<PAGE>
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SONICPORT.COM, INC.
--------------------------------------------
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required.
[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock, $0.0001 par value per share
(2) Aggregate number of securities to which transaction applies:
14,666,667 shares
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
<TABLE>
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Average High and Low Price of Aggregate number of Aggregate Value of shares of Filing Fee of 1/50th of One
Common Stock reported on the shares of Common Stock to Common Stock to which Percent of the Value of
American Stock Exchange on which transaction applies transaction applies shares of Common Stock
October 6, 2000
--------------------------------------------------------------------------------------------------------------------------------
$0.94 14,666,667 $13,786,666.98 $2,757.33
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(4) Proposed maximum aggregate value of transaction:
$13,786,666.98
(5) Total fee paid:
$2,757.33
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
SONICPORT.COM, INC.
1641 20th Street
Santa Monica, California 90404
October 20, 2000
To Our Shareholders:
On behalf of the Board of Directors of SonicPort.com, Inc. (the "Company"),
I cordially invite you to attend the Annual Meeting (the "Meeting") of the
shareholders of the Company to be held at the Fairmont Miramar Hotel, 101
Wilshire Boulevard, Santa Monica, California 90401 on November 14, 2000 at 2:00
p.m. PST.
At the Meeting, you will be asked to consider and approve the following
proposals (the "Proposals"): (i) the Company's acquisition (the "Acquisition")
of all of the outstanding common stock of U.S. Dataworks, Inc., a Delaware
corporation f/k/a Allstate Dataworks, Inc. ("Allstate"), pursuant to a Share
Exchange Agreement, dated as of September 25, 2000, by and between the Company,
Allstate and the stockholders of Allstate signatory therein, and as
consideration for the Acquisition, the Company agreed to issue 14,666,667
restricted shares of its common stock (the "Common Stock"), $0.0001 par value
per share, (ii) the election of six members of the Board of Directors to serve
until the next annual meeting of shareholders, (iii) ratification of the
appointment of Singer, Lewak, Greenbaum & Goldstein LLP as the Company's
independent public accountants for fiscal year 2001, (iv) the change of the
Company's name to "SonicPort, Inc.," and (v) to adopt a 2000 Stock Option Plan.
The Board of Directors has approved the Proposals and determined that they
are advisable, fair to and in the best interests of the shareholders of the
Company. The Board of Directors recommends that you vote FOR approval of the
Proposals.
Approval of the Proposals will require the affirmative vote of the holders
of a majority of the voting power of all of the shares of the Common Stock of
the Company outstanding on October 18, 2000, the record date, with each share of
Common Stock of the Company entitled to one vote.
Details of the Proposals are set forth in the attached proxy statement.
Please give this material your careful attention.
Whether or not you plan to attend the Meeting, please complete, sign and
date the accompanying proxy and return it in the enclosed prepaid envelope. If
you hold shares of Common Stock of the Company and attend the Meeting, you may
vote in person even if you have previously returned your proxy card. Your prompt
cooperation will be greatly appreciated.
Sincerely,
/s/ DAVID BAEZA
-----------------------------------
David Baeza
President and Chief Executive Officer
<PAGE>
SONICPORT.COM, INC.
1641 20th Street
Santa Monica, California 90404
NOTICE OF ANNUAL MEETING
To Be Held
November 14, 2000
To the Shareholders of SonicPort.com, Inc.:
NOTICE IS HEREBY GIVEN, in accordance with the applicable provisions
of the Nevada General Corporation Law and the American Stock Exchange rules,
that an annual meeting (the "Meeting") of the shareholders of SonicPort.com,
Inc., a Nevada corporation (the "Company"), whose principal executive offices
are located at 1641 20th Street, Santa Monica, California 90404, will be held as
follows:
PLACE: Fairmont Miramar Hotel, 101 Wilshire Boulevard, Santa
Monica, California 90401
DATE: November 14, 2000
TIME: 2:00 p.m. PST
The purpose of the Meeting is as follows:
1. To approve the Company's acquisition (the "Acquisition") of all
of the outstanding common stock of U.S. Dataworks, Inc., a
Delaware corporation f/k/a Allstate Dataworks, Inc. ("Allstate"),
pursuant to a Share Exchange Agreement, dated as of September 25,
2000, by and between the Company, Allstate and the stockholders
of Allstate signatory therein. As consideration for the
Acquisition, the Company agreed to issue 14,666,667 restricted
shares of its common stock (the "Common Stock"), $0.0001 par
value per share.
2. To elect six members of the Board of Directors to serve until the
next annual meeting of shareholders.
3. To ratify the appointment of Singer, Lewak, Greenbaum & Goldstein
LLP as the Company's independent public accountants for fiscal
year 2001.
4. To change the Company's name to "SonicPort, Inc."
5. To adopt a 2000 Stock Option Plan.
6. All such other matters as may be brought before such Meeting.
The Board of Directors has fixed the close of business on October 18,
2000 as the record date for determination of shareholders entitled to notice of,
and to vote at, the Meeting.
By Order of The Board of Directors.
/s/ RICHARD SHAPIRO
---------------------------------------
Richard Shapiro
Secretary
Santa Monica, California October 20, 2000
Shares can be voted at the Meeting only if the record holder thereof
is present at the Meeting or represented by a proxy. Whether or not you plan to
attend the Meeting, please complete, sign and date the accompanying proxy and
return it in the enclosed prepaid envelope. If you hold shares of Common Stock
of the Company and attend the Meeting, you may vote in person even if you have
previously returned your proxy card.
5
<PAGE>
SONICPORT.COM, INC.
1641 20th Street
Santa Monica, California 90404
PROXY STATEMENT
Mailing Date: October 20, 2000
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD: November 14, 2000
DATE, TIME AND PLACE; MATTERS TO BE CONSIDERED
This Proxy Statement is being furnished to the holders of Common Stock,
$0.0001 par value per share (the "Common Stock"), of SonicPort.com, Inc. (the
"Company" or the "Registrant"), on behalf of the Company, in connection with the
solicitation of proxies by the Board of Directors for use at the annual meeting
(the "Meeting") of shareholders to be held on November 14, 2000, and at any
adjournments thereof. The Meeting will be held at 2:00 p.m. PST, on the above
date, at the Fairmont Miramar Hotel, 101 Wilshire Boulevard, Santa Monica,
California 90401. At the Meeting, the holders of the Company's Common Stock will
be asked to consider and approve the following proposals (the "Proposals"):
(1) the Company's acquisition (the "Acquisition") of all of the
outstanding common stock of U.S. Dataworks, Inc., a Delaware corporation f/k/a
Allstate Dataworks, Inc. ("Allstate"), pursuant to a Share Exchange Agreement,
dated as of September 25, 2000, by and between the Company, Allstate and the
stockholders of Allstate signatory therein. As consideration for the
Acquisition, the Company agreed to issue 14,666,667 restricted shares (the
"Shares") of its common stock (the "Common Stock"), $0.0001 par value per share;
(2) the election of six members of the Board of Directors to serve until
the next annual meeting of shareholders;
(3) ratification of the appointment of Singer, Lewak, Greenbaum &
Goldstein LLP as the Company's independent public accountants for fiscal year
2001;
(4) the change of the Company's name to "SonicPort, Inc.;"
(5) to adopt a 2000 Stock Option Plan; and
(6) all other matters as may be brought before such Meeting.
THE BOARD OF DIRECTORS HAS APPROVED THE PROPOSALS AND DETERMINED THAT THEY
ARE ADVISABLE, FAIR TO AND IN THE BEST INTERESTS OF THE SHAREHOLDERS OF THE
COMPANY. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE
PROPOSALS.
<PAGE>
--------------------------------------------------------------------------------
SUMMARY OF THE ACQUISITION
This summary highlights material information relating to the
Acquisition and may not contain all of the information that is important to
you. Shareholders are urged to read the full text of this Proxy Statement and
its Exhibits in their entirety.
SonicPort.com, Inc.
. We are a financial services application service provider (ASP)
specializing in integrating transaction processing software, supported by
broadband hosting, technical expertise and customer service. Additional
value-added services include web design and development, customer software
development, strategic marketing and planning.
. Our mailing address is 1641 20th Street, Santa Monica, California 90404,
(310) 828-1999.
Allstate
. Established in 1997, Allstate develops, markets and supports transaction
processing software for Windows NT computer systems. Its customer base
includes many of the largest financial institutions as well as credit card
companies, government institutions and high volume merchants. It also has
a strategic alliance with CheckFree, Inc. to license Allstate software for
its banking customers and Thomson Financial Publishing to incorporate
their EPICWare database into the Allstate products.
. The mailing address of U.S. Dataworks, Inc., f/k/a Allstate Dataworks,
Inc. is 5301 Hollister Road, Suite 250, Houston, Texas 77040, (713) 934-
3856.
The Acquisition
. Pursuant to the Share Exchange Agreement, we have agreed to issue
14,666,667 restricted shares of Common Stock of the company, $0.0001 par
value per share, upon the closing of the Acquisition as consideration for
our purchase of all of the outstanding Common Stock of Allstate. As of
October 18, there were 26,789,426 shares of our Common Stock outstanding.
. As a requirement of listing additional shares of our common stock on the
American Stock Exchange, and as a condition to the consummation of the
Acquisition, a majority of the voting power of our outstanding Common
Stock must approve the Acquisition.
. We have retained Houlihan Lokey Howard & Zukin for the purpose of
determining whether the terms and conditions of the Share Exchange
Agreement and the transactions contemplated in connection with the
Acquisition are fair to our shareholders from a financial point of view.
. The affirmative vote of the holders of a majority of the voting power of
all our outstanding shares of our Common Stock is required to approve and
consummate the Acquisition.
. David Baeza, our President and Chief Executive Officer, and Stanton
Dodson, our Chairman, have each agreed to vote the shares of Common Stock
owned by them, respectively, in favor of the adoption and approval of the
Share Exchange Agreement and the transactions contemplated in connection
with the Acquisition.
. In connection with the Acquisition, we will enter into a Registration
Rights Agreement pursuant to which we will grant the recipients of the
14,666,667 restricted shares certain piggy-back registration rights with
respect to their shares.
--------------------------------------------------------------------------------
<PAGE>
RECORD DATE; QUORUM AND VOTING AT THE MEETING
The close of business on October 18, 2000 has been fixed as the record date
for the determination of shareholders entitled to notice of, and to vote at, the
Meeting. Only those shareholders of record, on the record date, will be entitled
to vote on the Proposals described herein. The voting securities of the Company
are the shares of its Common Stock, of which 26,789,426 shares were issued and
outstanding as of October 18, 2000.
A quorum is necessary in order for a vote on the Proposals presented at the
Meeting. A majority of the outstanding shares entitled to vote, present in
person or represented by proxy, shall constitute a quorum. Proxies which abstain
on one or more proposals and "broker non-votes" will be deemed present for
quorum purposes for all proposals to be voted on at the meeting. Broker non-
votes occur where a broker holding stock in street name votes the shares on some
matters but not others. The missing votes are broker non-votes. Client directed
abstentions are not broker non-votes. Broker non-votes will be treated as not
entitled to vote and therefore will not be counted as either a vote for or
against the proposals. Shareholders whose shares are in street name and do not
return a proxy are not counted for any purpose and are neither an abstention nor
a broker non-vote. Shareholders who sign, date and return a proxy but do not
indicate how their shares are to be voted are giving management full authority
to vote their shares as they deem best for the Company. Abstentions (i.e., votes
withheld by shareholders who are present and entitled to vote) will be counted
as present for purposes of determining whether there is a quorum for the
transaction of business.
The affirmative vote of the holders of a majority of the voting power of
all outstanding shares of Common Stock of the Company, with each share of Common
Stock of the Company entitled to one vote, is required to approve the Proposals.
Accordingly, abstention votes will have the effect of votes against the approval
of the Proposals.
Under the rules of the American Stock Exchange, shareholder approval is
required as a prerequisite to approval of applications to list additional shares
to be issued as sole or partial consideration for the acquisition of the stock
of a company when such issuance could result in an increase in outstanding
common stock of 20% or more. On the closing date of the Acquisition, the
stockholders of Allstate will receive 14,666,667 Shares. The Company is relying
on an exemption from registration under the Securities Act of 1933, as amended
(the "Securities Act"), for offers and sales that do not involve a public
offering in connection with the issuance of the Shares. The Shares will be
subject to restrictions on transferability and resale and cannot be transferred
or resold except as permitted under the Securities Act. The Company has agreed
to grant the recipients of the Shares certain registration rights with respect
to their Shares. Upon registration of the Shares, there could be an increase in
issued and outstanding Common Stock of the Company in excess of 20%. The Company
has agreed to list the Shares on the American Stock Exchange concurrently with
the consummation of the Acquisition, and the Company expects that the
Acquisition will occur shortly after the Meeting upon your approval of the
Acquisition.
David Baeza, the Company's Chief Executive Officer and President, and
Stanton Dodson, the Company's Chairman, who collectively hold approximately 52%
of the Common Stock of the Company, have each indicated their intention to vote
their shares, respectively, in favor of the Acquisition.
All shares of Common Stock of the Company that are entitled to vote and are
represented at the Meeting by properly executed proxy cards received prior to or
at the Meeting, and not duly and timely revoked, will be voted at the Meeting
(or adjournment or postponement thereof) in accordance with the instructions
indicated on the proxy cards. If no instructions are indicated, the proxies will
be voted FOR approval of the Proposals.
If any other matters are properly presented for consideration at the
Meeting, David Baeza and Stanton Dodson, and each of them (the persons named in
the enclosed proxy card as the proxies for the Common Stock of the Company) will
have discretion to vote on these matters in accordance with their best judgment.
REVOCATION OF PROXIES AND VOTING INSTRUCTIONS
A holder of Common Stock of the Company may revoke a proxy card given
pursuant to this solicitation at any time before the proxy card is voted by
returning a subsequently dated proxy card to the Secretary of the
<PAGE>
Company, by filing an instrument in writing with the Secretary of the Company
revoking the proxy card, or by voting in person at the Meeting. Attendance at
the Meeting will not in and of itself revoke a proxy card.
Holders of Common Stock of the Company who are entitled to revoke their
proxy card may do so via facsimile at (310) 828-1898. Any beneficial owner of
Common Stock of the Company whose shares are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to revoke
should contact the registered holder promptly and instruct the registered holder
to revoke on his behalf. There can be no assurance that the registered holder
will have sufficient time prior to the Meeting to deliver a revocation upon
instruction by the beneficial owner.
PROXY SOLICITATION
The Company will pay its own expenses incurred in connection with this
Proxy Statement and the Meeting, including the disbursements of legal counsel
and accountants. In addition to solicitation by mail, proxies may be solicited
by directors, officers and employees of the Company in person or by telephone,
facsimile or other means of communication. The directors, officers and employees
will not be additionally compensated, but will be reimbursed for reasonable out-
of-pocket expenses, in connection with their solicitation. Arrangements will
also be made with custodians, nominees and fiduciaries for forwarding of proxy
solicitation materials to beneficial owners of shares held of record by the
custodians, nominees and fiduciaries, and the Company will reimburse the
custodians, nominees and fiduciaries for reasonable expenses incurred in
connection therewith.
SHAREHOLDERS SHOULD NOT SEND ANY STOCK CERTIFICATES WITH THEIR PROXY CARDS.
<PAGE>
PROPOSAL 1: THE ACQUISITION
SONICPORT.COM
The Company is a financial services application service provider (ASP)
specializing in integrating transaction processing software, supported by
broadband hosting, technical expertise and customer service. Additional value-
added services include web design and development, customer software
development, strategic marketing and planning.
ALLSTATE
Established in 1997, Allstate develops, markets and supports transaction
processing software for Windows NT computer systems. Its customer base includes
many of the largest financial institutions as well as credit card companies,
government institutions and high volume merchants. It also has a strategic
alliance with CheckFree, Inc. to license Allstate software for its banking
customers and Thomson Financial Publishing to incorporate their EPICWare
database into the Allstate products.
TERMS OF THE ACQUISITION
On September 25, 2000, the Company entered into the Share Exchange
Agreement and agreed to acquire all of the outstanding common stock of Allstate.
As consideration for the Acquisition, the Company agreed to issue 14,666,667
Shares to the former stockholders of Allstate. The Company is relying on an
exemption from registration under the Securities Act for offers and sales that
do not involve a public offering in connection with the issuance of the Shares.
The Shares will be subject to restrictions on transferability and resale and
cannot be transferred or resold except as permitted under the Securities Act.
The Company has agreed to grant recipients of the Shares certain registration
rights with respect to their Shares. The Company intends to account for the
Acquisition using the purchase method under U.S. generally accepted accounting
principles.
The Board of Directors has determined that the acquisition of Allstate is
in the best interest of the Company and the shareholders. The Company believes
that the Acquisition will enable the Company to attract a significantly larger
customer base within the financial services community for whom the Company will
provide innovative turnkey solutions, such as check truncation, Internet debits
and automated clearing house transactions.
The Acquisition will be treated as a reorganization within the meaning of
the Section 368(a) of the Internal Revenue Code, and no gain or loss will be
recognized by any Allstate stockholder for U.S. federal income tax purposes on
the exchange of Allstate common stock for Common Stock of the Company. The
aggregate tax basis of the Allstate common stock received by the Company will be
the same as the aggregate tax basis of the Allstate common stock surrendered in
exchange therefor in the Acquisition.
Richard Shapiro, our current Treasurer, Chief Financial Officer, Senior
Vice-President and Secretary, is also the Secretary of Allstate and the
beneficial owner of 493,286 shares of Allstate common stock. As a part of the
Acquisition, Mr. Shapiro will sell the shares of Allstate common stock that he
holds and will receive 1,800,000 shares of Common Stock of the Company. John
Cooper, the Chief Executive Officer of Allstate and one of our directors, is the
beneficial owner of 493,286 shares of Allstate common stock. As a part of the
Acquisition, Mr. Cooper will sell the shares of Allstate common stock that he
holds and will receive 1,800,000 shares of Common Stock of the Company.
FAIRNESS OPINION
The Company has retained Houlihan Lokey Howard & Zukin for the purpose of
determining whether the terms and conditions of the Share Exchange Agreement and
the transactions contemplated in connection with the Acquisition are fair to its
shareholders from a financial point of view.
THE BOARD OF DIRECTORS RECOMMENDS THAT COMPANY SHAREHOLDERS VOTE FOR
APPROVAL OF THE ACQUISITION.
<PAGE>
PROPOSAL 2: ELECTION OF DIRECTORS
The Company's Board of Directors currently consists of six directors.
If any nominee is unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute as the Board of
Directors may recommend. At this time the Board of Directors knows of no reason
why any nominee might be unable to serve.
THE BOARD OF DIRECTORS RECOMMENDS THAT COMPANY SHAREHOLDERS VOTE FOR
APPROVAL OF THE NOMINEES NAMED BELOW TO SERVE AS DIRECTORS OF THE COMPANY.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
SECTION 16(A) OF THE EXCHANGE ACT
The following table sets forth the names of the Board of Directors'
nominees for election as directors and sets forth the names of all executive
officers and advisory board members. Also set forth is certain other information
with respect to each such person's age, principal occupation(s) during the past
five years and positions currently held with the Company.
Name Age Position(s) Held Year
---- --- With the Company Term
---------------- Expires
-------
Directors:
David Baeza 35 President, Chief 2000
Executive Officer
and Director
Stanton Dodson 36 Chairman of the Board of 2000
Directors
John Cooper 41 Director 2000
Raymond Wong 41 Director 2000
H. Joe Frazier 66 Director 2000
Joe Abrell 66 Director 2000
Executive Officer:
Richard Shapiro 41 Treasurer, Chief
Financial Officer and
Secretary
DIRECTORS:
DAVID BAEZA, President, Chief Executive Officer and Director. Mr. Baeza is a co-
founder of the Company and has served as its President and CEO of the Company
since July 1998. Mr. Baeza has over 10 years experience in the
telecommunications industry. Prior to his position with the Company, Mr. Baeza
was the Chief Marketing Officer and Executive Vice President of CGI, a company
that specialized in direct marketing of subscription based services. Mr. Baeza
served as Director of Sales and Marketing for Federal TransTel, opening their
West Coast operations center in Los Angeles and substantially increasing their
annual gross sales. As Vice President of Sales for R.J.GORDON & Company (Inc.
500), Mr. Baeza was responsible for increasing the Merchant Bank Portfolio from
$10 million annually to $50 million annually. During his tenure at R.J.gordon,
Mr. Baeza created and served as President and Executive Director of the
Teleservices Industry Association, a non-profit agency that lobbied Capitol Hill
to amend the telecommunications bill. Mr. Baeza also designed the first national
AIDS/STD toll-free
<PAGE>
information line for the Center of Disease Control and American Social Health
Association. Additionally, Mr. Baeza designed successful Direct Response
television applications for Sony's Game Show Network and MTV Europe. Mr. Baeza
graduated with a Bachelor of Science degree in Finance from California
Polytechnic University and earned his MBA from Nova University in Florida
graduating summa cum laude.
STANTON DODSON, Chairman of the Board of Directors. Mr. Dodson is a co-founder
of the Company and has served as the Chairman of the Board of Directors since
July 1998. Mr. Dodson has spent the last twelve years working as a financier
with software, multimedia and Internet companies, most recently serving as
President of the software-publisher, Global MediaNet Corporation (GMC) since
1994. He served as executive producer on some of that company's award-winning
titles including LEONARD NIMOY'S SCIENCE FICTION I & II and the Martha Stewart
endorsed, GROWING GOOD ROSES. Mr. Dodson was also responsible for developing a
joint venture to build an online and educational tool for entrepreneurs with
Harvard Business School Publications. Mr. Dodson also co-founded Transglobal
Capital Corporation in 1994, a NASD-licensed securities Broker-Dealer that he
oversaw until he sold the business in 1997. From 1991 to 1994, Mr. Dodson
founded and served as President of Ichor Communications, Inc, a consulting
company that advised entertainment and multimedia clients on equity financing.
The company was acquired by GMC in 1994. Mr. Dodson attended the University of
South Carolina, where he majored in Business Administration with a concentration
in Finance.
JOHN COOPER, Director. Mr. Cooper has been a director of the Company since
April, 1999. Mr. Cooper has been the President and Chief Technical Officer of
Allstate Communications, Inc. (ACI) since 1997. Mr. Cooper joined ACI (a
privately held California corporation) in 1995 as its Chief Operating Officer.
ACI is a holding company specializing in out-bound business-to-business
telemarketing, audiotext, and the development and marketing of software to
financial institutions through US Dataworks, a Texas LLC. In 1985, Mr. Cooper
joined Real-Share, Inc., a data processing company that supplied transactional
services to TeleCheck franchises worldwide. Following Real-Share's acquisition
of TeleCheck Southwest in 1985, Mr. Cooper continued as a software developer in
Houston, Texas. In 1988, Mr. Cooper headed up the team that developed the
transaction processing system for the audiotext industry, under the name Shared
Global Systems, Inc. In 1989, Mr. Cooper was named as the first President of
Shared Global Systems. In 1992, TeleCheck franchises were bought by First
Financial Management (FFM). Mr. Cooper was promoted to Vice President of
Management of Information Services for TeleCheck while still serving as the
President of Shared Global Systems. In 1995, Shared Global Systems had grown by
a factor 10 and enjoyed twice the earnings-margin of its sister companies. FFM
was acquired that same year by First Data Company. Mr. Cooper received his B.S.
in Computer Science from Western Missouri State in 1984.
H. JOE FRAZIER, Director. Mr. Frazier has been a director of the Company since
October, 1999. Mr. Frazier also serves as a director of Simon Transportation,
Inc., a NASDAQ listed company. Mr. Frazier served as the Chief Executive Officer
for Westinghouse Communities, Inc., a subsidiary of Westinghouse Electric
Corporation, from 1973 until 1993. Under Mr. Frazier's direction, Westinghouse
Communities, Inc. grew substantially in assets, revenue and enjoyed a 30% annual
growth in operating profits. In 1992, Mr. Frazier founded Full House Resort,
Inc., a NASDAQ listed company, where he functioned as a director of the company.
Prior to his twenty-year tenure at Westinghouse Communities, Inc., Mr. Frazier
had been a senior partner with Frazier, Tiballi & Schroeder. Mr. Frazier began
his career as a partner in the legal firm of Patterson, Maloney & Frazier in
1962. Mr. Frazier received his Bachelor of Arts degree in Accounting and Finance
from the University of Oklahoma and his Juris Doctor law degree from the
University of Miami.
JOE ABRELL, Director. Mr. Abrell has been a director of the Company since
October, 1999. Mr. Abrell is a communications expert having worked in the field
for 40 years. As a newspaper reporter, news magazine correspondent, television
journalist/executive, NFL executive and owner of a public relations/marketing
firm, he has experienced first hand all facets of the communications, marketing
and media industry. As Vice President of the Miami Dolphins, he was instrumental
in the building of Joe Robbie Stadium, now renamed Pro Player Stadium, as one of
the very few privately financed sports stadiums in the country. In 1963, he
became Director of Special News Projects for WTVJ, Miami, Florida, one of the
CBS network's most important affiliates. In 1969 he was appointed News Director
and in 1972 Director of Public Affairs. He also hosted the successful Miami
television news magazine program, Montage, until he left to join the Miami
Dolphins in 1984. Most recently he has worked to successfully launch PrimeCo
Personal Communications, one of the leaders in the new innovative wireless
<PAGE>
technology, in the Florida market. He holds a Bachelor of Arts degree in
Journalism/Literature from Indiana University, a Masters degree in Political
Science from Columbia University, obtained while on the CBS News Fellowship, and
also a Juris Doctor law degree from the University of Miami.
RAYMOND WONG, Director. Mr. Wong has been a Director of the Company since
October, 1999. Mr. Wong is an Engineering Consultant, specializing in areas of
production design, prototype, manufacturing, production, quality and cost
management in semiconductor packaging and automated manufacturing. He also
consults on factory automation, manufacturing processes, assembly equipment
requirements and latest technology trends. In 1990, Mr. Wong started his own
consulting firm (WOSTECH Company). Throughout his career, he has worked for many
high profile corporations. From 1998 to 1999, Mr. Wong served as a Manufacturing
and Process Engineering Manager for Microwave dB Inc. He was an advisor to and
assisted in creating an $8 million state-of-the-art manufacturing facility. From
1997 to 1998, Mr. Wong served as a Sr. Staff Manufacturing Engineer for Hughes
Space and Communications Co., specializing in satellite communications
manufacturing. From 1988 to 1997, Mr. Wong served as an Engineering Manager for
M/A Com (AMP Inc.). He set up automated assembly lines that gave the company the
competitive edge it needed for market position. During this period the annual
sales went from $18 million to $60 million. From 1984 to 1988, Mr. Wong served
as Manufacturing/Process Engineering Specialist for TRW Semiconductor (Motorola
RF Div.). From 1980-1984, Mr. Wong served as a Sr. Electronic Design Engineer
for General Dynamics Corp. Mr. Wong currently serves on the Board of Directors
for Powerski International Corp. This company is developing a new
sport/motorized jet board. Mr. Wong graduated with a Bachelor of Science degree
in Electrical Engineering from the University of Pittsburgh with a minor in
Computer Science.
EXECUTIVE OFFICER:
RICHARD SHAPIRO - Treasurer, Chief Financial Officer, Senior Vice-President and
Secretary. Mr. Shapiro joined the Company in July, 2000. Mr. Shapiro has more
than 17 years of experience in senior financial management positions. Most
recently, he served since 1994 as chief financial officer, director of human
resources and a board member of Allstate Communications, Inc., where he oversaw
all financial operations of this 450-employee telecommunications and financial
management company. He also served as chief operating officer of that company's
International Division. During and prior to his years at Allstate
Communications, Mr. Shapiro gained experience at both public and private
companies in a broad spectrum of financial management activities, including
merchant banking, taxation, SEC reporting and international business. He also
enjoys extensive knowledge of Internet-based business operations. Mr. Shapiro is
a 1983 graduate of California State University Northridge and actively
participates in several private foundations in the Los Angeles area.
During the year ended March 31, 2000, 19 meetings of the Board of Directors
were held, and no director attended fewer than 75% of such meetings.
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by, or
paid for all services rendered to the Company during the fiscal years ended
March 31, 1999 and March 31, 2000 by those persons who served as Chief Executive
Officer and any Named Executive Officer who received compensation in excess of
$100,000 during such years.
<PAGE>
SUMMARY COMPENSATION TABLE (US$)
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
---------------------- --------------
Other
Annual Securities All Other
Name and Salary Bonus Compensation Underlying Compensation
Principal Position Year ($) /(1)/ ($) /(3)/ ($) /(4)/ Options ($) ($)
------------------ -------- ----------- --------------- ----------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
David Baeza, 2000 174,383 7,000 0 50,000
President and CEO
1999 63,333 0
Stanton Dodson, 2000 165,305 17,799 0 50,000
Chairman
1999 32,800
Bill Cooper 2000 134,646 0 0 27,500
Former Chief
Financial Officer
</TABLE>
_______________________________________
/(1)/ No officers received or will receive any bonus or other annual
compensation other than salaries during fiscal year 1999 and 2000,
other than stated above. The table does not include any amounts for
personal benefits extended to officers of the Company, such as the
cost of automobiles, life insurance and supplemental medical
insurance, because the specific dollar amounts of such personal
benefits cannot be ascertained. Management believes that the value of
non-cash benefits and compensation distributed to executive officers
of the Company individually or as a group during fiscal year 2000 did
not exceed the lesser of US $50,000 or ten percent of such officers,
individual cash compensation or, with respect to the group, US $50,000
times the number of persons in the group or ten percent of the group's
aggregate cash compensation.
/(2)/ No officers received or will receive any long term incentive plan
(LTIP) payouts or other payouts during fiscal year 2000.
/(3)/ Bonus awarded based on performance.
9
<PAGE>
Option Grants in Fiscal Year 2000
-----------------------------------------
The following table provides information on option grants to the Named
Executive officers and the Company's directors in Fiscal Year 2000.
OPTION GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
Percentage of Number of Total Options
Securities Granted
Underlying to Employees Exercise Price
Name Options Granted in Fiscal Year ($/sh) Expiration Date
-------------------- ---------------------- --------------------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
David Baeza 50,000 ** $ 4.40 8/17/04
Stanton Dodson 50,000 ** $ 4.40 8/17/04
John Cooper 25,000 ** $ .50 7/1/04
15,000 $4.0625 10/1/04
15,000 $4.5156 1/1/05
15,000* $4.3430 4/3/05
15,000* $1.5000 7/3/05
Ray Wong 15,000 ** $4.0625 10/1/04
15,000 $4.5156 1/1/05
15,000* $4.3430 4/3/05
15,000* $1.5000 7/3/05
H. Joe Frazier 45,000 ** $4.0625 10/1/04
15,000 $4.5156 1/1/05
15,000* $4.3430 4/3/05
15,000* $1.5000 7/3/05
Joe Abrell 15,000 ** $4.0625 10/1/04
30,000 $4.3125 10/19/04
15,000 $4.5156 1/1/05
15,000* $4.3430 4/3/05
15,000* $1.5000 7/3/05
</TABLE>
* Options granted in 2001 Fiscal Year; not included in the percentage of
total options granted in Fiscal Year 2000.
** Less than 1%
10
<PAGE>
AGGREGATE FISCAL YEAR-END OPTION VALUES
Number of Securities Underlying Unexercised Value of Unexercised Options Held at
Fiscal Year-End (#)
<TABLE>
<CAPTION>
Name Exercisable Unexercisable Exercisable
<S> <C> <C> <C>
David Baeza 50,000 0 0
Stanton Dodson 50,000 0 0
John Cooper 55,000 0 $14,762
Ray Wong 30,000 0 $1,643
H. Joe Frazier 60,000 0 $10,082
Joe Abrell 60,000 0 $ 2,582
</TABLE>
_________________________
/(1)/ Based on the difference between the option exercise price and the fair
market value per shared based on the closing price of $4.3438 reported
by the NASD OTC Bulletin Board on March 31, 2000.
The Company's 1999 Stock Option Plan is administered by the Compensation
Committee of the Board of Directors, which consists of Messrs. Cooper and
Frazier. The Compensation Committee determines to whom options are granted, the
number of shares subject to each option, the vesting schedule and the exercise
price. The exercise price may not be less than the fair market value of the
Common Stock on the date of grant. Options generally vest over five years and
have a duration of ten years. The exercise price may be paid in cash, by
delivering shares of Common Stock already owned by the option holder or by
complying with any other payment mechanism approved by the plan administrator.
Subject to certain limitations, the Compensation Committee may modify the terms
of and reprice outstanding options.
OPTION EXERCISES IN 2000
No Named Executive exercised any stock option in Fiscal Year 2000.
1999 STOCK OPTION PLAN DESCRIPTION
The Company's Board of Directors adopted the 1999 Stock Option Plan (the
"Plan") in August, 1999, which was approved by the Company's shareholders at the
special meeting of shareholders held on October 12, 1999. The Plan provides for
the grant to directors, officers, employees and consultants of the Company
(including its subsidiaries) of options to purchase up to an aggregate of
2,200,000 shares of Common Stock. Options granted under the Plan may be
"incentive stock options" as defined in Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), or nonqualified options.
The exercise price of incentive stock options may not be less than 100% of the
fair market value of the Common Stock as of the date of grant (110% of the fair
market value if the grant is to an employee who owns more than 10t of the total
combined voting power of all classes of capital stock of the Company). The Code
currently limits to $100,000 the aggregate value of Common Stock that may be
acquired in any one year pursuant to incentive stock options under the 1999
Plan, or any other option plan adopted by the Company. Nonqualified options may
be granted under the 1999 Plan at an exercise price of not less than 100% of the
fair market value of the Common Stock on the date of grant. Nonqualified options
also may be granted without regard to any restriction on the amount of Common
Stock that may be acquired pursuant to such options in any one year.
Options granted under the Plan may not be exercised more than ten years after
the grant (five years after the grant if the grant is an incentive stock option
to an employee who owns more than 10% of the total combined voting power of all
classes of capital stock of the Company).
11
<PAGE>
PARTICIPATION IN THE 1999 PLAN
All of the Company's executive officers, directors, employees and consultants
of the Company and its subsidiary will be eligible to participate in the Plan.
The Company has granted a total of 2,533,846 options under the Plan as of March
31, 2000. The Company also issued other options outside the Plan.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The laws of the State of Nevada and the Company's Bylaws provide for
indemnification of the Company's directors for liabilities and expenses that
they may incur in such capacities. In general, directors and officers are
indemnified with respect to actions taken in good faith in a manner reasonably
believed to be in, or not opposed to, the best interests of the Company, and
with respect to any criminal action or proceeding, actions that the indemnitee
had no reasonable cause to believe were unlawful.
The Company has been advised that in the opinion of the Securities and
Exchange Commission, indemnification for liabilities arising under the
Securities Act is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
COMPENSATION OF DIRECTORS
The Company reimburses each Director for reasonable expenses (such as travel
and out-of-pocket expenses) in attending meetings of the Board of Directors.
Each director has received certain options to purchase the Company's common
stock as compensation for his services as Director.
AUDIT COMMITTEE
The Company's Board of Directors established an Audit Committee, composed of
the three outside directors, Messrs. Frazier, Abrell and Mr. Wong. The principal
functions of the Audit Committee include making recommendations to the Board
regarding the selection of independent public accountants to audit annually the
books and records of the Company, reviewing the proposed scope of each audit and
reviewing the recommendations of the independent public accountants as a result
of their audit of the Company. The Audit Committee will also periodically review
the activities of the Company's accounting staff and the adequacy of the
Company's internal controls.
EMPLOYMENT AND RELATED AGREEMENTS
There are no employment agreements with Messrs. Baeza and Dodson at this time.
The Company anticipates that such agreements will be entered into in fiscal year
2001. The Company has entered into an employment agreement with a key employee,
Sylvia Hanna as of September 1, 1999, pursuant to which Ms. Hanna has been
retained as the Company's Director of Internet Business Development. Ms. Hanna
has also been granted 372,000 options to purchase the Company's Common Stock,
20,000 of which have been fully vested at the time of signing the employment
agreement and the remaining 352,000 are granted and vested over time for each
year of her employment with the Company. Ms. Hanna's employment agreement is for
a three year term, renewable at the parties mutual consent. The Company has also
entered into an employment agreement with Linda Boorman. The agreement with Ms.
Boorman is for a two and half year term. Ms. Boorman has been granted a total of
200,000 options pursuant to her agreements with the Company. Such options are
vested over the term of her agreement. The Company also entered into an
employment agreement with Richard Shapiro as of July 3, 2000. Mr. Shapiro's
employment agreement is for a three year term, and he was granted a total of
900,000 options pursuant to his employment agreement. Of the 900,000 options Mr.
Shapiro received, 150,000 vested immediately upon commencement of his employment
with the Company, and the remaining 750,000 options are vested over the term of
his agreement.
12
<PAGE>
COMPENSATION AND AUDIT COMMITTEES; COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
The Board has a Compensation Committee comprised of Messrs. Cooper and
Frazier, and an Audit Committee comprised of Messrs. Frazier, Abrell and Wong,
who may be deemed to be outside/non-employee directors.
The compensation Committee reviews and approves the annual salary and bonus
for each executive officer (consistent with the terms of any applicable
employment agreement), reviews, approves and recommends terms and conditions for
all employee benefit plans (and changes thereto) and administers the Company's
stock option plans and such other employee benefit plans as may be adopted by
the Company from time to time.
The Audit Committee reports to the Board regarding the appointment of the
independent public accountants of the Company, the scope and fees of the
prospective annual audit and the results thereof, compliance with the Company's
accounting and financial policies and management's procedures and policies
relative to the adequacy of the Company's system of internal accounting
controls.
PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Singer, Lewak, Greenbaum & Goldstein LLP became the Company's independent
public accountants for the fiscal year ended March 31, 2000. The Board of
Directors has appointed Singer, Lewak, Greenbaum & Goldstein LLP as independent
public accountants for the Company for the fiscal year ending March 31, 2001.
Representatives of Singer, Lewak, Greenbaum & Goldstein LLP are expected to be
present at the Meeting to respond to shareholders' questions and will have the
opportunity to make a statement if they so desire. The ratification of the
appointment of the auditors must be approved by a majority of the voting power
of all our outstanding shares of our common stock at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT COMPANY SHAREHOLDERS VOTE FOR THE
APPROVAL OF THE APPOINTMENT OF SINGER, LEWAK, GREENBAUM & GOLDSTEIN LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDED MARCH
31, 2001.
PRO FORMA UNAUDITED COMBINED CONDENSED FINANCIAL STATEMENTS
The following pro forma unaudited combined condensed financial statements
give effect to the Acquisition of Allstate to be accounted for under the pooling
of interests method of accounting. For pro forma purposes, the financial
statements of the Company have been combined with the financial statements of
Allstate for the year ended March 31, 2000, and for the three months ended June
30, 2000. The pro forma unaudited combined balance sheets and statements of
operations as of March 31, 2000 present the combined financial position and
results of operations of the Company and Allstate as of June 30, 2000 assuming
that the Acquisition had occurred as of April 1, 1999. The pro forma unaudited
combined balance sheets and statements of operations as of June 30, 2000 present
the combined financial position and results of operations of the Company and
Allstate as of June 30, 2000 assuming that the Acquisition had occurred as of
April 1, 2000. The unaudited pro forma financial information purports neither to
represent what the Company's financial position or results of operations would
have actually been if the Acquisition had occurred on April 1, 1999 or April 1,
2000 nor to project the Company's financial position or results of operations
for any future date or period. The unaudited pro forma financial information
should be read in conjunction with the Company's financial statements and notes
thereto included in the Company's Annual Report on From 10-KSB as of March 31,
2000 and in the Company's Quarterly Report on Form 10-QSB as of June 30, 2000.
13
<PAGE>
PRO FORMA BALANCE SHEET
MARCH 31, 2000
<TABLE>
<CAPTION>
SONICPORT.com ALLSTATE COMBINED
---------------------------------------------------------------
<S> <C> <C> <C>
Cash and cash equivalents $ 1,208,585 $ 3,720 $ 1,212,305
Accounts receivable-Trade 1,354 1,354
Due from related parties 7,709 7,709
Prepaid media 975,000 975,000
Prepaid services 60,000 60,000
Prepaid expenses and other current assets 45,367 45,367
---------------------------------------------------------------
Total current assets 2,296,661 5,074 2,301,735
PROPERTY AND EQUIPMENT, net 1,351,068 60,276 1,411,344
OTHER ASSETS 46,429 1,824 48,253
---------------------------------------------------------------
TOTAL ASSETS $ 3,694,158 $ 67,174 $ 3,761,332
===============================================================
Notes payable $ 355,000 $ 0 $ 355,000
Current portion of convertible promissory notes 500,000 500,000
Accounts payable 427,393 427,393
Accrued expenses 108,352 108,352
Interest payable 46,707 46,707
Due to related parties 10,750 10,750
---------------------------------------------------------------
Total current liabilities 1,448,202 0 1,448,202
CONVERTIBLE PROMISSORY NOTES, net 250,000 250,000
---------------------------------------------------------------
Total liabilities 1,698,202 0 1,698,202
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, no par value 10,000,000 shares --
authorized 0 shares issued and outstanding
Common stock, $0.0001 par value 90,000,000 shares
authorized 23,835,588 shares issued and
outstanding 2,384 2,500 4,884
Common stock committed 2,385,032 shares 6,107,550 6,107,550
Additional paid-in capital 6,780,260 6,780,260
(Deficit)/earnings accumulated (10,894,238) 64,674 (10,829,564)
---------------------------------------------------------------
Total shareholders' equity 1,995,956 67,174 2,063,130
---------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,694,158 $ 67,174 $ 3,761,332
===============================================================
</TABLE>
14
<PAGE>
PRO FORMA BALANCE SHEET
JUNE 30, 2000
<TABLE>
<CAPTION>
SONICPORT.com ALLSTATE COMBINED
---------------------------------------------------------------
ASSETS
<S> <C> <C> <C>
Cash and cash equivalents $ 256,436 $ 6,643 $ 263,079
Accounts receivable-Trade 135,136 135,136
Common stock subscription receivable 50,000 50,000
Due from related parties 43,133 43,133
Prepaid media 975,000 975,000
Prepaid services 30,000 30,000
Prepaid expenses and other current assets 101,135 5,814 106,949
---------------------------------------------------------------
Total current assets 1,590,840 12,457 1,603,297
PROPERTY AND EQUIPMENT, net 1,362,061 1,186,812 2,548,873
OTHER ASSETS 48,814 1,824 50,638
---------------------------------------------------------------
TOTAL ASSETS $ 3,001,715 $1,201,093 $ 4,202,808
===============================================================
LIABILITIES AND SHAREHOLDERS EQUITY
Notes payable $1,176,030 $ 1,176,030
Current portion of convertible promissory notes 0
Accounts payable 445,640 445,640
Accrued expenses 32,164 32,164
Interest payable 10,416 10,416
Due to related parties 0
---------------------------------------------------------------
Total current liabilities 488,220 1,176,030 $ 1,664,250
CONVERTIBLE PROMISSORY NOTES, net 250,000 250,000
---------------------------------------------------------------
Total liabilities 738,220 1,176,030 $ 1,914,250
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, no par value 10,000,000 shares 64 64
authorized 640,000 shares issued and outstanding
Common stock, $0.0001 par value 90,000,000 shares
authorized 26,094,735 shares issued and
outstanding 2,609 2,500 5,109
Common stock committed 666,625 shares 2,186,438 2,186,438
Additional paid-in capital 13,502,173 13,502,173
(Deficit)/earnings accumulated (13,427,789) 22,563 (13,405,226)
---------------------------------------------------------------
Total shareholders' equity 2,263,495 25,063 2,288,558
---------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,001,715 $1,201,093 $ 4,202,808
===============================================================
</TABLE>
15
<PAGE>
Pro Forma Income Statement
Twelve Months Ended March 31, 2000
<TABLE>
<CAPTION>
SONICPORT.COM ALLSTATE COMBINED
<S> <C> <C> <C>
REVENUES $628,973 $628,973
----------------------------------------------------------
COST OF REVENUES 0
----------------------------------------------------------
GROSS MARGIN (LOSS) 0 628,973 628,973
----------------------------------------------------------
OPERATING EXPENSES
General and administrative 5,708,800 569,770 6,278,570
Consulting - related parties 184,469 184,469
----------------------------------------------------------
Total operating expenses 5,893,269 569,770 6,463,039
INCOME (LOSS) FROM OPERATIONS (5,893,269) 59,203 (5,834,066)
OTHER INCOME (EXPENSE)
Interest expense (3,329,457) (3,329,457)
Interest income 17,710 17,710
----------------------------------------------------------
Total other income (expense) (3,311,747) 0 (3,311,747)
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (9,205,016) 59,203 (9,145,813)
EXTRAORDINARY ITEM
Settlement 0
Income from forgiveness of interest payable 0
----------------------------------------------------------
NET LOSS ($9,205,016) $59,203 ($9,145,813)
==========================================================
BASIC AND DILUTED LOSS PER SHARE
Loss before extraordinary item (0.39) (0.39)
Extraordinary item
----------------------------------------------------------
Total basic and diluted loss per share (0.39) (0.39)
==========================================================
WEIGHTED-AVERAGE COMMON
SHARES OUTSTANDING 23,355,109 23,355,109
==========================================================
</TABLE>
<PAGE>
Pro Forma Income Statement
Three Months Ended June 30, 2000
<TABLE>
<CAPTION>
SONICPORT.COM ALLSTATE COMBINED
<S> <C> <C> <C>
REVENUES $ 228,074 $ 175,768 $ 403,842
----------------------------------------------------------
COST OF REVENUES 1,232,016 1,232,016
----------------------------------------------------------
GROSS MARGIN (LOSS) (1,003,942) 175,768 (828,174)
----------------------------------------------------------
OPERATING EXPENSES
General and administrative 1,569,189 164,504 1,733,693
Consulting - related parties
----------------------------------------------------------
Total operating expenses 1,569,189 164,504 1,733,693
INCOME (LOSS) FROM OPERATIONS (2,573,131) 11,264 (2,561,867)
OTHER INCOME (EXPENSE)
Interest expense (8,880) (875) (9,755)
Interest income 6,793 6,793
----------------------------------------------------------
Total other income (expense) (2,087) (875) (2,962)
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (2,575,218) 10,389 (2,564,829)
EXTRAORDINARY ITEM
Settlement (52,500) (52,500)
Income from forgiveness of interest payable 41,667 41,667
----------------------------------------------------------
NET LOSS ($2,533,551) ($42,111) ($2,575,662)
==========================================================
BASIC AND DILUTED LOSS PER SHARE
Loss before extraordinary item (0.10) (0.10)
Extraordinary item
----------------------------------------------------------
Total basic and diluted loss per share (0.10) (0.10)
==========================================================
WEIGHTED-AVERAGE COMMON
SHARES OUTSTANDING 26,572,913 26,572,913
==========================================================
</TABLE>
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERSHIP AND MANAGEMENT
The following table sets forth, as of September 30, 2000, the stock
ownership of all persons known to own beneficially five percent or more of the
Company's Common Stock and all directors and officers of the Company,
individually and as a group. Each person has sole voting and investment power
over the shares indicated, except as noted. Unless otherwise indicated, the
address for each shareholder is 1641 20th Street, Santa Monica, California
90404.
NAME AND ADDRESS SHARES OF PERCENT OF SHARES
OF BENEFICIAL OWNER COMMON STOCK OUTSTANDING
David Baeza (l) (3) 7,396,000 27.61%
Stanton Dodson (l) (4) 6,417,915 23.96%
Richard Shapiro (1) (5) 0 %
John Cooper (1) (6) 2,000 *%
Ray Wong (l) (7) 185,615 *%
Joe Abrell (l) (8) 0 0%
H.J. Joe Frazier (l) (9) 0 0%
All Officers and Directors as 14,001,530 52.27%
a Group (7 persons) ========== =====
---------------------------
* Less than 1%
(1) C/o Sonicport.com, Inc. address: 1641 20th Street, Santa Monica, CA
90404.
(2) Based on 26,789,426 shares outstanding as of September 30, 2000.
(3) Excludes 50,000 options exercisable at $4.40 per share granted to Mr.
Baeza under 1999 Plan, as herein defined. The options were fully
vested at the date of grant.
(4) Excludes 50,000 options exercisable at $4.40 per share granted to Mr.
Dodson under 1999 Plan, as herein defined. The options were fully
vested at the date of grant.
(5) Excludes 150,000 options exercisable at $1.50 per share granted to Mr.
Shapiro in July, 2000. The options were fully vested at the date of
grant. Mr. Shapiro has been granted an additional number of a total of
750,000 options, none of which will be vested in a less than a six-
months period. Also, excludes 1,800,000 shares of Common Stock of the
Company that Mr. Shapiro will receive upon consummation of the
Acquisition. See "Proposal 1: The Acquisition--Terms of the
Acquisition."
(6) Excludes a total of 85,000 options exercisable at various exercise
prices per share granted to Mr. Cooper. The options were fully vested
at the date of grant. Also, does not include the 8,500 options granted
to Shoshana Cooper, Mr. Cooper's wife for rendering consulting
services to the Company. Also, excludes 1,800,000 shares of Common
Stock of the Company that Mr. Cooper will receive upon consummation of
the Acquisition. See "Proposal 1: The Acquisition--Terms of the
Acquisition."
(7) Excludes 60,000 options exercisable at various exercise prices per
share granted to Mr. Wong. The options were fully vested at the date
of grant.
(8) Excludes 90,000 options exercisable at various exercise prices per
share granted to Mr. Abrell. The options were fully vested at the date
of grant.
18
<PAGE>
(9) Excludes 90,000 options exercisable at various exercise prices per
share. The options were fully vested at the date of grant. Also,
excludes 100,000 shares of common stock issuable upon conversion of
$250,000 Convertible Debenture.
As used in this table, "beneficial ownership" is determined in accordance
with the rules of the Securities and Exchange Commission and generally includes
voting or investment power with respect to the shares shown.
The Company believes that the beneficial owners of securities listed above,
based on information furnished by such owners, have sole investment and voting
power with respect to such shares, subject to community property laws where
applicable. Shares of Common Stock subject to options or warrants currently
exercisable, or exercisable within 60 days, are deemed outstanding for purposes
of computing the percentage of the person holding such options or warrants, but
are not deemed outstanding for purposes of computing the percentage of any other
person.
As of September 30, 2000 there were approximately 289 shareholders of
record and approximately 977 beneficial owners. The percentage of beneficial
ownership is based upon 26,789,426 shares of Common Stock outstanding as of
September 30, 2000 as recorded by the transfer agent.
PROPOSAL 4: NAME CHANGE
The Board of Directors has proposed to amend the Company's Articles of
Incorporation to change the name of the Company to "SonicPort, Inc." The Board
of Directors believes that the new name better reflects the current business of
the Company. This proposal requires the affirmative vote of a majority of the
outstanding shares of Common Stock of the Company entitled to vote at the
Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT COMPANY SHAREHOLDERS VOTE FOR THE
APPROVAL OF THE NAME CHANGE OF THE COMPANY TO "SONICPORT, INC."
PROPOSAL 5: ADOPTION OF 2000 STOCK OPTION PLAN
In August, 2000, the Company's Board of Directors approved the Company's
2000 Stock Option Plan (the "2000 Plan"), which amends and restates the 1999
Stock Option Plan. The purpose of the 2000 plan is to enable the Company to
attract and retain top-quality employees, officers, directors and consultants
and to provide such employees, officers, directors and consultants with an
incentive to enhance shareholder returns. The full text of the 2000 Plan
appears as Exhibit E to this Proxy Statement and the description of the 2000
Plan herein is qualified by reference to Exhibit E.
DESCRIPTION OF THE 2000 PLAN
The 2000 Plan provides for the grant to directors, officers, employees and
consultants of the Company (including its subsidiaries) of options to purchase
up to an aggregate of 4,000,000 shares of Common Stock. The 2000 Plan may be
administered by the Board of Directors or a committee of the Board of Directors
(in either case, the "Committee"), which has complete discretion to select the
optionees and to establish the terms and conditions of each option, subject to
the provisions of the 2000 Plan. Options granted under the 2000 Plan may be
"incentive stock options" as defined in Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), or nonqualified options.
The exercise price of incentive stock options may not be less than 100% of
the fair market value of the Common Stock as of the date of grant (110% of the
fair market value if the grant is to an employee who owns more than 10% of the
total combined voting power of all classes of capital stock of the Company).
The Code currently limits to $100,000 the aggregate value of Common Stock that
may be acquired in any one year pursuant to incentive stock options under the
2000 Plan or any other option plan adopted by the Company. Nonqualified options
may be granted under the 2000 Plan at an exercise price of not less than 100% of
the fair market value of the Common Stock on the date of grant. Nonqualified
options also may be granted without regard to any restriction on the amount of
Common Stock that may be acquired pursuant to such options in any one year.
Subject to the limitations contained in the 2000 Plan, options granted
under the 2000 Plan will become exercisable at such times and in such
installments (but not less than 20% per year) as the Committee shall provide in
19
<PAGE>
the terms of each individual stock option agreement. The Committee must also
provide in the terms of each stock option agreement when the option expires and
becomes unexercisable, and may also provide the option expires immediately upon
termination of employment for any reason. No option held by directors,
executive officers or other persons subject to Section 16 of the Securities
Exchange Act of 1934, as amended, may be exercised during the first six months
after such option is granted.
Unless otherwise provided in the applicable stock option agreement, upon
termination of employment of an optionee, all options that were then exercisable
would terminate three months (one year in the case of termination by reason of
death or disability) following termination of employment. Any options which
were not exercisable on the date of such termination would immediately terminate
concurrently with the termination of employment.
The Board of Directors may at any time amend, alter, suspend or terminate
the Plan. No amendment, alteration, suspension or termination of the Plan will
impair the rights of any optionee, unless mutually agreed otherwise between the
optionee and the Committee, which agreement must be in writing and signed by the
optionee and the Company. Termination of the 2000 Plan will not affect the
Committee's ability to exercise the powers granted to it hereunder with respect
to options granted under the Plan prior to the date of such termination.
Options granted under the 2000 Plan may not be exercised more than ten
years after the grant (five years after the grant if the grant is an incentive
stock option to an employee who owns more than 10% of the total combined voting
power of all classes of capital stock of the Company). Options granted under
the 2000 Plan are not transferable and may be exercised only by the respective
grantees during their lifetime or by their heirs, executors or administrators in
the event of death. Under the 2000 Plan, shares subject to cancelled or
terminated options are reserved for subsequently granted options. The number of
options outstanding and the exercise price thereof are subject to adjustment in
the case of certain transactions such as mergers, recapitalizations, stock
splits or stock dividends. The 2000 Plan is effective for ten years, unless
sooner terminated or suspended.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Incentive stock options granted under the 2000 Plan will be afforded
favorable federal income tax treatment under the Code. If an option is treated
as an incentive stock option, the optionee will recognize no income upon grant
or exercise of the option unless the alternative minimum tax rules apply. Upon
an optionee's sale of the shares (assuming that the sale occurs at least two
years after grant of the option and at least one year after exercise of the
option), any gain will be taxed to the optionee as long-term capital gain. If
the optionee disposes of the shares prior to the expiration of the above holding
periods, then the optionee will recognize ordinary income in an amount generally
measured as the difference between the exercise price and the lower of the fair
market value of the shares at the exercise date or the sale price of the shares.
Any gain or loss recognized on such a premature sale of the shares in excess of
the amount treated as ordinary income will be characterized as capital gain or
loss.
All other options granted under the 2000 Plan will be nonstatutory stock
options and will not qualify for any special tax benefits to the optionee. An
optionee will not recognize any taxable income at the time he or she is granted
a nonstatutory stock option. However, upon exercise of the nonstatutory stock
option, the optionee will recognize ordinary income for federal income tax
purposes in an amount generally measured as the excess of the then fair market
value of each share over its exercise price. Upon an optionee's resale of such
shares, any difference between the sale price and the fair market value of such
shares on the date of exercise will be treated as capital gain or loss and will
generally qualify for long-term capital gain or loss treatment if the shares
have been held for more than one year. Recently enacted legislation provides
for reduced tax rates for long-term capital gains based on the taxpayer's income
and the length of the taxpayer's holding period.
The foregoing does not purport to be a complete summary of the federal
income tax considerations that may be relevant to holders of options or to the
Company. It also does not reflect provisions of the income tax laws of any
municipality, state or foreign country in which an optionee may reside, nor does
it reflect the tax consequences of an optionee's death.
20
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PARTICIPATION IN THE 2000 PLAN
All of the Company's executive officers, directors and employees of the
Company and its subsidiary will be eligible to participate in the 2000 Plan. The
Company has not granted any options pursuant to the 2000 Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT COMPANY SHAREHOLDERS VOTE FOR
APPROVAL OF 2000 STOCK OPTION PLAN.
21
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OTHER MATTERS
The Board of Directors of the Company has no knowledge of any other matters
which may come before the meeting and does not intend to present any other
matters. However, if any other matters shall properly come before the meeting
or any adjournment thereof, the persons soliciting proxies will have the
discretion to vote as they see fit unless directed otherwise.
If you do not plan to attend the meeting, in order that your shares may be
represented and in order to assure the required quorum, please sign, date and
return your proxy promptly. In the event you are unable to attend the meeting,
at your request, the Company will cancel the proxy.
SUBMISSION OF SHAREHOLDER PROPOSALS
Shareholders of the Company are advised that any shareholder proposal,
including nominations to the Board of Directors, intended for consideration at
the Meeting must be received by the Company no later than October [ ], 2000 to
be included in the proxy materials for the Meeting. It is recommended that the
shareholders submitting proposals direct them to Richard Shapiro, Secretary of
the Company, and utilize certified mail, return receipt requested in order to
ensure timely delivery.
ANNUAL REPORT TO SHAREHOLDERS
The Annual Report to shareholders of the Company for the fiscal year ended
March 31, 2000 was mailed to shareholders prior to the mailing of this proxy
statement. If you are a beneficial owner of the Company's common stock, as of
the record date, and did not previously receive a copy of the Company's annual
report for the fiscal year ended March 31, 2000, the Company will provide you
with a copy of the annual report for the fiscal year ended March 31, 2000, upon
written request to Richard Shapiro, Secretary of the Company.
DOCUMENTS INCORPORATED BY REFERENCE
The Company is currently subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission. Such reports, proxy statements and
other information may be inspected and copies at the public reference facilities
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C.
20549; at its New York Regional Office, Suite 1300, 7 World Trade Center, New
York, New York 10048; and its Chicago Regional Office, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661, and copies of such materials can be
obtained from the Public Reference Section of the Commission at its principal
office in Washington, D.C., at prescribed rates. In addition, such materials
may be accessed electronically at the Commission's site on the World Wide Web,
located at http://www.sec.gov.
The Commission allows the Company to "incorporate by reference" information
into this proxy statement, which means that the Company can disclose important
information by referring its shareholders to another document filed separately
with the Commission. The information incorporated by reference is deemed to be
part of this proxy statement. This proxy statement incorporates by reference
the documents set forth below that the Company has previously filed with the
Commission. These documents contain important information about the Company and
its finances.
Quarterly report on Form 10-QSB for the quarter ended June 30, 2000.
Annual Reports on Form 10-KSB and 10-KAB/A for the fiscal year ended March
31, 2000.
Annual Reports of Form 10-KSB for the fiscal years ended January 31, 1999
and January 31, 1998.
BY ORDER OF THE BOARD OF DIRECTORS
President and Chief Executive Officer
22
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REVOCABLE PROXY
SONICPORT.COM, INC.
--------------------------------------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 14, 2000
--------------------------------------------------------------------------------
The undersigned hereby appoints David Baeza and Stanton Dodson with full
powers of substitution to act as attorneys and proxies for the undersigned, to
vote all shares of Common Stock of the Company which the undersigned is
entitled to vote at the Annual Meeting of Shareholders, to be held at the
Fairmont Miramar Hotel, 101 Wilshire Boulevard, Santa Monica, California 90401
on November 14, 2000 at 2:00 p.m. PST as follows:
VOTE FOR AGAINST ABSTAIN
1. The acquisition of U.S. Dataworks, Inc., a
Delaware corporation f/k/a Allstate Dataworks,
Inc. [_] [_] [_]
VOTE FOR WITHHELD
2. The election of directors of all nominees
listed below (except as marked to the contrary
below.)
David Baeza [_] [_]
Stanton Dodson [_] [_]
John Cooper [_] [_]
Raymond Wong [_] [_]
H. Joe Frazier [_] [_]
Joe Abrell [_] [_]
VOTE FOR WITHHELD
3. Ratification of the appointment of Singer, [_] [_]
Lewak, Greenbaum & Goldstein LLP as the
Company's independent public accountants for
fiscal year 2001
VOTE FOR AGAINST ABSTAIN
4. To change the name of the Company to
"SonicPort, Inc." [_] [_] [_]
VOTE FOR AGAINST ABSTAIN
5. Approve the Company's 2000 Stock Option Plan [_] [_] [_]
The Board of Directors recommends a vote "FOR" each of the listed propositions.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSITIONS STATED. iF ANY OTHER BUSINESS IF
PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY
IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO
OTHER BUSINESS TO BE PRESENTED AT THE MEETING. THIS PROXY ALSO CONFERS
DISCRETIONARY AUTHORITY ONTO THOSE PERSONS NAMED IN THIS PROXY TO VOTE WITH
RESPECT TO THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEE IS UNABLE
TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE, AND MATTERS INCIDENT TO THE CONDUCT
OF THE ANNUAL MEETING.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting and after
notification to the Secretary of the Company at the Meeting of the
shareholder's decision to terminate this proxy, then the power of said
attorneys and proxies shall be deemed terminated and of no further force and
effect.
The undersigned acknowledges
receipt from the Company prior
to the execution of this proxy
of notice of the Meeting, a
Proxy Statement dated October
[ ], 2000 and an Annual
Report to Shareholders.
Dated: _________________ , 2000
-------------------------------
PRINT NAME OF SHAREHOLDER
-------------------------------
PRINT NAME OF SHAREHOLDER
-------------------------------
Signature
-------------------------------
Signature
Please sign exactly as your
name appears on the envelope
in which this card was mailed.
When signing as attorney,
executor, administrator,
trustee or guardian, please
give your full title. If
shares are held jointly, each
holder should sign.
PLEASE COMPLETE,
DATE, SIGN AND MAIL
THIS PROXY PROMPTLY
IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
