SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 000-29331
IKON VENTURES, INC.
(Exact name of registrant as specified in its charter)
Nevada 76-0270295
(State or other jurisdiction (IRS employer
of incorporation or organization) Identification No.)
Suite 305, Collier House
163/169 Brompton Road
London, England SW3 1PY
(Address of principal executive offices)
011-171-591-4435
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class: Name of Each Exchange on Which Registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of Class)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes No X
------- -------
Check if there is no disclosure of delinquent filers pursuant to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB. [X]
State issuer's revenues for its most recent fiscal year: none
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked price of such common
equity, as of a specified date within the past 60 days: $570,684 as of July 19,
2000.
State the number of shares outstanding of each of the issuer's classes
of common equity, as of July 19, 2000: 15,105,000 shares of common stock, par
value $.001 per share.
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PART I
Item 1. Description of Business
Forward-looking Statements
This Annual Report includes forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934 (the "Exchange
Act"). These statements are based on management's beliefs and assumptions, and
on information currently available to management. Forward-looking statements
include statements in which words such as "expect," "anticipate," "intend,"
"plan," "believe," estimate," "consider," or similar expressions are used.
Forward-looking statements are not guarantees of future performance.
They involve risks, uncertainties and assumptions. The Company's future results
and stockholder values may differ materially from those expressed in these
forward-looking statements. Many of the factors that will determine these
results and values are beyond the Company's ability to control or predict. For
these statements, the Company claims the protection of the safe harbor for
forward-looking statements contained in Section 21E of the Exchange Act.
History
Ikon Ventures, Inc., a Nevada corporation, is the surviving entity in a
merger with its then corporate parent, Northline Industrial Corporation, a Texas
corporation ("NIC"). The background to the merger and related transactions is as
follows:
NIC was incorporated under the laws of the State of Texas on December
28, 1988, and issued 25,000,000 shares of common stock, par value $.0001 per
share (the "NIC Common Stock"), in consideration of the performance of
organizational services in the amount of $2,500.00. Following incorporation, NIC
remained inactive until March 1996 when the then management adopted a business
plan providing for the reincorporation of the company in the State of Nevada and
the establishment and operation of a scheduled charter cargo airline under the
name "Air Epicurean" to transport fresh fish and other sensitive food items. On
June 24, 1996, NIC completed a limited private offering of 550,000 shares of NIC
Common Stock at $0.05 per share, pursuant to Rule 504 ("Rule 504") of Regulation
D, as promulgated by the Securities and Exchange Commission (the "SEC") pursuant
to Section 3 of the Securities Act of 1933, as amended (the "Act"). On July 19,
1996, NIC caused the incorporation of Air Epicurean, Inc. ("Air Epicurean"), as
a wholly owned Nevada corporation for the purpose of effecting the
reincorporation of NIC as a Nevada corporation. In December 1996, the management
of NIC concluded that the previously adopted business plan to establish air
carrier operations was not commercially viable and initiated a search for a
suitable merger candidate.
On March 5, 1997, NIC merged with and into Air Epicurean and Air
Epicurean became the surviving corporation. Pursuant to the merger, each share
of NIC Common Stock issued and outstanding immediately prior thereto was
converted into one share of Air Epicurean common stock, par value $.001 per
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share (the "Common Stock"), and the officers and directors of NIC became the
officers and directors of Air Epicurean. All references below to the "Company"
include Air Epicurean and NIC.
On April 24, 1997, the Company effected a ten for one reverse split of
its outstanding shares of Common Stock resulting in there then being 2,555,000
shares of Common Stock issued and outstanding, and the shareholders of the
Company approved a change of corporate name to Ikon Ventures, Inc. that was
effected on May 8, 1997.
On May 12, 1997, the Company's then board of directors authorized in
principle the acquisition of Zeolite Mira s.r.l., an Italian corporation based
in Mira, Italy ("Zeolite Mira"), engaged in the manufacture and sale of
detergents and components thereof. On May 30, 1997, the Company entered into a
series of interrelated agreements (the "Acquisition Agreements") pursuant to
which it agreed to purchase 90% of the capital stock of Zeolite Mira, of which
50% was to be acquired from Birac Holding S.p.A., a Yugoslavian corporation
("Birac"), in exchange for approximately $1,000,000 and 40% was to be acquired
from Holding Societa Per La Generale Fisica E Chimica Spa In Proprieta Mista
(Holding Institute of General & Physical Chemistry; referred to herein as the
"Institute"), a Yugoslavian corporation controlled by Professor Dusan Vucelic
("Professor Vucelic"), in exchange for 180,000 shares of Common Stock. The
Institute would continue to be the owner of the remaining 10% of Zeolite Mira.
The Acquisition Agreements also provided, among other things, for the following:
(i) loans or lines of credit to be furnished by the Company to Zeolite Mira of
up to $3,000,000 to be used for working capital and of up to $4,000,000 for
capital expenditures, subject to the board of directors of Zeolite Mira
approving budgets and business plans to be provided by Professor Vucelic; (ii)
the purchase by the Company of 100% of the capital stock of Deacon Holding N.V.,
a Netherlands Antilles corporation that owned a 90% interest in certain
detergent related intellectual property rights and technical information
("Deacon"), from the Institute in exchange for 1,020,000 shares of Common Stock;
(ii) the conveyance to Deacon by Professor Vucelic of certain additional
intellectual property rights related to the detergent industry in exchange for
1,275,000 shares of Common Stock; (iii) the placement in escrow of the 2,295,000
shares to be issued to the Institute and the Professor in connection with the
purchase of Deacon and the additional intellectual rights (the "Earn-Out
Shares") to be released based upon the cash flow to be generated by Zeolite Mira
over a period of 10 years but, in any event, at the end of such period; (iv) the
payment to Professor Vucelic of $350,000, and (v) the retention of Professor
Vucelic as president and a director of Zeolite Mira and a director of the
Company for a period of three years.
On June 11, 1997, the Company completed a private placement of
9,500,000 shares of Common Stock at $.10 per share pursuant
to Rule 504.
On June 12,1997, the Company completed all of the transactions
contemplated under the Acquisition Agreements. In connection therewith, Ian
Rice, Professor Vucelic, Brian Copsey Stephen Gross and Kurt Schlapfer were
elected directors of the Company; Mr. Rice was elected as Chairman; Professor
Vucelic was appointed as President; Mr. Copsey was appointed as Chief Financial
Officer, Kurt Schlapfer was appointed as Secretary, and all of the other
officers and directors of the Company resigned. Professor Vucelic resigned as an
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officer and director of the Company in May 1998, and Mr. Copsey resigned as an
officer and director of the Company in June 1999.
In September 1997, the Company and the Institute agreed to form a joint
venture to build a plant in Yugoslavia to manufacture powder detergents. In
furtherance of the joint venture, the parties caused the formation of Bexley
Limited, a Yugoslavian corporation ("Bexley"), of which the Company acquired 90%
of the capital stock and the Institute acquired the remaining 10%. The
construction of the plant and the purchase of the related equipment was to be
supervised by the Institute and financed by loans from the Company.
On October 9, 1997, the Company completed a private placement to
accredited investors of 1,600,000 Units of the Company at a purchase price of
$5.00 per Unit, each Unit consisting of one share of Common Stock and one three
year warrant to purchase one-half share of Common Stock at an exercise price
equal to $7.50 per share. The placement was effected pursuant to Regulation 506
of Regulation D.
On May 13, 1998, the Company's board of directors announced that after
reviewing the performance and capital requirements of the Company's then
subsidiaries, Zeolite Mira, Deacon and Bexley, it had decided to consider all of
the Company's strategic alternatives, including the possible sale or other
disposition of the Company's subsidiaries. Pursuant to that decision, on July
19, 1998, the Company sold all of its interest in Deacon to Professor Vucelic.
As consideration therefor, Professor Vucelic and the Institute returned to the
Company all of the Earn-Out Shares, all of Professor Vucelic's then outstanding
options to purchase shares of Common Stock were canceled and Professor Vucelic
resigned as an officer and director of the Company. He remained, however, as an
officer and director of Zeolite Mira.
On July 30, 1998, the Company entered into an agreement to sell all of
its interest in Bexley and related equipment purchased by the Company for the
plant to be operated by Bexley to Hemslade Trading Limited, an unrelated party,
for an aggregate consideration of $1,082,804. The final installment of the
consideration was received in January 1999.
On March 30, 1999, after obtaining the requisite shareholder approval,
the Company sold all of its 90% interest in the share capital of Zeolite Mira as
follows: (i) 12% to the Institute in consideration of the return of 180,000
shares of Common Stock, and (ii) 78% to CEFT Engineering and Trading AG, an
unrelated Swiss corporation ("CEFT"), as well as all of the Company's right to
outstanding principal and interest payments arising from all loans extended to
Zeolite Mira by the Company, except the loan made in December 1998 in the
outstanding amount of $495,000, in consideration of $350,000. Simultaneously,
Zeolite Mira paid the Company $250,000 as final settlement of the payment
obligations of Zeolite Mira arising under the December 1998 loan.
Since the sale of the Company's interest in Zeolite Mira, the Company
has not had any operating business. The Company does not own or lease any real
estate except for its executive office suite facility, has no employees or
consultants other than its Chairman, Ian Rice, and will have no operations of
its own unless and until it engages in one or more of the activities described
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below under this Item 1. The Company is a "blank check" company that intends to
enter into a business combination with one or more as yet unidentified privately
held businesses.
In January 2000, the Company issued an aggregate of 400,000 shares of
Common Stock to Ludgate Communications, Inc. and its assignee in partial payment
of certain public relations services rendered by Ludgate during 1998.
The Company's' shares of Common Stock have been trading on the OTC
Bulletin Board under the symbol "IKON" since May 1997. The closing bid price of
the Common Stock on the OTC Bulletin Board was $0.04 on July 19, 2000.
Proposed Business
The Company intends to enter into a business combination with one or
more as yet unidentified privately held businesses. Management believes that the
Company will be attractive to privately held companies interested in becoming
publicly traded by means of a business combination with the Company, without
offering their own securities to the public. The Company will not be restricted
in its search for business combination candidates to any particular geographical
area, industry or industry segment, and may enter into a combination with a
private business engaged in any line of business. Management's discretion is, as
a practical matter, unlimited in the selection of a combination candidate. The
Company has not entered into any agreement, arrangement or understanding of any
kind with any person regarding a business combination. The Company does not
intend to enter into any business combination involving any business or venture
with which its officers or directors are affiliated.
Depending upon the nature of the transaction, all or some of the
current officers and directors of the Company probably will resign their
directorship and officer positions with the Company in connection with the
Company's consummation of a business combination. See "Form of Acquisition"
below. In such event, it is likely that the Company's current management will
not have any control over the conduct of the Company's business following the
Company's completion of a business combination.
It is anticipated that business opportunities will come to the
Company's attention from various sources, including its management, its other
stockholders, professional advisors such as attorneys and accountants,
securities broker-dealers, venture capitalists, members of the financial
community, and others who may present unsolicited proposals. The Company has no
plans, understandings, agreements, or commitments with any individual or entity
to act as a finder of or as a business consultant in regard to any business
opportunities for the Company. There are no plans to use advertisements, notices
or any general solicitation in the search for combination candidates.
PRE-COMBINATION ACTIVITIES. The Company is a "blank check" company,
defined as an inactive company with nominal assets and liabilities. With these
characteristics, management believes that the Company will be attractive to
privately held companies interested in becoming publicly traded by means of a
business combination with the Company, without offering their own securities to
the public. The Company intends to pursue negotiations with qualified candidates
after effectiveness of this Registration Statement.
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The term "business combination" (or "combination") means the result of
(i) a statutory merger of a combination candidate into or its consolidation with
the Company or a wholly owned subsidiary of the Company formed for the purpose
of the merger or consolidation, or (ii) the exchange of securities of the
Company for the assets or outstanding equity securities of a privately held
business entity or individual, and similar transactions. A combination may be
structured in one of the foregoing ways or in any other form that will result in
the combined entity being a publicly held corporation. It is unlikely that any
proposed combination will be submitted for the approval of the Company's
shareholders prior to consummation. Pending negotiation and consummation of a
combination, the Company anticipates that it will have no business activities or
sources of revenues and will incur no significant expenses or liabilities other
than expenses related to its ongoing filings required by the Exchange Act, the
negotiation and consummation of a combination and maintenance of its executive
office suite facility, as well as payment of consulting fees to its Chairman.
The Company anticipates that the business opportunities presented to it
will (1) be recently organized with no operating history, or a history of losses
attributable to under-capitalization or other factors; (2) be experiencing
financial or operating difficulties; (3) be in need of funds to develop a new
product or service or to expand into a new market; (4) be relying upon an
untested product or marketing concept; or (5) have a combination of the
foregoing characteristics. Given the above factors, it should be expected that
any acquisition candidate may have a history of losses or low profitability.
The Company will not be restricted in its search for business
combination candidates to any particular geographical area, industry or industry
segment, and may enter into a combination with a private business engaged in any
line of business, including service, finance, mining, manufacturing, real
estate, oil and gas, distribution, transportation, medical, communications, high
technology, biotechnology or any other. Management's discretion is, as a
practical matter, unlimited in the selection of a combination candidate.
Management of the Company will seek combination candidates in the United States
and other countries, as available time permits, through existing associations
and by word of mouth.
The Company has not entered into any agreement or understanding of any
kind with any person regarding a business combination. There is no assurance
that the Company will be successful in locating a suitable combination candidate
or in concluding a business combination on terms acceptable to the Company. The
Company's Board of directors has not established a time limitation by which it
must consummate a suitable combination; however, if the Company is unable to
consummate a suitable combination within a reasonable period, such period to be
determined at the discretion of the Company's Board of Directors, the Board of
Directors will probably recommend its liquidation and dissolution. It is
anticipated that the Company will not be able to diversify, but will essentially
be limited to one such venture because of the Company's lack of capital. This
lack of diversification will not permit the Company to offset potential losses
from one acquisition against profits from another, and should be considered an
adverse factor affecting any decision to purchase the Company's securities.
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The Company's management has the authority and discretion to effect
transactions having a potentially adverse impact upon the Company's shareholders
and to complete a combination without submitting any proposal to the
stockholders for their prior approval. The Company's shareholders should not
anticipate that they will have any meaningful opportunity to consider or vote
upon any candidate selected by the Company's management for acquisition.
However, it is anticipated that the Company's shareholders will, prior to
completion of any combination, be given information about the candidate
company's business, financial condition, management and other information
required by ITEMS 6(a), (d), (e), 7 and 8 of Schedule 14A of Regulation 14A
under the Exchange Act.
COMBINATION SUITABILITY STANDARDS. The analysis of candidate
companies will be undertaken by or under the supervision of the Company's
Chairman, who is not a professional business analyst.
To a large extent, a decision to participate in a specific combination
may be made upon management's analysis of the quality of the candidate company's
management and personnel, the anticipated acceptability of new products or
marketing concepts, the merit of technological changes, the perceived benefit
the candidate will derive from becoming a publicly held entity, and numerous
other factors that are difficult, if not impossible, to objectively quantify or
analyze. In many instances, it is anticipated that the historical operations of
a specific candidate may not necessarily be indicative of the potential for the
future because of the possible need to shift marketing approaches substantially,
expand significantly, change product emphasis, change or substantially augment
management, or make other changes. The Company will be dependent upon the owners
and management of a candidate to identify any such problems that may exist and
to implement, or be primarily responsible for the implementation of, required
changes. Because the Company may participate in a business combination with a
newly organized candidate or with a candidate that is entering a new phase of
growth, it should be emphasized that the Company will incur further risks,
because management in many instances will not have proved its abilities or
effectiveness, the eventual market for the candidate's products or services will
likely not be established and the candidate may not be profitable when acquired.
Otherwise, the Company anticipates that it may consider, among other
things, the following factors:
1. Potential for growth and profitability, indicated by new
technology, anticipated market expansion, or new products;
2. The Company's perception of how any particular candidate will
be received by the investment community and by the Company's
stockholders;
3. Whether, following the business combination, the financial
condition of the candidate would be, or would have a
significant prospect in the foreseeable future of becoming
sufficient to enable the securities of The Company to qualify
for listing on an exchange or on Nasdaq, so as to permit the
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trading of such securities to be exempt from the requirements
of the federal "penny stock" rules adopted by the Commission.
4. Capital requirements and anticipated availability of required
funds, to be provided by the Company or from operations,
through the sale of additional securities, through joint
ventures or similar arrangements, or from other sources;
5. The extent to which the candidate can be advanced;
6. Competitive position as compared to other companies of similar
size and experience within the industry segment as well as
within the industry as a whole;
7. Strength and diversity of existing management, or
management prospects that are scheduled for recruitment;
8. The cost of participation by the Company as compared to the
perceived tangible and intangible values and potential; and
9. The accessibility of required management expertise, personnel,
raw materials, services, professional assistance, and other
required items.
No one of the factors described above will be controlling in the
selection of a candidate. Potentially available candidates may occur in many
different industries and at various stages of development, all of which will
make the task of comparative investigation and analysis of such business
opportunities extremely difficult and complex. It should be recognized that,
because of the Company's limited capital available for investigation and
management's limited experience in business analysis, the Company may not
discover or adequately evaluate adverse facts about the opportunity to be
acquired. The Company cannot predict when it may participate in a business
combination. It expects, however, that the analysis of specific proposals and
the selection of a candidate may take several months or more.
Management believes that various types of potential merger or
acquisition candidates might find a business combination with the Company to be
attractive. These include acquisition candidates desiring to create a public
market for their shares in order to enhance liquidity for current shareholders,
acquisition candidates that have long-term plans for raising capital through the
public sale of securities and believe that the possible prior existence of a
public market for their securities would be beneficial, and acquisition
candidates which plan to acquire additional assets through issuance of
securities rather than for cash, and believe that the possibility of development
of a public market for their securities will be of assistance in that process.
Acquisition candidates that have a need for an immediate cash infusion are not
likely to find a potential business combination with the Company to be an
attractive alternative.
Prior to consummation of any combination (other than a mere sale by the
Company insiders of a controlling interest in the Company's common stock) the
Company intends to require that the combination candidate provide the Company
with the financial statements required by ITEM 310 of Regulation S-B, including
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at the least an audited balance sheet as of the most recent fiscal year end and
statements of operations, changes in stockholders' equity and cash flows for the
two most recent fiscal years, audited by certified public accountants acceptable
to the Company's management, and the necessary unaudited interim financial
statements. Such financial statements must be adequate to satisfy the Company's
reporting obligations under Section 15(d) or 13 of the Exchange Act. If the
required audited financial statements are not available at the time of closing,
the Company must reasonably believe that the audit can be obtained in less than
60 days. This requirement to provide audited financial statements may
significantly narrow the pool of potential combination candidate available,
since most private companies are not already audited. Some private companies
will either not be able to obtain an audit or will find the audit process too
expensive. In addition, some private companies on closer examination may find
the entire process of being a reporting company after a combination with the
Company too burdensome and expensive in light of the perceived potential
benefits from a combination.
FORM OF ACQUISITION. It is impossible to predict the manner in which
the Company may participate in a business opportunity. Specific business
opportunities will be reviewed as well as the respective needs and desires of
the Company and the promoters of the opportunity and, upon the basis of that
review and the relative negotiating strength of the Company and such promoters,
the legal structure or method deemed by management to be suitable will be
selected. Such structure may include, but is not limited to, leases, purchase
and sale agreements, licenses, joint ventures and other contractual
arrangements. The Company may act directly or indirectly through an interest in
a partnership, corporation or other form of organization. Implementing such
structure may require the merger, consolidation or reorganization of the Company
with other corporations or forms of business organization, and although it is
likely, there is no assurance that the Company would be the surviving entity. In
addition, the present management and stockholders of the Company most likely
will not have control of a majority of the voting shares of the Company
following a reorganization transaction. As part of such a transaction, the
Company's existing directors may resign and new directors may be appointed
without any vote or opportunity for approval by the Company's shareholders.
It is likely that the Company will acquire its participation in a
business opportunity through the issuance of Common Stock or other securities of
the Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under the
Internal Revenue Code of 1986, depends upon the issuance to the stockholders of
the acquired company of a controlling interest (i.e. 80% or more) of the common
stock of the combined entities immediately following the reorganization. If a
transaction were structured to take advantage of these provisions rather than
other "tax free" provisions provided under the Internal Revenue Code, the
Company's current stockholders would retain in the aggregate 20% or less of the
total issued and outstanding shares. This could result in substantial additional
dilution in the equity of those who were stockholders of the Company prior to
such reorganization. Any such issuance of additional shares might also be done
simultaneously with a sale or transfer of shares representing a controlling
interest in the Company by the current officers, directors and principal
shareholders.
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It is anticipated that any new securities issued in any reorganization
would be issued in reliance upon exemptions, if any are available, from
registration under applicable federal and state securities laws. In some
circumstances, however, as a negotiated element of the transaction, the Company
may agree to register such securities either at the time the transaction is
consummated, or under certain conditions or at specified times thereafter. The
issuance of substantial additional securities and their potential sale into any
trading market that might develop in the Company's securities may have a
depressive effect upon such market.
The Company will participate in a business opportunity only after the
negotiation and execution of a written agreement. Although the terms of such
agreement cannot be predicted, generally such an agreement would require
specific representations and warranties by all of the parties thereto, specify
certain events of default, detail the terms of closing and the conditions that
must be satisfied by each of the parties thereto prior to such closing, outline
the manner of bearing costs if the transaction is not closed, set forth remedies
upon default, and include miscellaneous other terms.
As a general matter, the Company anticipates that it, and/or its
officers and principal shareholders, will enter into a letter of intent with the
management, principals or owners of a prospective business opportunity prior to
signing a binding agreement. Such a letter of intent will set forth the terms of
the proposed acquisition but will not bind any of the parities to consummate the
transaction. Execution of a letter of intent will by no means indicate that
consummation of an acquisition is probable. Neither the Company nor any of the
other parties to the letter of intent will be bound to consummate the
acquisition unless and until a definitive agreement concerning the acquisition
as described in the preceding paragraph is executed. Even after a definitive
agreement is executed, it is possible that the acquisition would not be
consummated should any party elect to exercise any right provided in the
agreement to terminate it on specified grounds.
It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require substantial
management time and attention and substantial costs for accountants, attorneys
and others. If a decision is made not to participate in a specific business
opportunity, the costs therefore incurred in the related investigation would not
be recoverable. Moreover, because many providers of goods and services require
compensation at the time or soon after the goods and services are provided, the
inability of the Company to pay until an indeterminate future time may make it
impossible to procure goods and services.
POST-COMBINATION ACTIVITIES. Management anticipates that, following
consummation of a combination, control of the Company will change as a result of
the issuance of additional Common Stock to the shareholders of the business
acquired in the combination. Once ownership control has changed, it is likely
that the new controlling shareholders will call a meeting for the purpose of
replacing the incumbent directors of the Company with candidates of their own,
and that the new directors will then replace the incumbent officers with their
own nominees. Rule 14f-1 under the Exchange Act requires that, if in connection
with a business combination or sale of control of the Company there should arise
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any arrangement or understanding for a change in a majority of the Company's
directors and the change in the board of directors is not approved in advance by
the Company's shareholders at a shareholder meeting, then none of the new
directors may take office until at least ten (10) days after an information
statement has been filed with the Commission and sent to the Company's
shareholders. The information statement furnished must as a practical matter
include the information required by ITEMs 6(a), (d) and (e), 7 and 8 of Schedule
14A of Regulation 14A in a proxy statement.
Following consummation of a combination, management anticipates that
the Company will file a current report on Form 8-K with the Commission which
discloses among other things the date and manner of the combination, material
terms of the definitive agreement, the assets and consideration involved, the
identity of the person or persons from whom the assets or other property was
acquired, changes in management and biographies of the new directors and
executive officers, identity of principal shareholders following the
combination, and contains the required financial statements. The Form 8-K report
also will be required to include all information as the business acquired called
for by ITEM 101 of Regulation S-B.
Potential Benefits To Insiders
In connection with a business combination, the Company may require that
a company being acquired repay all advances, if any, made to the Company by the
Company's shareholders and management or any accrued fees or expense
reimbursements, at or prior to closing of a combination. Otherwise, there are no
conditions that any combination or combination candidate must meet, such as
buying stock from the Company's officers, directors or principal shareholders
("insiders") or paying compensation to any of the Company's insiders, or their
respective affiliates.
Use Of Consultants And Finders
Although there are no current plans to do so, the Company's management
might hire and pay an outside consultant to assist in the investigation and
selection of candidates, and might pay a finder's fee to a person who introduces
a candidate with which the Company completes a combination. Since the Company
has no current plans to use any outside consultants or finders to assist in the
investigation and selection of candidates, no policies have been adopted
regarding use of consultants or finders, the criteria to be used in selecting
such consultants or finders, the services to be provided, the term of service,
or the structure or amount of fees that may be paid to them. However, because of
the limited resources of the Company, it is likely that any such fee the Company
agrees to pay would be paid in stock and not in cash. The Company has had no
discussions, and has entered into no arrangements or understandings, with any
consultant or finder. The Company's officers and directors have not in the past
used any particular consultant or finder on a regular basis and have no plan to
either use any consultant or recommend that any particular consultant be engaged
by the Company on any basis.
It is possible that compensation in the form of common stock, options,
warrants or other securities of the Company, cash or any combination thereof,
may be paid to outside consultants or finders. No securities of the Company will
be paid to officers, directors or promoters of the Company nor any of their
respective affiliates as a finder's fee. Any payments of cash to a consultant or
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finder would be made by the business acquired or persons affiliated or
associated with it, and not by the Company. It is possible that the payment of
such compensation may become a factor in any negotiations for the Company's
acquisition of a business opportunity. Any such negotiations and compensation
may present conflicts of interests between the interests of persons seeking
compensation and those of the Company's shareholders, and there is no assurance
that any such conflicts will be resolved in favor of the Company's shareholders.
State Securities Laws Considerations
Section 18 of the Securities Act of 1933, as amended in 1996 (the
"Act"), provides that no law, rule, regulation, order or administrative action
of any state may require registration or qualification of securities or
securities transactions that involve the sale of a "covered security." The term
"covered security" is defined in Section 18 to include among other things
transactions by "any person not an issuer, underwriter or dealer," (in other
words, secondary transactions in securities already outstanding) that are
exempted from registration by Section 4(1) of the Act, provided the issuer of
the security is a "reporting company," meaning that it files reports with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act.
Section 18 as amended preserves the authority of the states to require
certain limited notice filings by issuers and to collect fees as to certain
categories of covered securities, specifically including Section 4(1) secondary
transactions in the securities of reporting companies. Section 18 expressly
provides, however, that a state may not "directly or indirectly prohibit, limit,
or impose conditions based on the merits of such offering or issuer, upon the
offer or sale of any (covered) security. This provision prohibits states from
requiring registration or qualification of securities of an Exchange Act
reporting company which is current in its filings with the SEC.
The states generally are free to enact legislation or adopt rules that
prohibit secondary trading in the securities of "blank check" companies like the
Company. Section 18, however, of the Act preempts state law as to covered
securities of reporting company. Thus, while the states may require certain
limited notice filings and payment of filing fees by the Company as a
precondition to secondary trading of its shares in those states, they cannot, so
long as the Company is a reporting issuer, prohibit, limit or condition trading
in the Company's securities based on the fact that the Company is or ever was a
blank check company. The Company will comply with such state limited notice
filings as may be necessary in regard to secondary trading. At this time, the
Company's stock is not actively traded in any market, and an active market in
its common stock is not expected to arise, if ever, until after completion of a
business combination.
No Investment Company Act Regulation
Prior to completing a combination, the Company will not engage in the
business of investing or reinvesting in, or owning, holding or trading in
securities, or otherwise engaging in activities which would cause it to be
classified as an "investment company" under the Investment Company Act of 1940.
To avoid becoming an investment company, not more than 40% of the value of the
11
<PAGE>
Company's assets (excluding government securities and cash and cash equivalents)
may consist of "investment securities," which is defined to include all
securities other than U.S. government securities and securities of
majority-owned subsidiaries. Because the Company will not own less than a
majority of any assets or business acquired, it will not be regulated as an
investment company. The Company will not pursue any combination unless it will
result in the Company owning at least a majority interest in the business
acquired.
Competition
The Company will be in direct competition with many entities in its
efforts to locate suitable business opportunities. Included in the competition
will be business development companies, venture capital partnerships and
corporations, small business investment companies, venture capital affiliates of
industrial and financial companies, broker-dealers and investment bankers,
management and management consultant firms and private individual investors.
Most of these entities will possess greater financial resources and will be able
to assume greater risks than those which the Company, with its limited capital,
could consider. Many of these competing entities will also possess significantly
greater experience and contacts than the Company's management. Moreover, The
Company also will be competing with numerous other blank check companies for
such opportunities.
Employees
The Company does not have any employees and it is not expected to have
any employees except as a result of completing a combination.
Item 2. Description of Property
The Company does not own or lease any real property except for an
executive office suite leased from Sal Pension Fund on a month to month basis at
a monthly base rent of approximately $1,500.
Item 3. Legal Proceedings
As of the date hereof, the Company is not a party to any material
pending legal proceeding and is not aware of any threatened legal proceeding.
Item 4. Submission of Matters to a Vote of Security Holders
None.
12
<PAGE>
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
Market Information
The Company's Common Stock trades on the OTC Bulletin Board under the
symbol "IKON. The following table sets forth the high and low closing bid prices
for the Common Stock for the periods indicated.
HIGH LOW
Year Ended December 31, 1998
First Quarter........................... $7.25 $5.375
Second Quarter........................ 5.75 3.00
Third Quarter.......................... 3.00 1.125
Fourth Quarter......................... 1.50 .40625
Year Ended December 31, 1999
First Quarter........................... $ .625 $.15625
Second Quarter........................ .25 .0625
Third Quarter.......................... .20 .065
Fourth Quarter........................ .10 .03
Year Ended December 31, 2000
First Quarter........................... $ .10 $.01
Second Quarter........................ .06 .01
On July 19, 2000 the closing bid price of the Common Stock on the OTC
Bulletin board was $.04.
There are no outstanding options or warrants to purchase, or securities
convertible into, shares of Common Stock.
The Company is not and has not proposed to publicly offer any shares of
Common Stock.
13
<PAGE>
Holders of Record
As of June 16, 2000, there were approximately 86 holders of record of
the Company's Common Stock. The Company believes that the number of beneficial
owners is much higher.
Dividends
The Company has never paid a cash dividend on its Common Stock nor does
the Company anticipate paying cash dividends on its Common Stock in the near
future. It is the present policy of the Company not to pay cash dividends on the
Common Stock but to retain earnings, if any, to fund growth and expansion.
Recent Sale of Unregistered Securities
No securities that were not registered under the Act have been issued
or sold by the Company during the fiscal year ended December 31, 1999, except as
described below.
On February 18, 1999, the Company issued to David Palmer, its then
Chief Financial Officer, a warrant to purchase 50,000 shares of Common Stock at
$.001 in connection with his employment by the Company. The warrant was
exercised in April 1999, at which time 50,000 shares of Common Stock were issued
to Mr. Palmer. The warrant and the shares issued upon exercise thereof were
offered and sold to a sophisticated investor in reliance upon the exemption
provided by Section 4(2) of the Act. The securities have been appropriately
legended and the Company received from Mr. Palmer a representation regarding his
intent to acquire the securities for the purpose of investment only, and not
with a view toward the subsequent distribution thereof.
Also, on January 28, 2000, the Company issued to Ludgate
Communications, Inc., and its designee, Jeremy T. Glantz, an aggregate of
400,000 shares of Common Stock as partial payment for certain public relations
services rendered to the Company by Ludgate. The foregoing offers and sales were
made to sophisticated parties in reliance upon the exemption provided by Section
4(2) of the Act. Each party was furnished with information regarding the Company
and each had an opportunity to verify the information supplied. Additionally,
the Company obtained a representation from each party of its intention to
acquire the securities for the purpose of investment only, and not with a view
toward the subsequent distribution thereof. The securities bear appropriate
restrictive legends.
Item 6. Management's Discussion and Analysis or Plan of Operations
The Company's plan of operation over the next twelve months is set
forth above under ITEM 1 (Description of Business). That plan of operation has
been adopted in order to attempt to create value for the Company's shareholders.
14
<PAGE>
Results Of Operations
The Company has been inactive since April 1999, when it disposed of all
of its then operations. Accordingly, management believes that comparison between
the results of operation for the current period and prior periods would not be
meaningful.
Liquidity And Capital Resources
As of December 31, 1999, the Company's principal sources of liquidity
consisted of cash of $13,000. As of May 31, 2000 the Company had approximately
$3,700 in cash and no material liabilities except for legal fees and expenses
incurred and to be incurred in connection with its filing obligations as a
publicly traded company. The Company has no commitments for any capital
expenditure and foresees none. However, the Company will incur routine fees and
expenses incident to its reporting duties as a public company, and it will incur
fees and expenses in the event it makes or attempts to make an acquisition. The
Company expects no significant operating costs other than professional fees
payable to attorneys and accountants and monthly rental payments of
approximately $1,500 for its executive office suite. In addition, the Company
was obligated to pay a monthly consulting fee of $12,250 to Sigma Limited S.A.
for the services of the Company's Chairman. This agreement expired by its terms
on June 30, 2000. Effective January 2000, Sigma has agreed that the Company may
defer payment of such fee until the completion of a combination transaction by
the Company.
The Company does not anticipate that funding will be necessary in order
to complete a proposed combination, except possibly for fees and costs of the
Company's professional advisers. Accordingly, there are no plans to raise
capital to finance any business combination, nor does management believe that
any combination candidate will expect cash from the Company. The Company hopes
to require the candidate companies to deposit with the Company an advance that
the Company can use to defray professional fees and costs and travel, lodging
and other due diligence costs of management. Otherwise, management would have to
advance such costs out of they own pockets, and there is no assurance that they
will advance such costs.
Other routine expenses, such as making required filings with the SEC
and office rent and related expenses will inevitably be incurred. In order to
pay these, the company will be forced to utilize the available funds, and, if
insufficient, will be forced to borrow money or prevail upon existing
shareholders to provide additional capital, whether as a loan or investment, to
the Company. It is by no means certain that existing shareholders will want or
be financially able to do so. There are no plans to sell additional securities
of the Company to raise capital. The company's failure for any reason to timely
file reports required under the Securities Exchange Act of 1934, as amended,
could subject it to fines and penalties and make it less desirable to a
potential combination candidate. None of these sources of funds is assured and,
if no funds can be raised, the Company may be effectively unable to pursue its
business plan.
The Company's shareholders and management members who advance money to
the Company to cover operating expenses will expect to be reimbursed by the
15
<PAGE>
company acquired, prior to or simultaneously with the completion of a
combination. The Company has no intention of borrowing money to pay any officer,
director or shareholder of the Company or their affiliates.
16
<PAGE>
Item 7. Financial Statements
The following financial statements of the Company are included in Item
7.
Report of the auditors to the members of IKON Ventures, Inc. F-1
Report of KPMG to the members of IKON Ventures, Inc. F-2
Consolidated balance sheet F-3
Consolidated statement of operations F-4
Consolidated statement of stockholders' equity F-5
Consolidated statement of cash flows F-6
Notes to the consolidated financial statements F-7
<PAGE>
IKON VENTURES, INC.
INDEPENDENT AUDITORS' REPORT
Independent Auditors' report to the members of IKON Ventures, Inc.
The board of directors and stockholders
We have audited the accompanying consolidated balance sheet of IKON Ventures,
Inc. as of December 31, 1999 and the related statement of income, stockholders'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit. The financial
statements for the year ended December 31, 1998 were audited by another auditor,
KPMG, whose audit report was dated 15 July 1999. This report was a standard
report with a paragraph similar to the final paragraph of this report on going
concern.
We conducted our audit in accordance with U.S. generally accepted Auditing
Standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of IKON Ventures, Inc. as of
December 31, 1999 and the results of its operations and cash flows for the year
then ended in conformity with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that IKON
Ventures, Inc. will continue as a going concern. As discussed in note 2 to the
financial statements, IKON Ventures, Inc. has suffered losses from operations
resulting in significantly depleted cash flows. These matters raise substantial
doubt about the ability of IKON Ventures, Inc. to continue as a going concern.
The directors plans in regard to these matters are also described in note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
HLB Kidsons
Registered Auditors
Chartered Accountants
London
17 May 2000
F-1
<PAGE>
kpmg
PO Box 695
8 Salisbury Square
London EC4Y 8BB
United Kingdom
Report of the auditors to the members of Ikon Ventures, Inc.
The Board of Directors and Stockholders
We have audited the accompanying consolidated balance sheets of Ikon Ventures,
Inc. and subsidiaries as of December 31, 1998 and 1997, and the related
consolidated statements of income, stockholders' equity, and cash flows for the
two years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with U.S. 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of IKON Ventures, Inc.
and subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for the two years then ended in conformity with
U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that Ikon
Ventures, Inc. and subsidiaries will continue as a going concern. As discussed
in note 2 to the financial statements, Ikon Ventures, Inc. and subsidiaries have
suffered losses from operations resulting in significantly depleted cash flows.
These matters raise substantial doubt about the ability of Ikon Ventures, Inc.
and subsidiaries to continue as a going concern. The directors plans in regard
to these matters are also described in note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
KPMG
Chartered Accountants 15 July, 1999
Registered Auditors
F-2
<PAGE>
<TABLE>
<CAPTION>
IKON VENTURES, INC.
CONSOLIDATED BALANCE SHEET
at December 31, 1999
<S> <C> <C> <C> <C>
Notes 1999 1998 1997
$000 $000 $000
Assets
Current assets
Cash and cash equivalents 13 166 2,576
Trade accounts receivable, net - 744 288
Prepaid and other current assets 56 95 -
--------- --------- ---------
Total current assets 69 1,005 2,864
Property, plant and equipment, net 2 52 715
Net assets of discontinued operations 4 - 600 11,065
--------- --------- ---------
71 1,657 14,644
========= ========= =========
Liabilities and stockholders' equity
Current liabilities
Bank overdraft - - 26
Trade accounts payable 18 294 898
Accrued expenses and other 38 92 1
--------- --------- ---------
Total current liabilities
56 386 925
Other liabilities - 80 80
--------- --------- ---------
Total liabilities 56 466 1,005
--------- --------- ---------
Stockholders' equity
Common stock, $0.001 per value. Authorised
100,00,000 shares; issued and outstanding
14,835,000 shares in 1998, 14,655,000 shares
in 1999 and 16,130,000 in 1997 15 15 16
Additional paid-in capital 11,675 11,720 18,017
Accumulated deficit (11,675) (10,544) (4,394)
--------- --------- ----------
Total stockholders' equity 15 1,191 13,639
--------- --------- ---------
Total liabilities and stockholders' equity 71 1,657 14,644
========= ========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
F-3
<PAGE>
<TABLE>
<CAPTION>
IKON VENTURES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
for the year ended December 31, 1999
<S> <C> <C> <C> <C>
Notes 1999 1998 1997
$000 $000 $000
Net sales - continuing operations - - -
Cost of goods sold - continuing operations - - -
---------- ---------- ----------
Gross profit - continuing operations - - -
Selling, general and administrative expenses (691) (1,767) (1,748)
---------- ---------- -----------
Operating loss - continuing operations (691) (1,767) (1,748)
Other income, net - 47 (12)
---------- ---------- -----------
Loss from continuing operations before provision for
income taxes (691) (1,720) (1,760)
Provision for income tax 6 - - (80)
---------- ---------- -----------
Loss from continuing operations (691) (1,720) (1,840)
Net loss from discontinued operations 4 - (3,939) (257)
Loss on disposal of discontinued operations 4 (440) (491) (2,272)
---------- ---------- -------
Net loss 2 (1,131) (6,150) (4,369)
========== ========== ===========
Loss per common share (basic) - all operations ($0.08) ($0.41) ($0.27)
========== ========== ===========
- continuing operations ($0.05) ($0.11)
========== ==========
- discontinued
operations ($0.03) ($0.30)
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
F-4
<PAGE>
<TABLE>
<CAPTION>
IKON VENTURES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
for the year ended December 31, 1999
<S> <C> <C> <C> <C> <C>
Shares Common Additional Accumulated Total
stock paid in deficit stockholders
$000 capital $000 equity
$000 $000
Balances at December 31, 1997 16,130,000 16 18,017 (4,394) 13,639
Retirement of shares in connection
with Deacon sale (2,295,000) (2) (6,906) - (6,908)
Issuance of common stock for cash at
$0.80 per share 1,000,000 1 800 - 801
Share issue expenses - - (191) - (191)
Net loss - - - (6,150) (6,150)
------------ ------- ---------- ---------- ----------
Balances at December 31, 1998 14,835,000 15 11,720 (10,544) 1,191
Retirement of shares in connection
with Zeolite Mira sale (180,000) - (45) - (45)
Net loss - - - (1,131) (1,131)
------------ ------- ---------- ---------- ----------
Balances at December 31, 1999 14,655,000 15 11,675 (11,675) 15
============ ======= ========== ========== ==========
</TABLE>
F-5
<PAGE>
<TABLE>
<CAPTION>
IKON VENTURES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended December 31, 1999
<S> <C> <C> <C> <C>
Note 1999 1998 1997
$000 $000 $000
Net cash used by operating activities 7 (925) (3,020) (4,693)
--------- --------- ----------
Cash flows from investing activities - -
Proceeds from disposal of discontinued operations 740
Acquisition of subsidiaries (1,028)
Net cash acquired on acquisition of subsidiaries 190
Proceeds from disposal of property, plant and equipment
32 - -
--------- --------- ---------
Net cash used in investing activities (838)
Net cash provided by investing activities 772 - -
--------- --------- ---------
Cash flows from financing activities - 610 8,105
--------- --------- ---------
Proceeds from issuance of common stock
Net cash provided by financing activities - 610 8,105
--------- --------- ---------
Net decrease in cash and cash equivalents (153) (2,410) 2,574
Cash and cash equivalents at beginning of year 166 2,576 2
--------- --------- ---------
Cash and cash equivalents at end of year 13 166 2,576
========= ========= =========
Major non-cash transactions
During 1999, as part of the disposal of the company's interest in Zeolite Mira
S.r.l., 180,000 shares of the company's stock were returned to the company.
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
F-6
<PAGE>
IKON VENTURES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
1 Summary of significant accounting policies and practices
(a) Description of business
IKON Ventures Inc. ("the Company") was incorporated in Nevada
on May 31, 1997. The Company operated a Zeolite and related
chemicals production facility in Mira, Italy, through its main
subsidiary Zeolite Mira S.r.l. ("Zeolite Mira"). The Company's
customers were major European detergent companies with a small
proportion of production being sold through trading companies.
At the beginning of 1999 Zeolite Mira was sold and has been
treated as a discontinued operation in the financial
statements and accompanying notes. The company now has no
trading operations and is exploring new opportunities.
(b) Principles of consolidation
The consolidated financial statements include the financial
statements of the Company and its subsidiaries. The company
does not recognise receivables from minority interests in
respect of deficits on shareholders' equity. All significant
inter-company balances and transactions are eliminated on
consolidation.
In view of the sale of the company's interest in Zeolite Mira
in early 1999, the trading results of this subsidiary from
January 1, 1999 to the date of disposal on March 24, 1999 have
been excluded from the financial statements on the grounds
that the company did not have effective control of the
subsidiary during this period.
(c) Cash equivalents
The company considers all highly liquid investments with
original maturities of three months or less to be cash
equivalents.
(d) Property, plant and equipment
Property, plant and equipment are stated at cost. Depreciation
on plant and equipment is calculated on the straight-line
method over the estimated useful lives of the assets.
F-0
<PAGE>
IKON VENTURES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
(continued)
1 Summary of significant accounting policies and practices (continued)
(e) Research and development
Research and development costs are expensed as incurred. There
were no research and development cost in the years ended
December 31, 1999 and 1998.
(f) Income taxes
Income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognised for
the future tax consequences attributable to differences
between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases and
operating loss and tax credit carryforwards. Deferred tax
assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of
a change in tax rates is recognised in income in the period
that includes the enactment date.
(g) Commitment and contingencies
Liabilities for loss contingencies, including environmental
remediation costs, arising from claims, assessments,
litigation, fines and penalties, and other sources are
recorded when it is probable that a liability has been
incurred and the amount of the assessment and/or remediation
can be reasonably estimated. Recoveries from third parties
which are probable of realisation are separately recorded, and
are not offset against the related environmental liability, in
accordance with Financial Accounting Standards Board
Interpretation No.39, Offsetting of Amounts Related to Certain
Contracts.
In October 1997, the American Institute of Certified Public
Accountants issued Statement of Position ("SOP") 96-1,
Environmental Remediation Liabilities. SOP 96-1 was adopted by
the company on January 1, 1998 and requires, among other
things, environmental remediation liabilities to be accrued
when the criteria of Statement of Financial Accounting
Standards ("SFAS") No. 5, Accounting for Contingencies, have
been met. The guidance provided by SOP 96-1 is consistent with
the company's current method of accounting for environmental
remediation costs and, therefore, adoption of this new
Statement does not have a material impact on the Company's
financial position, results of operations, or liquidity.
F-1
<PAGE>
IKON VENTURES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
(continued)
1 Summary of significant accounting policies and practices (continued)
(g) Commitment and contingencies (continued)
The Company accrues for losses associated with environmental
remediation obligations when such losses are probable and
reasonably estimable. Accruals for estimated losses for
environmental remediation obligations generally are recognised
no later than completion of the remedial feasibility study.
Such accruals are adjusted as further information develops or
circumstances change. Costs of future expenditures for
environmental remediation obligations are not discounted to
their present value. Recoveries of environmental remediation
costs from other parties are recorded as assets when their
receipt is deemed probable.
(h) Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from
these estimates.
(i) Impairment of long-lived assets and long-lived assets to be
disposed of
The Company adopted the provisions of SFAS No 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of, on January 1, 1997. This Statement
requires that long-lived assets and certain identifiable
intangibles be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying
amount of an asset to future net cash flows expected to be
generated by the asset. If such assets are considered to be
impaired, the impairment to be recognised is measured by the
amount by which the carrying amount of the assets exceed the
fair value of the assets. Assets to be disposed of are
reported at the lower of the carrying amount or fair value
less costs to sell.
F-2
<PAGE>
IKON VENTURES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
(continued)
1 Summary of significant accounting policies and practices (continued)
(i) Impairment of long-lived assets and long-lived assets to be
disposed of (continued)
During 1998, the Company performed a review of their
long-lived assets and determined that an impairment of certain
Zeolite Mira assets existed as at December 31, 1998. As a
result, a charge of $2,917,000 was recorded in 1998 to write
the assets down to net realisable value. Zeolite Mira was
subsequently sold for its written down value in 1999.
(j) Foreign currency translation
Assets and liabilities denominated in foreign currencies are
translated into US dollars at current exchange rates. For
operations using the US dollar or the currency of a highly
inflationary economy as their functional currency, translation
gains or losses or generally reported in non-interest
revenues. Translation gains and losses for operations using
any other currency as their functional currency are reported,
net of tax effects, in stockholders' equity as cumulative
translation adjustments.
2 Financial position and basis of accounting
These consolidated financial statements have been prepared on a going
concern basis which contemplates the commencement, continuation and
expansion of trading activities as well as the realisation of assets and
liquidation of liabilities in the ordinary course of business.
During 1997 the Company acquired the net liabilities of Zeolite Mira,
issuing shares to finance the acquisition. The Company traded at a loss
during 1997 and Zeolite Mira continued to record losses in 1998,
depleting the Company's cash resources. The Company sold Zeolite Mira in
1999 resulting in the Company having no operating entities.
Management's future plans for the company are to raise further capital
from both existing and new shareholders and to use the proceeds to
acquire additional businesses. Discussions are currently underway with a
number of possible acquirees.
F-3
<PAGE>
IKON VENTURES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
(continued)
2 Financial position and basis of accounting (continued)
The Company's continuation as a going concern is dependent on its
ability to issue new stock which will be required to fund the purchase
of additional businesses. This factor among others may indicate that the
Company may be unable to continue as a going concern for a reasonable
period of time. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
3 Acquisition and dispositions
1998
On July 7, 1998, the Company sold the entire share capital of Deacon
Holding N.V. ("Deacon Holding") to the Holding Institute of General and
Physical Chemistry and Professor Vucelic, both of whom are related
parties to the Company. The Company received $6,908,000 through the
return of 2,295,000 shares of the Company's stock. The market value of
these shares on return was lower than the deemed value on acquisition
which resulted in a loss on disposal of $2,272,000. To reflect this, the
book value of Deacon Holding at December 31, 1997 was written down to
the disposal price and a provision for the loss on disposal was recorded
in the 1997 income statement.
Also on July 7, 1998, the Company disposed of its interest in Bexley
Ltd. ("Bexley") to Hemslade Trading Limited. The company received
consideration of $1,083,000 and recorded a loss on disposal of $247,000
in the 1998 income statement.
1999
On March 24, 1999 the Company sold the 90% of the capital stock of
Zeolite Mira it owned. The consideration was $600,000 cash, the return
of 180,000 shares of the Company's stock and the cancellation of all
indebtedness between the company and Zeolite Mira. Part of the loss
arising on the sale was provided in the 1998 accounts and the balance
has been provided in 1999.
F-4
<PAGE>
IKON VENTURES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
(continued)
4 Discontinued operations
On March 24, 1999, the Company completed the sale of its sole operating
subsidiary, Zeolite Mira, to CEFT Engineering & Trading AG, a Swiss
registered company. Under the terms of the purchase agreement, the
Company received $600,000 cash consideration and the return of 180,000
shares of the Company's common stock. Results of these operations were
classified as discontinued in 1998 and the trading of Zeolite Mira form
January 1, 1999 to March 24, 1999 has been excluded from these financial
statements on the grounds that the company did not have effective
control of the subsidiary during that period. Summarised financial
information on the discontinued operations is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1999 1998
$000 $000
Net sales - 20,368
---------- ----------
Gross profit - 212
---------- ----------
Operating loss (note (i)) - (4,133)
---------- ----------
Loss from discontinued operations - (3,939)
========== ==========
Loss on disposal of discontinued operations (note (ii)) (440) (491)
========== ==========
(i) Included in the determination of operating loss in 1998 is a charge
of $2,917,000 related to the permanent impairment of goodwill. The
goodwill was related to the 1998 acquisition by the Company.
(ii) Loss on disposal of discontinued operations in 1999 includes a tax
credit of $80,000.
</TABLE>
F-5
<PAGE>
IKON VENTURES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
(continued)
4 Discontinued operations (continued)
<TABLE>
<CAPTION>
<S> <C> <C>
1999 1998
$000 $000
Net assets of discontinued operations - 7,818
Current assets
Property, plant and equipment - 5,095
Other assets - 64
Current liabilities - (11,574)
Other liabilities - (803)
---------- ----------
Net assets of discontinued operations - 600
========== ==========
</TABLE>
F-6
<PAGE>
IKON VENTURES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
(continued)
5 Fair value of financial instruments
SFAS No 107, Disclosure About Fair Value of Financial Instruments,
requires certain disclosures regarding the fair value of financial
instruments. Cash and cash equivalents, trade accounts receivable,
other current assets, trade accounts payables and accrued expenses are
reflected in the consolidated financial statements at fair value
because of the short term maturity of these instruments.
6 Income taxes
No credit has been taken for the operating losses which potentially give
rise to a deferred tax asset for the Company, on the grounds that the
directors do not believe that the company will be able to derive any
value from such an asset.
7 Reconciliation of net loss to net cash provided by operating activities
The reconciliation of net loss to net cash provided by operating
activities was as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1999 1998
$000 $000
Net loss (1,131) (6,150)
- 3,939
Adjustments to reconcile loss to net cash provided by
operating activities:
Loss from discontinued operations
Loss on disposal of discontinued operations 440 491
18 37
Changes in assets and liabilities net of effect from acquisitions and
disposals:
Depreciation and amortisation of property, plant and equipment
Decrease (increase) in accounts receivable 604 (456)
Decrease in accounts payable (266) (604)
(Decrease) increase in accrued expenses and liabilities (54) 65
Decrease (increase) in prepayments and other assets 39 (95)
--------- ---------
Cash used by continuing operations (350) (2,773)
Cash used by discontinued operations (575) (247)
--------- ---------
Cash used by operating activities (925) (3,020)
========= =========
</TABLE>
F-7
<PAGE>
IKON VENTURES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
(continued)
8 Stock option plan
On June 20, 1998 the directors of IKON Ventures Inc. adopted a stock
option plan (the "Plan") pursuant to which the Board of Directors of
IKON Ventures Inc. may grant stock options to Officers, Directors and
key employees. The Plan authorises grants of options to purchase up to
3,500,000 shares of authorised but un-issued common stock. At December
31, 1999 no options had been granted under the Plan.
9 Related party transactions
(i) The services stated below were provided to Zeolite Mira by the
Institute of General and Physical Chemistry, which held a 10%
share in Zeolite Mira.
1999 1998
$000 $000
Technical assistance - 122
========== ==========
(ii) Sigma S.A., a company for which Mr I W Rice, a director of IKON
Ventures Inc. acts as a consultant provided consultancy fees to
the company. The amounts paid to Sigma S.A. in 1999 and 1998
were $148,864 and $161,808 respectively.
10 Business and credit concentrations
The business is not currently trading and has no concentration of
business or credit risk.
F-8
<PAGE>
Item 8. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
KPMG ("KPMG") were previously the principal accountants for the Company.
On March 14, 2000, the engagement of KPMG was terminated by the Company's
board of directors.
In connection with the audit by KPMG of the Company's consolidated balance
sheets for the fiscal years ended December 31, 1998 and 1997, and the related
consolidated statements of income, stockholders' equity and cash flows for the
two years then ended, there were no disagreements with KPMG on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which disagreements if not resolved to their satisfaction
would have caused KPMG to make reference in connection with their opinion to the
subject matter of the disagreement.
None of the matters described in Item 304(a)(v) of Regulation S-B are
applicable.
On March 14, 2000, the board of directors of the Company resolved to engage
HLB Kidsons ("Kidsons") to be the Company's independent auditor which engagement
became effective on or around that date. Kidsons had not previously provided any
services to the Company.
PART III
Item 9. Directors and Executive Officers of the Registrant
The following table sets forth the name, age and position of each
director and executive officer of the Company as of the date hereof.
NAME AGE POSITION
Ian Rice 60 Chairman, Chief Executive Officer
and Director
Stephen Gross 51 Treasurer and Director
Kurt Schlapfer 46 Secretary and Director
There are no family relationships among the officers and directors.
There is no arrangement or understanding between the Company (or any of its
directors or officers) and any other persons pursuant to which such person was
or is to be selected as a director or officer, or under which any officer or
director is acting or will act on behalf of or at the direction of any other
person. The directors and officers are expected to devote their time to the
Company's affairs on an "as needed" basis and in the case of Mr. Rice, as
reasonably requested by the Company, but are not required to make any specific
portion of their time available to the Company. It is anticipated that officers
and directors in the aggregate will, on average, devote no more than 30 hours
per week to the Company`s affairs.
17
<PAGE>
Ian Rice has been Chairman, Chief Executive Officer and a director of
the Company since June 1997. From June 1999 to September 1999, Mr. Rice was
President and a director, and since September 1999 to date has been Chairman, of
Wall Street Strategies Corporation, a provider of financial services whose
shares are traded on the OTC Bulletin Board. From January 1994 until October
1996, Mr. Rice was Chairman and a director of Asia Media Communications, Ltd.
(n/k/a My Web Inc.com), then a holding company based in Switzerland whose shares
are traded on the OTC Bulletin Board. From November 1985, until the present, Mr.
Rice has been employed as a consultant to Sigma Limited S.A., a private
investment firm based in Switzerland.
Stephen Gross has been a director of the Company since June 1997. Mr.
Gross is a certified public accountant and since November 1970 to date, has been
the Chairman of the Board of HLB Gross Collins, P.C., an accounting firm located
in Atlanta, Georgia. During the past five years, Mr. Gross has been a director
of the following companies, all of whose shares are publicly traded: Charter
Bank & Trust from January 1987 to January 1997; Common Sense Trusts from January
1987 to date; Comstar.net, Inc. from November 1999 to date; e-bank,com, Inc.
from April 1998 to date; Van Kampen American Capital Bond Fund, Inc., SSB
Concert Investment Series, from January 1998 to date; Van Kampen American
Capital Exchange Fund from January 1996 to January 1998; Van Kampen American
Capital Convertible Securities from January 1996 to January 1998; Van Kampen
Capital Income Trust from January 1996 to January 1998; Wall Street Strategies
Corporation from August 1999 to date; and WebMD, Inc. from January 1997 to
August 1998.
Kurt Schlapfer has been Secretary and a director of the Company since
June 1997. From October 1997 to date, Mr. Schlapfer has been President and Chief
Executive Officer of JML Portfolio Management Ltd., a private investment advisor
based in Zug, Switzerland. From February 1992, until June 1998, Mr. Schlapfer
was a director, and from June 1995 until June 1998, the President and Chief
Financial Officer, of Marshall Minerals Corp., a Canadian gold mining company
whose shares are publicly traded on the Toronto Stock Exchange. From June 1996,
until June 1998, Mr. Schlapfer was a director of Eden Roc Mineral Corp., a
Canadian gold mining company whose shares are publicly traded on the Toronto
Stock Exchange.
Prior Experience With Blank Check Companies
With the exception of Mr. Rice, none of the officers or
directors of the Company has ever been an executive officer or director of a
blank check or "blind pool" company that conducted a public offering. Mr. Rice
has been an executive officer and director of two blank check companies (one of
which, Asia Media Communications, Ltd., was a reporting company, i.e., required
to file periodic reports with the SEC, while Mr. Rice served in such
capacities), and his experience is detailed below.
1. Asia Media Communications, Ltd. (n/k/a My Web
Inc.com)("AMCL") - Organized in 1985 in Nevada. In January 1994, as part of a
federal bankruptcy court approved plan of reorganization, AMCL acquired all of
the assets of a corporation owned and controlled by Mr. Rice and his daughter
consisting of a film library. In connection with such acquisition, Mr. Rice and
his daughter were issued 3,800,000 shares of AMCL, representing approximately
54% of the then total issued and outstanding capital stock of AMCL, and Mr. Rice
and his daughter were elected as directors and Mr. Rice was elected as Chairman
and Chief Executive Officer of AMCL. Commercial exploitation of the film library
18
<PAGE>
proved not viable and the Company was inactive until March 18, 1996 when it
merged with Kremlyovskaya Group, Inc. ("KGI"), a privately held corporation
engaged in the distribution of a proprietary premium brand of vodka and other
luxury goods. In connection with the merger, the former shareholders of KGI were
issued a controlling interest in the shares of AMCL, all of the directors of
AMCL immediately prior to the merger other than Mr. Rice resigned and Mr. Rice
and his daughter voluntarily canceled 3,0592,000 shares of AMCL common stock
owned by them. Mr. Rice remained a director and the Chairman.
On October 9, 1996, the merger with KGI was rescinded on
account of certain breaches of the representations and warranties made by the
former shareholders of KGI and all of the shares of AMCL issued to such
shareholders were canceled. As a result, Mr. Rice again became the controlling
shareholder of AMCL.
In October 1997, Mr. Rice and another shareholder of AMCL,
sold to an unrelated party 2,220,000 and 1,435,667 shares, respectively of AMCL
for an aggregate consideration of $150,000 (approximately $.04 per share) and
Mr. Rice resigned as an officer and director of AMHL. Mr. Rice was retained for
a period of 90 days as a consultant to AMCL for which he received 750,000 shares
of AMCL.
2. Wall Street Strategies Corporation ("WSSC") - Organized in
1999 in Nevada under the name Vacation Emporium Corporation as a successor to
The Vacation Emporium International, Inc., a Colorado corporation. In June 1999,
Mr. Rice purchased 8,000,000 shares of common stock of WSSC, representing
approximately 57% of the total shares of WSSC common stock then issued and
outstanding, for $20,000 and was elected the sole director and President of
WSSC. At the time, WSSC was a blank check company. In September 1999, WSSC
acquired all of the capital stock of Wall Street Strategies Inc., a private
company engaged in providing financial services, in exchange for 9,455,898
shares of WSSC's common stock, representing approximately 53.84% of the total
shares of WSSC common stock then issued and outstanding. Mr. Rice resigned as
president but was elected Chairman. Mr. Rice has not sold or otherwise disposed
of any of his shares of WSSC common stock except that immediately prior to the
acquisition he voluntarily canceled 7, 850,000 of his shares in WSSC.
Potential Conflicts Of Interest
None of the Company's officers or directors are presently
affiliated with any other company having a similar business plan to that of the
Company. If any officer or director should become so affiliated, the interests
of such company may from time to time be inconsistent in some respects with the
interests of the Company because both may be competing directly or indirectly
for the acquisition of a combination candidate. There may be factors that make
the Company or such other company more or less attractive to a potential
combination candidate, such as age of the company, name, capitalization, state
of incorporation, articles of incorporation or by-law provisions, etc. However,
any such conflicts would not be expected to be resolved through arm's-length
negotiation, but rather in the discretion of management.
Certain conflicts of interest may also arise between the
Company and its officers and directors due to the fact that each has other
employment and business interests to which he devotes his primary attention. The
19
<PAGE>
Company has not established policies or procedures for the resolution of
conflicts of interest between the Company and its management.
There can be no assurance that members of management will
resolve all conflicts of interest in the Company's favor. The officers and
directors of the Company are accountable to the Company and its shareholders as
fiduciaries, which means that they are legally obligated to exercise good faith
and integrity in handling the Company's affairs and in their dealings with the
company. Failure by them to conduct the Company's business in its best interests
may result in liability to them.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who own more than ten percent of the Common
Stock of the Company to file reports of ownership and changes in ownership with
the Securities and Exchange Commission. Executive officers, directors and more
than ten percent stockholders are required by regulations promulgated under the
Exchange Act to furnish the Company with copies of all Section 16(a) reports
filed. Since the Company was not a reporting company under the Exchange Act
during the last fiscal year, no such reports were required to be filed until
after the end of the fiscal year ended December 31, 1999.
Item 10. Executive Compensation
Cash And Other Compensation
During the three preceding fiscal years, the Company has not paid any
cash or cash equivalent compensation to any named executive officer or director
of the Company except as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
-------------------------- --------------------------------------------------------------------------------------------
Annual Compensation
-------------------------- ------------------ ---------------------- ---------------- ---------------------------------
Name and Other Annual
Principal Position Year Salary Bonus Compensation
($) ($) ($)
(a) (b) (c) (d) (e)
-------------------------- ------------------ ---------------------- ----------------- -------------------------------
Ian Rice, CEO 1996 $0.00 $0.00 $0.00
-------------------------- ------------------ ---------------------- ----------------- -------------------------------
1997 $64,000* $0.00 $0.00
-------------------------- ------------------ ---------------------- ----------------- -------------------------------
1998 $147,000* $0.00 $0.00
-------------------------- ------------------ ---------------------- ----------------- -------------------------------
</TABLE>
*Paid as a consulting fee to Sigma Limited S.A., a Swiss corporation ("Sigma"),
for the services of its consultant, Ian Rice, pursuant to a Consulting
Agreement, dated as of July 1, 1997 and as amended on October 27, 1997. The
agreement expired on June 30, 2000 and provided for the payment of an annual
consulting fee of $147,000. On January 10, 2000, Sigma agreed that if the
Company had insufficient funds to pay the required consulting fee the Company
could defer payment thereof until such time as the Company completed a
20
<PAGE>
combination transaction. All of the capital stock of Sigma is owned by a
discretionary trust of which Mr. Rice is neither a trustee nor a beneficiary.
Among the discretionary beneficiaries of the trust are members of Mr. Rice's
family. Mr. Rice disclaims beneficial ownership of Sigma.
Compensation Pursuant To Plans
No director or executive officer has received compensation from the
Company pursuant to any compensatory or benefit plan. There is no plan or
understanding, express, or implied, to pay any compensation to any director or
executive officer pursuant to any compensatory or benefit plan of the Company,
although the Company anticipates that it may compensate its officers or
directors for services to the Company with options to purchase stock, in lieu of
cash.
In June 1997, the Company's board of directors adopted an incentive
program and pursuant thereto granted options to various officers and directors,
all subject to approval by the Company's shareholders. The program was never
approved by shareholders and in 1998 the program and the options granted
thereunder were terminated. In 1999, the board of directors adopted and the
shareholders approved an incentive program. The Company has no long-term
incentive plan, as that term is defined in the rules and regulations of the SEC.
1999 Incentive Program
The Company has adopted the 1999 Incentive Program (the "Program") that
permits the granting of any or all of the following types of awards: stock
options, including incentive stock options, stock appreciation rights in tandem
with stock options or free standing and restricted stock grants. The purpose of
the Program is to promote the growth of the Company by enabling the Company to
attract and retain the best available persons for positions of substantial
responsibility and to provide certain key employees with additional incentives
to contribute to the success of the Company.
The aggregate number of shares that may be issued or transferred under
the Program is 2,225,000, plus (i) any shares that are forfeited under the
program, plus (ii) the number of shares repurchased by the company in the open
market and otherwise with an aggregate price no greater than the cash received
by the Company from the sale of shares under the Program; plus (iii) any shares
surrendered to the Company in payment of the exercise price of options issued
under the Program. However, no award may be issued that would bring the total of
all outstanding awards under the Program to more than 15% of the total number of
shares of Common Stock of the Company at the time outstanding.
Eligible participants under the program include executives, directors,
professional or administrative employees, consultants or advisors to the Company
or any subsidiary thereof, all of whom are referred to as "Grantees." Incentive
stock options may be granted under the Program only to selected employees
(including officers) of the Company and its affiliates. All Grantees may be
awarded grants under the Program other than incentive stock options.
The maximum term of incentive stock options under the Program is 10
years, except that in certain cases, as discussed below, the maximum term is
five years. The exercise price of incentive stock options under the program may
21
<PAGE>
not be less than the fair market value of the common Stock subject to the option
on the date of grant and, in some cases, as discussed below, may not be less
than 110% of such fair market value. The exercise price of non-qualified options
under the Program is determined by the Company's board of directors (or a
committee thereof if so appointed) which is the administrator of the Program.
No incentive stock option may be granted under the Program to any
person who, at the time of grant, owns (or is deemed to own) stock possessing
more than 10% of the total combined voting power of the Company or any affiliate
of the Company, unless the option price is at least 110% of the fair market
value of the stock subject to the option on the date of grant, and the term of
the option does not exceed five years from the date of grant. For incentive
stock options granted under the program. The aggregate fair market value,
determined at the date of grant, of the shares of Common Stock with respect to
which such options are exercisable for the first time by any grantee during any
calendar year may not exceed
Grants under the program may only be exercised while the Grantee is in
the employment or consultancy of the Company, except that the board may grant
may provide for partial or complete exceptions to this requirement. The Program
terminates on the tenth anniversary of its effective date unless terminated
earlier by the board or extended by the board.
Item 11. Security Ownership of Certain Beneficial Owners and Management
Beneficial Ownership
The following table sets forth information as of July 20, 2000, based
on information obtained from the persons named below, with respect to the
beneficial ownership of the Common Stock by (i) each person known by the Company
to own beneficially 5% or more of the Common Stock, (ii) each director and
officer of the Company and (iii) all directors and officers as a group. The
number of shares of Common Stock owned are those "beneficially owned" as
determined under the rules of the Securities and Exchange Commission, including
any shares of Common Stock as to which a person has sole or shared voting or
investment power and any shares of Common Stock which the person has the right
to acquire within 60 days through the exercise of any option, warrant or right.
22
<PAGE>
Number of Percent
Name and Address of Beneficial Owner Shares Owned Owned
Ian Rice..................................... 837,900 5.55%
c/o Ikon Ventures, Inc.
163-169 Brompton Road
London SW 3 1PY
England
All Executive Officers and Directors
as a Group (3 persons).......................... 837,900 5.55%
Changes In Control
A change in control of the Company probably will occur upon
consummation of a business combination, which is anticipated to involve a
significant change in ownership of the Company and in the membership of the
board of directors. The extent of any such change of control in ownership or
board composition cannot be predicted at this time.
Item 12. Certain Relationships and Related Transactions
The Company has not entered into any transactions during the last two
fiscal years with any director, executive officer, director nominee, 5% or more
shareholder, nor has the Company entered into transactions with any member of
the immediate families of the foregoing persons (includes spouse, parents,
children, siblings, and in-laws) nor is any such transaction proposed, except
that during 1998 the Holding Societa Per La Generale Fisica E Chimica Spa in
Proprieta Mista (Holding Institute of General & Physical Chemistry), the then
owner of approximately 10% of the Company's issued and outstanding shares of
Common Stock and controlled by Professor Dusan Vucelic, the then President and a
director of the Company, provided certain technical assistance to the Company's
then 90% owned subsidiary, Zeolite Mira s.r.l. for which the Company paid the
Institute $122,000.
It is the policy of the Company with respect to insider transactions,
that all transactions between the Company, its officers, directors, principal
stockholders and their affiliates be on terms no less favorable to the Company
than could be obtained from unrelated third parties in arms-length transactions,
and that all such transactions shall be approved by a majority of the
disinterested members of the board of directors. The Company believes that the
transaction described above complied with such policy.
In addition, on January 10, 2000, Sigma Limited S.A., the provider of
Ian Rice's services to the Company, agreed that the Company may defer any
consultancy fees payable to Sigma until such time as the Company completes a
combination transaction whereupon all deferred fees shall be due and payable.
23
<PAGE>
PART IV
Item 13. Exhibits, List and Reports on Form 8-K
(a) Exhibits
Exhibit Number Description of Exhibit*
3.1(1) Articles of Incorporation, as amended
3.1(2) Certificate of Amendment to Articles of Incorporation
3.2 Registrant's By-laws
4.1 Specimen Common Stock Certificate
4.1 Form of Warrant Issued to Purchasers of Units
10.1 Consulting Agreement dated as of July 1, 1997 between
Registrant and Sigma Limited S.A.
10.2 Amendment to Consulting Agreement, dated October 10, 1997
between Registrant and Sigma Limited S.A
10.3 Letter from Sigma Limited S.A. amending Consulting Agreement
dated January 10, 2000
10.4 1999 Incentive Program
16 Letter from KPMG**
27.1 Financial Data Schedule**
-------------------
* Except as indicated otherwise, all exhibits are incorporated by reference
to Registrant's Registration Statement on Form 10-SB.
** Included herewith.
b) Reports on Form 8-K
None.
24
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
IKON VENTURES, INC.
By: /s/
-----------------------------
Ian Rice, Chairman, President
and Chief Executive Officer
Dated: July ___, 2000
Name Title Date
/s/ Director July 20, 2000
-----------------------------
Ian Rice
/s/ Director July 21, 2000
-----------------------------
Stephen Gross
/s/ Director July 20, 2000
----------------------------- Chief Financial
Kurt Schlapfer and Accounting Officer
25
