Company estimates that there are 79 "holders of record" of its
common stock resident in the United States holding the above referenced
1,456,300 shares.
As of 3/4/98, the Company estimates there are over 100 total beneficial
shareholders of its common stock.
As of 3/4/98, the Company estimates that it had 56 holders of its 245,600 "A"
warrants, issued in the January-March 1997 private placement. Forty-nine of
these shareholders are resident in the United States holding 90,100 "A"
warrants.
As of 3/4/98, the Company estimates that it had 57 holders of its 296,600 "B"
warrants, issued in the January-March 1997 private placement. Fifty of these
shareholders are resident in the United States holding 141,100 "B" warrants.
As of 3/4/98, the Company estimates that it had five holders of its "C" and "D"
warrants, issued in the February 1998 private placement. Three of these
shareholders are resident in the United States holding 57,000 "C" and "D"
warrants.
There are no restrictions that limit the Company's ability to pay dividends on
its common stock. The Company has not declared any dividends since incorporation
and does not anticipate that it will do so in the foreseeable future. The
present policy of the Company is to retain future earnings for use in its
operations and expansion of its business.
37
<PAGE> 38
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
On 11/15/96, the Company merged with Cascade Trade Association ("CTA"), a
private company incorporated in Washington, USA. The Company was the "surviving
corporation" and obtained 100% of the ownership and debt of CTA through the
purchase of CTA's outstanding common stock through the issuance of 1,000,000
shares of the Company's common stock. CTA shareholders, Steven M. White and
Norma K. Fetz received 900,000 and 100,000 shares of the Company, respectively.
During January-March 1997, the Company issued 250,000 shares of common stock for
consulting services (deemed value of $125,000), pursuant to a private placement
in the United States under Section 4.2 of the 1933 Act. The recipients were:
Master Media Corp. (an unrelated closely-held private company)(126,000 shares);
Neal & Associates, LLC (an unrelated closely-held private company)(62,000
shares); and Dr. Mary Martin (an unrelated person)(62,000 shares).
During March 1997, the Company completed, pursuant to a private placement in the
United States under Section 504 of Regulation D, a private placement of its
common stock to which 300,000 units were subscribed for $150,000 by 58
investors. Under the terms of the private placement, one "A" warrant and one "B"
warrant was issued with each one share of common stock issued. The warrants are
immediately exercisable and tradable after the closing of the private placement.
Each "A" warrant entitles the holder to purchase one additional share at a price
of $0.75 per share until 9/30/97 (extended to 3/31/98 by corporate resolution).
Each "B" warrant entitles the holder to purchase one additional share at a price
of $1.00 per share until 12/31/97 (extended to 5/31/98 by corporate resolution).
The warrants may be extended upon appropriate notice being given by the Company.
During February 1998, the Company completed, pursuant to a private placement in
the United States under Section 504 of Regulation D, a private placement of its
common stock to which 120,000 units were subscribed for $72,000 by five
investors. Under the terms of the private placement, one "C" warrant and one "D"
warrant was issued with each one share of common stock issued. The warrants are
immediately exercisable and tradable after the closing of the private placement.
Each "C" warrant entitles the holder to purchase one additional share at a price
of $0.80 per share until 6/30/98. Each "D" warrant entitles the holder to
purchase one additional share at a price of $1.10 per share until 6/30/98. The
warrants may be extended upon appropriate notice being given by the Company.
Also, during February 1998, 57,800 "A" warrants from the March 1997 private
placement were exercised, raising $43,350.
38
<PAGE> 39
ITEM 11. DESCRIPTION OF SECURITIES
Common Stock
The authorized capital of the Registrant is 25,000,000 shares of common stock
with par value of $0.001 of which 1,550,000 were issued and outstanding at
3/31/97, the end of the most recent fiscal year. At 3/26/98, there were
1,727,800 shares of common stock outstanding.
All of the authorized common stock of the Registrant are of the same class and,
once issued, rank equally as to dividends, voting powers, and participation in
assets. Holders of common stock are entitled to one vote for each share held of
record on all matters to be acted upon by the shareholders.
Holders of common stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors, in its discretion, out of
funds legally available therefore.
Upon liquidation, dissolution or winding up of the Registrant, holders of common
stock are entitled to receive pro rata the assets of the Registrant, if any,
remaining after payments of all debts and liabilities. No shares have been
issued subject to call or assessment. There are no pre-emptive or conversion
rights and no provisions for redemption or purchase for cancellation, surrender,
or sinking or purchase funds.
There are no restrictions on the repurchase or redemption of shares of the
Registrant while there is any arrearage in the payment of dividends or sinking
fund installments.
Debt Securities to be Registered. Not applicable.
Other Securities to be Registered. Not applicable.
39
<PAGE> 40
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's By-Laws address indemnification under Article V.
The corporation shall indemnify any and all of its Directors and Officers, and
it former Directors and Officers, or any person who may have served at the
corporation's request as a Director or Officer of another corporation in which
it owns shares of capital stock or of which it is a creditor, against expenses
actually and necessarily incurred by them in connection with the defense of any
action, suit or proceeding in which they, or any of them, are made parties, or a
party, by reason of being or having been Director(s) or Officer(s) of the
corporation, or of such other corporation, except, in relation to matters as to
which any such Director or Officer or former Director or Officer or person shall
be judged in such action, suit or proceeding to be liable for negligence or
misconduct in the performance of duty. Such indemnification shall not be deemed
exclusive of any other rights to which those indemnified may be entitled, under
By-Law, agreement, vote of shareholders or otherwise.
40
<PAGE> 41
ITEM 13. FINANCIAL STATEMENTS
The financial statements and notes thereto as required under ITEM #13 are
attached hereto and found immediately following the text of this Registration
Statement. The audit report of Andersen Andersen & Strong LC, independent
Certified Public Accountants, is included herein immediately preceding the
financial statements.
Audited Financial Statements
for Fiscal 1997/1996 Ended March 31st
Unaudited Interim Financial Statements
for the Nine Months Ended 12/31/97
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
Not Applicable
41
<PAGE> 42
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS
The financial statements and notes thereto as required under ITEM #13 are
attached hereto and found immediately following the text of this Registration
Statement. The audit report of Andersen Andersen & Strong LC, independent
Certified Public Accountants, for the audited financial statements and notes
thereto is included herein immediately preceding the audited financial
statements.
(A-1) Audited Financial Statements:
Fiscal 1997/1996 Ended March 31st
Auditor's Report, dated 8/11/97
Consolidated Balance Sheets at 3/31/97 and 3/31/96
Consolidated Statements of Operations
for the fiscal years ended 3/31/97 and 3/31/96
Consolidated Statements of Cash Flows
for the fiscal years ended 3/31/97 and 3/31/96
Consolidated Statements of Stockholders' Equity
for the fiscal years ended 3/31/97 and 3/31/96
Notes to Financial Statements
(A-2) Unaudited Interim Financial Statements
Nine Months Ended December 31, 1997
Consolidated Balance Sheets at 12/31/97 and 3/31/97
Consolidated Statements of Operations
for the Nine Months ended 12/31/97 and
for the Twelve Months ended 12/31/96
Consolidated Statements of Cash Flow
for the Nine Months ended 12/31/97
for the Twelve Months ended 12/31/96
Consolidated Statements of Stockholders' Equity
for Fiscal 1996/1997 and the Nine Months Ended 12/31/97
Notes to Financial Statements
42
<PAGE> 43
(B) INDEX TO EXHIBITS:
3. Corporate Charter/Certificate of Existence/
Articles of Incorporation/By-Laws of the Company ....... 61
4. Instruments Defining Rights of Security Holders.
- Refer to Exhibit No. 3. -
6. Opinion re: Discount on Capital Shares. Not Applicable
7. Opinion re: Liquidation Preference. Not Applicable
9. Voting Trust Agreements. Not Applicable
10. Material Contracts:
a. Merger Agreement for CTA, dated 11/15/96 .......... 81
11. Statement re: Computation of EPS. Not Applicable
12. Statement re: Computation of Ratios. Not Applicable
14. Material Foreign Patents. Not Applicable
16. Letter re: Change of Accountant. Not Applicable
21. Subsidiaries of the Registrant. Not Applicable
24. Power of Attorney. Not Applicable
27. Financial Data Schedule. Not Applicable
28. Information from Reports Furnished to State Insurance
Regulatory Authorities. Not Applicable
99. Other Material Documents:
a. Information Statement regarding 300,000 unit
private placement, dated 1/3/97 ................... 84
b. Final Form D regarding 300,000 unit
private placement, dated 1/3/97 ................... 98
c. Final NY Form M-11 regarding 300,000 unit
private placement, dated 1/3/97 ................... 102
d. Information Statement regarding 120,000 unit
private placement, dated 2/7/98 ................... 107
e. Final Form D regarding 120,000 unit
private placement, dated 2/7/98 ................... 121
f. Final NY Form M-11 regarding 120,000 unit
private placement, dated 2/7/98 ................... 126
g. Notice/Agenda/Minutes regarding
Annual Meeting of Shareholders held 9/30/97 ....... 131
SIGNATURE PAGE ....................................... 139
43
<PAGE> 44
[[ANDERSEN ANDERSEN & STRONG, L.C. LETTERHEAD]
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors
of International Barter Corp. and Subsidiary
Seattle, Washington
We have audited the consolidated financial statements of International Barter
Corp. and subsidiary for the years ended March 31, 1997 and 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of International
Barter Corp. and subsidiary as of March 31, 1997 and 1996, and the results of
their operations and their cash flows for the years then ended, in accordance
with generally accepted accounting principles.
/s/ ANDERSEN ANDERSEN & STRONG
August 11, 1997
Salt Lake City, Utah
<PAGE> 45
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 2) $ 162,327 $ 5,019
Accounts receivable, net of allowance for
doubtful accounts of $5,860 and 5,208 (Note 2) 58,936 52,661
Notes receivable - current (Note 3) 2,052 2,300
Other current assets 2,056 1,869
--------- ---------
Total Current Assets 225,371 61,849
--------- ---------
PROPERTY AND EQUIPMENT, at cost, net of
accumulated depreciation (Notes 2 and 5) 25,364 34,444
--------- ---------
OTHER ASSETS
Notes receivable - noncurrent (Note 3) 35,072 34,953
Deposits 4,500 4,800
--------- ---------
Total Other Assets 39,572 39,753
--------- ---------
$ 290,307 $ 136,046
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 444 $ 943
Trade Dollars issued in excess of earned (Notes 2 and 6) 98,274 137,823
Current portion of long-term debt (Note 7) 15,978 14,404
Other current liabilities 3,582 7,141
--------- ---------
Total Current Liabilities 118,278 160,311
--------- ---------
LONG-TERM DEBT (Note 7) 32,905 48,939
--------- ---------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.001 par value in 1997 and no par value in
1996; authorized 25,000,000 shares in 1997 and 50,000
shares in 1996; issued and outstanding 1,250,000
shares in 1997 and 10,000 shares in 1996 (Notes 1 and 8) 1,250 8,101
Additional paid-in capital (Note 8) 131,851 --
Subscribed shares, 300,000 shares in 1997 (Note 8) 150,000
Accumulated deficit (143,977) (81,305)
--------- ---------
Total Stockholders' Equity (Deficit) 139,124 (73,204)
--------- ---------
$ 290,307 $ 136,046
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE> 46
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
REVENUE $ 452,673 $ 297,843
COST OF SALES 108,847 75,287
----------- -----------
Gross Profit 343,826 222,556
----------- -----------
OPERATING EXPENSES
Selling, general and administrative 395,306 184,560
Depreciation 9,080 7,395
----------- -----------
Total Operating Expenses 404,386 191,955
----------- -----------
Income (Loss) from Operations (60,560) 30,601
----------- -----------
OTHER INCOME (EXPENSE)
Interest income 4,028 3,005
Interest expense (6,010) (7,635)
----------- -----------
Total Other Income (Expense)-net (1,982) (4,630)
----------- -----------
Net Income (Loss) Before Income Taxes (62,542) 25,971
Income Tax Expense (Notes 2 and 9) 130 4,721
----------- -----------
Net Income (Loss) $ (62,672) $ 21,250
=========== ===========
Net Income (Loss) Per Common Share (Note 2) $ (.04) $ 2.13
=========== ===========
Weighted Average Common Shares Outstanding 1,550,000 10,000
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE> 47
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (62,672) $ 21,250
Adjustments to reconcile net income (loss) to cash
provided by operating activities:
Depreciation 9,080 7,395
Stock issued for services 125,000 --
Deferred income taxes 130 (531)
Net trade revenue earned over trade costs (39,549) 40,649
Changes in operating assets and liabilities:
Accounts receivable (6,275) (9,263)
Contracts receivable 129 840
Prepaids and other assets 113 --
Accounts payable and other liabilities (4,188) (36,871)
--------- ---------
Net Cash Provided by Operating Activities 21,768 23,469
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES -- --
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from subscribed stock 150,000 --
Repayment of notes payable (14,460) (12,722)
--------- ---------
Net Cash Provided (Used) by Financing Activities 135,540 (12,722)
--------- ---------
Net Increase in Cash 157,308 10,747
Cash at Beginning of Period 5,019 (5,728)
--------- ---------
Cash at End of Period $ 162,327 $ 5,019
========= =========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest $ 5,785 $ 7,445
Cash paid for income taxes 5,000 --
NON-CASH INVESTING AND FINANCING ACTIVITIES
Auto purchased with Trade Dollars $ -- $ 25,588
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE> 48
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
ADDITIONAL
COMMON STOCK PAID-IN SUBSCRIBED ACCUMULATED
SHARES AMOUNT CAPITAL STOCK DEFICIT TOTAL
--------- --------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT APRIL 1, 1995 10,000 $ 8,101 $ -- $ -- $(102,555) $ (94,454)
Net income -- -- -- -- 21,250 21,250
--------- --------- --------- --------- --------- ---------
BALANCE AT MARCH 31, 1996 10,000 8,101 -- -- (81,305) (73,204)
Exchange of 1 share of CTA for 100
shares of IBC; change from no par
to $.001 per share. (Notes 1 and 8) 990,000 (7,101) 7,101 -- -- --
Stock issued for services at $.50 per share 250,000 250 124,750 -- -- 125,000
Shares subscribed at $.50 per share -- -- -- 150,000 -- 150,000
Net loss -- -- -- -- (62,672) (62,672)
--------- --------- --------- --------- --------- ---------
BALANCE AT MARCH 31, 1997 1,250,000 $ 1,250 $ 131,851 $ 150,000 $(143,977) $ 139,124
========= ========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE> 49
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997 AND 1996
1. DESCRIPTION OF BUSINESS AND ORGANIZATION
The Company is engaged in operations in the retail barter exchange area of the
commercial barter industry. The Company acts as a third-party record-keeper of
clients' transactions and balances, which are denominated in Trade Dollars. A
Trade Dollar is an accounting unit used to record the value of trades as
determined by the buying and selling parties in barter transactions. Trade
Dollars denote the right to receive goods or services available from other
clients or the obligation to provide goods or services to other clients. Trade
Dollars may not be redeemed for cash. Trade Dollars are not legal tender,
securities, or commodities. Clients pay cash and Trade Dollar fees and
commissions to the Company. For these services, the Company typically receives a
cash commission of 10% on the purchases made by clients.
The Company operates with the objectives of long-term equity-building while also
ensuring availability of sufficient cash for current operating requirements.
Accordingly, the Company may in any period report significant revenue, profits,
and increases in net assets from transactions denominated in Trade Dollars or
other noncash consideration.
International Barter Corp. (IBC) was incorporated on September 18, 1996, in the
State of Nevada. On November 15, 1996, IBC effected a merger agreement with
Cascade Trade Association (CTA) wherein IBC issued 1,000,000 shares of stock in
exchange for 10,000 shares (100%) of the issued and outstanding stock of CTA.
The corporate existence of CTA will cease to exist upon the filing of
appropriate articles of merger, after a suitable transition period in which both
entities will operate. For accounting purposes, the acquisition has been treated
as a reverse acquisition; the acquisition of IBC by CTA and as a
recapitalization of CTA. The historical financial statements prior to November
15, 1996 are those of CTA.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary. Intercompany transactions have been eliminated.
Trade Dollar Transactions
Normal Valuation of Trade Dollars. The Company uses the ratio of one Trade
Dollar to one United States dollar in measuring and accounting for purchases and
sales. This one-for-one ratio is the pervasive standard with the Company and
throughout the barter industry. The Company does not recognize any accounting
implications if differences are observed between trade dollar and U. S. dollar
prices that are within reasonable ranges that might exist between prices of
similar U.S. dollar transaction.
<PAGE> 50
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997 AND 1996
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)-
Trade Dollar Valuation in the Statements of Operations and the Balance Sheets.
The ratio of $1 per Trade Dollar is applicable to revenue and costs and expenses
in the statement of operations.
The negative Trade Dollar balance of the Company is shown as a liability in the
balance sheet. This occurs as a result of the Company "borrowings" trade dollars
through the issuance of Trade Dollars in excess of the amounts earned by the
Company.
At each balance sheet date, in accordance with generally accepted accounting
principles, any positive trade dollar balance of the Company would be evaluated
for net realizable value. The Company would adjust the carrying value of the
trade dollars if the fair value of the trade dollars is less than the carrying
value of it is probable that not all trade dollars will be used.
Information that would be used to support the net realizable value of a
significant positive trade dollar balance at a balance sheet date would include
the Company's past track record of utilizing Trade Dollars, evident ability and
intent to utilize the Trade Dollars in a reasonable time, indicated by the
quantity of Trade Dollars relative to the size of the Company's procurement
budget for items the Trade Dollars may be used for, and preparation of a trade
plan for timely utilization on a $1 per Trade Dollar basis for goods and
services that will be available.
Revenue Recognition
The Company recognizes revenue equal to the cash to be received from the
commission earned when the buyer has made an unconditional commitment to pay and
the earnings process has been completed by the finalization of a trade
transaction.
Income Taxes
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the bases of certain assets and
liabilities for financial and tax reporting. The deferred taxes represent the
future tax return consequences of those differences which will either be taxable
or deductible when the assets and liabilities are recovered or settled.
Income (Loss) Per Share
Income (loss) per share of common stock is computed on the basis of the weighted
average shares of common stock outstanding, plus common equivalent shares
arising from the effect of dilutive stock warrants using the modified treasury
stock method, and net income increased for debt reduction and investment in
short-term paper from the hypothetical exercise of warrants.
<PAGE> 51
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997 AND 1996
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)-
Depreciation and Amortization
Property and equipment are stated at cost. Depreciation is computed on the
straight-line method for financial statement purposes. Estimated useful lives
range from 5 to 7 years.
Allowance for Uncollectible Accounts
The Company provides an allowance for accounts receivable which are doubtful of
collection. The allowance is based upon management's periodic analysis of
receivables, evaluation of current economic conditions, and other pertinent
factors. Ultimate losses may vary from the current estimates and, as additions
to the allowance become necessary, are charged against earnings in the period in
which they become known. Losses are charged and recoveries are credited to the
allowance.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amount of assets, liabilities, revenue,
expenses, gains and losses, and also disclosures about contingent assets and
liabilities. Actual results may vary from estimates and assumptions that were
used in preparing the financial statements.
Concentration of Credit Risk Arising from Cash Deposits in Excess of Insured
Limits
The company maintains its major cash balances at one financial institution
located in Seattle, Washington. The balances are insured by the Federal Deposit
Insurance Corporation up to $100,000. At March 31, 1997, the Company's
uninsured cash balances total $62,327.
3. NOTES RECEIVABLE
At March 31, 1997 and 1996, notes receivable consisted of the following:
<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Note receivable from individual, payable over a ten-year period
in monthly installments of $125, including
interest at 10% per annum (collateralized by real estate) $11,516 $ --
Note receivable from individual, payable over a ten-year period
in monthly installments of $185, including interest at
10% per annum (collateralized by real estate) 12,893 13,430
</TABLE>
<PAGE> 52
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997 AND 1996
3. NOTES RECEIVABLE (continued)-
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Note receivable from individual, payable over a fifteen-year
period in monthly installments of $146, including interest at
10.75% per annum (payments in arrears) (collateralized
by real estate) $ 12,715 $ 12,715
Note receivable from individual, payable over a fifteen-year
period in monthly installments of $146, including interest
at 10.75% per annum (collateralized by real estate) -- 11,108
-------- --------
37,124 37,253
Less current portion (2,052) (2,300)
-------- --------
$ 35,072 $ 34,953
======== ========
</TABLE>
4. FAIR VALUES OF FINANCIAL INSTRUMENTS
The Company estimates that the fair value of all financial instruments at
March 31, 1997 and 1996 does not differ materially from the aggregate carrying
values of its financial instruments recorded in the accompanying balance sheets.
5. PROPERTY AND EQUIPMENT
At March 31, 1997 and 1996, property and equipment consisted of the following:
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
Equipment $ 81,170 $ 81,170
Furniture and fixtures 15,280 15,280
Leasehold improvements 19,706 19,706
Automobile 25,588 25,588
--------- ---------
141,744 141,744
Less, accumulated depreciation (116,380) (107,300)
--------- ---------
$ 25,364 $ 34,444
========= =========
</TABLE>
Depreciation expense for the years ending March 31, 1997 and 1996, was $9,080
and $7,395, respectively.
6. EXCESS OF TRADE DOLLARS ISSUED OVER TRADE DOLLARS EARNED
At March 31, 1997 and 1996, the Company had expended 98,274 and 137,823 Trade
Dollars respectively, in excess of the amount of Trade Dollars earned by the
Company. This situation is commonly referred to in the commercial barter
industry as a "negative trade balance."
<PAGE> 53
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997 AND 1996
6. EXCESS OF TRADE DOLLARS ISSUED OVER TRADE DOLLARS EARNED (continued)-
This provides the Company with additional liquidity and the opportunity to
complete advantageous purchase transactions that benefit the Company. The
Company would be ultimately obligated to provide goods and services to clients
to offset any amounts of Trade Dollars issued in excess of earned.
7. LONG-TERM DEBT
At March 31, 1997 and 1996, long-term debt consisted of the following:
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Note payable to Key Bank at $894 per month, including interest at
prime plus 2 1/2% per annum (collateralized by
equipment) $ 15,410 $ 23,956
Note payable to Financial Services, Inc. at $793 per month,
including interest at 10% per annum (collateralized by
equipment) 33,473 39,387
-------- --------
48,883 63,343
Less, current maturities (15,978) (14,404)
-------- --------
$ 32,905 $ 48,939
======== ========
</TABLE>
The annual maturities of long-term debt for the next five years are as follows:
<TABLE>
<CAPTION>
YEAR ENDING
MARCH 31, AMOUNT
- ----------- --------
<S> <C>
1998 $ 15,978
1999 13,052
2000 7,898
2001 8,849
2002 3,106
--------
Total $ 48,883
========
</TABLE>
<PAGE> 54
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997 AND 1996
8. CAPITAL STOCK
Cascade Trade Association (CTA) was organized on October 26, 1987, in the State
of Washington. Subsequent to its organization, it issued 10,000 shares of
common stock for $8,101. The Company was incorporated on September 18, 1996,
in the State of Nevada. On November 15, 1996, the Company effected a merger
agreement with CTA wherein the Company issued 1,000,000 shares of common stock
in exchange for all of the issued and outstanding shares of CTA.
On January 2, 1997, the Company issued 250,000 shares of common stock in
exchange for services valued at $.50 per share.
In January through March of 1997, the Company completed a private placement
(Offering) of its common stock pursuant to which 300,000 shares were subscribed
for $150,000. Under the terms of the private placement, one "A" warrant and one
"B" warrant was issued with each one share of common stock issued. The warrants
are immediately exercisable and tradeable after the closing of the offering.
Each "A" warrant entitles the holder to purchase one additional share at a
price of $.75 per share during a six-month period after the closing of the
Offering. Each "B" warrant entitles the holder to purchase one additional share
at a price of $1.00 per share during a nine-month period after closing of the
Offering. The warrants may be extended upon appropriate notice given
shareholders by the management.
9. INCOME TAXES
The components of the provision for income taxes at December 31, 1997 and 1996
are as follows:
<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Current - Federal $ -- $ 5,252
Deferred (benefit) - Federal 130 (531)
------- -------
Income tax expense $ 130 $ 4,721
======= =======
</TABLE>
A reconciliation of the consolidated income tax expense on income per the U. S.
Federal statutory rate to the reported income tax follows:
<TABLE>
<CAPTION>
1997 1996
------ ------
<S> <C> <C>
Taxes at U.S. Federal statutory rate $ -- $3,187
Non-deductible expenses -- 1,056
Depreciation and bad debts allowance 130 478
------ ------
Effective tax $ 130 $4,721
====== ======
</TABLE>
<PAGE> 55
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1997 AND 1996
9. INCOME TAXES (continued)-
Deferred tax liabilities (assets) consisted of the following at March 31, 1997
and 1996:
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Depreciation $ 351 $ --
-------- --------
Gross deferred tax liabilities 351 --
-------- --------
Bad debt allowance 1,992 1,771
-------- --------
Loss carryforwards 20,604 --
-------- --------
Gross deferred tax assets 22,596 --
-------- --------
(20,604) (1,771)
-------- --------
Valuation allowance - deferred tax asset $ (1,641) $ (1,771)
======== ========
</TABLE>
The net change in the valuation allowance for deferred taxes was an increase of
$20,604 for fiscal year 1997. The change relates to a loss carryforward from
fiscal year 1996.
As of March 31, 1997, approximately $61,000 of loss carryforwards are available
for future use. Their use, however, is limited to future earnings of the
Company. The carryforwards expire in fiscal year 2012. No benefit for such
amounts have been recognized in the financial statements.
10. COMMITMENTS AND CONTINGENCIES
The Company leases office space for $1,800 per month, payable $1,250 per month
in cash and $550 in Trade Dollars. Future minimum rental commitments consist of
the following:
<TABLE>
<CAPTION>
YEAR ENDING
MARCH 31, AMOUNT
- ----------- --------
<S> <C>
1998 $ 10,800
</TABLE>
Of the minimum rental commitment due in fiscal 1998, $7,500 is payable in cash
and $3,300 is payable in Trade Dollars.
<PAGE> 56
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 AND MARCH 31,1997
(UNAUDITED - PREPARED BY MANAGEMENT)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1997 1997
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 93,714 $ 162,327
Accounts Receivable, Net of allowance 46,979 52,661
for doubtful accounts of $5,860 and $5,860
Notes receivable - current 1,950 2,052
Other current assets -- 2,056
--------- ----------
Total Current Assets 142,643 225,371
--------- ----------
PROPERTY AND EQUIPMENT, at cost, net of 45,577 25,364
accumulated depreciation
OTHER ASSETS
Notes receivable - noncurrent 33,355 35,072
Deferred tax asset 1,992 --
Deposits 4,500 4,500
--------- ----------
Total Other Assets 39,847 39,753
--------- ----------
TOTAL ASSETS $ 228,067 $ 290,307
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 4,072 $ 444
Trade dollars issued in excess of earned 46,743 92,274
Current portion of long-term debt 15,534 15,978
Other current liabilities 8,206 3,582
--------- ----------
Total Current Assets 74,555 118,278
--------- ----------
LONG-TERM DEBT 20,827 32,905
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value
Authorized: 25,000,000
Issued and Outstanding: 1,550,000 (1,250,000) 1,550 1,250
Additional paid-in capital 281,551 131,851
Subscribed shares -- 150,000
Accumulated deficit (150,415) (143,977)
--------- ----------
Total Stockholders' Equity (Deficit) $ 132,686 $ 139,124
--------- ----------
TOTAL STOCKHOLDERS' EQUITY AND LIABILITIES $ 228,067 $ 290,307
</TABLE>
<PAGE> 57
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997
AND TWELVE MONTHS ENDED MARCH 31,1997
(UNAUDITED --PREPARED BY MANAGEMENT)
<TABLE>
<CAPTION>
NINE MONTHS TWELVE MONTHS
ENDED ENDED
DECEMBER 31, MARCH 31,
1997 1996
------------ ------------
<S> <C> <C>
REVENUE $ 460,615 $ 452,673
COST OF SALES 126,241 108,847
----------- -----------
GROSS PROFIT 334,374 343,826
----------- -----------
OPERATING EXPENSES
Selling, General and Administrative 408,594 395,306
Depreciation 6,700 9,080
----------- -----------
Total operating Expenses 415,294 404,386
----------- -----------
OTHER INCOME (EXPENSES)
Other Income 50,928 --
Other Expenses (1,148) --
Interest Income 28,712 4,028
Interest Expense (4,011) (6,010)
----------- -----------
Total Other Income (Expense) - net 74,481 (1,982)
----------- -----------
NET INCOME (LOSS) BEFORE INCOME TAXES (6,438) 62,542
Income Tax Expense 130
NET INCOME (LOSS) $ (6,438) $ (62,672)
=========== ===========
NET INCOME (LOSS) PER COMMON SHARE $ (0.00) $ (0.04)
=========== ===========
Wtg Avg Common Shares Outstanding 1,550,000 1,550,000
</TABLE>
<PAGE> 58
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997
AND TWELVE MONTHS ENDED MARCH 31,1997
(UNAUDITED --PREPARED BY MANAGEMENT)
<TABLE>
<CAPTION>
NINE
MONTHS YEAR
ENDED ENDED
12/31/97 3/31/97
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (6,438) $ (62,672)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation 6,700 9,080
Stock issued for service -- 125,000
Deferred income taxes -- 130
Net trade revenue earned over trade costs (65,266) (39,549)
Changes in operating assets and liabilities:
Accounts receivable 11,957 (6,275)
Contracts receivable 1,818 170
xxxx and other assets 64 113
Accounts payable and other liabilities 11,322 (4,188)
------------ ------------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (39,841) 21,768
============ ============
Acquisition of property and equipment (13,915) --
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (13,915) --
Proceeds from subscribed stock -- 150,000
Repayment of notes payable (14,855) (14,460)
------------ ------------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (14,855) 135,540
============ ============
Net Increase (Decrease) in Cash (68,613) 157,308
Cash at Beginning of Period 162,327 5,019
Cash at End of Period $ 93,714 $ 162,327
------------ ------------
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 4,011 $ 5,785
Cash paid for income taxes -- $ 5,000
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Fixed assets purchased with Trade Dollars $ 17,735 --
</TABLE>
<PAGE> 59
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
AND NINE MONTHS ENDED DECEMBER 31,1997
(UNAUDITED - PREPARED BY MANAGEMENT)
f
<TABLE>
<CAPTION>
ADDITIONAL
COMMON STOCK PAID-IN SUBSCRIBED ACCUMULATED
SHARES AMOUNT CAPITAL STOCK DEFICIT TOTAL
---------- -------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT APRIL 1, 1995 10,000 $ 8,101 -- -- $ (102,555) $ (94,454)
Net Income 21,250 21,250
BALANCE AT MARCH 31, 1996 10,000 8,101 -- -- (81,305) (73,204)
Exchange of 1 share of CTA for
100 shares of IBC; change from
no par to $0.001 per share 990,000 (7,101) 7,101 --
Stock Issued for Services at $0.50 250,000 250 124,750 125,000
Shares Subscribed at $0.50 150,000 150,000
Net Loss (61,672)
BALANCE AT MARCH 31, 1997 1,250,000 1,250 131,851 150,000 (143,977) 139,124
Subscribed Shares issued 300,000 300 149,700 (150,000) --
Net Loss (6,438) (6,438)
BALANCE AT DECEMBER 31, 1997 1,550,000 $ 1,550 $ 200,631 -- $ (150,415) $ 132,686
</TABLE>
<PAGE> 60
INTERNATIONAL BARTER CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997
AND TWELVE MONTHS ENDED MARCH 31,1997
(UNAUDITED --PREPARED BY MANAGEMENT)
GENERAL
The Company's principal business consists of offering barter services for
retail, professional, and corporate clients. During November 1996, the Company
acquired Cascade Trade Association, a private company incorporated in
Washington, USA, in a reverse takeover.
1. BASIS OF PREPARATION OF INTERIM FINANCIAL STATEMENTS
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and all adjustments (consisting solely of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
Nine Month period ending December 31, 1997 are not necessarily indicative of the
results that may be experienced for the fiscal year ending March 31, 1998.
<PAGE> 61
SIGNATURE PAGE
Pursuant to the requirements of Section 12g of the Securities Exchange Act of
1934, the Registrant certifies that it meets all of the requirements for filing
of Form 10 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
International Barter Corp.
Registrant
March 27, 1998 /s/ Steven M. White
- -------------- --------------------------------------------------------------
Date Steven M. White, Chairman/President/CEO/Treasurer/Director
<PAGE> 1
EXHIBIT 3
SECRETARY OF STATE
[STATE OF NEVADA SEAL]
CORPORATE CHARTER
I, DEAN HELLER, the duly elected and qualified Nevada Secretary of State, do
hereby certify that INTERNATIONAL BARTER CORP. did on SEPTEMBER 18,1996 file in
this office the original Articles of Incorporation; that said Articles are now
on file and of record in the office of the Secretary of State of the State of
Nevada, and further, that said Articles contain all the provisions required by
the law of said State of Nevada.
IN WITNESS WHEREOF, I have hereunto set my
hand and affixed the Great Seal of State, at
my office, in Carson City, Nevada, on
September 18,1996.
/s/ DEAN HELLER
Secretary of State
By [SIG]
[STATE OF NEVADA SEAL] Certification Clerk
<PAGE> 2
SECRETARY OF STATE
[STATE OF NEVADA SEAL]
CERTIFICATE OF EXISTENCE
WITH STATUS IN GOOD STANDING
I, DEAN HELLER, the duly elected and qualified Nevada Secretary of State, do
hereby certify that I am, by the laws of said State, the custodian of the
records relating to filings by corporations, limited-liability companies,
limited partnerships, and limited-liability partnerships pursuant to Title 7 of
the Nevada Revised Statutes which are either presently in a status of good
standing or were in good standing for a time period subsequent of 1976 and am
the proper officer to execute this certificate.
I further certify that the records of the Nevada Secretary of State, at the date
of this certificate, evidence, INTERNATIONAL BARTER CORP., as a corporation duly
organized under the laws of Nevada and existing under and by virtue of the laws
of the State of Nevada since September 18, 1996, and is in good standing in this
state.
IN WITNESS WHEREOF, I have hereunto set my
hand and affixed the Great Seal of State, at
my office, in Carson City, Nevada, on
October 8, 1997.
/s/ DEAN HELLER
Secretary of State
By /s/ JACQUELINE CURRY
[STATE OF NEVADA SEAL] Certification Clerk
<PAGE> 3
CERTIFICATE OF AMENDMENT OF ARTICLES
(After Issuance of Stock)
INTERNATIONAL BARTER CORP.
We the undersigned President and Secretary of the above named corporation do
hereby certify:
That the Board of Directors of said corporation at a meeting duly convened, held
on the 29th day of September, 1996, adopted a resolution to amend the original
articles as follows:
Article Number Four is amended to read as follows:
That the total number of common stock authorized that may be
issued by the Corporation is Twenty Five Million (25,000,000) shares of
stock with par value of .001 per share. Said shares may be issued by
the corporation from time to time for such considerations as may be
fixed by the Board of Directors.
The number of shares of the Corporation outstanding and entitled to vote on an
amendment to the Articles of Incorporation is 25,000; that the said change and
amendment have been consented to and approved by a majority of the stockholders
holding at least a majority of each class of stock outstanding and entitled to
vote thereon.
/s/ [SIG]
-------------------------------------------
President
/s/ [SIG]
-------------------------------------------
Secretary
State of Washington )
)SS.
County of King )
On this 22nd day of September, 1997, personally appeared before me, a Notary
Public, ??????
???????, who acknowledged that he/she/they, executed the above instrument.
(Notary seal) [SIG]
[SEAL] --------------------------------------------
Notary Public
<PAGE> 4
ARTICLES OF INCORPORATION
OF
INTERNATIONAL BARTER CORP.
FIRST. The name of the corporation is:
INTERNATIONAL BARTER CORP.
SECOND. Its registered office in the State of Nevada is located at
2533 North Carson Street, Carson City, Nevada 89706 that this Corporation may
maintain an office, or offices, in such other place within or without the State
of Nevada as may be from time to time designated by the Board of Directors, or
by the By-Laws of said Corporation, and that this Corporation may conduct all
Corporation business of every kind and nature, including the holding of all
meetings of Directors and Stockholders, outside the State of Nevada as well as
within the State of Nevada.
THIRD. The objects for which this Corporation is formed are: To
engage in any lawful activity, including, but not limited to the following:
(A) Shall have such rights, privileges and powers as may be conferred upon
corporations by any existing law.
(B) May at any time exercise such rights, privileges and powers, when not
inconsistent with the purposes and objects for which this corporation is
organized.
1
<PAGE> 5
C) Shall have power to have succession by its corporate name for the
period limited in its certificate or articles of incorporation, and when no
period limited, perpetually, or until dissolved and its affairs wound up
according to law.
(D) Shall have power to sue and be sued in any court of law or equity.
(E) Shall have power to make contracts.
(F) Shall have power to hold, purchase and convey real and personal estate
and to mortgage or lease any such real and personal estate with its franchises.
The power to hold real and personal estate shall include the power to take the
same by devise or bequest in the State of Nevada, or in any other state,
territory or country.
(G) Shall have power to appoint such officers and agents as the affairs of
the corporation shall require, and to allow them suitable compensation.
(H) Shall have power to make By-Laws not inconsistent with the
constitution or laws of the United States, or of the State of Nevada, for the
management, regulation and government of its affairs and property, the transfer
of its stock, the transaction of its business, and the calling and holding of
meetings of its stockholders.
(I) Shall have power to wind up and dissolve itself, or be wound up or
dissolved.
(J) Shall have power to adopt and use a common seal or stamp, and alter
the same at pleasure. The use of a seal or stamp by the corporation on any
corporate documents is not necessary. The corporation may use a seal or stamp,
if it desires, but such use or nonuse shall not in any way affect the legality
of the document.
(K) Shall have power to borrow money and contract debts when necessary for
the transaction of its business, or for the exercise of its corporate rights,
privileges or franchises,
2
<PAGE> 6
or for any other lawful purpose of its incorporation; to issue bonds, promissory
notes, bills of exchange, debentures, and other obligations and evidences of
indebtedness, payable at a specified time or times, or payable upon the
happening of a specified event or events, whether secured by mortgage, pledge or
otherwise, or unsecured, for money borrowed, or in payment for property
purchased, or acquired, or for any other lawful object.
(L) Shall have power to guarantee, purchase, hold, sell, assign, transfer,
mortgage, pledge or otherwise dispose of the shares of the capital stock of, or
any bonds, securities or evidences of the indebtedness created by, any other
corporation or corporations of the State of Nevada, or any other state or
government, and, while owners of such stock, bonds, securities or evidences of
indebtedness, to exercise all the rights, powers and privileges of ownership,
including the right to vote, if any.
(M) Shall have power to purchase, hold, sell and transfer shares of its
own capital stock, and use therefor its capital, capital surplus, surplus, or
other property or fund.
(N) Shall have power to conduct business, have one or more offices, and
hold, purchase, mortgage and convey real and personal property in the State of
Nevada, and in any of the several states, territories, possessions and
dependencies of the United States, the District of Columbia, and any foreign
countries.
(O) Shall have power to do all and everything necessary and proper for the
accomplishment of the objects enumerated in its certificate or articles of
incorporation, or any amendment thereof, or necessary or incidental to the
protection and benefit of the corporation, and, in general, to carry on any
lawful business necessary or incidental to the attainment of the
3
<PAGE> 7
objects of the corporation, whether or not such business is similar in nature to
the objects set forth in the certificate or articles of incorporation of the
corporation, or any amendment thereof.
(P) Shall have power to make donations for the public welfare or for
charitable, scientific or educational purposes.
(Q) Shall have power to enter into partnerships, general or limited, or
joint ventures, in connection with any lawful activities, as may be allowed by
law.
FOURTH. That the total number of common stock authorized that may be
issued by the Corporation is TWENTY FIVE THOUSAND (25,000) shares of stock
without nominal par value and no other class of stock shall be authorized. Said
shares may be issued by the corporation from time to time for such
considerations as may be fixed by the Board of Directors.
FIFTH. The governing board of this corporation shall be known as
directors, and the number of directors may from time to time be increased or
decreased in such manner as shall be provided by the By-Laws of this
Corporation, providing that the number of directors shall not be reduced to
fewer than one (1).
The name and post office address of the first board of Directors shall be
one (1) in number and listed as follows:
NAME POST OFFICE ADDRESS
---- -------------------
Robert Seligman 2533 North Carson Street
Carson City, Nevada 89706
SIXTH. The capital stock, after the amount of the subscription
price, or par value, has been paid in, shall not be subject to assessment to pay
the debts of the corporation.
4
<PAGE> 8
SEVENTH. The name and post office address of the Incorporator
signing the Articles of Incorporation is as follows:
NAME POST OFFICE ADDRESS
---- -------------------
Robert Seligman 2533 North Carson Street
Carson City, Nevada 89706
EIGHTH. The resident agent for this corporation shall be:
LAUGHLIN ASSOCIATES, INC.
The address of said agent, and, the registered or statutory address of this
corporation in the state of Nevada, shall be:
2533 North Carson Street
Carson City, Nevada 89706
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized:
Subject to the By-Laws, if any, adopted by the Stockholders, to
make, alter or amend the By-Laws of the Corporation.
To fix the amount to be reserved as working capital over and above
its capital stock paid in; to authorize and cause to be executed, mortgages and
liens upon the real and personal property of this Corporation.
By resolution passed by a majority of the whole Board, to designate one (1) or
more committees, each committee to consist of one or more of the Directors of
the Corporation,
5
<PAGE> 9
which, to the extent provided in the resolution, or in the By-Laws of the
Corporation, shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the Corporation. Such committee,
or committees, shall have such name, or names, as may be stated in the By-Laws
of the Corporation, or as may be determined from time to time by resolution
adopted by the Board of Directors.
When and as authorized by the affirmative vote of the Stockholders
holding stock entitling them to exercise at least a majority of the voting power
given at a Stockholders meeting called for that purpose, or when authorized by
the written consent of the holders of at least a majority of the voting stock
issued and outstanding, the Board of Directors shall have power and authority at
any meeting to sell, lease or exchange all of the property and assets of the
Corporation, including its good will and its corporate franchises, upon such
terms and conditions as its board of Directors deems expedient and for the best
interests of the Corporation.
ELEVENTH. No shareholder shall be entitled as a matter of right to
subscribe for or receive additional shares of any class of stock of the
Corporation, whether now or hereafter authorized, or any bonds, debentures or
securities convertible into stock, but such additional shares of stock or other
securities convertible into stock may be issued or disposed of by the Board of
Directors to such persons and on such terms as in its discretion it shall deem
advisable.
TWELFTH. No director or officer of the Corporation shall be
personally liable to the Corporation or any of its stockholders for damages for
breach of fiduciary duty as a director or officer involving any act or omission
of any such director or officer; provided, however, that the foregoing provision
shall not eliminate or limit the liability of a director or
6
<PAGE> 10
officer (i) for acts or omissions which involve intentional misconduct, fraud or
a knowing violation of law, or (ii) the payment of dividends in violation of
Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of
this Article by the stockholders of the Corporation shall be prospective only,
and shall not adversely affect any limitation on the personal liability of a
director or officer of the Corporation for acts or omissions prior to such
repeal or modification.
THIRTEENTH. This Corporation reserves the right to amend, alter,
change or repeal any provision contained in the Articles of Incorporation, in
the manner now or hereafter prescribed by statute, or by the Articles of
Incorporation, and all rights conferred upon Stockholders herein are granted
subject to this reservation.
7
<PAGE> 11
I, THE UNDERSIGNED, being the Incorporator hereinbefore named for
the purpose of forming a Corporation pursuant to the General Corporation Law of
the State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 18th day of September 1996.
/s/ ROBERT SELIGMAN
---------------------------------
Robert Seligman
STATE OF NEVADA )
) SS:
CARSON CITY )
On this 18th day of September, 1996 in Carson City, Nevada, before me, the
undersigned, a Notary Public in and for Carson City, State of Nevada, personally
appeared:
Robert Seligman
Known to me to be the person whose name is subscribed to the foregoing document
and acknowledged to me that he executed the same.
(Notary seal) /s/ LISA MARIE VANNUCCI
--------------------------------------------
Notary Public
I, Laughlin Associates, Inc. hereby accept as Resident Agent for the previously
named Corporation.
September 18, 1996 /s/ ROBERT SELIGMAN
- ------------------ --------------------------------------------
Date Executive Vice President
<PAGE> 12
INTERNATIONAL BARTER CORP.
BY-LAWS
ARTICLE I MEETINGS OF SHAREHOLDERS
1. Shareholders' Meetings shall be held in the office of the
corporation, at Carson City, NV, or at such other place or places as the
Directors shall, from time to time, determine.
2. The annual meeting of the shareholders of this corporation shall be
held at 11:00 a.m., on the l8th day of September of each year beginning in
1997, at which time there shall be elected by the shareholders of the
corporation a Board of Directors for the ensuing year, and the shareholders
shall transact such other business as shall properly come before them. If the
day fixed for the annual meeting shall be a legal holiday such meeting shall be
held on the next succeeding business day.
3. A notice signed by any Officer of the corporation or by any person
designated by the Board of Directors, which sets forth the place of the annual
meeting, shall be personally delivered to each of the shareholders of record, or
mailed postage prepaid, at the address as appears on the stock book of the
corporation, or if no such address appears in the stock book of the corporation,
to his last known address, at least ten (10) days prior to the annual meeting.
Whenever any notice whatever is required to be given under any article of
these By-Laws, a waiver thereof in writing, signed by the person or persons
entitled to the notice, whether before or after the time of the meeting of the
shareholders, shall be deemed equivalent to proper notice.
4-1
<PAGE> 13
4. A majority of the shares issued and outstanding, either in person or
by proxy, shall constitute a quorum for the transaction of business at any
meeting of the shareholders.
5. If a quorum is not present at the annual meeting, the shareholders
present, in person or by proxy, may adjourn to such future time as shall be
agreed upon by them, and notice of such adjournment shall be mailed, postage
prepaid, to each shareholder of record at least ten (10) days before such date
to which the meeting was adjourned; but if a quorum is present, they may adjourn
from day to day as they see fit, and no notice of such adjournment need be
given.
6. Special meetings of the shareholders may be called at anytime by the
President; by all of the Directors provided there are no more than three, or if
more than three, by any three Directors; or by the holder of a majority share of
the capital stock of the corporation. The Secretary shall send a notice of such
called meeting to each shareholder of record at least ten (10) days before such
meeting, and such notice shall state the time and place of the meeting, and the
object thereof. No business shall be transacted at a special meeting except as
stated in the notice to the shareholders, unless by unanimous consent of all
shareholders present, either in person or by proxy, all such shares being
represented at the meeting.
7. Each shareholder shall be entitled to one vote for each share of
stock in his own name on the books of the corporation, whether represented in
person or by proxy.
8. At all meetings of shareholders, a shareholder may vote by proxy
executed in writing by the shareholder or by his duly authorized
attorney-in-fact. Such proxy shall be filed with the Secretary of the
corporation before or at the time of the meeting.
9. The following order of business shall be observed at all meetings of
the
4-2
<PAGE> 14
shareholders so far as is practicable:
a. Call the roll;
b. Reading, correcting, and approving of the minutes of the
previous meeting;
c. Reports of Officers;
d. Reports of Committees;
e. Election of Directors;
f. Unfinished business; and
g. New business.
10. Unless otherwise provided by law, any action required to be taken at
a meeting of the shareholders, or any other action which may be taken at a
meeting of the shareholders, may be taken without a meeting if a consent in
writing, setting forth the action to be taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof.
ARTICLE II STOCK
1. Certificates of stock shall be in a form adopted by the Board of
Directors and shall be signed by the President and Secretary of the corporation.
2. All certificates shall be consecutively numbered; the name of the
person owning the shares represented thereby, with the number of such shares and
the date of issue shall be entered on the company's books.
3. All certificates of stock transferred by endorsement thereon shall
be surrendered by cancellation and new certificates issued to the purchaser or
assignee.
4. Upon surrender to the corporation or the transfer agent of the
corporation of a
4-3
<PAGE> 15
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, and
cancel the old certificate; every such transfer shall be entered on the transfer
book of the corporation.
5. The corporation shall be entitled to treat the holder of record of
any share as the holder in fact thereof, and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such share on the part
of any other person whether or not it shall have express or other notice
thereof, except as expressly provided by the laws of this state.
ARTICLE III DIRECTORS
1. A Board of Directors, consisting of at least one (1) person shall be
chosen annually by the shareholders at their meeting to manage the affairs of
the corporation. The Directors' term of office shall be one (1) year, and
Directors may be re-elected for successive annual terms.
2. Vacancies on the Board of Directors by reason of death, resignation
or other causes shall be filled by the remaining Director or Directors choosing
a Director or Directors to fill the unexpired term.
3. Regular meetings of the Board of Directors shall be held at 1:00
p.m., on the 18th day of September of each year beginning in 1997 at the office
of the company at Carson City, NV, or at such other time or place as the Board
of Directors shall by resolution appoint; special meetings may be called by the
President or any Director giving ten (10) days notice to each Director. Special
meetings may also be called by execution of the appropriate waiver of notice and
called when executed by a majority of the Directors of the company. A majority
of the
4-4
<PAGE> 16
Directors shall constitute a quorum.
4. The Directors shall have the general management and control of the
business and affairs of the corporation and shall exercise all the powers that
may be exercised or performed by the corporation, under the statutes, the
Articles of Incorporation, and the By-Laws. Such management will be by equal
vote of each member of the Board of Directors with each Board member having an
equal vote.
5. The act of the majority of the Directors present at a meeting at
which a quorum is present shall be the act of the Directors.
6. A resolution, in writing, signed by all or a majority of the members
of the Board of Directors, shall constitute action by the Board of Directors to
effect therein expressed, with the same force and effect as though such
resolution had been passed at a duly convened meeting; and it shall be the duty
of the Secretary to record every such resolution in the Minute Book of the
corporation under its proper date.
7. Any or all of the Directors may be removed for cause by vote of the
shareholders or by action of the Board. Directors may be removed without cause
only by vote of the shareholders.
8. A Director may resign at any time by giving written notice to the
Board, the President or the Secretary of the corporation. Unless otherwise
specified in the notice, the resignation shall take effect upon receipt thereof
by the Board or such Officer, and the acceptance of the resignation shall not be
necessary to make it effective.
9. A Director of the corporation who is present at a meeting of the
Directors at which action on any corporate matter is taken shall be presumed to
have assented to the action
4-5
<PAGE> 17
taken unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the person acting
as the Secretary of the meeting before the adjournment thereof or shall forward
such dissent by registered mail to the Secretary of the corporation immediately
after the adjournment of the meeting. Such right to dissent shall not apply to a
Director who voted in favor of such action.
ARTICLE IV OFFICERS
1. The Officers of this company shall consist of: a President, one or
more Vice Presidents, Secretary, Treasurer, and such other officers as shall,
from time to time, be elected or appointed by the Board of Directors.
2. The PRESIDENT shall preside at all meetings of the Directors and the
shareholders and shall have general charge and control over the affairs of the
corporation subject to the Board of Directors. He shall sign or countersign all
certificates, contracts and other instruments of the corporation as authorized
by the Board of Directors and shall perform all such other duties as are
incident to his office or are required by him by the Board of Directors.
3. The VICE PRESIDENT shall exercise the functions of the President
during the absence or disability of the President and shall have such powers and
such duties as may be assigned to him, from time to time, by the Board of
Directors.
4. The SECRETARY shall issue notices for all meetings as required by
the By-Laws, shall keep a record of the minutes of the proceedings of the
meetings of the shareholders and Directors, shall have charge of the corporate
books, and shall make such reports and perform such other duties as are incident
to his office, or properly required of him by the Board of Directors. He shall
be responsible that the corporation complies with Section 78.105 of the
4-6
<PAGE> 18
Nevada Revised Statutes and supplies to the Nevada Resident Agent or Registered
Office in Nevada, any and all amendments to the corporation's Articles of
Incorporation and any and all amendments or changes to the By-Laws of the
corporation. In compliance with Section 78.105, he will also supply to the
Nevada Resident Agent or Registered Office in Nevada, and maintain, a current
statement setting out the name of the custodian of the stock ledger or duplicate
stock ledger, and the present and complete Post Office address, including street
and number, if any, where such stock ledger or duplicate stock ledger is kept.
5. The TREASURER shall have the custody of all monies and securities of
the corporation and shall keep regular books of account. He shall disburse the
funds of the corporation in payment of the just demands against the corporation,
or as may be ordered by the Board of Directors, making proper vouchers for such
disbursements and shall render to the Board of Directors, from time to time, as
may be required of him, an account of all his transactions as Treasurer and of
the financial condition of the corporation. He shall perform all duties incident
to his office or which are properly required of him by the Board of Directors.
6. The RESIDENT AGENT shall be in charge of the corporation's
registered office in the State of Nevada, upon whom process against the
corporation may be served and shall perform all duties required of him by
statute.
7. The salaries of all Officers shall be fixed by the Board of
Directors and may be changed, from time to time, by a majority vote of the
Board.
8. Each of such Officers shall serve for a term of one (1) year or
until their successors are chosen and qualified. Officers may be re-elected or
appointed for successive annual terms.
4-7
<PAGE> 19
9. The Board of Directors may appoint such other Officers and Agents,
as it shall deem necessary or expedient, who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be
determined, from time to time, by the Board of Directors.
10. Any Officer or Agent elected or appointed by the Directors may be
removed by the Directors whenever in their judgment the best interests of the
corporation would be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed.
11. A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the Directors for the unexpired
portion of the term.
ARTICLE V INDEMNIFICATION OF OFFICERS AND DIRECTORS
The corporation shall indemnify any and all of its Directors and Officers,
and its former Directors and Officers, or any person who may have served at the
corporation's request as a Director or Officer of another corporation in which
it owns shares of capital stock or of which it is a creditor, against expenses
actually and necessarily incurred by them in connection with the defense of any
action, suit or proceeding in which they, or any of them, are made parties, or a
party, by reason of being or having been Director(s) or Officer(s) of the
corporation, or of such other corporation, except, in relation to matters as to
which any such Director or Officer or former Director or Officer or person shall
be adjudged in such action, suit or proceeding to be liable for negligence or
misconduct in the performance of duty. Such indemnification shall not be deemed
exclusive of any other rights to which those indemnified may be entitled, under
By-Law, agreement, vote of shareholders or otherwise.
4-8
<PAGE> 20
ARTICLE VI DIVIDENDS
The Directors may, from time to time, declare, and the corporation may
pay, dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.
ARTICLE VII WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be
given to any shareholder or Director of the corporation under the provisions of
these By-Laws or under the provisions of the Articles of Incorporation, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.
ARTICLE VIII AMENDMENTS
1. Any of these By-Laws may be amended by a majority vote of the
shareholders at any annual meeting or at any special meeting called for that
purpose.
2. The Board of Directors may amend the By-Laws or adopt additional
By-Laws, but shall not alter or repeal any By-Laws adopted by the shareholders
of the company.
CERTIFIED TO BE THE BY-LAWS OF:
INTERNATIONAL BARTER CORP.
BY: [SIG]
--------------------------------------------
Secretary
4-9
<PAGE> 1
EXHIBIT 10
MERGER AGREEMENT FOR PURCHASE AND SALE OF STOCK
DATED: 11-15-96
BETWEEN: International Barter Corporation ("IBC")
AND: Cascade Trade Association ("CTA")
AND: Steven White ("WHITE")
AND: Norma Fetz ("FETZ")
WHEREAS, the parties to this AGREEMENT have duly agreed on a plan and contract
of merger, this document reduces to writing the AGREEMENT that International
Barter Corporation ("IBC") (a corporation organized under the laws of the state
of Nevada, with its principal office located at 21400 International Boulevard,
Suite 207, city of Seattle, county of King, state of Washington) be merged with
Cascade Trade Association ("CTA") (a corporation organized under the laws of the
State of Washington, with its principal office located at 21400 International
Boulevard, Suite 207, city of Seattle, county of King, state of Washington).
1.0 RECITALS
1.1 The parties identified above have agreed that CTA should merge with
IBC. IBC will be the "surviving corporation" and obtain 100% of the ownership
and debt of CTA through purchase of CTA's outstanding stock, and CTA will
receive IBC stock in consideration for the merger, with CTA shareholders WHITE
and FETZ sharing on a pro rata basis in proportion to their respective holdings
in CTA.
1.2 The total number of shares which IBC is authorized to issue is
25,000,000 shares, consisting of a single class of common stock with par value
of $0.001 per share. Currently, no stock has been issued and there are no
shareholders.
1.3 The total number of shares which CTA is authorized to issue is 50,000
shares, consisting of a single class of common stock with no par value. A total
of 10,000 shares have been issued, 9,000 are held by Steven White and 1,000 are
held by Norma Fetz.
1.4 The respective Boards of Directors of IBC and CTA (collectively "the
constituent corporations") deem it desirable and in the best interests of the
corporations and their shareholders that CTA, (also called the "nonsurviving
corporation"), be merged into IBC (also called the "surviving corporation").
For the reasons set forth above, and in consideration of the mutual covenants
and promises of the parties contained herein, the constituent corporations
agree, pursuant to applicable law, that CTA shall be merged into IBC as a single
corporation, in the manner detailed herein, wherein the parties have agreed to
prescribe the terms and conditions of such merger, the method of carrying it
out, and the manner of converting the shares of CTA into shares of IBC.
2.0 DEFINITIONS
2.1 "AGREEMENT" means this merger agreement for the purchase and sale of
stock.
2.2 "EFFECTIVE DATE" means the date entered on page one of this AGREEMENT.
<PAGE> 2
3.0 AGREEMENT
3.1 IBC TO BE SURVIVING CORPORATION. CTA shall be merged into IBC, and
the corporate existence of CTA shall cease to exist upon the filing of
appropriate articles of merger, after a suitable transition period in which
both entities will operate. These articles will be filed at the direction and
sole discretion of IBC. After the articles are filed, the existence of CTA shall
cease and all rights not already transferred by this AGREEMENT shall, without
limitation, be transferred to IBC as the sole owner of all CTA assets and
liabilities. IBC agrees that it shall become immediately subject to all the
debts and liabilities of CTA, even before articles of merger are filed, in the
same manner as if IBC has incurred them. Any and liens on the property of any
of the corporations shall remain unimpaired.
3.2 PRINCIPAL OFFICE. The principal office of IBC shall remain the same
after this merger.
3.3 OBJECTS AND PURPOSES. The nature of the business and the objects and
purposes of this merger are to continue the same business objects and purposes
of CTA, namely that of engaging in wholesale and retail barter, under the name
and sponsorship of IBC. There shall be continuity of all purposes, and the
business of CTA shall remain unchanged.
3.4 AMENDED ARTICLES. Upon the completion of the transition period, the
articles of incorporation of IBC, as amended, shall be amended to read as
follows:
FOURTEENTH. IBC shall enter into negotiations with and conclude
agreements of merger with various barter exchanges which are deemed in the best
interests of its shareholders and the corporation. Upon such agreements, IBC
shall merge with said exchanges, which exchange shall obtain all the rights and
privileges of IBC members, and IBC shall obtain all the rights and privileges
defined in the agreement of merger. These articles shall then be amended to so
state those corporations or associations which have merged with IBC. They are
listed as follows:
1. Cascade Trade Association, a Washington corporation.
3.5 BYLAWS. The present bylaws of IBC, insofar as not inconsistent with
this AGREEMENT, shall be the bylaws of the corporation following the merger.
3.6 DIRECTORS. The names and addresses of the directors of IBC shall
remain the same following merger, and they shall hold office until the next
regularly scheduled meeting of the Board of Directors.
3.7 METHOD OF CONVERTING SHARES. As of the date of this AGREEMENT, the
shares of the constituent corporations shall, without any other action on the
part of the respective holders thereof, become converted into shares of IBC as
follows:
A. IBC shall obtain 100% of all outstanding and treasury stock
of CTA.
B. CTA shall receive 1,000,000 shares of IBC stock, valued at
$0.50 per share.
C. Shares received by CTA shall be issued to shareholders as
follows: 900,000 shares in the name of Steven White, and
100,000 shares in the name of Norma Fetz. By signing below,
the aforementioned shareholders warrant that this
distribution represents a fair pro rata distribution of the
shares received, and that each shareholder has received full
and fair disclosure of the terms of this merger. In
<PAGE> 3
addition, each shareholder recognizes that their interest in IBC
is subject to immediate and substantial dilution if IBC offers
more shares for any reason. However, IBC shall not be authorized
to issue more than 25,000,000 shares without due consideration
of the rights of minority shareholders by law.
3.8 EXTRAORDINARY TRANSACTIONS. No constituent corporation shall
enter into any extraordinary transactions prior to the effective date of this
merger without the prior written consent of the other party.
3.9 TRANSFER OF PROPERTY RIGHTS. All of the property, rights,
privileges, leases, trademarks, copyrights and patents of any nature whatsoever
shall be transferred from CTA to IBC. This includes but is not limited to the
rights in the name "Cascade Trade Association". The officers and directors are
authorized as necessary to execute all deeds, conveyances, assignments or
documents of any nature that are necessary to carry out this intent.
3.10 AGREEMENT AND RATIFICATION OF SHAREHOLDERS. The shareholders
signing below hereby waive any and all notice of meetings, and hereby consent
to and approve the merger of IBC and CTA. Said shareholders constitute 100% of
the ownership of outstanding voting shares, and are empowered under the
articles of incorporation and bylaws to approve and ratify mergers, and hereby
approve and adopt such merger as recommended by the Board of CTA and represent
that they have had full information and opportunity to inquire into the
specifics of this merger. Thus, this merger is approved by 100% of the
shareholders of CTA.
3.11 INSTRUMENTS OF FURTHER ASSURANCE. If at any time it shall be
determined or advised that any instruments of further assurance are desirable
in order to evidence the vesting in IBC of all powers, assets and liabilities
of CTA, the appropriate officers or directors are hereby authorized to execute
and acknowledge all such instruments of further assurance, and to do such
further acts or things, either in the name of the constituent corporations or
in the name of IBC, as may be desirable to carry out the purposes and details
of the AGREEMENT of merger.
4.0 EXECUTING SIGNATURES
4.1 IN WITNESS WHEREOF, the Directors and Shareholders of IBC and the
Directors and Shareholders of CTA have EXECUTED this AGREEMENT under their
respective corporate seals and with duly authorized authority at Seattle,
Washington, the day and year first above written.
/s/ STEVEN WHITE
- -----------------------------------
Steven White, President, CEO
and on behalf of the Board of Directors
International Barter Corporation
/s/ STEVEN WHITE
- -----------------------------------
Steven White, President, Cascade Trade Association,
and on behalf of the Board of Directors of
Cascade Trade Association
/s/ STEVEN WHITE
- -----------------------------------
Steven White, Shareholder,
Cascade Trade Association
/s/ NORMA FETZ
- -----------------------------------
Norma Fetz, Shareholder,
Cascade Trade Association
<PAGE> 1
EXHIBIT 99.A
INFORMATION STATEMENT
INTERNATIONAL BARTER CORP.
(A Nevada Corp.)
300,000 units
Offering price - $.50 PER UNIT
EACH UNIT CONSISTS OF I SHARE OF COMMON STOCK, PAR VALUE ($ .001) OF
INTERNATIONAL BARTER CORP. (the "Company"), ONE CLASS A WARRANT("A warrant"),
AND ONE CLASS B WARRANT("B warrant"). EACH "A" WARRANT ENTITLES THE HOLDER TO
PURCHASE AN ADDITIONAL SHARE OF COMMON STOCK AT A PRICE OF $0.75 PER SHARE
DURING A 6-MONTH PERIOD AFTER THE CLOSE OF THE OFFERING. EACH "B" WARRANT
ENTITLES THE HOLDER TO PURCHASE AN ADDITIONAL SHARE OF COMMON STOCK AT A PRICE
OF $1.00 PER SHARE DURING A 9 MONTH PERIOD AFTER THE CLOSE OF THE OFFERING.
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE, INVOLVE A HIGH DEGREE OF
RISK AND IMMEDIATE DILUTION, AND SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN
AFFORD TO LOSE THEIR ENTIRE INVESTMENT. SEE "HIGH RISK FACTORS" FOR SPECIAL
FACTORS CONCERNING THE COMPANY.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PAYMENT FOR THE UNITS SHOULD BE MADE BY CHECK OR MONEY ORDER PAYABLE TO
"International Barter Corp".
<TABLE>
<CAPTION>
Underwriter's
Price to Commissions Proceeds to the
Investors and Discounts Company(2)
--------- ------------- ---------------
<S> <C> <C> <C>
Per unit $0.50 $-0- $0.50
Maximum (300,000 units) $150,000.00 $-0- $150,000.00
</TABLE>
(See notes on following page)
International Barter Corp.
21400 International Blvd. Suite 207
Seattle, Washington 98198
(206)870-9290
The date of this Information Statement is January 3, 1997
<PAGE> 2
(FOOTNOTES FROM COVER PAGE)
(1) The Units are being offered on behalf of the Company by the Management
of the company (who will not be paid for such services), on a "best
efforts only" basis with respect to all 300,000 units. There can be no
assurance that any or all of the Units being offered will be sold.
Because this is a "best efforts only" offering, with no minimum
required to be sold, the proceeds may be released to the Company upon
receipt thereof, while the offering continues for the remaining unsold
Units. The offering expires March 3, 1997. Management can elect to
extend the offering to May 3, 1997.
(2) The proceeds to the Company set forth in the table to the cover page of
the Offering Document have been computed before deduction of expenses
that will be incurred in connection with this offering including
filing, printing, legal, accounting, transfer agent and other fees. It
is estimated that the expenses to be incurred by the company in
connection with this offering will be approximately $7,500. It is
estimated that the net proceeds to the Company after deducting all
expenses in connection with the offering will be approximately
$142,500. (This figure does not include any proceeds which would be
realized upon the exercise of any warrants).
Prior to this offering there has been no market for the Units, the Common Stock
(the "shares") or the Warrants of International Barter Corp. (The "Company").
There can be no assurance that any trading market in these securities will
develop hereafter, or that any trading if developed, will continue. The Company
is not subject to reporting requirements of section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange" Act), meaning that it is not
required to file annual or quarterly reports with the Securities and Exchange
Commission. The Company is conducting this offering pursuant to Rule 504 of
Regulation D promulgated under the Securities Act of 1933 (the "Act"), which
exempts from registration with the Securities and Exchange Commission offerings
of up to $1,000,000 which comply with the requirements of the Rule.
(ii)
<PAGE> 3
BLUE SKY NOTICE
IT IS ANTICIPATED THAT THE UNITS DESCRIBED HEREIN WILL BE OFFERED FOR SALE IN
THE STATES OF NEW YORK AND FLORIDA. A DESCRIPTION OF THE RELEVANT CONDITIONS AND
RESTRICTIONS REQUIRED BY THE STATE OF NEW YORK IS SET FORTH BELOW.
NOTICE TO NEW YORK RESIDENTS.
THIS DOCUMENT HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL OF THE STATE OF NEW
YORK PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW
YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NOTICE TO FLORIDA RESIDENTS
FLORIDA RESIDENTS ARE ADVISED THAT THE UNITS HAVE NOT BEEN REGISTERED WITHIN THE
STATE OF FLORIDA. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. PURSUANT TO
FLORIDA STATUTES, SECTION 517.061 (11) (a)(5), THE SALE OF A SECURITY TO A
FLORIDA RESIDENT SHALL BE VOIDABLE BY THE PURCHASER EITHER (i) WITHIN THREE DAYS
AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY THE PURCHASER TO THE ISSUER,
AN AGENT OF THE ISSUER OR AN ESCROW AGENT, OR (ii) WITHIN THREE DAYS AFTER THE
AVAILABILITY OF THAT PRIVILEGE HAS BEEN COMMUNICATED TO THE PURCHASER, WHICHEVER
OCCURS FIRST, PROVIDED HOWEVER, THAT THERE ARE MORE THAN FIVE FLORIDA
PURCHASERS.
THIS INFORMATION STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OR ANY OFFER TO BUY ANY SECURITY IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE DELIVERY OF THIS INFORMATION
STATEMENT SHALL NOT UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE
HAS NOT BEEN ANY CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE THEREOF.
THE UNITS ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE ACCEPTANCE OF AN
OFFER TO PURCHASE, WITHDRAWAL OR CANCELLATION OF ANY OFFERING WITHOUT NOTICE.
THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER, IN WHOLE OR IN PART, FOR THE
PURCHASE OF ANY OF THE UNITS OFFERED HEREBY.
(iii)
<PAGE> 4
TABLE OF CONTENTS
Page
----
SUMMARY................................................................ 1
DESCRIPTION OF THE BARTER BUSINESS..................................... 1
BUSINESS OF THE COMPANY................................................ 3
HIGH RISK FACTORS...................................................... 4
USE OF PROCEEDS........................................................ 6
LEGAL PROCEEDINGS...................................................... 6
MANAGEMENT............................................................. 6
PRINCIPAL SHAREHOLDERS................................................. 7
CERTAIN TRANSACTIONS................................................... 8
DESCRIPTION OF SECURITIES.............................................. 8
SUBSCRIPTION OFFER..................................................... 9
(iv)
<PAGE> 5
SUMMARY
The following is a summary of certain information contained in this Information
Statement and is qualified in its entirely by the more detailed information
appearing elsewhere in the Information Statement.
The Company
International Barter Corporation (the "Company" or "IBC") was incorporated in
the State of Nevada on September 18, 1996. IBC was formed to become the market
leader in the consolidation of the independent retail barter exchange industry.
DESCRIPTION OF THE BARTER BUSINESS
Conventional barter is the oldest form of commerce; historically barter involved
a direct person-to-person exchange of goods and services. Thus, conventional
barter was limited to a transaction between two parties. The development of
modem commercial barter was dependent on the development of an index of
valuation for establishing barter credits and debits. This index of valuation is
the industry-accepted "trade dollar". The trade dollar is a ledger entry by
which goods and services can be bought and sold. Trade dollars are credited and
debited to each business's trade account, similar to a bank account. Exchange
clientele are serviced by trade brokers who operate in a manner similar to that
of a stock broker. In addition, barter clients can make transactions between
themselves without the services of a trade broker.
Retail trade exchanges are classified as third party record keepers, having the
same fiduciary obligations as banks and stockbrokers under the Tax Equity and
Fiscal Responsibility Act of 1982. For tax purposes, trade dollars are taxable
in the year earned and reported on 1099B forms to the IRS.
Organized commercial barter is one of the fastest growing industries of the
1990's. The International Reciprocal Trade Association (IRTA), a trade group
that prepares annual estimates of commercial bartering in the U.S. and Canada,
reports that the total value of products and services bartered by large and
small businesses rose to $8.5 billion during 1995. This is a 10.7% rise over
$7.6 billion in 1994 and the fifth consecutive year of double-digit growth in
sales for barter credits in lieu of cash. Barter companies provide a marketplace
offering a range of the products and services, such as media, travel, hotels,
printing, and business equipment that may be purchased with trade credits, which
are dollar denominated units. The general premise of retail barter is to
generate new business to those that participate and then to provide avenues to
conserve cash flow.
-1-
<PAGE> 6
A barter boom among small businesses helped fuel 1995's growth, according to
IRTA. Expanding retail barter networks served 400,000 small businesses in 1995,
up 12 percent over 1994. The average amount of trading by each business also
rose 12 percent, boosting small business barter to $1.3 billion last year
compared to $1.0 billion in 1994. However, only about 3% of the companies in
the U.S. currently use the services of a barter trade exchange. This virtually
untapped market presents tremendous growth opportunities for the barter
industry.
There are approximately 400 independent trade exchanges in the U.S. and two
national companies, ITEX, and BXI. The independent trade exchanges for the most
part are local or regional organizations with approximately 500 clients, five
employees, and gross revenue in the $100,000 to $200,000 range. Tremendous time
and energy is devoted to accounting/ bookkeeping, marketing and sales, and
customer service. Most independent exchanges have trouble exceeding the 500
client mark and tend to stagnate in a "maintenance" mode of operation. It is
difficult to make a great living as an independent exchange owner, whereas a
number of brokers in the national barter exchanges do very well. Therefore, IBC
believes that a substantial percentage of the independent trade exchanges are
interested in joining a national firm or joining together to become a national
firm.
The advent of a global barter marketplace on the Internet will further encourage
firms to incorporate bartering into their business plans to reach new outlets,
ensure against unsold inventory, and finance larger advertising campaigns.
Based on present trends, 1.6 million businesses will be engaged in barter in
North America within a decade. This is four times the nearly 400,000 firms now
engaged in barter. IRTA expects the number of clients of barter companies to
double over the next five years and to double again by the end of the decade, a
15 percent annual growth rate. A total of 1.6 million barter clients out of 6.3
million businesses who have employees (excluding small businesses with only one
employee) amounts to a penetration rate of only 25 percent. Thus there is
substantial opportunity for continued long-term growth in the barter trade
exchange industry.
IRTA also foresees average annual trade volume per trade exchange client
doubling from approximately $3,500 today to $7,000 by the year 2006. This
estimate is in real terms, not considering inflation, which if included would
raise trade volume even more. IRTA's forecast is based on the trend to targeting
larger-trading clients, and servicing them with more trade brokers equipped with
the latest technology and access to global availabilities on the World Wide Web
in addition to conventional methods.
Trade growth for the most recent decade averaged 15.3 percent per year. The
American industry's ability to sustain a 15 percent growth rate is supported by
expansion plans of existing trade networks and strong growth in new start-ups.
Independent barter companies account for half of the industry's growth.
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<PAGE> 7
One can see that if the number of clients quadruples during the next ten years,
and the average trade volume per client doubles, the trade exchange sector in
North America will be a $10 billion business - eight times its size today.
IBC will compete directly with two national companies, ITEX and BXI. These
companies have more offices, greater sales, stronger financial and marketing
resources than IBC. Increased competition from both companies is expected as IBC
continues acquiring companies. One barter company - ITEX- is a public company.
The growth of ITEX accelerated after their stock began to trade on the NASD
bulletin board in 1992. Their stock was listed on NASDAQ in 1994. Other barter
companies will likely go public in the next few years; these will compete with
IBC. Industry experts suggest that the barter industry will be stimulated by the
emergence of public barter companies and that the industry could grow much more
efficiently if there were 5 to 10 public companies in the industry.
The nineties may well be remembered as an era when the growth in the barter
industry entered a takeoff stage. The significance of the takeoff stage of
growth is that the industry will be generating the retained earnings, and
attracting the outside capital, needed to organized, train, and deploy the
people and technology needed to service a growing number of global clients
linked together in the emerging multi-media marketplace. It will add a
significant new dimension to the financial and commercial worlds.
BUSINESS OF THE COMPANY
IBC started business in September, 1996. IBC's plan is to acquire select
independent retail barter exchanges and national retail barter franchisees
across the United States and Canada. Through acquisitions, IBC will become an
international player in the barter industry, providing a centralized currency,
company standard marketing and support materials, centralized data processing,
and ongoing training and promotion to support and expand the IBC client base. It
is IBC's intent to maintain the existing management team of the acquired
exchanges.
Retail barter clients are demanding greater accessibility of products and
services locally and nationally, exceptional customer service, and better
technology. Therefore, IBC has identified the necessity of consolidating the 400
independent barter exchanges in the U.S. and Canada to satisfy client demands,
to advance the barter industry and to expand barter purchasing power. IBC plans
to expand throughout the U.S. and Canada.
IBC's goal is to become the strongest barter exchange, with the best products
and services available in the barter industry. IBC's marketing strategy is to
aggressively acquire select independent and national franchise offices to form a
national client base, expanding barter purchasing power, creating a centralized
currency, standardized marketing and support materials,
-3-
<PAGE> 8
and providing ongoing training and promotion to support and expand the IBC
client base, IBC's goal is to acquire 20% or more of the market share of the
trade exchange business in the U.S.
The management of IBC believes that they have an advantage over the two existing
national trade exchanges in convincing the independents to join with IBC. The
company has studied the operations of both ITEX and BXI and believe they can
combine the benefits of both while avoiding their weaknesses. The company's main
strength over the other two national exchanges is that IBC will be entering the
market place with a clean slate: IBC will be able to focus on acquisitions of
the best run independent barter exchanges in the industry. IBC has developed
state-of-the-art technology to operate each Area Office.
The purchase price for the acquired exchange will be a combination of cash and
restricted class 144 stock. Valuation will be based on gross revenue, number of
clients and trade volume.
In November, 1996 IBC acquired Cascade Trade Association (CTA). CTA has annual
revenues of approximately $380,000 and close to 550 clients. CTA was established
in 1983 and is the leading barter exchange in the State of Washington.
IBC is currently developing a central processing facility in Rohnert Park, CA.
Centralized efficient processing will be a major incentive for independent and
national franchise exchanges to affiliate with IBC. All Area Offices will have
TradeWorks(R) and BarterServe(R) software, linked directly to the IBC central
processing facility. This facility should be ready for IBC's business in
February, 1997.
IBC plans to acquire twelve trade exchanges by the end of 1997. After expansion
down the west coast of the U.S. IBC will focus on developing business throughout
the U.S. and Canada. The company expects revenue to grow more than 100% per year
for at least the next five years.
Current Service
IBC currently offers barter services for retail, professional and corporate
clients through Area Offices. The company provides Area offices a centralized
barter currency, expansive purchasing power, centralized data processing,
standardized marketing and support and materials, co-op advertising, and ongoing
training and promotion and support to expand the IBC client base.
IBC markets clients' products and services to other clients through directories,
newsletters, brokers, and other means. When clients make barter purchases, IBC
debits "trade dollars from the buyer's account and credits the sellers account,
similar to an ordinary bank account. Generally, sales are at prevailing retail
price and 100% barter. Monthly, clients receive an account statement showing all
activity for that period. IBC charges a 10% cash commission when the client
purchases and monthly fees of $15 cash/$15 trade dollars.
-4-
<PAGE> 9
HIGH RISK FACTORS
The Securities offered hereby involve a high degree of risk. Prospective
investors, prior to making an investment decision, should carefully consider,
along with matters referred to herein, the following risk factors:
1. FUNDS MAY BE INSUFFICIENT TO COMPLETE PLANS FOR GROWTH. The company believes
the net proceeds from this stock offering and cash flow from operations will be
sufficient to allow IBC to meet the expected growth in demand for their
services. However, there is no guarantee that this will happen. There is no
assurance that IBC will be able to expand as projected. If the market acceptance
of their service slows, margins and profitability may suffer.
2. No GUARANTEE OF ACQUISITIONS. IBC may fail to acquire a sufficient number of
exchanges to develop a substantial market share of the retail barter exchange
industry.
3. NO GUARANTEE OF CONTINUED GROWTH IN BARTER INDUSTRY. There is no guarantee
that the retail barter industry will continue to grow at the rapid rates of the
last six years. In this case IBC may face heightened competition and be unable
to generate sufficient service fees to cover operating expenses.
4. INCREASED REGULATION. The barter industry is a self regulated industry. IBC
is required by the federal government to FILE 1099-B forms for each client
transaction on an annual basis. IBC has obtained all required federal and state
permits, licenses, and bonds to operate its facilities. There can be no
assurance that IBC's operations will not be subject to more restrictive
government regulation or that IBC's profitability will be subject to increased
taxation by federal, state, or local agencies.
5. COMPETITION. IBC will attempt, without assurance, to find a niche in the
barter industry. However, there are established entities in this industry which
have greater financial resources and experience than IBC. Accordingly, IBC will
encounter intense competition in its efforts to expand its barter business.
Another barter company may begin actively acquiring independent trade exchanges
and could acquire the most desirable exchanges. In addition, there can be no
assurance that a group of independent barter exchanges will not join forces to
create another national barter company.
6. DILUTION. An investor who acquires Units pursuant to this offering will incur
immediate and substantial dilution.
7. LACK OF MARKET FOR SECURITIES. There is no established public trading market
for IBC's securities, and there is no assurance that a public market for the
Securities will ever develop or, if it develops, that it will continue.
Purchasers of the units in this offering, therefore, may incur substantial
difficulty in selling their Securities should they desire to do so.
-5-
<PAGE> 10
8. ARBITRARY OFFERING PRICE AND EXERCISE PRICE. The offering price of the Units
and the per share exercise price of the warrants were established arbitrarily by
IBC. There is no direct relationship between the offering price and the net
tangible book value, shareholder's equity or net worth of the Company or any
other recognized criterion of value.
9. STOCK SALE RULE. Possible inability to sell the securities in the Secondary
Market. The securities offered hereby are not exempt form Rule 15(g)-9 under the
Securities Exchange Act of 1934 (the "34 Act"). Rule 15(g)-9 imposes additional
sales practice requirements on the brokers who sell non-exempt securities to
persons other than established customers. For transactions covered by the rule,
broker-dealers must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior to the
sale. Consequently, this may affect the ability of purchasers in this offering
to sell their securities in the secondary market.
10. PENNY STOCK REFORM ACT; POSSIBLE INABILITY TO SELL IN THE SECONDARY MARKET.
In October, 1990, Congress enacted the "Penny Stock Reform Act of 1990" (the "90
Act") to counter fraudulent practices common in penny stock transactions. Rule 3
a51-1 of the Exchange Act defines a "penny stock" as an equity that is not,
among other things: a) a reported security; b) a security registered or approved
for registration and traded on a national securities exchange that meets certain
guidelines, where the trade is effected through the facilities of that national
exchange; c) a security listed on NASDAQ; d) a security of an issuer that meets
certain minimum financial requirement ("net tangible assets" in excess of
$2,000,000 or $5,000,000, respectively, depending upon whether the issuer has
been continuously operating for more or less than three years, or "average
revenue" of at least $6,000,000 for the last year); or e) a security with a
price of at least $5.00 per share in the transaction in question or that has a
bid quotation (as defined in the Rule) of at least $5.00 per share. The Units
offered herein do fall within the definition of "PennyStock" under Rule 3a5l-l.
Pursuant to the '90 Act, brokers provide investors with written disclosure
documents containing information concerning various aspects involved in the
market for penny stocks as well as specific information about the penny stock
and the transaction involving the purchase and sale of that stock (e.g. price
quotes and broker-dealer and associated person compensation). Subsequent to the
transaction, the broker will be required to deliver monthly or quarterly
statements containing specific information about the penny stock. These added
disclosure requirements will most likely negatively affect the ability of the
purchasers herein to sell their securities in the secondary market.
USE OF PROCEEDS
If the entire offering is sold the net proceeds to be received by the Company,
after deducting the expenses of the offering, would total $142,500 if the
maximum is sold. Such proceeds are anticipated to be used for acquisitions of
other trade exchanges and for the general working capital of the company.
-6-
<PAGE> 11
LEGAL PROCEEDINGS
IBC is not a party to any material legal proceedings.
MANAGEMENT
Steven White. Mr. White is President, CEO, Vice President of Finance and a
Director of International Barter Corp. Mr. White was previously the founder,
President and CEO of Cascade Trade Association (CTA) for 13 years. He has been
involved in all business aspects of running CTA including management,
administration, sales and market research. While at CTA he developed
BarterServe (R), a database of travel, goods and services. Mr. White was elected
to the Board of Directors of National Association of Trade Exchanges (NATE) in
1995 and the Board elected him vice-president of NATE for 1995 and 1996.
Alan Zimmelman. Mr. Zimmelman is Vice President of Operations of IBC. Mr.
Zimmelman was formerly an Area Director for BXI-West Los Angeles. Mr.
Zimmelman's area was ranked #1 in trade volume for six of the nine years he was
with BXI. Mr. Zimmelman was instrumental in growing his area 300% over his
tenure. His experience includes twelve years in the hotel industry and five in
hospital administration.
Richard Mayer. Mr. Mayer is Vice President of Sales and Marketing. Mr. Mayer
joined CTA in November, 1995 as Vice President of Marketing. His prior
employment included 29 years with General Electric Capital Corp. where he held
several management positions in the Consumer and Commercial Industrial Leasing
and Financing sectors. He is very experienced in human resources, market
forecasting, financial statement analysis, and sales and marketing development.
Norma Fetz. Mrs. Fetz is Vice President and Controller of IBC. Since 1986, Mrs.
Fetz was Secretary and Treasurer for CTA as well as Controller for CTA.
BOARD OF DIRECTORS
Currently, Steven White and Richard Mayer are on the Board of Directors.
PRINCIPAL SHAREHOLDERS
Currently 1,250,000 shares of IBC have been issued. The following table sets
forth the information, as to the date of this Prospectus, with respect to the
beneficial ownership of the outstanding IBC stock by each person known by IBC to
be the beneficial owner of five percent or more of the outstanding common stock.
-7-
<PAGE> 12
<TABLE>
<CAPTION>
Shares owned Percent of Class
Name and address of beneficially and Before after offering
beneficial owner of record offering Half Maximum
- ---------------- ---------------- -------- ---------------- -------
<S> <C> <C> <C> <C>
Steven White 900,000 72% 64.2% 58.1%
2228 S. 291 St.
Federal Way, WA 98003
Norma Kay Fetz 100,000 8% 7.1% 6.5%
11604 SE 304 Street
Auburn, WA 98092
Master Media Corp. 126,000 10.1% 9.0% 8.1%
3160 East Desert Road
Suite 3542
Las Vegas, NV 89121
</TABLE>
CERTAIN TRANSACTIONS
The company was incorporated in the State of Nevada on September 18, 1996. IBC
acquired Cascade Trade Association in November, 1996 in exchange for 1,000,000
shares of IBC restricted stock. Master Media Corp. received 126,000 shares for
consulting services to IBC on January 2, 1997.
DESCRIPTION OF SECURITIES
UNITS
Each unit consists of one Common Share and 1 "A" warrant and 1 "B" warrant. The
terms of the Warrants are described below under the caption "Warrants".
COMMON STOCK
The company is authorized to issue 25 million shares of Common Stock, $.001 par
value per share, of which 1,250,000 shares are issued and outstanding, excluding
Units to be issued in this offering. Each outstanding share of Common Stock is
entitled to one vote, whether in person or by proxy, on all matters that may be
voted by the owners thereof at meeting of the shareholders.
The holders of Common Stock "i" have equal ratable rights to dividends from
funds legally available therefore, when, and if declared by the Board of
Directors of the company; (ii) are entitled to share ratably in all of the
assets of the Company available for distribution to holders of Common stock upon
liquidation, dissolution or winding up of the affairs of the company;
-8-
<PAGE> 13
(iii) do not have preemptive subscription or conversion rights, or redemption or
sinking fund provisions applicable thereto; and (iv) are entitled to one
non-cumulative vote per share on all matters on which stockholders may vote at
all meetings of stockholders.
All shares of Common stock which are the subject of this offering, which issued,
will be fully paid for and non-assessable, with no personal liability attaching
to the ownership thereof. The holders of shares of Common Stock of the company
do not have cumulative voting rights, which means that the holders of more than
50% of such outstanding shares, voting for the election of directors, can elect
all directors of the Company if they so choose and, in such event, the holders
of the remaining shares will not be able to elect any of the Company's
directors.
WARRANTS
The warrants are immediately exercisable and tradeable after the closing of the
offering. Each "A" warrant entities the holder to purchase one additional share
at a price of $.75 per share during a six month period after the closing of the
offering. Each "B" warrant entitles the holder to purchase one additional share
at a price of $ 1.00 per share during a 9 month period after the closing of the
offering. The warrants may be extended upon appropriate notice given to
shareholders by the management.
DIVIDEND POLICY
The payment by the Company of dividends, if any, in the future, rests within the
discretion of the Board of Directors. IBC has not paid any cash dividends and
management does not anticipate that cash dividends will be declared or paid on
its Common Stock in the foreseeable future.
SUBSCRIPTION OFFER
The company hereby offers the right to subscribe at $.50 per Unit (each unit
consisting of 1 common share and 2 purchase warrants ). The Company proposes to
offer the units directly. The offering will be conducted on behalf of the
Company under the direction of its officers and directors. No compensation is to
be paid to the officers or directors or any "associated person" of the Company
(as that term is defined in the Act) in connection with the offer and sale of
the Units.
The Company's officers, directors and stockholders and their associates may
provide the company with the names of persons whom they believe may be
interested in purchasing the units. The Company may sell the Units to such
persons if they reside in a state in which the Company is permitted to sell the
Units.
-9-
<PAGE> 14
METHOD OF SUBSCRIBING
Persons may subscribe by filling in and signing the subscription agreement and
delivering it, prior to the expiration date (as defined below), to the Company.
The subscription price of $.50 per Unit must be paid in cash or by check, bank
draft or postal express money order payable in United States dollars to the
order of International Barter Corp. Certificates for the shares and warrants
subscribed for will be issued as soon as practical after subscriptions have been
accepted. Subscription may not be withdrawn once made.
EXPIRATION Date
The subscription offer will expire at 5:00 P.M. New York time on March 3, 1997
(the "Expiration Date") unless management agrees to extend the offering to May
3, 1997.
RIGHT TO REJECT
The company reserves the right to reject any subscription in its sole discretion
for any reason whatsoever and to withdraw this offering at any time prior to
acceptance by the Company of the subscription received.
TRANSFER AGENT
The transfer Agent for the units, the Common Stock and the Warrants of the
Company is Atlas Stock Transfer Company.
-10-
<PAGE> 1
EXHIBIT 99.B
FORM A
<TABLE>
<CAPTION>
<S> <C> <C>
------------------------------
UNITED STATES OMB APPROVAL
SECURITIES AND EXCHANGE COMMISSION ------------------------------
Washington, D.C. 20549 OMB NUMBER: 3235-0076
Expires: December 31, 1996
FORM D Estimated average burden
hours per response.....16.00
NOTICE OF SALE OF SECURITIES ------------------------------
PURSUANT TO REGULATION D,
SECTION 4(6), AND/OR ------------------------------
UNIFORM LIMITED OFFERING EXEMPTION SEC USE ONLY
------------------------------
Prefix Serial
------------------------------
DATE RECEIVED
------------------------------
- --------------------------------------------------------------------------------------------------------------------------
Name of Offering (/ / check if this is an amendment and name has changed, and indicate change.)
International Barter Corporation
- --------------------------------------------------------------------------------------------------------------------------
Filing Under (Check box(es) that apply): /X/ Rule 504 / / Rule 505 / / Rule 506 / / Section 4(6) / / ULOE
Type of Filing: /X/ New Filing / / Amendment
- --------------------------------------------------------------------------------------------------------------------------
A. BASIC IDENTIFICATION DATA
- --------------------------------------------------------------------------------------------------------------------------
1. Enter the information requested about the issuer
Name of Issuer (/ / check if this is an amendment and name has changed, and indicate change.)
International Barter Corporation
- --------------------------------------------------------------------------------------------------------------------------
Address of Executive Offices (Number and Street, City, State, Zip Code) Telephone Number (Including Area Code)
21400 International Blvd. #207, Seattle, WA 98198-6086 (206) 870-9290
- --------------------------------------------------------------------------------------------------------------------------
Address of Principal Business Operations (Number and Street, City, State, Zip Code) Telephone Number (including Area Code)
(if different from Executive Offices)
- --------------------------------------------------------------------------------------------------------------------------
Brief Description of Business Operates a commercial barter trade exchange
- --------------------------------------------------------------------------------------------------------------------------
Type of Business Organization
/X/ corporation / / limited partnership, already formed / / other (please specify):
/ / business trust / / limited partnership, to be formed
- --------------------------------------------------------------------------------------------------------------------------
Month Year
Actual or Estimated Date of Incorporation or Organization: [09] [96] /X/ Actual / / Estimated
Jurisdiction of Incorporation or Organization: (Enter two-letter U.S. Postal Service abbreviation for State:
CN for Canada; FN for other foreign jurisdiction) [W A]
__________________________________________________________________________________________________________________________
</TABLE>
GENERAL INSTRUCTIONS
FEDERAL: Who Must File: All issuers making an offering of securities in reliance
on an exemption under Regulation D or Section 4(6), 17 CFR 230.510 et seq. or 15
U.S.C. 77d(6).
When To File: A notice must be filed no later than 15 days after the first sale
of securities in the offering. A notice is deemed filed with the U.S. Securities
and Exchange Commission (SEC) on the earlier of the date it is received by the
SEC at the address given below or, if received at that address after the date on
which it is due, on the date it was mailed by United States registered or
certified mail to that address.
Where to File: U.S. Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington D.C. 20549.
Copies Requested: Five (5) copies of this notice must be filed with the SEC, one
of which must be manually signed. Any copies not manually signed must be
photocopies of the manually signed copy or bear typed or printed signatures.
Information Required: A new filing must contain all information requested.
Amendments need only report the name of the issuer and offering, any changes
thereto, the information requested in Part C, and any material changes from the
information previously supplied in Parts A and B. Part E and the Appendix need
not be filed with the SEC.
Filing Fee: There is no federal filing fee.
STATE: This notice shall be used to indicate reliance on the Uniform Limited
Offering Exemption (ULOE) for sales of securities in those states that have
adopted ULOE and that have adopted this form. Issuers relying on ULOE must file
a separate notice with the Securities Administrator in each state where sales
are to be, or have been made. If a state requires the payment of a fee as a
precondition to the claim for the exemption, a fee in the proper amount shall
accompany this form. This notice shall be filed in the appropriate states in
accordance with state law. The Appendix to the notice constitutes a part of this
notice and must be completed.
ATTENTION
FAILURE TO FILE NOTICE IN THE APPROPRIATE STATES WILL NOT RESULT IN A LOSS OF
THE FEDERAL EXEMPTION. CONVERSELY, FAILURE TO FILE THE APPROPRIATE FEDERAL
NOTICE WILL NOT RESULT IN A LOSS OF AN AVAILABLE STATE EXEMPTION UNLESS SUCH
EXEMPTION IS PREDICATED ON THE FILING OF A FEDERAL NOTICE.
SEC 1972 (1/94) 1 of 8
<PAGE> 2
- --------------------------------------------------------------------------------
A. BASIC IDENTIFICATION DATA
- --------------------------------------------------------------------------------
2. Enter the information requested for the following:
- Each promoter of the issuer, if the issuer has been organized within the
past five years;
- Each beneficial owner having the power to vote or dispose, or direct the
vote or disposition of, 10% or more of a class of equity securities of the
issuer;
- Each executive officer and director of corporate issuers and of corporate
general and managing partners of partnership issuers; and
- Each general and managing partner of partnership users.
- --------------------------------------------------------------------------------
Check Box(es) that Apply:
[ ] Promoter [X] Beneficial Owner [X] Executive Officer
[X] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
White, Steven
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
21400 International Blvd. #207, Seattle, WA 98198
- --------------------------------------------------------------------------------
Check Box(es) that Apply:
[ ] Promoter [X] Beneficial Owner [ ] Executive Officer
[ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
Master Media Corporation
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
316 East Desert Road, Suite 3542, Las Vegas, NV 89121
- --------------------------------------------------------------------------------
Check Box(es) that Apply:
[ ] Promoter [ ] Beneficial Owner [ ] Executive Officer
[ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply:
[ ] Promoter [ ] Beneficial Owner [ ] Executive Officer
[ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply:
[ ] Promoter [ ] Beneficial Owner [ ] Executive Officer
[ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply:
[ ] Promoter [ ] Beneficial Owner [ ] Executive Officer
[ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply:
[ ] Promoter [ ] Beneficial Owner [ ] Executive Officer
[ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
(Use blank sheet, or copy and use additional copies of this sheet, as necessary)
2 of 8
<PAGE> 3
- -------------------------------------------------------------------------------
B. INFORMATION ABOUT OFFERING
- -------------------------------------------------------------------------------
1. Has the issuer sold, or does the issuer intend to sell, to Yes No
non-accredited investors in this offering?......................... [X] [ ]
Answer also in Appendix, Column 2, if filing under ULOE.
2. What is the minimum investment that will be accepted from any
individual?........................................................ $100
3. Does the offering permit joint ownership of a Yes No
single unit?....................................................... [ ] [X]
4. Enter the information requested for each person who has been or
will be paid or given, directly or indirectly, any commission or
similar remuneration for solicitation of purchasers in connection
with sales of securities in the offering. If a person to be
listed is an associated person or agent of a broker or dealer
registered with the SEC and/or with a state or states, list the
name of the broker or dealer. If more than five (5) persons to be
listed are associated persons of such a broker or dealer, you may
set forth the information for that broker or dealer only.
- -------------------------------------------------------------------------------
Full Name (Last name first, if individual)
None
- -------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- -------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- -------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States).................[ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID]
[IL] [IN] [IA] [KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] [MS] [MO]
[MT] [NE] [NV] [NH] [NJ] [NM] [NY] [NC] [ND] [OH] [OK] [OR] [PA]
[RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA] [WV] [WI] [WY] [PR]
- -------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- -------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- -------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- -------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States).................[ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID]
[IL] [IN] [IA] [KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] [MS] [MO]
[MT] [NE] [NV] [NH] [NJ] [NM] [NY] [NC] [ND] [OH] [OK] [OR] [PA]
[RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA] [WV] [WI] [WY] [PR]
- -------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- -------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- -------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- -------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States).................[ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID]
[IL] [IN] [IA] [KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] [MS] [MO]
[MT] [NE] [NV] [NH] [NJ] [NM] [NY] [NC] [ND] [OH] [OK] [OR] [PA]
[RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA] [WV] [WI] [WY] [PR]
- -------------------------------------------------------------------------------
(Use blank sheet, or copy and use additional copies of this sheet, as
necessary.)
3 of 8
<PAGE> 4
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
C. OFFERING PRICE, NUMBER OF INVESTORS, EXPENSES AND USE OF PROCEEDS
- ------------------------------------------------------------------------------------------------------------------------------------
1. Enter the aggregate offering price of securities included in this
offering and the total amount already sold. Enter "0" if answer is "none"
or "zero." If the transaction is an exchange offering, check this box [ ]
and indicate in the columns below the amounts of the securities offered
for exchange and already exchanged.
Aggregate Amount Already
Type of Security Offering Price Sold
Debt ........................................................................... $ $
-------- ------
Equity ......................................................................... $150,000 $ 0
-------- ------
[ ] Common [ ] Preferred
Convertible Securities (including warrants) .................................... $ $
-------- ------
Partnership Interests .......................................................... $ $
-------- ------
Other (Specify) _______________________________) ............................... $ $
-------- ------
Total ..................................................................... $150,000 $ 0
-------- ------
Answer also in Appendix, Column 3, if filing under ULOE.
2. Enter the number of accredited and non-accredited investors who have purchased
securities in this offering and the aggregate dollar amounts of their purchases.
For offerings under Rule 504, indicate the number of persons who have purchased
securities and the aggregate dollar amount of their purchases on the total lines.
Enter "0" if answer is "none" or "zero."
Aggregate
Number Dollar Amount
Investors of Purchases
Accredited Investors ........................................................... 0 $
-------- ------
Non-accredited Investors ....................................................... 0 $
-------- ------
Total (for filings under Rule 504 only) ................................... 0 $
-------- ------
Answer also in Appendix, Column 4, if filing under ULOE.
3. If this filing is for an offering under Rule 504 or 505, enter the information
requested for all securities sold by the issuer, to date, in offerings of the type
indicated, in the twelve (12) months prior to the first sale of securities in this
offering. Classify securities by type listed in Part C - Question 1.
Type of Dollar Amount
Type of offering Security Sold
Rule 505 ....................................................................... NA $ 0
-------- ------
Regulation A .................................................................. NA $ 0
-------- ------
Rule 504 ....................................................................... NA $ 0
-------- ------
Total ..................................................................... $ 0
-------- ------
4. a. Furnish a statement of all expenses in connection with the issuance and
distribution of the securities in this offering. Exclude amounts relating solely
to organization expenses of the issuer. The information may be given as subject to
future contingencies. If the amount of an expenditure is not known, furnish an
estimate and check the box to the left of the estimate.
Transfer Agent's Fees ................................................................................. [ ] $ 0
------
Printing and Engraving Costs .......................................................................... [ ] $1,500
------
Legal Fees ............................................................................................ [ ] $4,000
------
Accounting Fees ....................................................................................... [ ] $1,000
------
Engineering Fees ...................................................................................... [ ] $ 0
------
Sales Commissions (specify finders' fees separately) .................................................. [ ] $ 0
------
Other Expenses (identify) Miscellaneous ............................................................... [ ] $1,000
------------- ------
Total ............................................................................................ [ ] $7,500
------
4 of 8
</TABLE>
<PAGE> 1
EXHIBIT 99.C
N.Y. Form M-11 ** File No. S27-77-22
(Rev. 5/90) (for renewals only)
Approved January 29, 1997
STATE OF NEW YORK
DEPARTMENT OF LAW
ISSUER STATEMENT
(Section 359-e Gen. Bus. Law)
Name of International Barter Principal 21400 International Blvd. Suite 207
Issuer Corp Office Seattle, WA 98198-6086
------------------------ -----------------------------------
Street Address City State Zip
Telephone Number (206) 870-9290
---------------------
This form is not to be used by issuers engaged in any aspect of real estate or
mortgage financing unless they also obtain a letter upon written application
pursuant to Section 352e or g. Theatrical Syndication must comply with Article
23 of the Arts and Cultural Affairs Law.
1. Issuer is [x] an existing; [ ] a proposed; [x] a corporation; [ ] general
partnership; [ ] limited partnership; [ ] other (specify) _______________
organized under the laws of Nevada on __________________. The entire offering is
[ ] intrastate, [x] interstate
2. The business of the issuer is (described briefly) operates a commercial
barter trade exchange
3. Issuer proposes to offer [x] stock; [ ] bonds; [ ] notes;
[ ] partnership interests; [ ] other (specify)___________________
4. The securities will be sold [x] by the officers and directors of the
issuer; [ ] N.Y. registered broker [ ] by an underwriter; [ ] by salesmen
employed by issuer. The securities will be sold on a [ ] best efforts basis; [ ]
firm commitment. If by an underwriter or broker, indicate the names of
underwriters or syndicate manager _______________________________________.
5. Total amount of offering $150,000 Anticipated offering expenses total
$7,500 consisting of: Selling: $0 Other: $7,500.
6. State use of the net proceeds to be obtained: Acquisition of other
commercial barter trade exchanges and general working capital
** Found on the fee receipt you received for your original filing.
- --------------------------------------------------------------------------------
Filing is incomplete without a copy Filing Fee Enclosed as Follows:
of offering literature. If not Total amount of offering
available, please explain. under $500,000......... $200
Indicate to whom you wish over $500,000.......... $800
the fee receipt sent.
( ) Attorney (X) Issuer Send remittance to:
Bureau of Investor Protection
Personal checks not accepted. and Securities
Attorney's checks, certified check, N.Y. Department of Law
bank check, money order only, 120 Broadway
payable to the N.Y.S. Department New York, NY 10271
of Law
<PAGE> 2
7. If the securities are being offered partly or entirely for the account of
selling holders, please check [ ]. Indicate the details of the secondary
offering below for each seller.
Anticipated
Name of Seller Address Dollar Amount Offered
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. Has registrant, any officer, director or principal or
partner ever
A. been suspended or expelled from membership in any
securities or commodities exchange, association of
securities or commodities dealers or investment
advisors? .......................................... Yes [ ] No [X]
B. had a license or registration as a dealer, broker,
investment advisor or salesman, futures commission
merchant, associated person, commodity pool
operator, or commodity trading advisor denied,
suspended or revoked? .............................. Yes [ ] No [X]
C. been enjoined or restrained by any court or
government agency from:
1. the issuance, sale or offer for sale of
securities or commodities? ...................... Yes [ ] No [X]
2. rendering securities or commodities advice? ..... Yes [ ] No [X]
3. handling or managing trading accounts? .......... Yes [ ] No [X]
4. continuing any practices in connection with
securities or commodities? ...................... Yes [ ] No [X]
D. been convicted of any crime (other than minor
traffic)?
E. used or been known by any other name? .............. Yes [ ] No [X]
F. been the subject of any professional disciplinary
proceeding? ........................................ Yes [ ] No [X]
G. been adjudged a bankrupt or made a general
assignment for benefit of creditors; or been an
officer, director or principal of any entity which
was reorganized in bankruptcy, adjudged a bankrupt
or made a general assignment for benefit of
creditors? ......................................... Yes [ ] No [X]
H. had an offering of securities within the last three
years or been an officer, director, principal or
partner of any entity which had an offering of
securities within the last three years ............. Yes [ ] No [X]
I. if the answer to any of the above is "YES", attach a
statement of full particulars.
9. Are there any outstanding judgments (not including
judgments involving domestic relations) against the
issuer or any officer, director, principal or partner
thereof? If yes, attach statement of full particulars.. Yes [ ] No [X]
10. List names and residence addresses of all employees (officers and
directors not included) of Issuer who are selling in N.Y.S., N.Y. Form M-2
must be filed for each person listed.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
11. Limited Partnerships are required to submit a list of all limited partners
as soon as the offering is completed. This may be done in letter form.
12. If the Issuer is a limited partnership list all of the general partners:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
<PAGE> 3
13. The information set forth below should be provided for each officer,
director, principal or partner. In the case of a corporate general partner
information must be provided for all officers. If not enough space is
provided use continuation sheets. Do not refer to prospectus or offering
literature. SEC biographies can be substituted for employment history only.
<TABLE>
<S> <C>
a. Name: Steven White Title: President and CEO and Director
Home Address: 2228 S. 291 St. Phone: (206) 839-6733
Federal Way, WA 98003
Place of Birth: Los Angeles, CA Date of Birth: 4/29/58
Social Security #: ###-##-#### Prior home addresses for past five years:
920 Washington Ave., Bremerton, WA 98337
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</TABLE>
Following is my complete employment and business affiliation record
for the past five years: (Indicate periods of self-employment and
unemployment. Include all corporations or other entities where you
hold or held a substantial equity or controlling interest.)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
From To Employer or Business Affiliation Position Held and
Mo. Yr. Mo. Yr. Name Address Type of Business
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7/83 Present Cascade Trade Assoc. 21400 Intl Blvd. #207 President
Seattle, WA 98198
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
b. Name: Richard Mayer Title: Vice President-Marketing and Director
Home Address: 30709 5th Place S. Phone: (206) 941-8199
Federal Way, WA 98003
Place of Birth: Buffalo, NY Date of Birth: 7/6/39
Social Security #: ###-##-#### Prior home addresses for past five years:
-------------------------------------------------------------------------
None
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</TABLE>
Following is my complete employment and business affiliation record
for the past five years: (Indicate periods of self-employment and
unemployment. Include all corporations or other entities where you
hold or held a substantial equity or controlling interest.)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
From To Employer or Business Affiliation Position Held and
Mo. Yr. Mo. Yr. Name Address Type of Business
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
11/95 Present Cascade Trade Assoc. 21400 Intl Blvd. #207 VP-Marketing
Seattle, WA 98198
- ---------------------------------------------------------------------------------------------------------
4/89 11/95 Money Mailer of the Sound 30709 5th Place S. Owner
Federal Way, WA
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
13. The information set forth below should be provided for each officer,
director, principal or partner. In the case of a corporate general partner
information must be provided for all officers. If not enough space is
provided use continuation sheets. Do not refer to prospectus or offering
literature. SEC biographies can be substituted for employment history only.
<TABLE>
<S> <C>
c. Name: Norma Kay Fetz Title: Vice President
Home Address: 11604 SE 304th St. Phone: (206) 833-8306
Aubuca, WA 98092
Place of Birth: Seattle, WA Date of Birth: 10/29/55
Social Security #: ###-##-#### Prior home addresses for past five years:
-------------------------------------------------------------------------
None
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</TABLE>
Following is my complete employment and business affiliation record
for the past five years: (Indicate periods of self-employment and
unemployment. Include all corporations or other entities where you
hold or held a substantial equity or controlling interest.)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
From To Employer or Business Affiliation Position Held and
Mo. Yr. Mo. Yr. Name Address Type of Business
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
9/84 Present Cascade Trade Assn 21400 Intl Blvd #207 Vice President
Seattle, WA 98198
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
d. Name: Alan Zimmelman Title: Vice President Operations
Home Address: 1151 Wild Canary Lane Phone: (619) 944-7202
Oliverhain, CA 92024
Place of Birth: Los Angeles, CA Date of Birth: 9/22/44
Social Security #: ###-##-#### Prior home addresses for past five years:
-------------------------------------------------------------------------
4508 Beck Avenue, North Hollywood, CA 91602
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</TABLE>
Following is my complete employment and business affiliation record
for the past five years: (Indicate periods of self-employment and
unemployment. Include all corporations or other entities where you
hold or held a substantial equity or controlling interest.)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
From To Employer or Business Affiliation Position Held and
Mo. Yr. Mo. Yr. Name Address Type of Business
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
11/87 8/96 BXI West Los Angeles 162 S. Rancho Santa Fe President
#E901347
Encinitas, CA 92024-4
- ------------------------------------------------------------------------------------------------------------
9/96 Present IBC 21400 International Blvd #207 VP Operations
Seattle, WA 98198
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 5
c. Name: _____________________________ Title: _________________________________
Home Address: _____________________________________ Phone: ____________________
Place of Birth: ______________________ Place of Birth: ________________________
Social Security #: _____________ Prior home addresses for past five years:_____
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Following is my complete employment and business affiliation record for the
past five years: (Indicate periods of self-employment and unemployment.
Include all corporations or other entities where you hold or held a substantial
equity or controlling interest.)
________________________________________________________________________________
From To Employer or Business Affiliation Position Held and
Mo. Yr. Mo. Yr. Name Address Type of Business
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The use of power of attorney is not acceptable. If all signatures are not
available at time of filing, you must submit the proper total fee and all
information required by Item 13. Note in your letter of transmittal that
counterpart forms with missing signatures will be submitted within 30 days of
filing.
Limited Partnerships must supply one signature for each general partner. One
signature by an officer of a corporate general partner is sufficient, however
all selling officers must sign.
Each of the undersigned, constituting all officers, directors, partners, and
controlling principals of the registrant do hereby state and represent that all
statements contained herein are true and correct and understands that any false
statement shall constitute a violation of Art. 23-A of the General Business Law.
<TABLE>
<CAPTION>
Signature Name and Title (please type or print) Date
--------- ------------------------------------- ----
<S> <C> <C>
/s/ STEVEN WHITE Steven White, President and CEO and Director 1-3-97
- ---------------------- -------------------------------------------- ------
/s/ RICHARD MAYER Richard Mayer, VP and Director 1/3/98
- ---------------------- -------------------------------------------- ------
/s/ NORMA KAY FETZ Norma Kay Fetz, VP 1/3/97
- ---------------------- -------------------------------------------- ------
/s/ ALAN ZIMMELMAN Alan Zimmelman, VP
- ---------------------- -------------------------------------------- ------
- ---------------------- -------------------------------------------- ------
- ---------------------- -------------------------------------------- ------
- ---------------------- -------------------------------------------- ------
- ---------------------- -------------------------------------------- ------
- ---------------------- -------------------------------------------- ------
- ---------------------- -------------------------------------------- ------
- ---------------------- -------------------------------------------- ------
</TABLE>
To complete this filing a State Notice and Further State Notice must be filed
with the Secretary of State in Albany. In the case of a non-resident issuer a
Consent to Service of Process must be filed with the Secretary of State.
All changes or amendments to this form must be submitted on NY Form M-3 with a
$20 fee.
<PAGE> 1
EXHIBIT 99.D
INFORMATION STATEMENT
INTERNATIONAL BARTER CORP.
(A Nevada Corp.)
120,000 units
Offering price - $.60 PER UNIT
EACH UNIT CONSISTS OF 1 SHARE OF COMMON STOCK, PAR VALUE ($.001) OF
INTERNATIONAL BARTER CORP. (the "Company"), ONE CLASS C WARRANT ("C warrant"),
AND ONE CLASS D WARRANT ("D warrant"). EACH "C" WARRANT ENTITLES THE HOLDER TO
PURCHASE AN ADDITIONAL SHARE OF COMMON STOCK AT A PRICE OF $.80 PER SHARE DURING
A 3-MONTH PERIOD AFTER THE CLOSE OF THE OFFERING. EACH "D" WARRANT ENTITLES THE
HOLDER TO PURCHASE AN ADDITIONAL SHARE OF COMMON STOCK AT A PRICE OF $1.10
PER SHARE DURING A 3-MONTH PERIOD AFTER THE CLOSE OF THE OFFERING.
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE, INVOLVE A HIGH DEGREE OF
RISK AND IMMEDIATE DILUTION, AND SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN
AFFORD TO LOSE THEIR ENTIRE INVESTMENT. SEE "HIGH RISK FACTORS" FOR SPECIAL
FACTORS CONCERNING THE COMPANY.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PAYMENT FOR THE UNITS SHOULD BE MADE BY CHECK OR MONEY ORDER PAYABLE TO
"International Barter Corp".
<TABLE>
<CAPTION>
Underwriter's
Price to Commissions Proceeds to the
Investors and Discounts Company(2)
--------- ------------- ----------
<S> <C> <C> <C>
Per unit $0.60 $-0- $0.60
Maximum (120,000 units) $72,000.00 $-0- $72,000.00
</TABLE>
(See notes on following page)
International Barter Corp.
21400 International Blvd. Suite 207
Seattle, WA 98198
(206)870-9290
The date of this Information Statement is February 7, 1998
<PAGE> 2
(FOOTNOTES FROM COVER PAGE)
(1) The Units are being offered on behalf of the Company by the Management
of the company (who will not be paid for such services), on a "best
efforts only" basis with respect to all 120,000 units. There can be no
assurance that any or all of the Units being offered will be sold.
Because this is a "best efforts only" offering, with no minimum
required to be sold, the proceeds may be released to the Company upon
receipt thereof, while the offering continues for the remaining unsold
units. The offering expires February 28, 1998 Management can elect to
extend the offering to March 31, 1998.
(2) The proceeds to the Company set forth in the table to the cover page of
the Offering Document have been computed before deduction of expenses
that will be incurred in connection with THIS offering including filing
printing, legal, accounting, transfer agent and other fees. It is
estimated that the expenses to be incurred by the company in connection
with the offering will be approximately $1000. It is estimated that the
net proceeds to the Company after deducting all expenses in connection
with the offering will be approximately $71,000. (This does not
include any proceeds which would be realized upon the exercise of any
warrants).
Prior to this offering there has been no market for the Units, the Common Stock
(the "shares") or the Warrants of International Barter Corp. (The "Company").
There can be no assurance that any trading market in these securities will
develop hereafter, or that any trading if developed, will continue. The Company
is not subject to reporting requirements of section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange" Act), meaning that it is not
required to file annual or quarterly reports with the Securities and Exchange
Commission. The Company is conducting this offering pursuant to Rule 504 of
Regulation D promulgated under the Securities Act of 1933 (the "Act"), which
exempts from registration with the Securities and Exchange Commission offerings
of up to $ 1,000,000 which comply with the requirements of the Rule.
(ii)
<PAGE> 3
BLUE SKY NOTICE
IT IS ANTICIPATED THAT THE UNITS DESCRIBED HEREIN WILL BE OFFERED FOR SALE IN
THE STATE OF NEW YORK. A DESCRIPTION OF THE RELEVANT CONDITIONS AN RESTRICTIONS
REQUIRED BY THE STATE OF NEW YORK IS SET FORTH BELOW.
NOTICE OF NEW YORK RESIDENTS
THIS DOCUMENT HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL OF THE STATE OF NEW
YORK PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL FOR THE STATE OF NEW
YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THIS INFORMATION STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OR ANY OFFER TO BUY ANY SECURITY IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE DELIVERY OF THIS INFORMATION
STATEMENT SHALL NOT UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE
HAS NOT BEEN ANY CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE THEREOF.
THE UNITS ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE ACCEPTANCE OF AN
OFFER TO PURCHASE, WITHDRAWAL OR CANCELLATION OF ANY OFFERING WITHOUT NOTICE.
THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER, IN WHOLE OR IN PART, FOR THE
PURCHASE OF ANY OF THE UNITS OFFERED HEREBY.
(iii)
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY ................................................................ 1
DESCRIPTION OF THE BARTER BUSINESS ..................................... 1
BUSINESS OF THE COMPANY ................................................ 3
HIGH RISK FACTORS ...................................................... 4
USE OF PROCEEDS ........................................................ 6
LEGAL PROCEEDINGS ...................................................... 6
MANAGEMENT ............................................................. 6
PRINCIPAL SHAREHOLDERS ................................................. 7
CERTAIN TRANSACTIONS ................................................... 8
DESCRIPTION OF SECURITIES .............................................. 8
SUBSCRIPTION OFFER ..................................................... 9
</TABLE>
(iv)
<PAGE> 5
SUMMARY
The following is a summary of certain information contained in this Information
Statement and is qualified in its entirety by the more detailed information
appearing elsewhere in the Information Statement.
THE COMPANY
International Barter Corp. (The "Company" or "IBC") was incorporated in the
State of Nevada on September 18, 1996. IBC was formed to become the market
leader in the consolidation of the independent retail barter exchange industry.
DESCRIPTION OF THE BARTER BUSINESS
Conventional barter is the oldest form of commerce; historically barter involved
a direct person-to-person exchange of goods and services. Thus, conventional
barter was limited to a transaction between the two parties. The development of
modem commercial barter was dependent on the development of an index of
valuation for establishing barter credits and debits. This index of valuation is
the industry-accepted "trade dollar". The trade dollar is a ledger entry by
which goods and services can be bought and sold. Trade dollars are credited and
debited to each business's trade account, similar to a bank account. Exchange
clientele are serviced by trade brokers who operate in a manner similar to that
of a stockbroker. In addition, barter clients can make transactions between
themselves without the services of a trade broker.
Retail trade exchanges are classified as third party record keepers, having the
same fiduciary obligations as banks and stockbrokers under the Tax Equity and
Fiscal Responsibility Act of 1982. For tax purposes, trade dollars are taxable
in the year earned and reported on 1099B forms to the IRS.
Organized commercial barter is one of the fastest growing industries of the
1990's. The International Reciprocal Trade Association (IRTA), a trade group
that prepares annual estimates of commercial bartering in the U.S. and Canada,
reports that the total value of products and services bartered by large and
small businesses rose to $8.5 billion during 1995. This is a 10.7% rise over
$7.6 billion in 1994 and the fifth consecutive year of double-digit growth in
sales for barter credits in lieu of cash. Barter companies provide a marketplace
offering a range of the products and services, such as media, travel, hotels,
printing, and business equipment that may be purchased with trade credits, which
are dollar denominated units. The general premise of retail barter is to
generate new business to those that participate and then to provide avenues to
conserve cash flow.
A barter boom among small businesses helped fuel 1995's growth, according to
IRTA. Expanding retail barter networks served 400,000 small businesses in 1995,
up 12 percent over 1994. The average amount of trading by each business also
rose 12 percent, boosting small business barter to $1.3 billion last year
compared to $ 1.0 billion in 1994. However, only about 3% of the companies
-1-
<PAGE> 6
in the U.S. currently use the services of a barter trade exchange. This
virtually untapped market presents tremendous growth opportunities for the
barter industry.
There are approximately 400 independent trade exchanges in the U.S. and two
national companies, ITEX, and BXI. The independent trade exchanges for the most
part are local or regional organizations with approximately 500 clients, five
employees, and gross revenue in the $100,000 to $200,000 range. Tremendous time
and energy is devoted to accounting/bookkeeping, marketing and sales, and
customer service. Most independent exchanges have trouble exceeding the 500
client mark and tend to stagnate in a "maintenance" mode of operation. It is
difficult to make a great lining as an independent exchange owner, whereas a
number of brokers in the national barter exchanges do very well. Therefore, IBC
believes that a substantial percentage of the independent trade exchanges are
interested in joining a national firm or joining together to become a national
firm.
The advent of a global barter marketplace on the Internet will further encourage
firms to incorporate bartering into their business plans to reach new outlets,
ensure against unsold inventory, and finance larger advertising campaigns.
Based on present trends, 1.6 million businesses will be engaged in barter in
North America within a decade. This is four times the nearly 400,000 firms now
engaged in barter. IRTA expects the number of barter companies to double over
the next five years and to double again by the end of the decade, a 15 percent
annual growth rate. A total of 1.6 million barter clients out of 6.3 million
businesses who have employees (excluding small businesses with only one
employee) amounts to a penetration rate of only 25 percent. Thus there is a
substantial opportunity for continued longterm growth in the barter trade
exchange industry.
IRTA also foresees average annual trade volume per trade exchange client
doubling from approximately $3,500 today to $7,000 by the year 2006. This
estimate is in real terms, not considering inflation, which if included would
raise trade volume even more. IRTA's forecast is based on the trend to targeting
larger-trading clients, and servicing them with more trade brokers equipped with
the latest technology and access to global availabilities on the World Wide Web
in addition to conventional methods.
Trade growth for the last ten years averaged 15.3 percent per year. The American
industry's ability to sustain a 15 percent growth is supported by expansion
plans of existing trade networks and strong growth in new start-ups. Independent
barter companies account for half of the industry's growth.
One can see that if the number of clients quadruples during the next ten years,
and the average trade volume per client doubles, the trade exchange sector in
North America will be $10 billion business - eight times its size today.
-2-
<PAGE> 7
IBC will compete directly with two national companies, ITEX and BXI. These
companies have more offices, greater sales, stronger financial and marketing
resources than IBC. Increased competition from both companies is expected as IBC
continues acquiring companies. One barter company - ITEX - is a public company.
The growth of ITEX accelerated after their stock began to trade on the NASD
bulletin board in 1992. Their stock was listed on NASDAQ in 1994. Other barter
companies will likely go public in the next few years; these will compete with
IBC. Industry experts suggest that the barter industry will be stimulated by the
emergence of public barter companies and that the industry could grow much more
efficiently if there were 5 to 10 public companies the industry.
The nineties may well be remembered as an era when the growth in the barter
industry entered a takeoff stage. The significance of the takeoff stage of
growth is that the industry will be generating the retained earnings, and
attracting the outside capital, needed to organize, train, and deploy the people
and technology needed to service a growing number of global clients linked
together in the emerging multi-media marketplace. It will add a significant new
dimension to the financial and commercial worlds.
BUSINESS OF THE COMPANY
IBC started business in September, 1996. IBC's plan is to acquire select
independent retail barter exchanges and national retail barter franchisees
across the United States and Canada. Through acquisitions, IBC will become an
international player in the barter industry, providing a centralized currency,
company standard marketing and support materials, centralized data processing,
and ongoing training and promotion to support and expand the IBC client base. It
is IBC's intent to maintain the existing management team of the acquired
exchanges.
Retail barter clients are demanding greater accessibility of products and
services locally and nationally, exceptional customer service, and better
technology. Therefore, IBC has identified the necessity of consolidating the 400
independent barter exchanges in the U.S. and Canada to satisfy client demands,
to advance the barter industry and to expand barter purchasing power. IBC plans
to expand throughout the U.S. and Canada.
IBC's goal is to become the strongest barter exchange, with the best products
and services available in the barter industry. IBC's marketing strategy is to
aggressively acquire select independent and national franchise offices to form a
national client base, expanding barter purchasing power, creating a centralized
currency, standardized marketing and support materials, and providing ongoing
training and promotion to support and expand the IBC client base. IBC's goal is
to acquire 20% or more of the market share of the trade exchange business in the
U.S.
The management of IBC believes that they have an advantage over the two existing
national trade exchanges in convincing the independents to join with IBC. The
company has studied the operations of both ITEX and BXI and believe they can
combine the benefits of both while avoiding their weaknesses. The company's main
strength over the other two national exchanges is that IBC will be entering the
marketplace with a clean slate. IBC will be able to focus on
-3-
<PAGE> 8
acquisitions of the best run independent barter exchanges in the industry. IBC
has developed state-of-the-art technology to operate each office.
The purchase price for the acquired exchange will be a combination of cash and
restricted class 144 stock. Valuation will be based on gross revenue, number of
clients and trade volume.
In November, 1996 IBC acquired Cascade Trade Association (CTA). CTA has annual
revenues of approximately $380,000 and close to 550 clients. CTA was established
in 1983 and is the leading barter exchange in the State of Washington.
IBC is currently developing a central processing facility in Rohnert Park, CA.
Centralized efficient processing will be a major incentive for independent and
national franchise exchanges to affiliate with IBC. All Area Offices will have
TradeWorks(R) and BarterServe(R) software linked directly to the IBC central
processing facility. This facility should be ready for IBC's business in
February, 1997.
IBC plans to acquire twelve trade exchanges by the end of 1998. After expansion
down the west coast of the U.S. IBC will focus on developing business throughout
the U.S. and Canada. The company expects revenue to grow more than 100% per
year for at least the next five years.
CURRENT SERVICE
IBC currently offers barter services for retail, professional and corporate
clients through Area offices. The company provides Area offices a centralized
barter currency, expansive purchasing power, centralized data processing,
standardized marketing and support and materials, co-op advertising, and ongoing
training and promotion and support to expand the IBC client base.
IBC markets client's products and services to other clients through directories,
newsletters, brokers, and other means. When clients make barter purchases, IBC
debits trade dollars from the buyer's account and credits the sellers account,
similar to an ordinary bank account. Generally, sales are at prevailing retail
price and 100% barter. Monthly, clients receive an account statement showing all
activity for that period. IBC charges a 10% cash commission when the client
purchases and monthly fees of $15 cash/$15 trade dollars.
HIGH RISK FACTORS
The Securities offered hereby involve a high degree of risk. Prospective
investors, prior to making an investment decision, should carefully consider,
along with matters referred to herein, the following risk factors:
1. FUNDS MAY BE INSUFFICIENT TO COMPLETE PLANS FOR GROWTH. The company believes
the net proceeds from this stock offering and cash flow from operations will be
sufficient to allow IBC to meet the expected growth in demand for their
services. However, there is no guarantee that this
-4-
<PAGE> 9
will happen. There is no assurance that IBC will be able to expand as projected.
If the market acceptance of their service slows, margins and profitability may
suffer.
2. NO GUARANTEE OF ACQUISITIONS. IBC may fail to acquire a sufficient number of
exchanges to develop a substantial market share of the retail barter exchange
industry.
3. NO GUARANTEE OF CONTINUED GROWTH IN THE BARTER INDUSTRY. There is no
guarantee that the retail barter industry will continue to grow at the rapid
rates of the last six years. In this case IBC may face heightened competition
and be unable to generate sufficient service fees to cover operating expenses.
4. INCREASED REGULATION. The barter industry is a self regulated industry. IBC
is required by the federal government to file 1099-B forms for each client
transaction on an annual basis. IBC has obtained all required federal and state
permits, licences, and bonds to operate its facilities. There can be no
assurance that IBC's operations will not be subject to more restrictive
government regulation or that IBC's profitability will be subject to increased
taxation by federal, state, or local agencies.
5. COMPETITION. IBC will attempt, without assurance, to find a niche in the
barter industry. However, there are established entities in this industry which
have greater financial resources and experience than IBC. Accordingly, IBC will
encounter intense competition in its efforts to expand its barter business.
Another barter company may begin actively acquiring independent trade exchanges
and could acquire the most desirable exchanges. In addition, there can be no
assurance that a group of independent barter exchanges will not join forces to
create another national barter company.
6. DILUTION. An investor who acquires Units pursuant to this offering will incur
immediate and substantial dilution.
7. LACK OF MARKET FOR SECURITIES. There is no established public trading market
for IBC's securities, and there is no assurance that a public market for the
securities will ever develop or, if it develops, that it will continue.
Purchasers of the units in this offering, therefore, may incur substantial
difficulty in selling their securities should they desire to do so.
8. ARBITRARY OFFERING PRICE AND EXERCISE PRICE. The offering price of the Units
and the per share exercise price of the warrants were established arbitrarily by
IBC. There is no direct relationship between the offering price and the net
tangible book value, shareholder's equity or net worth of the Company or any
other recognized criterion of value.
9. STOCK SALE RULE. Possible inability to sell the securities in the Secondary
Market. The securities offered hereby are not exempt from Rule 12(g)-9 under the
Securities Exchange Act of 1934 (the "34 Act"). Rule 15(g)-9 imposes additional
sales practice requirements on the brokers who sell non-exempt securities to
persons other than established customers. For transactions
-5-
<PAGE> 10
covered by the rule, broker-dealers must make a special suitability
determination for the purchaser and receive the purchaser's written agreement to
the transaction prior to the sale. Consequently, this may affect the ability of
purchasers in this offering to sell their securities in the secondary market.
10. PENNY STOCK REFORM ACT; POSSIBLE INABILITY TO SELL IN THE SECONDARY MARKET.
In October 1990. Congress enacted the "Penny Stock Reform Act of 1990" (the "90
Act") to counter fraudulent practices common in penny stock transactions. Rule
3a51-1 of the Exchange Act defines a "penny stock" as an equity that is not,
among other things: a) a reported security; b) a security registered or approved
for registration and traded on a national securities exchange that meets certain
guidelines, where the trade is effected through the facilities of that national
exchange; c) a security listed on NASDAQ; d) a security of an issuer that meets
certain minimum financial requirement ("net tangible assets" in excess of
$2,000,000 or $5,000,000, respectively, depending upon whether the issuer has
been continuously operating for more or less than three years, or "average
revenue" of at least $6,000,000 in the last year); or e) a security with a price
of at least $5.00 per share in the transaction in question or that has a bid
quotation (as defined in the Rule) of at least $5.00 per share. The Units
offered herein do fall within the definition of "Penny Stock" under Rule 3a51-1.
Pursuant to the '90 act, brokers provide investors with written disclosure
documents containing information concerning various aspects involved in the
market for penny stocks as well as specific information about the penny stock
and the transaction involving the purchase and sale of that stock (e.g. price
quotes and broker-dealer and associated person compensation). Subsequent to the
transaction, the broker will be required to deliver monthly or quarterly
statements containing specific information about the penny stock. These added
disclosure requirements will most likely negatively affect the ability of the
purchasers herein to sell their securities in the secondary market.
USE OF PROCEEDS
If the entire offering is sold the net proceeds to be received by the Company,
after deducting the expenses of the offering, would total $71,000 if the maximum
is sold. Such proceeds are anticipated to be used for acquisitions of other
trade exchanges and for the general working capital of the company.
LEGAL PROCEEDINGS
IBC is not a party to any material legal proceedings.
MANAGEMENT
Steven White. Mr. White is President, CEO, Vice President of Finance and a
Director of International Barter Corp. Mr. White was previously the founder,
President and CEO of Cascade Trade Association (CTA) for 14 years. He has been
involved in all business aspects of running CTA including management,
administration, sales and market research. While at CTA he
-6-
<PAGE> 11
developed BarterServe R, a database of travel, goods and services. Mr. White was
elected to the Board of Directors of the National Association of Trade Exchanges
(NATE) in 1995, 1996, and 1997, and the Board elected him vice-president of NATE
for 1995 and 1996. He was President elect in 1997 and President in 1998.
Alan Zimmelman. Mr. Zimmelman is Vice President of Operations of IBC. Mr.
Zimmelman was formerly an Area Director for BXI-West Los Angeles . Mr.
Zimmelman's area was ranked #1 in trade volume for six of the nine years he was
with BXI. Mr. Zimmelman was instrumental in growing his area 300% over his
tenure. His experience included twelve years in the hotel industry and five in
hospital administration.
Richard Mayer. Mr. Mayer is Vice President of Sales and Marketing. Mr. Mayer
joined CTA in November, 1995 as Vice President of Marketing. His prior
employment included 29 years with General Electric Capital Corp. where he held
several management positions in the Consumer and Commercial Industrial Leasing
and Financing sectors. He is very experienced in human resources, market
forecasting, financial statement analysis, and sales and marketing development.
Norma Fetz. Mrs. Fetz is Vice President and Controller of IBC. Since 1986, Mrs.
Fetz was Secretary and Treasurer for CTA as well as Controller for CTA.
Board OF DIRECTORS
Currently, Steven White, Glen White, Alan Zimmelman and Richard Mayer are on the
Board of Directors.
PRINCIPAL SHAREHOLDERS
Currently, 1,550,000 shares of IBC have been issued. The following table sets
forth the information, as to the date of this Prospectus, with respect to the
beneficial ownership of the outstanding IBC stock by each person known by IBC to
be the beneficial owner of five percent or more of the outstanding common stock.
<TABLE>
<CAPTION>
Shares owned Percent of Class
Name and address of beneficially and Before after offering
beneficial owner of record Offering Half Maximum
- ---------------- --------- -------- ---- -------
<S> <C> <C> <C> <C>
Steven White 900,000 58% 56% 54%
2228 S. 291 Street
Federal Way, WA 98003
Norma Kay Fetz 100,000 6.5% 6.2% 5.9%
11604 SE 304 Street
Auburn, WA 98092
</TABLE>
-7-
<PAGE> 12
<TABLE>
<CAPTION>
Shares owned Percent of Class
Name and address of beneficially and Before after offering
beneficial owner of record Offering Half Maximum
- ---------------- --------- -------- ---- -------
<S> <C> <C> <C> <C>
Master Media Corp. 126,000 8.1% 7.8% 7.5%
3160 East Desert Road
Suite 3542
Las Vegas, NV 89121
</TABLE>
CERTAIN TRANSACTIONS
The company was incorporated in the State of Nevada on September 18, 1996. IBC
acquired Cascade Trade Association in November, 1996 in exchange for 1,000,000
shares of IBC restricted stock. Master Media Corp. Received 126,000 shares for
consulting services to IBC on January 2, 1997.
DESCRIPTION OF SECURITIES
UNITS
Each unit consists of one Common share and 1 "C" warrant and 1 "D" warrant. The
terms of the Warrants are described below under the caption "Warrants".
COMMON STOCK
The company is authorized to issue 25 million shares of Common Stock, $.001 par
value per share, of which 1,550,000 are issued and outstanding, excluding Units
to be issued in this offering. Each outstanding share of Common Stock is
entitled to one vote, whether in person or by proxy, on all matters that may be
voted by the owners thereof at meeting of the shareholders.
The holders of Common Stock (i) have equal ratable rights to dividends form
funds legally available therefore, when, and if declared by the Board of
Directors of the company; (ii) are entitled to share ratable in all of the
assets of the Company available for distribution to holders of Common stock upon
liquidation, dissolution or winding up of the affairs of the company; (iii)do
not have preemptive subscription or conversion rights, or redemption on
provisions applicable thereto: and (iv) are entitled to one non-cumulative vote
per share on all matters on which stockholders may vote at all meetings of
stockholders.
All shares of Common stock which are the subject of this offering, which issued,
will be fully paid for and non-assessable, with no personal liability attaching
to the ownership thereof. The holders of shares of Common Stock of the company
do not have cumulative voting rights, which means that the holders of more than
50% of such outstanding shares, voting for the election of directors can elect
all directors of the Company if they so choose and, in such event, the holders
of the remaining shares will not be able to elect any of the Company's
directors.
-8-
<PAGE> 13
WARRANTS
The warrants are immediately exercisable and tradeable after the closing of the
offering. Each "C" warrant entitles the holder to purchase one additional share
at a price of $.80 per share during a three month period after the closing of
the offering. Each "B" warrant entities the holder to purchase one additional
share at a price of $ 1.10 per share during a 3 month period after the closing
of the offering. The warrants may be extended upon appropriate notice given to
shareholders by the management.
DIVIDEND POLICY
The payment by the Company of dividends, if any, in the future, rests within the
discretion of the Board of Directors. IBC has not paid any cash dividends and
management does now anticipate that cash dividends will be declared or paid on
its common stock in the foreseeable future.
SUBSCRIPTION OFFER
The company hereby offers that right to subscribe at $.50 per Unit (each unit
consisting of 1 common share and 2 purchase warrants). The Company proposes to
offer the units directly. The offering will be conducted on behalf of the
Company under the direction of its officers and directors. No compensation is to
be paid to the officers or directors or any "associated person" of the Company
(as that term is defined in the Act) in connection with the offer and sale of
the units.
The Company's officers, directors and stockholders and their associates may
provide the company with the names of persons whom they believe may be
interested in purchasing the units. The Company may sell the Units to such
persons if they reside in a state in which the Company is permitted to sell the
Units.
METHOD OF SUBSCRIBING
Persons may subscribe by filling in and signing the subscription agreement and
delivering it, prior to the expiration date (as defined below), to the Company.
The subscription price of $.50 per Unit must be paid in cash or by check, bank
draft or postal express money order payable in United States dollars to the
order of International Barter Corp. Certificates for the shares and warrants
subscribed for will be issued as soon as practical after subscriptions have been
accepted. Subscription may not be withdrawn once made.
EXPIRATION DATE
The subscription offer will expire at 5:00 P.M, New York time on February 28,
1998 (the "Expiration Date") unless management agrees to extend the offering to
March 31, 1998.
-9-
<PAGE> 14
RIGHT TO REJECT
The company reserves the right to reject any subscription in it sole discretion
for any reason whatsoever and to withdraw this offering at any time prior to
acceptance by the Company of the subscription received.
-10-
<PAGE> 1
EXHIBIT 99.E
FORM D February 9, 1998
<TABLE>
<CAPTION>
<S> <C> <C>
------------------------------
UNITED STATES OMB APPROVAL
SECURITY AND EXCHANGE COMMISSION ------------------------------
Washington, D.C. 20549 OMB NUMBER: 3235-0076
This was filed with Expires: December 31, 1993
SEC on February 9, FORM D Estimated average burden
1998 hours per form........16.00
NOTICE OF SALE OF SECURITIES ------------------------------
PURSUANT TO REGULATION D,
SECTION 4(6), AND/OR ------------------------------
UNIFORM LIMITED OFFERING EXEMPTION SEC USE ONLY
------------------------------
Prefix Serial
------------------------------
DATE RECEIVED
------------------------------
- --------------------------------------------------------------------------------------------------------------------------
Name of Offering (/ / check if this is an amendment and name has changed, and indicate change.)
International Barter Corp.
- --------------------------------------------------------------------------------------------------------------------------
Filing Under (Check box(es) that apply): /X/ Rule 504 / / Rule 505 / / Rule 506 / / Section 4(6) / / ULOE
Type of Filing: / / New Filing /X/ Amendment Additional offering of stock
- --------------------------------------------------------------------------------------------------------------------------
A. BASIC IDENTIFICATION DATA
- --------------------------------------------------------------------------------------------------------------------------
1. Enter the information requested about the issuer
Name of Issuer (/ / check if this is an amendment and name has changed, and indicate change.)
International Barter Corp.
- --------------------------------------------------------------------------------------------------------------------------
Address of Executive Offices (Number and Street, City, State, Zip Code) Telephone Number (Including Area Code)
400 International Blvd. #207, Seattle, WA 98198-6086 (206) 870-9290
- --------------------------------------------------------------------------------------------------------------------------
Address of Principal Business Operations (Number and Street, City, State, Zip Code) Telephone Number (including Area Code)
(if different from Executive Offices)
- --------------------------------------------------------------------------------------------------------------------------
Brief Description of Business Operates a commercial barter trade exchange
- --------------------------------------------------------------------------------------------------------------------------
Type of Business Organization
/X/ corporation / / limited partnership, already formed / / other (please specify):
/ / business trust / / limited partnership, to be formed
- --------------------------------------------------------------------------------------------------------------------------
Month Year
Actual or Estimated Date of Incorporation or Organization: [09] [96] / / Actual / / Estimated
Jurisdiction of Incorporation or Organization: (Enter two-letter U.S. Postal Service abbreviation for State:
CN for Canada; FN for other foreign jurisdiction) [W A]
__________________________________________________________________________________________________________________________
</TABLE>
GENERAL INSTRUCTIONS
FEDERAL: Who Must File: All issuers making an offering of securities in reliance
on an exemption under Regulation D or Section 4(6), 17 CFR 230.501 et seq. or 15
U.S.C. 77d(6).
When To File: A notice must be filed no later than 15 days after the first sale
of securities in the offering. A notice is deemed filed with the U.S. Securities
and Exchange Commission (SEC) on the earlier of the date it is received by the
SEC at the address given below or, if received at that address after the date on
which it is due, on the date it was mailed by United States registered or
certified mail to that address.
Where to File: U.S. Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington D.C. 20549.
Copies Requested: Five (5) copies of this notice must be filed with the SEC, one
of which must be manually signed. Any copies not manually signed must be
photocopies of the manually signed copy or bear typed or printed signatures.
Information Required: A new filing must contain all information requested.
Amendments need only report the name of the issuer and offering, any changes
thereto, the information requested in Part C, and any material changes from the
information previously supplied in Parts A and B. Part E and the Appendix need
not be filed with the SEC.
Filing Fee: There is no federal filing fee.
STATE: This notice shall be used to indicate reliance on the Uniform Limited
Offering Exemption (ULOE) for sales of securities in those states that have
adopted ULOE and that have adopted this form. Issuers relying on ULOE must file
a separate notice with the Securities Administrator in each state where sales
are to be, or have been made. If a state requires the payment of a fee as a
precondition to the claim for the exemption, a fee in the proper amount shall
accompany this form. This notice shall be filed in the appropriate states in
accordance with state law. The Appendix to the notice constitutes a part of this
notice and must be completed.
ATTENTION
FAILURE TO FILE NOTICE IN THE APPROPRIATE STATES WILL NOT RESULT IN A LOSS OF
THE FEDERAL EXEMPTION. CONVERSELY, FAILURE TO FILE THE APPROPRIATE FEDERAL
NOTICE WILL NOT RESULT IN A LOSS OF AN AVAILABLE STATE EXEMPTION UNLESS SUCH
EXEMPTION IS PREDICATED ON THE FILING OF A FEDERAL NOTICE.
SEC 1972 (5/91) 1 of 8
<PAGE> 2
- --------------------------------------------------------------------------------
A. BASIC IDENTIFICATION DATA
- --------------------------------------------------------------------------------
2. Enter the information requested for the following:
- Each promoter of the issuer, if the issuer has been organized within the
past five years;
- Each beneficial owner having the power to vote or dispose, or direct the
vote or disposition of, 10% or more of a class of equity securities of the
issuer;
- Each executive officer and director of corporate issuers and of corporate
general and managing partners of partnership issuers; and
- Each general and managing partner of partnership users.
- --------------------------------------------------------------------------------
Check Box(es) that Apply:
[ ] Promoter [X] Beneficial Owner [X] Executive Officer
[X] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
White, Steven
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
21400 International Blvd. #207, Seattle, WA 98198
- --------------------------------------------------------------------------------
Check Box(es) that Apply:
[ ] Promoter [X] Beneficial Owner [ ] Executive Officer
[ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
Master Media Corporation
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
3160 East Desert Road, Suite 3542, Las Vegas, NV 89121
- --------------------------------------------------------------------------------
Check Box(es) that Apply:
[ ] Promoter [ ] Beneficial Owner [ ] Executive Officer
[ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply:
[ ] Promoter [ ] Beneficial Owner [ ] Executive Officer
[ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply:
[ ] Promoter [ ] Beneficial Owner [ ] Executive Officer
[ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply:
[ ] Promoter [ ] Beneficial Owner [ ] Executive Officer
[ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply:
[ ] Promoter [ ] Beneficial Owner [ ] Executive Officer
[ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
(Use blank sheet, or copy and use additional copies of this sheet, as necessary)
2 of 8
<PAGE> 3
- -------------------------------------------------------------------------------
B. INFORMATION ABOUT OFFERING
- -------------------------------------------------------------------------------
1. Has the issuer sold, or does the issuer intend to sell, to Yes No
non-accredited investors in this offering?......................... [X] [ ]
Answer also in Appendix, Column 2, if filing under ULOE.
2. What is the minimum investment that will be accepted from any
individual?........................................................ $100
Yes No
3. Does the offering permit joint ownership of a single unit?........ [ ] [X]
4. Enter the information requested for each person who has been or
will be paid or given, directly or indirectly, any commission or
similar remuneration for solicitation of purchasers in connection
with sales of securities in the offering. If a person to be
listed is an associated person or agent of a broker or dealer
registered with the SEC and/or with a state or states, list the
name of the broker or dealer. If more than five (5) persons to be
listed are associated persons of such a broker or dealer, you may
set forth the information for that broker or dealer only.
- -------------------------------------------------------------------------------
Full Name (Last name first, if individual)
None
- -------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- -------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- -------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States).................[ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID]
[IL] [IN] [IA] [KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] [MS] [MO]
[MT] [NE] [NV] [NH] [NJ] [NM] [NY] [NC] [ND] [OH] [OK] [OR] [PA]
[RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA] [WV] [WI] [WY] [PR]
- -------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- -------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- -------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- -------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States).................[ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID]
[IL] [IN] [IA] [KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] [MS] [MO]
[MT] [NE] [NV] [NH] [NJ] [NM] [NY] [NC] [ND] [OH] [OK] [OR] [PA]
[RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA] [WV] [WI] [WY] [PR]
- -------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- -------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- -------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- -------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States).................[ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID]
[IL] [IN] [IA] [KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] [MS] [MO]
[MT] [NE] [NV] [NH] [NJ] [NM] [NY] [NC] [ND] [OH] [OK] [OR] [PA]
[RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA] [WV] [WI] [WY] [PR]
- -------------------------------------------------------------------------------
(Use blank sheet, or copy and use additional copies of this sheet, as
necessary.)
3 of 8
<PAGE> 4
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
C. OFFERING PRICE, NUMBER OF INVESTORS, EXPENSES AND USE OF PROCEEDS
- ------------------------------------------------------------------------------------------------------------------------------------
1. Enter the aggregate offering price of securities included in this
offering and the total amount already sold. Enter "0" if answer is "none"
or "zero." If the transaction is an exchange offering, check this box [ ]
and indicate in the columns below the amounts of the securities offered
for exchange and already exchanged.
Aggregate Amount Already
Type of Security Offering Price Sold
Debt ........................................................................... $ $
-------- ------
Equity ......................................................................... $ 72,000 $ 0
-------- ------
[X] Common [ ] Preferred
Convertible Securities (including warrants) .................................... $ $
-------- ------
Partnership Interests .......................................................... $ $
-------- ------
Other (Specify) _______________________________) ............................... $ $
-------- ------
Total ..................................................................... $ 72,000 $ 0
-------- ------
Answer also in Appendix, Column 3, if filing under ULOE.
2. Enter the number of accredited and non-accredited investors who have purchased
securities in this offering and the aggregated dollar amounts of their purchases.
For offerings under Rule 504, indicate the number of persons who have purchased
securities and the aggregate dollar amount of their purchases on the total lines.
Enter "0" if answer is "none" or "zero."
Aggregate
Number Dollar Amount
Investors of Purchases
Accredited investors ........................................................... 0 $
-------- ------
Non-accredited ................................................................. 0 $
-------- ------
Total (for filings under Rule 504 only) ................................... 0 $
-------- ------
Answer also in Appendix, Column 4, if filing under ULOE.
3. If this filing is for an offering under Rule 504 or 505, enter the information
requested for all securities sold by the issuer, to date, in offerings of the types
indicated, in the twelve (12) months prior to the first sale of securities in this
offering. Classify securities by type listed in Part C - Question 1.
Type of Dollar Amount
Type of offering Security Sold
Rule 505 ....................................................................... NA $ 0
-------- ------
Regulation A .................................................................. NA $ 0
-------- ------
Rule 504 ....................................................................... NA $ 0
-------- ------
Total ..................................................................... $ 0
-------- ------
4. a. Furnish a statement of all expenses in connection with the issuance and
distribution of the securities in this offering. Exclude amounts relating solely
to organization expenses of the issuer. The information may be given as subject to
future contingencies. If the amount of an expenditure is not known, furnish an
estimate and check the box to the left of the estimate.
Transfer Agent's Fees ................................................................................. [ ] $ 0
------
Printing and Engraving Costs .......................................................................... [ ] $ 0
------
Legal Fees ............................................................................................ [ ] $ 0
------
Accounting Fees ....................................................................................... [ ] $ 0
------
Engineering Fees ...................................................................................... [ ] $ 0
------
Sales Commissions (specify finders' fees separately) .................................................. [ ] $ 0
------
Other Expenses (identify) Miscellaneous ............................................................... [ ] $1,000
------------- ------
Total ............................................................................................ [ ] $1,000
------
4 of 8
</TABLE>
<PAGE> 5
- --------------------------------------------------------------------------------
C. OFFERING PRICE, NUMBER OF INVESTORS, EXPENSES AND USE OF PROCEEDS
- --------------------------------------------------------------------------------
b. Enter the difference between the aggregate offering price
given in response to Part C - Question 1 and total expenses
furnished in response to Part C - Question 4.a. This
difference is the "adjusted gross proceeds to the issuer." ......... $72,000
5. Indicate below the amount of the adjusted gross proceeds to the issuer used
or proposed to be used for each of the purposes shown. If the amount for any
purpose is not known, furnish an estimate and check the box to the left of
the estimate. The total of the payments listed must equal the adjusted gross
proceeds to the issuer set forth in response to Part C - Question 4.b above.
Payments to
Officers,
Directors, & Payments To
Affiliates Others
Salaries and fees.......................... [ ] $_______ [ ] $_______
Purchase of real estate.................... [ ] $_______ [ ] $_______
Purchase, rental or leasing and
installation of machinery and equipment.... [ ] $_______ [ ] $_______
Construction or leasing of plant
buildings and facilities................... [ ] $_______ [ ] $_______
Acquisition of other businesses
(including the value of securities
involved in this offering that may
be used in exchange for the assets
or securities of another issuer
pursuant to a merger)...................... [ ] $_______ [ ] $ 22,000
--------
Repayment of indebtedness.................. [ ] $_______ [ ] $_______
Working capital............................ [ ] $_______ [ ] $ 50,000
--------
Other (specify): __________________________ [ ] $_______ [ ] $_______
___________________________________________
_________________________________.......... [ ] $_______ [ ] $_______
Column Totals.............................. [ ] $_______ [ ] $_______
Total Payments Listed (column totals added) [ ] $ 72,000
--------
- --------------------------------------------------------------------------------
D. FEDERAL SIGNATURE
- --------------------------------------------------------------------------------
The issuer has duly caused this notice to be signed by the undersigned duly
authorized person. If this notice is filed under Rule 505, the following
signature constitutes an undertaking by the issuer to furnish to the U.S.
Securities and Exchange Commission, upon written request of its staff, the
information furnished by the issuer to any non-accredited investor pursuant to
paragraph (b)(2) of Rule 502.
- --------------------------------------------------------------------------------
Issuer (Print or Type) Signature Date
International Barter Corp. [SIG] 2-7-98
- --------------------------------------------------------------------------------
Name of Signer (Print or Type) Title of Signer (Print or Type)
Steven White President, CEO and Director
- --------------------------------------------------------------------------------
- ----------------------------ATTENTION-------------------------------------------
INTERNATIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL CRIMINAL
VIOLATIONS. (SEE 18 U.S.C. 1001.)
- --------------------------------------------------------------------------------
5 of 8
<PAGE> 1
EXHIBIT 99.F
N.Y. Form M-11 February 9, 1998
(Rev. 5/90)
** File No. S27-77-22
(for renewals only)
This was filed STATE OF NEW YORK
with NYS on DEPARTMENT OF LAW
February 9, 1998 ISSUER STATEMENT
(Section 359-e Gen. Bus. Law)
Name of International Barter Principal 21400 International Blvd. Suite 207
Issuer Corp Office Seattle, WA 98195-6086
------------------------ -----------------------------------
Street Address City State Zip
Telephone Number (206) 870-9290
---------------------
This form is not to be used by issuers engaged in any aspect of real estate or
mortgage financing unless they also obtain a letter upon written application
pursuant to Section 352e or g. Theatrical Syndication must comply with Article
23 of the Arts and Cultural Affairs Law.
1. Issuer is [x] an existing; [ ] a proposed; [x] a corporation; [ ] general
partnership; [ ] limited partnership; [ ] other (specify) _______________
organized under the laws of Nevada on __________________. The entire offering is
[ ] intrastate, [ ] interstate
2. The business of the issuer is (described briefly) operates a commercial
barter trade exchange.
3. Issuer proposes to offer [x] stock; [ ] bonds; [ ] notes;
[ ] partnership interests; [ ] other (specify)___________________
4. The securities will be sold [x] by the officers and directors of the
issuer; [ ] N.Y. registered broker [ ] by an underwriter; [ ] by salesmen
employed by issuer. The securities will be sold on a [x] best efforts basis; [ ]
firm commitment. If by an underwriter or broker, indicate the names of
underwriters or syndicate manager _______________________________________.
5. Total amount of offering $72,000 Anticipated offering expenses total
$1000 consisting of: Selling: $______________ Other: $1000.
------
6. State use of the net proceeds to be obtained: General working capital and
acquisition of other commercial barter trade exchanges.
** Found on the fee receipt you received for your original filing.
- --------------------------------------------------------------------------------
Filing is incomplete without a copy Filing Fee Enclosed as Follows:
of offering literature. If not Total amount of offering
available, please explain. under $500,000......... $200
Indicate to whom you wish over $500,000.......... $800
the fee receipt sent.
( ) Attorney ( ) Issuer Send remittance to:
Bureau of Investor Protection
Personal checks not accepted. and Securities
Attorney's checks, certified check, N.Y. Department of Law
bank check, money order only, 120 Broadway
payable to the N.Y.S. Department New York, NY 10271
of Law
<PAGE> 2
7. If the securities are being offered partly or entirely for the account of
selling holders, please check [ ]. Indicate the details of the secondary
offering below for each seller.
Anticipated
Name of Seller Address Dollar Amount Offered
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. Has registrant, any officer, director or principal or
partner ever
A. been suspended or expelled from membership in any
securities or commodities exchange, association of
securities or commodities dealers or investment
advisors? .......................................... Yes [ ] No [X]
B. had a license or registration as a dealer, broker,
investment advisor or salesman, futures commission
merchant, associated person, commodity pool
operator, or commodity trading advisor denied,
suspended or revoked? .............................. Yes [ ] No [X]
C. been enjoined or restrained by any court or
government agency from:
1. the issuance, sale or offer for sale of
securities or commodities? ...................... Yes [ ] No [X]
2. rendering securities or commodities advice? ..... Yes [ ] No [X]
3. handling or managing trading accounts? .......... Yes [ ] No [X]
4. continuing any practices in connection with
securities or commodities? ...................... Yes [ ] No [X]
D. been convicted of any crime (other than minor
traffic)?
E. used or been known by any other name? .............. Yes [ ] No [X]
F. been the subject of any professional disciplinary
proceeding? ........................................ Yes [ ] No [X]
G. been adjudged a bankrupt or made a general
assignment for benefit of creditors; or been an
officer, director or principal of any entity which
was reorganized in bankruptcy, adjudged a bankrupt
or made a general assignment for benefit of
creditors? ......................................... Yes [ ] No [X]
H. had an offering of securities within the last three
years or been an officer, director, principal or
partner of any entity which had an offering of
securities within the last three years ............. Yes [ ] No [X]
I. if the answer to any of the above is "YES", attach a
statement of full particulars.
9. Are there any outstanding judgments (not including
judgments involving domestic relations) against the
issuer or any officer, director, principal or partner
thereof? If yes, attach statement of full particulars.. Yes [ ] No [X]
10. List names and residence addresses of all employees (officers and
directors not included) of Issuer who are selling in N.Y.S., N.Y. Form M-2
must be filed for each person listed.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
11. Limited Partnerships are required to submit a list of all limited partners
as soon as the offering is completed. This may be done in letter form.
12. If the Issuer is a limited partnership list all of the general partners:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
<PAGE> 3
13. The information set forth below should be provided for each officer,
director, principal or partner. In the case of a corporate general partner
information must be provided for all officers. If not enough space is
provided use continuation sheets. Do not refer to prospectus or offering
literature. SEC biographies can be substituted for employment history only.
<TABLE>
<S> <C>
a. Name: Steven White Title: President, CEO and Director
Home Address: 2228 S. 291 Phone: (206) 839-6733
Federal Way, WA 98003
Place of Birth: Los Angeles, CA Date of Birth: 4/29/58
Social Security #: ###-##-#### Prior home addresses for past five years:
920 Washington Ave., Bremerton, WA 98337
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</TABLE>
Following is my COMPLETE employment AND business affiliation record
for the past five years: (Indicate periods of self-employment and
unemployment. Include all corporations or other entities where you
hold or held a substantial equity or controlling interest.)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
From To Employer or Business Affiliation Position Held and
Mo. Yr. Mo. Yr. Name Address Type of Business
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7/83 Present Cascade Trade Assoc. 21400 Intl Blvd. #207 President
- ---------------------------------------------------------------------------------------------------------
IBC-name change of Cascade Trade
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
a. Name: Richard Mayer Title: Vice President-Marketng and Director
Home Address: 30709 5th Place S. Phone: (206) 941-8199
Federal Way, WA 98003
Place of Birth: Buffalo, NY Date of Birth: 7/6/39
Social Security #: ###-##-#### Prior home addresses for past five years:
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</TABLE>
Following is my COMPLETE employment AND business affiliation record
for the past five years: (Indicate periods of self-employment and
unemployment. Include all corporations or other entities where you
hold or held a substantial equity or controlling interest.)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
From To Employer or Business Affiliation Position Held and
Mo. Yr. Mo. Yr. Name Address Type of Business
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
11/95 Present Cascade Trade Assoc. 21400 Intl Blvd. #207 VP-Marketing
Seattle, WA 98198
- ---------------------------------------------------------------------------------------------------------
4/89 11/95 Money Mailer of the Sound 30709 5th Place S. Owner
Federal, WA
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
13. The information set forth below should be provided for each officer,
director, principal or partner. In the case of a corporate general partner
information must be provided for all officers. If not enough space is
provided use continuation sheets. Do not refer to prospectus or offering
literature. SEC biographies can be substituted for employment history only.
<TABLE>
<S> <C>
c. Name: Norma Kay Fetz Title: Secretary
Home Address: 11604-SE 304th St. Phone: (206) 833-8306
Auburn, WA 98092
Place of Birth: Seattle, WA Date of Birth: 10/29/55
Social Security #: ###-##-#### Prior home addresses for past five years:
-------------------------------------------------------------------------
None
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</TABLE>
Following is my complete employment and business affiliation record
for the past five years: (Indicate periods of self-employment and
unemployment. Include all corporations or other entities where you
hold or held a substantial equity or controlling interest.)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
From To Employer or Business Affiliation Position Held and
Mo. Yr. Mo. Yr. Name Address Type of Business
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
9/84 Present Cascade Trade Assn 21400 Intl Blvd. #207 Vice President
Seattle, WA 98198
- ---------------------------------------------------------------------------------------------------------
IBC-name change of Cascade Trade
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
d. Name: Alan Zimmelman Title: Vice President Operations-Director
Home Address: 1151 Wild Canary Lane Phone: (619) 944-7202
Olivenhain, CA
Place of Birth: Los Angeles, CA Date of Birth: 9/22/44
Social Security #: ###-##-#### Prior home addresses for past five years:
-------------------------------------------------------------------------
4508 Beck Avenue, North Hollywood, CA 91602
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</TABLE>
Following is my complete employment and business affiliation record
for the past five years: (Indicate periods of self-employment and
unemployment. Include all corporations or other entities where you
hold or held a substantial equity or controlling interest.)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
From To Employer or Business Affiliation Position Held and
Mo. Yr. Mo. Yr. Name Address Type of Business
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
11/87 8/96 BXI West Los Angeles 162 S. Rancho Santa Fe President
#E901347
Encinitas, CA 92024-4
- ---------------------------------------------------------------------------------------------------------
9/96 Present IBC 21400 Intl Blvd #207 VP Operations
Seattle, WA 98198
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 5
c. Name: Glen White Title: Director
-------------------------------- ---------------------------------
Home Address: 14281 Bourgeois Wy Phone: 619-538-8888
------------------------------------- --------------------- Place of
Birth: Los Angeles, CA Place of Birth: March 2, 1954
------------------------ ------------------------- Social
Security # 560944129 Prior home addresses for past five years:
-------------- ----- 6316 Sharps Dr,
Centreville, VA 22020
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Following is my complete employment and business affiliation record for the
past five years: (Indicate periods of self-employment and unemployment.
Include all corporations or other entities where you hold or held a
substantial equity or controlling interest.)
- --------------------------------------------------------------------------------
From To Employer or Business Affiliation Position Held and
Mo. Yr. Mo. Yr. Name Address Type of Business
- --------------------------------------------------------------------------------
June 77 Present U.S. Navy Washington DC Commander, Military
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The use of power of attorney is not acceptable. If all signatures are not
available at time of filing, you must submit the proper total fee and all
information required by Item 13. Note in your letter of transmittal that
counterpart forms with missing signatures will be submitted within 30 days of
filing.
Limited Partnerships must supply one signature for each general partner. One
signature by an officer of a corporate general partner is sufficient, however
all selling officers must sign.
Each of the undersigned, constituting all officers, directors, partners, and
controlling principals of the registrant do hereby state and represent that all
statements contained herein are true and correct and understands that any false
statement shall constitute a violation of Art. 23-A of the General Business Law.
<TABLE>
<CAPTION>
Signature Name and Title (please type or print) Date
--------- ------------------------------------- ----
<S> <C> <C>
/s/ STEVEN WHITE Steven White, President, CEO & Director 2-7-98
- ---------------------- -------------------------------------------- ------
/s/ RICHARD MAYER Richard Mayer, VP and Director 2-7-98
- ---------------------- -------------------------------------------- ------
/s/ NORMA KAY FETZ Norma Kay Fetz, Secretary 2-7-98
- ---------------------- -------------------------------------------- ------
/s/ ALAN ZIMMELMAN Alan Zimmelman, VP and Director 2-7-98
- ---------------------- -------------------------------------------- ------
/s/ GLEN WHITE Glen white, Director 2-7-98
- ---------------------- -------------------------------------------- ------
- ---------------------- -------------------------------------------- ------
- ---------------------- -------------------------------------------- ------
- ---------------------- -------------------------------------------- ------
- ---------------------- -------------------------------------------- ------
- ---------------------- -------------------------------------------- ------
- ---------------------- -------------------------------------------- ------
</TABLE>
To complete this filing a State Notice and Further State Notice must be filed
with the Secretary of State in Albany. In the case of a non-resident issuer a
Consent to Service of Process must be filed with the Secretary of State.
All changes or amendments to this form must be submitted on NY Form M-3 with a
$20 fee.
<PAGE> 1
EXHIBIT 99.G
[INTERNATIONAL BARTER CORP. LETTERHEAD]
NOTICE OF THE ANNUAL MEETING OF THE SHAREHOLDERS
OF
INTERNATIONAL BARTER CORPORATION
To: The Shareholders
You are hereby notified that the Annual Meeting of the Shareholders of the above
corporation will be held on September 30, 1997, at 10:00 a.m., at 21400
International Blvd., Suite 207, Seattle, Washington 98198-6086.
The purpose of the meeting is to discuss and ratify past and/or future merger
plans, additions to the Board of Directors, elections of officers and directors,
amendment to the Articles of Incorporation for the merger with Cascade Trade,
discussion of financial plans for the previous and coming year, and any other
business as may properly come before the Board of Directors.
DATE OF NOTICE: SEPTEMBER 10, 1997
[SIG]
- -------------------------------
Steven White
President and CEO
International Barter Corporation
<PAGE> 2
AGENDA
FOR THE ANNUAL MEETING OF THE SHAREHOLDERS
OF
INTERNATIONAL BARTER CORP.
SEPTEMBER 30, 1997 AT 10:00 a.m.
I. CALL TO ORDER, ROLL CALL
II. ELECTION OF CHAIRMAN OF THE BOARD AND SECRETARY
Ill. READING AND APPROVAL OF THE MINUTES OF PREVIOUS MEETING
IV. REPORTS OF THE OFFICERS
A. PRESIDENT'S REPORT
B. TREASURER'S REPORT/REPORT ON FINANCIAL STATEMENT
1. Audited Financial Statements
D. SECRETARY'S REPORT
V. REPORTS OF COMMITTEES OF THE BOARD
VI. UNFINISHED BUSINESS
A. RATIFICATION OF MERGER WITH CASCADE TRADE CORPORATION
1. Approval of Actions
2. Filing of Articles of Merger
B. RATIFICATION OF STOCK OFFERING
C. RATIFICATION OF PAST ACTIONS OF OFFICERS AND DIRECTORS
VIII. NEW BUSINESS
A. APPROVAL OF ENTERING INTO AND CONCLUDING MERGER
NEGOTIATIONS
1. THE Company's Plan
2. Subject to Shareholder Approval as required by
law
B. APPROVAL 0F LEASE RENEWAL
C. CORPORATE RULES REGARDING ACCESS TO RECORDS
<PAGE> 3
D. ISSUANCE OF STOCK WARRANTS
1. In exchange for advertising
2. Approval of Date Changes for Excercise of
Warrants
VIII. ELECTION OF OFFICERS AND DIRECTORS FOR UPCOMING YEAR
IX. SETTING OF NEXT ANNUAL MEETING, AND SUBSEQUENT MEETINGS
A. PROPOSED DATE IS MAY 15
B. MOTION TO CHANGE BYLAWS TO REFLECT PAR VALUE AND
AUTHORIZED SHARES
X. OTHER BUSINESS
XI. SHAREHOLDER'S COMMENTS
XII. ADJOURNMENT
<PAGE> 4
MINUTES OF THE ANNUAL
DIRECTORS AND SHAREHOLDERS MEETING
OF
INTERNATIONAL BARTER CORP.
Pursuant to the Notice to Shareholders (a copy of which is attached), an annual
meeting of the Directors and Shareholders of the above corporation was held on
September 30, 1997 at 10:00 a.m. at the offices of International Barter Corp.
("IBC") in Seattle, Washington, located at 21400 International Boulevard, Suite
207.
1. QUORUM. Roll was called and a quorum of both directors was declared present
based on the presence of the following Directors:
1. Steven White
2. Dick Mayer
In addition, a quorum of Shareholders was declared as the owners of 1,062,000
shares of IBC stock were present and accounted for.
A motion was made by Steven White and seconded by Dick Mayer to appoint Paul
Lehto, also serving as counsel for the purposes of this meeting, to act as
Parliamentarian. The motion was passed unanimously.
After the calling of the roll, the following corporate actions were taken by
appropriate motions duly made, seconded, and adopted by the unanimous vote of
the Directors and/or Shareholders entitled to vote (unless a higher or different
level of voting approval is stated).
II. ELECTION OF CHAIRPERSON AND SECRETARY. Steven White was nominated by Dick
Mayer as chairperson of the meeting, which was seconded by Norma Fetz. The
motion was passed unanimously. Steve White nominated Norma Fetz as Secretary,
which was seconded by Dick Mayer. The motion was passed unanimously, and Norma
Fetz was charged with preparing a record of the proceedings.
III. READING AND APPROVAL OF PREVIOUS MINUTES. The minutes of the organizational
meetings of the incorporators were read and approved unanimously without
amendment.
<PAGE> 5
IV. REPORTS.
A. Report by President Steven White
Steven White reported that progress was being made on making IBC a
publicly traded company. There has been a very good interest shown in
the company. The company's goal is to achieve maximum growth consistent
with the cash flow of the company.
B. Report by Treasurer/Financial Statement Report
The report from the Treasurer and the audited Financial Statements
completed by Anderson, Anderson & Strong for fiscal year ended March
31, 1997, was handed out to shareholders. Steve White also reported
that the first two quarters of the 1997/98 fiscal year have seen a 44%
increase in revenues.
C. Report by Secretary Norma Fetz
Norma Fetz reported that there is no Secretary's report at this time.
V. REPORTS OF COMMITTEES OF THE BOARD
There being no active committees of the Board, this agenda item saw no
action of record, except as follows:
Steven White moved and Norma Fetz seconded that the Board of Directors
be empowered to handle audits, stock issues, and issues regarding future
acquisitions in place of the shareholders, and that the Board create and staff
committees including an Audit Committee, Stock Committee, and an Acquisitions
Committee. The motion passed unanimously.
VI. UNFINISHED BUSINESS
A.Ratification of Merger with Cascade Trade Corporation
A motion was made by Dick Mayer, and seconded by Norma Fetz, that IBC
shareholders ratify the merger of IBC with Cascade Trade Association,
and direct that appropriate Articles of Merger be filed at the earliest
convenience of counsel. The shareholders voted unanimously to ratify
the merger, and to take all formal steps remaining to conclude the
merger.
B. Ratification of Stock Offering
A motion was made and seconded to approve all actions of the directors
and officers regarding the IBC stock offering's change in par value
from no par to a nominal par value, consistent with the resolution of
the Directors on this subject. The resolution was discussed and the
motion passed unanimously. A second motion was made by Steve White and
seconded by Dick Mayer to amend the Articles of Incorporation to
reflect that 25,000,000
<PAGE> 6
shares of stock are authorized to be issued. The motion was passed
unanimously, and counsel directed to file the amended Articles.
C. Past Actions of Officers and Directors
Expanding upon the Reports by the Officers given earlier, the
actions of the officers and directors over the last year were
detailed. Discussion of the change in bank accounts from Key Bank
to Wells Fargo, and the decision to obtain credit card
authorization. There appeared to be no conflict of interest
transactions or related entity transactions requiring shareholder
approval. A motion was made and seconded simply to accept these
reports, which was passed unanimously.
VII. NEW BUSINESS:
The Officers and Directors were authorized to take all actions and to sign all
documents reasonably needed to:
A. Adoption of Plans for Negotiation and Consummation of Future Mergers
or Acquisitions.
President Steve White presented details on IBC's plans to merge with
other regional and national barter exchanges. A motion was made by Dick
Mayer and seconded by Norma Fetz that IBC's Board of Directors be
empowered and have sole authority to enter into negotiations and
consummate mergers or acquisitions with up to 20 other barter exchanges
in the best interests of the corporation and subject to ratification by
the shareholders only when required by law. The motion was passed
unanimously.
B. Lease Renewal
Shareholders were informed that the existing lease at 21400
International Boulevard, Suite 207 in Seattle Washington was up for
renewal and a decision had been made to stay in the same location if the
lease can be renewed on substantially similar and favorable terms to the
present lease.
C. Corporate Rules Regarding Access to Records
A motion was made that shareholder identities be kept confidential, and
the Board of Directors would be empowered by the shareholders to develop
rules and employ counsel to create maximum confidentiality in IBC's
business operations consistent with its overall goals and philosophy.
The motion was passed unanimously.
D. A motion was made to delegate authority to the Board to negotiate and
make decisions regarding issuance of treasury stock in exchange for
advertising and other services that the Board deems prudent in its sole
discretion. The motion was passed unanimously.
E. Issuance of Stock and Warrants
<PAGE> 7
Approval of Date Changes for Exercise of Warrants: A motion was made by
Dick Mayer and seconded by Norma Fetz that the Board have sole authority
to determine a final date to exercise warrant rights contained in the
offering circular, and that all shareholders be given written notice of
this final date. The motion was passed unanimously.
VIII. ELECTION OF OFFICERS AND DIRECTORS FOR UPCOMING YEAR
Motions were made and seconded that the officers and directors for the
following term will be as follows:
Office: Director
Name: Steven White
21400 International Blvd. Suite 208
Seattle, WA 98198
OFFICE: Director
Name: Dick Mayer
21400 International Blvd, Suite 208
SEATTLE, WA 98198
Office: Director
Name: Alan Zimmelman
21400 International Blvd, Suite 208
Seattle, WA 98198
Office: Director
Name: Glen White
21400 International Blvd, Suite 208
Seattle, WA 98198
Office: Chairman of the Board
Name: Steven White
21400 International Blvd, Suite 208
Seattle, Wa 98198
Office: Secretary
Name: Norma Fetz
21400 International Blvd, Suite 208
Seattle, WA 98198
It was unanimously passed that the foregoing officers and directors would serve
until the next annual meeting as scheduled below.
<PAGE> 8
IX. SETTING OF NEXT ANNUAL MEETING, AND SUBSEQUENT MEETINGS
A. A motion was made and seconded that the next annual meeting be held
May 15, 1998 in Seattle Washington, and that the bylaws be amended to
reflect a new and regular annual meeting date at this May meeting, with
notice of this meeting to be given to all shareholders. Passed
unanimously.
X. OTHER BUSINESS
A motion was made and seconded to pay the director's reasonable travel
expenses to attend the annual meeting for this and all future annual
meetings. The motion was carried unanimously.
The meeting was recessed at 11:30 a.m. for a short break.
The meeting was reconvened at noon, and a general discussion among
shareholders was had.
XI. ADJOURNMENT
There being no further business, the meeting was duly adjourned at 12:20 p.m.
[SIG]
- -------------------------------------
Norma Fetz
Secretary, International Barter Corp.
September 30, 1997
