AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 19, 2000
REGISTRATION NO. 333-____________
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
____________________
GO ONLINE NETWORKS CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 33-0873993
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5681 Beach Blvd., Suite 100/101
Buena Park, California 90621
(Address of Principal Executive Offices, Including Zip Code)
Consulting Agreements
Legal Services Agreement
(Full Title of the Plan)
____________________
Joseph M. Naughton
5681 Beach Blvd., Suite 100/101
Buena Park, California 90621
(714) 736-9888
(Name, Address, and Telephone Number of Agent for Service)
COPIES TO:
M. Richard Cutler, Esq.
Cutler Law Group
610 Newport Center Drive, Suite 800
Newport Beach, California 92660
(949) 719-1977
CALCULATION OF REGISTRATION FEE
Title of Amount to be Proposed Maximum Proposed Maximum Amount of
Securities Registered Offering Price Aggregate Offering Registration
to be per Share Price Fee
Registered
Common
Stock,
par value
$0.001 560,000 $0.29 (1) $162,400 $42.88
---------------- --------- --------- --------
(1) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(c) based on the closing market price on
May 17, 2000.
<PAGE>
EXPLANATORY NOTE
Go Online Networks Corporation ("GONT") has prepared this Registration Statement
in accordance with the requirements of Form S-8 under the Securities Act of
1933, as amended (the "1933 Act"), to register certain shares of common stock,
$.001 par value per share, to be issued to certain selling shareholders.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
GONT will send or give the documents containing the information specified in
Part 1 of Form S-8 to employees or consultants as specified by Securities and
Exchange Commission Rule 428 (b) (1) under the Securities Act of 1933, as
amended (the "1933 Act"). GONT does not need to file these documents with the
commission either as part of this Registration Statement or as prospectuses or
prospectus supplements under Rule 424 of the 1933 Act.
REOFFER PROSPECTUS
GO ONLINE NETWORKS CORPORATION
5681 BEACH BOULEVARD, SUITE 101/100
BUENA PARK, CALIFORNIA 90621
(714) 736-9888
560,000 SHARES OF COMMON STOCK
The shares of common stock, $0.001 par value per share, of Go Online Networks
Corporation ("Go Online"or the "Company") offered hereby (the "Shares") will be
sold from time to time by the individuals listed under the Selling Shareholders
section of this document (the "Selling Shareholders"). The Selling Shareholders
acquired the Shares pursuant to Consulting Agreements for consulting services
and for legal services that the Selling Shareholders provided to Go Online.
The sales may occur in transactions on the NASDAQ over-the-counter market at
prevailing market prices or in negotiated transactions. Go Online will not
receive proceeds from any of the sale the Shares. Go Online is paying for the
expenses incurred in registering the Shares.
The Shares are "restricted securities" under the Securities Act of 1933 (the
"1933 Act") before their sale under the Reoffer Prospectus. The Reoffer
Prospectus has been prepared for the purpose of registering the Shares under the
1933 Act to allow for future sales by the Selling Shareholders to the public
without restriction. To the knowledge of the Company, the Selling Shareholders
have no arrangement with any brokerage firm for the sale of the Shares. The
Selling Shareholders may be deemed to be an "underwriter" within the meaning of
the 1933 Act. Any commissions received by a broker or dealer in connection with
resales of the Shares may be deemed to be underwriting commissions or discounts
under the 1933 Act.
Go Online's common stock is currently traded on the NASDAQ Over-the-Counter
Bulletin Board under the symbol "GONT."
________________________
This investment involves a high degree of risk. Please see "Risk Factors"
beginning on page 16.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED WHETHER
THIS REOFFER PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
________________________
May 17, 2000
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TABLE OF CONTENTS
Where You Can Find More Information . . . . . . . . . . . . . 2
Incorporated Documents . . . . . . . . . . . . . . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 17
Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . 18
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . 18
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . 19
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
________________________
You should only rely on the information incorporated by reference or provided in
this Reoffer Prospectus or any supplement. We have not authorized anyone else
to provide you with different information. The common stock is not being
offered in any state where the offer is not permitted. You should not assume
that the information in this Reoffer Prospectus or any supplement is accurate as
of any date other than the date on the front of this Reoffer Prospectus.
WHERE YOU CAN FIND MORE INFORMATION
Go Online is required to file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission
(the "SEC") as required by the Securities Exchange Act of 1934, as amended (the
"1934 Act"). You may read and copy any reports, statements or other information
we file at the SEC's Public Reference Rooms at:
450 Fifth Street, N.W., Washington, D.C. 20549;
Seven World Trade Center, 13th Floor, New York, N.Y. 10048
Please call the SEC at 1-800-SEC-0330 for further information on the Public
Reference Rooms. Our filings are also available to the public from commercial
document retrieval services and the SEC website (http://www.sec.gov).
INCORPORATED DOCUMENTS
The SEC allows Go Online to "incorporate by reference" information into this
Reoffer Prospectus, which means that the Company can disclose important
information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is deemed to be part of this
Reoffer Prospectus, except for any information superseded by information in this
Reoffer Prospectus.
2
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Go Online's Reports on Form 8-K, dated January 10, and March 27, 2000 are
incorporated herein by reference. Go Online's Registration Statements on Form
S-8 filed on January 20, February 17, and April 20, 2000 are also incorporated
herein by reference. Go Online's Form 10-KSB filed on March 29, 2000, and Form
10-QSB filed on May 15, 2000, are incorporated herein by reference. In addition,
all documents filed or subsequently filed by the Company under Sections 13(a),
13(c), 14 and 15(d) of the 1934 Act, before the termination of this offering,
are incorporated by reference.
The Company will provide without charge to each person to whom a copy of this
Reoffer Prospectus is delivered, upon oral or written request, a copy of any or
all documents incorporated by reference into this Reoffer Prospectus (excluding
exhibits unless the exhibits are specifically incorporated by reference into the
information the Reoffer Prospectus incorporates). Requests should be directed to
the Chief Financial Offer at Go Online at Go Online's executive offices, located
at 5681 Beach Blvd., Suite 100/101, Buena Park, California 90621. Go Online's
telephone number is (714) 736-9888. The Company's corporate Web site address is
http://www.jnne.com.
THE COMPANY
Go Online Networks Corporation operates in the high technology and
e-commerce business utilizing a two-tiered revenue model. In initiating our
strategy, we acquired and currently operate two distinct divisions, each
described below:
Internet Kiosk Division
-------------------------
We are pursuing a strategy in the installation of internet kiosks in the
mid-priced hotel market. Our internet kiosks, designed in three primary models,
are installed in the hotel lobby or an alternative centralized public access
room. Our kiosk division has developed two suppliers capable of manufacturing
small, integrated kiosks that can provide pay-as-you-use stand-alone internet
access. At no cost to the hotel owner and sharing revenues with us and the
owner, our internet kiosks have been and will continue to be marketed to these
mostly mid-priced hotels by sales agent organizations employed by our kiosk
division. Presently, 369 hotels have signed contracts and 167 have been
installed as of January 10, 2000. We believe that we will have many more by
year end and hope to reach our goals of installation of enough kiosks to make us
profitable by the first quarter of 2001.
ShopGoOnline.com
----------------
Utilizing online video and audio technology to assist with customer review,
our ShopGoOnline.com internet website offers a variety of products and services
via the world wide web. ShopGoOnline.com sells products such as jewelry, coins,
collectibles, electronics, computers, skin care and beauty products, and
personal fitness products. At ShopGoOnline.com, the customer can search for
products we have to sell by category or by product name and obtain a full
description of the product offer including a complete audio presentation of the
product as well as a video demonstration when appropriate.
Auctionomics.com
----------------
On May 10, 2000, we sold our seventy-five percent (75%) interest in
Auctionomics, Inc., a Nevada corporation, back to its founders, Harvey Turell
and Nathan Wolfstein.
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THE HOTEL INTERNET KIOSK
We believe the demand for internet access by travelers will continue to
grow as more of the United States and world population continues to go on line.
Travelers, whether business or personal, are a substantial potential market.
Business strategies to service the traveler's needs range from internet services
located in airports and hotels, to remote, hand held or car based devices. User
demand, capital requirements, and operating costs of alternative technologies,
along with the business models to service these travelers are all evolving, and
have mostly resulted to date in substantial operating losses.
Within the hotel industry, the primary attention paid to travelers to date
has been in the upscale, high priced and luxury hotels segments. These affluent
travelers are viewed as the most likely to pay for the cost of technological
solutions to internet access and entertainment demand. The twin demand drivers,
entertainment and internet, are expected to pay for these sophisticated
technological solutions.
On the other hand, little attention has been directed to mid-priced hotels
which is our primary focus, aside from possible provision of a modem jack on
phones. Cable or a satellite service is considered for entertainment. Owners
of franchises are resisting orders from chain corporations to spend significant
sums, such as electronic upgrades of room locks and other amenities.
In the upscale and luxury hotel category, the two leading companies, On
Command and LodgeNet have reported substantial losses in building their in-room
entertainment and internet access business in luxury hotels. LodgeNet now
services 4,700 lodging properties with 725,000 rooms, providing on demand
movies, video games, high-speed internet access and other programming.
LodgeNet's losses narrowed in the first six months of 1999 to ($16 million) from
($36 million) in the first half of 1998. Its competitor, On Command, claims an
installed base of 942,000 rooms, of which 11,000 rooms represent installation of
its new OCX platform including high-speed internet access. Losses at On Command
for the first six months of 1999 remained flat at ($15 million) with the
comparable 1998 period.
Aside from the current losses encountered in acquiring and installing new
accounts, and building new service technologies that include high speed internet
access, the room based services in upscale hotels require the companies to front
a high cost per room investment. Capital outlays of $400 per room are common.
High-speed internet access generally revolves around installation of a T1
network service (essentially a high speed digital type of telephone line) that,
while available, has significant installation, maintenance, and operating costs.
Daily per room fees for this unlimited internet access approach $10. Both
companies offer differing versions of in-room connectivity for laptops.
Airport based internet access holds significant potential. There are
significant complexities, costs, and time encountered for marketing,
contracting, and installing with multiple airport public authorities. The
prototype units being installed are generally sophisticated, expensive units
that integrate internet services with multiple advertising side panels with
electronic traveler information systems. GTE is a major factor in this large
market.
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THE MID-PRICED HOTEL MARKET
Market segmentation of the hotel industry began in 1981, with the
mid-priced and economy segments rapidly developing. This design and operational
model was coupled with franchising, and eventually consolidations, to build
large numbers of hotel properties and rooms. Brand identification programs for
these chains, e.g., Days Inn and Motel 6, were launched to promote occupancy and
brand loyalty. Leveraged buyout firms such as KKR acquired major brand names,
such as Motel 6. Economically priced hotels with minimal amenities and
standardized design have now became commonplace.
Today, to name just a few, corporations such as Choice Hotels International
have franchised over 3,600 mid-priced and budget hotels in the United States
operating under name chain brands such as Sleep, Comfort, Quality, Roadway, and
EconoLodge. Choice Hotels has developed mid-priced longer stay hotels under the
brand name Main Stay Suite. Cendant Corp developed the Days Inn franchise,
which includes 1,755 hotels in the United States. Other chains, including
Holiday Inn, Ramada, and Howard Johnson are expanding rapidly. Our business
model is intended to address the build up of mid-priced hotels by providing
efficient and cost-effective internet access for the guests in these mid strata
hotels.
This segment of hotels generates substantial numbers of travelers and
potential internet users. For example, a 150-bed hotel at 70% occupancy
generates 38,325 occupied rooms per year. If one-third of the occupied rooms
are double occupied on average, 51,000 potential internet users per year stay in
the hotel. In a 500-room hotel with 70% occupancy, and with half of the rooms
averaging two people, the number of annual potential users rises to 192,000. In
good locations, occupancy rates as well as double occupancy, run significantly
higher. Location too will also affect the mix of business travelers, a more
intense internet user. Younger family members entertain themselves by Web
surfing. Our internet kiosk business model addresses this pool of travelers at
middle and lower priced hotels for both the hotel and Go Online.
GROWTH OF THE ONLINE AUCTION
The internet offers for the first time the opportunity to create a
marketplace for person-to-person trading--the exchange of goods between
individuals. This trading has traditionally been conducted through trading
forums, such as classified advertisements, collectibles shows, garage sales and
flea markets, or through intermediaries, such as auction houses and local dealer
shops. These markets are inefficient because, among other things:
* their fragmented, regional nature makes it difficult and expensive for
buyers and sellers to meet, exchange information and complete transactions;
* they offer a limited variety and breadth of goods;
* they often have high transaction costs from intermediaries; and
* they are information inefficient, as buyers and sellers lack a reliable and
convenient means of setting prices for sales or purchases.
An internet-based centralized trading place can overcome the inefficiencies
associated with traditional person-to-person trading by facilitating buyers and
sellers meeting, listing items for sale, exchanging information, interacting
with each other and, ultimately, consummating transactions. Through such a
trading place, buyers can access a significantly broader selection of goods to
purchase and sellers have the opportunity to sell their goods efficiently to a
broader base of buyers. Because of the internet's efficiency, the number of
online auction purchasers is expected to increase.
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OUR PRODUCTS AND SERVICES
SHOPGOONLINE.COM
Mr. Scott Claverie, the current President, formed the ShopGoOnline.com
division as a small venture to develop internet e-commerce solutions. Through
our AMS Acquisition Corp. subsidiary, we provided seed financing in exchange for
a 75% interest in the ShopGoOnline.com website. This initial financing
contained an option for Mr. Claverie to reacquire majority ownership. This
option was recently extinguished for 1,250,000 shares of our common stock and
certain cash consideration. We own 75% of the equity, and are committed to
provide overall division financing and direction. ShopGoOnline.com is a dba of
AMS Acquisition Corp.
ShopGoOnline.com offers a variety of products and services via the world
wide web. ShopGoOnline.com sells products such as household items, jewelry,
coins, collectibles, electronics, computers, skin care and beauty products, and
personal fitness products. Almost anything that is normally offered to the
public through traditional retail or exclusive TV offers or infomercials can be
available through e-commerce on the internet.
At ShopGoOnline.com, the customer can search for products by category or by
product name and obtain a full description of the product offer including a full
color picture and full-motion video. In addition, the customer will be able to
view the TV offer in part or in its entirety all from the ShopGoOnline.com web
site.
When fully implemented, our ShopGoOnline.com web site will be a place where
a customer can find favorite products as well as some of those seen advertised
on TV. Our customers can shop from hundreds of products and add them to their
electronic shopping cart. At the checkout counter, the customer purchases all
the products selected from one easy location. Our ShopGoOnline.com division
then processes the orders and has the products delivered right to the customers'
door.
Our ShopGoOnline.com division derives revenue from three different sources:
1. Direct Sales B from selling product and services that are offered on the
web site.
2. Indirect sales B by referring our customers to "link share" numbers to
purchase products advertised on our web site.
3. Web hosting B by hosting other web pages that reside on our server
Our ShopGoOnline.com web site opened for business on July 6, 1999. Our
site is now open 24 hours a day, 365 days a year. We are in the initial growth
phase of our sales and advertising. For the period from inception of our web
site until December 31, 1999, we have had total gross sales of $21,456 on total
expenses associated with ShopGoOnline of $212,856 B a loss of $182,612.
Additional income of $22,219 was generated by ShopGoOnline for a business to
business web site development project for an outside third party. Our products
are shipped by our vendors via a method of the vendor's choice, although to date
most of our vendors have selected UPS as their primary shipper.
Currently, our ShopGoOnline.com web, file, print and fax servers operate on
industry standard hardware (including Intel processors, Seagate and IBM hard
drives and Linux software), that can be easily replaced if problems arise. Our
online video and audio technology is provided through our relationship with Real
Networks, Inc., and their RealAudioJ and RealVideoJ products which have become
widely utilized and accepted on the internet. Our use of their products is
producing videos that the compatible with the users home/work internet
connection and software.
Our internal and external web server software is balanced and maintained
using a server-load based rotation scheme. If a server becomes busy, the next
available server will receive and process the request. As the requests grow
beyond the capacity of the equipment, new machines will be added to the rotation
scheme in short order. This scheme allows for growth and failure redundancy.
To our knowledge, there are no known material limitation or upgrades necessary.
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We supply the products sold on ShopGoOnline.com directly from agreements
with vendors who sell on our site. These vendors include 5th Avenue, Ingram
Micro, Ingram Entertainment, Panda America, Guthey Renker and Carefree Traders.
We generally do not warehouse any inventory ourselves for resale. We make
arrangements with each individual vendor to package, ship and notify us of sale
and delivery. We obtain payment from our customers and pay the vendors directly
for these products.
On September 15, 1999 we entered into an agreement with Panoscan, Inc.,
through which Panoscan will work with ShopGoOnline to develop new ways to
present and promote products using digital imaging. Specifically, Panoscan
agreed to use its camera system to capture images for use on the Vera's in the
Glen area of the ShopGoOnline site. We agreed to credit Panoscan in our
promotions and press releases. Panoscan has completed their work on the
specific site section and it has been implemented on our web site.
INTERNET KIOSK DIVISION
Our internet kiosk, designed in three primary models, is designed to be
installed in a hotel lobby or an alternative centralized public access area.
Our primary strategy is to place these internet access kiosks in mid-price
hotels in the lobby or another high access area.
We have contractual arrangements with iCom Network, Inc. as well as
Infotouch Technologies, Inc., two suppliers who manufacture small, integrated
kiosks that can provide pay as you use stand alone internet access. Our
agreement with iCom provides that we agree to purchase five hundred internet
kiosks over twelve months with a minimum of 25 per month at a cost to us of
$3,250.00 per kiosk (payable net 15 days after shipment). On June 22, 1999 we
agreed to purchase 50 surfnet internet terminals from Infotouch during the
subsequent 45 days at between $3,195.00 and $3,395.00 each (depending on the
specific model chosen).
At no cost to the owner and in a revenue sharing model, our internet kiosks
have been and will continue to be marketed to mostly mid-priced hotels by sales
agent organizations employed by our Kiosk Division.
Available kiosks range from 23 inches wide to 30 inches wide, and 20 inches
high for the table top versions to 68.5 inches high for some of the stand alone
versions. The hotel chooses from our agreement the type of kiosk they desire,
the manufacturer and the kiosk finish color. Each kiosk includes a mechanism
for accepting currency and a traditional internet browser familiar to customers
for browsing the internet and obtaining email.
The hotel is required to provide free space, approximately 9-12 square
feet, under a four-year, renewable internet exclusive contract. The hotel
receives in exchange a 10% share of kiosk revenues with a $45 monthly minimum.
The contract is renewable by the hotel for an additional four years or eight
years in total. We agree to maintain the kiosk from our share of the revenues.
Presently, the total direct installed cost of each internet kiosk is
approximately $3,300, which has been brought down from our initial cost of
$5,100.
After entering into a contract with the hotel owner, we order the kiosks
from the manufacturer (providing a direct shipping address for the location),
order a telephone line approximately two weeks prior to installation, order the
internet service provider for the location and confirm that appropriate
telephone line and RJ11 jacks are installed and telephone service is active.
When the kiosk is shipped from the manufacturer and arrives at the site, we
dispatch an installation crew to install the kiosk and train the location owner
and employees on the use of the system. We later contact the location owner to
confirm the unit has been installed and respond to all questions or concerns
that he or she may have.
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The kiosk division business plan has several multi-level, integrated
strategies to maximize our revenues and business value from the kiosks. These
revenue and valuation sources are as follows:
* Revenues and earnings streams generated by the existing and potential
kiosks.
* Advertising revenues to be sold as spots and banners on the hotels' kiosks.
This revenue is based on "eyeballs" generated.
* A value derived from the exclusive 4-year internet service contract for a
hotel (with potential for 8 year exclusive contracts). The aggregate
value of these contracts should grow geometrically as hotels are added,
representing future revenue streams and the exclusive right to provide
that hotel's guests with internet services. Operating experience will
refine the value.
* Tie-ins to our other services by usage promotional affinity programs,
including ShopGoOnline.com.
* Develop branded "rewards" programs for hotels to give their guests that
operate through the kiosk.
Although we cannot be sure that we will be successful in marketing our
internet kiosks, we intend to have the 2,000 internet kiosks installed and
operating in hotels at the end of a two-year period. Presently, 369 hotels have
signed contracts and 167 have been installed as of January 10, 2000 in 25
different states. Our existing customers include franchises of Ramada Inns,
Holiday Inns, Howard Johnsons, Econolodge, Radisson Inn and Country Suites. No
one customer or chain accounts for a substantial portion of our business to
date. A majority of our kiosk sites are in metropolitan areas such as: Atlanta,
GA; Washington, DC; Birmingham, AL; Houston, TX; Dallas, TX; San Antonio, TX;
Orlando, FL; Chicago, IL; Phoenix, AZ; Nashville, TN; Charlotte, NC; Grand
Rapids, MI; Oklahoma City, OK etc. 329 of the 369 sites are located within 10
miles of an international or regional airport.
COMPETITION
The electronic commerce market, particularly over the internet, is
relatively new, rapidly evolving and competitive, and we expect competition to
intensify in the future. We will compete with many other companies which either
offer the same types of merchandise or provide the same or a similar type of
sales format to customers.
* ShopGoOnline.
Current competitors for our ShopGoOnline division include companies with online
commerce sites such as Onsale, Inc., Intermallamerica.com, iVillage.com,
Egghead, Amazon.com, Inc., AOL.com, Beyond.com Corporation, Buy.com Inc.,
Cyberian Outpost, Inc., Dell Computer Corporation and numerous other companies
marketing goods over the internet. Most of these companies have substantially
greater resources than we do and consequently have the ability to market their
products more effectively. This is not an exhaustive list of current
competitors.
We intend to compete with these companies by utilizing the key differentiation
of our streaming audio and video, as well as link to other sites and undertake
traditional advertising. In addition, it is not difficult to enter the online
commerce market, and current and new competitors can launch new online commerce
web sites at relatively low cost.
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* Internet Kiosks.
Our internet kiosk division competes on a national scale with other internet
kiosk competitors and other competitors for services to hotel guests. There are
numerous other potential competitors that could use their existing
infrastructure to provide internet services to the lodging industry, including
franchised cable operators, wireless cable operators, telecommunications
companies, major technology companies and DBS providers.
Our internet kiosk division also indirectly competes with "in-room" internet
suppliers such as Lodgenet and On Command, as well as other in-room internet
access providers. We are not seeking to compete in this market, but rather have
focused our marketing efforts on mid-priced hotels which are not likely to
commit the resources required to make in-room access available in the near
future. We also believe that the hotel lobby resource is easier for quick
access to email and other quick look ups similar to pay telephone resources.
GOVERNMENT REGULATION
Our internet and e-commerce businesses may become subject to increasing
government regulation as various government regulators continue their focus on
improving internet commerce. Several states, including California and
Washington, have laws regulating the disclosure of pricing information by
wholesalers and comparable businesses. In the future, governments of California,
Washington and other states could require additional disclosure in order to
comply with other regulations. In addition, several states have laws that
regulate auctions and auction companies within their jurisdiction. Some states
may interpret their statutes to apply to our transactions with consumers in such
states, even if those transactions originate over the internet. The burdens of
complying with auctioneering laws could materially increase our cost of doing
business. Similarly, states may construe their existing laws governing issues
such as property ownership, sales tax, libel and personal privacy to apply to
internet companies servicing consumers within their boundaries. Resolution of
whether or how these laws will be applied is uncertain and may take years to
resolve.
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SALES AND MARKETING
Web Promotion & Advertising
As with any internet company, we actively market our web sites and drive
traffic to them. We plan to market and brand our Go Online web sites through
conventional banner ads and reciprocal links placed throughout highly visible
online locations and print publications.
It is a standard in the industry to team with web promoters in order to
market our sites electronically. Web promoters (also known as media sales
companies) are actively involved in banner placement and swapping, search engine
registration, and other activities associated with Web promotion. Because of
their existing relationships and the ability to "package" deals, these firms
constitute the quickest, most cost-effective way to promote a site. Typically,
these firms take a percentage of their clients' total ad revenue (usually
35-50%) as compensation for their services.
Specifically, these firms provide :
* Exclusive sales representation
* Support by a sales force of experienced media professionals
* Increased focus on long-term sponsorship programs
* Total inventory and ad management
* Additional revenue streams from local and international ad sales efforts
To date, we have entered into agreements with Website Results, LinkShare
Corporation and Doubleclick. Our Website Results contract is designed to assist
us in building traffic to our website by developing key indices on search
engines. ShopGoOnline.com is a Platinum Program subscriber to Website Results
which specializes in developing multiple "doorway" pages for internet customers
for their subscribers. The "doorway" program is a system to rank multiple
keyword phrases for Website Result's clients to establish high ranking for those
phrases with the major search engines to build traffic by optimizing rankings in
order to produce quality targeted traffic for our website. We also have an
agreement with LinkShare through which we receive revenues and pay fees for
receiving traffic from other better known sites and referring web traffic
through our sites. We have agreed with DoubleClick to obtain 1,000,000
impressions on Doubleclick with "click through" to our ShopGoOnline website. We
paid $15,000 for this first agreement.
In the coming months, our management intends to pursue expanded traditional
and nontraditional marketing with our Website Results, Doubleclick, Linkshare
and other agreements to build consumer awareness of ShopGoOnline.com. The media
campaign, which we generally launched with the grand opening of
ShopGoOnline.com, was expanded with nationwide newspaper display ads which
reached a substantial number of readers in the eight major internet markets. We
placed display ads in the Boston Globe, San Francisco Examiner, Chicago Times,
New York Times, Miami Herald, San Diego Union Tribune, Los Angeles Times and
Dallas Morning News.
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The paper version of Auction Weekly has always listed 300+ auctions each
week while the online database is updated daily. Auction Advisory gives users
early warning and up to the minute changes, similar to traditional, short-notice
"public notices".
Auction Weekly is mailed first class every Tuesday. This 32-page newsletter
comprehensively lists all auctions in the Southwest (AZ, CA, CO, NM, NV, TX,
UT). The newsletter lists virtually every type of auction from large to small.
Auction Weekly lists government auctions, estates, IRS, U.S. customs, city,
county, state, bankruptcy, lien auctions, antiques, business liquidations, U.S.
Dept. of Defense, and U.S. Marshal.
Internet Kiosk Marketing
While we cannot be sure we will succeed with our goal, we intend to seek to
have the 2,000 internet kiosks installed and operating in hotels at the end of a
two-year period. To accelerate penetration of the hotel market and the use of
the installed kiosks, in September 1999 we initiated a major 45-day marketing
campaign for our kiosk division. The sales and marketing campaign includes:
* Advertising in trade magazines and attending trade shows to enhance our
kiosk program's visibility with hotel operators. An example is the
Asian-American Hotel Association, which represents approximately 60% of the
franchised mid and economy priced hotel owners.
* Providing the hotel upon kiosk installation with a full marketing program
to increase guest usage. This includes signage, which will be intended to draw
guests to the kiosk, and obtaining email while traveling. Guest access to their
email requires only knowing the short address of the mail servers of their
internet service providers (ISP) and password they currently use to access their
mail. This information is the same that is inputted into their home or office
email program and is readily available to the traveler before he/she departs.
* Distribute plastic affinity cards to reward users with credits to be spent
at our ShopGoOnline.com web site. Affinity members or guests of certain hotels
will be offered free minutes to check for their e-mail at check-in. Some hotels
look to also use the kiosks as a center around which to develop a stay rewards
program for their guests.
* Develop catalogs for periodic mailing to users of the kiosks for purchase
opportunities at our online sites.
* Retain sales agencies to represent our kiosk division to acquire agreements
to place internet kiosks in hotels within the United States and internationally.
Our most recent sales agreement was with Midwest Internet Solutions, Inc.
covering Indiana, Michigan, and Ohio.
Through December 31, 1999, we have installed a total of 167 kiosks and
have agreements signed with 369 sites.
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OUR BACKGROUND
Go Online Networks Corporation became a publicly traded corporation on the
over-the-counter bulletin board in April 1990 by the "reverse acquisition" of
Valencia Capital, a Colorado corporation. From this acquisition, our
shareholders became the majority shareholders and the corporation in November
1990 was renamed Jones Naughton Entertainment, IncA one for four reverse stock
split was accomplished at the same time, resulting in nine million common shares
then outstanding.
Under our then president, Mr. Spike Jones, Jr., we initially produced
infomercials but ceased infomercial production in 1993. Mr. Jones left us and
in 1995, we acquired Real Estate Television Network, Inc., a satellite real
estate TV network. Real Estate Television Network's target market was the
independent real estate office of the large franchised office networks, e.g.
Century 21. In 1996, many of the large independent real estate firms were
acquired by HSF, Inc., which resulted in a consolidated industry. The
consolidation led to the decision to internally produce and provide training and
other services, which were originally provided by outside vendors like Real
Estate Television Network. In 1996, we sold Real Estate Television Network to
AmeriNet Financial Services, Inc.
In late 1997 and 1998, we made the strategic decision to pursue
opportunities involving the internet. In the first quarter of 1998, we acquired
the assets of a small advertising agency, Affiliated Marketing Services, Inc
which we intended to move into internet advertising. We determined that
Affiliated Marketing Services, Inc.'s internet progress was insufficient, and
during the fourth quarter of 1998, we sold Affiliated Marketing Services, Inc.
back to its management.
Subsequent to the sale, we made our initial investment in AMS Acquisition
Corp., a previously unaffiliated corporate entity which was and continues to be
the developer of ShopGoOnline.com, investing $25,000 for a 75% equity interest.
AMS Acquisition Corp. was formed in Nevada on June 29, 1998. Management of that
corporation received a repurchase option to acquire back 26% of the outstanding
shares from us. We subsequently purchased this repurchase option. We issued to
management (primarily its President Scott Claverie) 1,250,000 shares of our
common stock, along with cash consideration.
During March 1998 we entered into an agreement to acquire the assets of
Sign Products of America, Inc., an unaffiliated business formed in November 1995
in California, which was engaged in the manufacturing, marketing, management and
display of advertising and informational kiosks. The purchase price was $50,000
with a down payment of $25,000 plus four equal quarterly installments at the 90
day, 180 day, 270 day and 350 day anniversaries of the closing date.
We acquired a 75% interest in Auctionomics, Inc. from Nathan A. Wolfstein
IV and Harvey A. Turell, the two previously unaffiliated founders/shareholders
in June 1999. Auctionomics, Inc. was formed in Nevada in June 1999. The
consideration was 500,000 shares of our common stock and a two-year warrant to
acquire an additional 500,000 shares of our common stock at $0.50. The
shareholders, Messrs. Turell and Wolfstein, are entitled to receive a bonus of
25% of Auctionomics.com pre-tax income, so long as they retain their 25%
ownership. If their shareholdings are reduced, the bonus is reduced
proportionally. We provided Auctionomics, Inc. with $25,000 for working capital
shortly after the acquisition in June 1999.
On May 10, 2000, we sold our interest in Auctionomics back to its original
founders. As consideration for the sale, Mr. Wolfstein and Mr. Turell returned
the 500,000 shares which were to be issued to them in the acquisition of
Auctionomics, and terminated the warrants. Their contractual rights to any
bonuses was also terminated. Finally, Mr. Wolfstein and Mr. Turell both agreed
to provide consulting services to Go Online for a period of three months to
assist with the divestiture of Auctionomics.
At a meeting of shareholders held on September 8, 1999, we reincorporated
in Delaware and changed our name to Go Online Networks Corporation. This change
was designed to provide us with the advantages of Delaware law for a public
corporation and to change the name to reflect our new internet businesses.
On January 10, 2000, we entered into an agreement with Westlake Capital
Corp., pursuant to which we issued 3,000,000 of our newly-issued shares of
common stock to acquire Westlake. Westlake was a reporting company with the
Securities and Exchange Commission. As part of the acquisition, we elected to
have successor issuer status under rule 12g-3 of the Securities Exchange Act of
1934, which makes us a reporting company.
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RESEARCH AND DEVELOPMENT
We have not spent any measurable amount of time on research and development
activities.
EMPLOYEES
As of March 31, 2000, we had 9 full-time employees and 8 part time
employees, including employees in each of our divisions. Of these employees,
four work in our administrative offices, five are employed by our internet kiosk
division, and nine are employed by our ShopGoOnline.com division. None of
our employees is covered by any collective bargaining agreement. We believe
that our relations with our employees are good.
FACILITIES
Our principal executive offices are located at 5681 Beach Boulevard, Suite
101/100, Buena Park, California 90621. Effective July 21, 1999 we entered into
a lease for this office space. The term of the lease is for 3 years with
monthly base rent payments of $1,600. The rent for the first year was prepaid.
Future base rent commitments during the years ended December 31 under this lease
are summarized as follows: 2000 - $ 8,000; 2001 - $ 19,200; and 2002 - $
11,200.
Effective May 15, 1999, we entered into a lease for office space in
northern California used by our ShopGoOnline.com division. The term of the
lease is for 5 years with monthly base rent payments of $1,615. The base rent
amounts are subject to increases of 3% per annum. We have the right to
terminate the lease between May 15, 2000 and June 15, 2000 and also between May
15, 2002 and June 15, 2002. The first years rent was prepaid. Future base rent
commitments during the years ended December 31 under this lease are summarized
as follows: 2000 - $ 19,380; 2001 - $19,380; 2002 - $ 19,380; 2003 - $ 19,380;
and 2004 - $ 8,075.
Effective August 12, 1999, we entered into a lease for office space for our
marketing department located at 13101 Washington Blvd., Suite 231, Culver City,
California. The term of the lease is until September 30, 2000, with a month to
month tenancy thereafter, with monthly base rental of $1,254.00 per month.
At the end of the lease terms for all of our rental space, we believe that
we can lease the same or comparable offices at approximately the same monthly
rate.
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LEGAL PROCEEDINGS
During 1996 we sold our wholly-owned subsidiary Real Estate Television
Network, Inc. in exchange for shares of stock of AmeriNet Financial Services,
Inc., the entity that acquired Real Estate Television Network. Since we were
unable to receive free trading shares of AmeriNet as agreed, on July 9, 1998 we
filed a lawsuit against AmeriNet and certain of its officers and directors
alleging breaches of written contracts, fraud and violations of various
Corporate Code sections. On September 2, 1998, AmeriNet filed a cross-complaint
against us alleging fraud and misrepresentation, breaches of contracts and
conspiracy. In the cross-complaint AmeriNet sought damages in the approximate
amount of $12,000,000, together with exemplary and punitive damages, attorney's
fees and cost of the suit. The actual losses identified by the cross-complaint
were less than $500,000. Effective on December 15, 1999, we entered into a
settlement with AmeriNet which provided for AmeriNet (which had subsequently
been renamed Homespace, Inc.) to issue to us 200,000 shares of Homespace common
stock and pay us $100,000, with mutual releases of claims on both sides.
On December 3, 1998, related to a different litigation matter, a default
judgment was entered against us in the approximate amount of $55,000 for alleged
amounts owed by Real Estate Television Network for which the plaintiff alleges
was also owed by us. On July 14, 1999 the default judgement was set aside
based on the fact that we were never properly served with a summons and
complaint. We contend that we are not liable for the amounts due since Real
Estate Television Network was a separate corporation and we never guaranteed
this obligation. Nevertheless, in April 2000, we entered into a settlement
agreement with the plaintiff and agreed to pay him the sum of $12,500 in cash
and 30,000 shares of our Series A Preferred Stock.
RISK FACTORS
In this section we highlight some of the risks associated with Go Online's
business and operations. Prospective investors should carefully consider the
following risk factors when evaluating an investment in the common stock offered
by this Reoffer Prospectus.
INVESTORS CANNOT DETERMINE POTENTIAL REVENUES, PROFITS OR FAILURES FROM OUR
HISTORY BECAUSE OUR INTERNET RELATED BUSINESSES HAVE EXISTED FOR ONLY A SHORT
PERIOD OF TIME. . Our executive officers commenced our major lines of business
- -- the Shop Go Online e-commerce site and our Go Online kiosk businesses --
relatively recently. Accordingly, you can evaluate our business, and therefore
our future prospects, based only on a limited operating history. In addition,
you must consider our prospects in light of the risks and uncertainties
encountered by companies in an early stage of development in new and rapidly
evolving markets.
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WE HAVE NEVER BEEN PROFITABLE AND MAY NOT BE PROFITABLE IN THE FUTURE. We
have incurred losses in our business operation since our inception. We expect to
continue to lose money for the foreseeable future, and we do not know when we
will become profitable, if at all. Failure to achieve and maintain
profitability may adversely affect the market price of our common stock.
OUR AUDITORS HAVE ADVISED THAT WE HAVE TO OBTAIN ADDITIONAL CAPITAL TO
CONTINUE IN BUSINESS. Our auditors in their report included in this prospectus
have expressed doubt about our ability to continue as a going company. That
risk is primarily dependent on our ability to raise sufficient money to
undertake our new business plan. If we do not continue as a business, our stock
would be worth substantially less.
WE MAY BE UNABLE TO MEET OUR CAPITAL REQUIREMENTS WHICH MAY SLOW DOWN OR
CURTAIL OUR BUSINESS PLANS . If our capital is insufficient to conduct our
business and if we are unable to obtain needed financing, we will be unable to
promote our two e-commerce websites, build and place sufficient kiosks or
otherwise maintain our competitive position. Since we intend to rapidly commence
advertising our e-commerce sites and since we desire to place internet kiosks
rapidly to get market share, it is certain that we will require additional
capital. We have not thoroughly investigated whether this capital would be
available, who would provide it, and on what terms. If we are unable to raise
the capital required to fund our growth, on acceptable terms, our business may
be seriously harmed or even terminated.
IF OUR ONLINE SERVERS FOR SHOPGOONLINE BECAME UNAVAILABLE, WE COULD
LOSE CUSTOMERS. We could lose existing or potential customers for our
ShopGoOnline business if they do not have ready access to our online servers,
or if our online servers and computer systems do not perform reliably and
to our customers' satisfaction. Network interruptions or other computer system
shortcomings, such as inadequate capacity, could reduce customer satisfaction
with our services or prevent customers from accessing our services and seriously
damage our reputation. As the number of individual users increases, we will need
to expand and upgrade the technology underlying our online services. We may
be unable to predict accurately changes in the volume of traffic and therefore
may be unable to expand and upgrade our systems and infrastructure in time
to avoid system interruptions.
WE CANNOT ALWAYS CONTROL THE AVAILABILITY AND QUALITY OF OUR PRODUCTS,
THEREBY INCREASING THE POSSIBILITY OF PROBLEMS WITH CUSTOMERS, BECAUSE WE RELY
ON THIRD-PARTY MERCHANDISE VENDORS FOR SUPPLY, SHIPPING AND QUALITY OF PRODUCTS
FOR OUR SHOPGOONLINE SITE. We rely on various vendors to supply us with
merchandise. We will likely not have any long-term contracts or arrangements
with our vendors that guarantee the availability of merchandise. We may not be
able to obtain sufficient quality and quantities of merchandise at competitive
prices. Also, the quality of service provided by such parties may fall below the
standard needed to enable us to conduct our business effectively.
OUR OPERATIONS MAY BE HARMED BY ACTIONS OUTSIDE OF OUR CONTROL BECAUSE WE
RELY ON OTHER THIRD PARTIES IN CONDUCTING OUR E-COMMERCE OPERATIONS. In
conducting our operations, we have decided that most activities will be
completed by several other third parties. We consequently cannot control the
quality of the products or the level of service they provide. This could hurt
our e-commerce businesses because customers could become dissatisfied. Our
third party vendors include the following:
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* Fulfillment. Third parties will fulfill a significant portion of our sales.
Any service interruptions experienced by these distribution centers as a result
of labor problems or otherwise could disrupt or prevent fulfillment of customer
orders;
* Payment processing. We will rely on one or two processors of credit card
transactions. If computer systems failures or other problems were to prevent
them from processing our credit card transactions, we would experience delays
and business disruptions; and
*
Shipping. We will use one or two primary delivery services to ship our
products. Our business would suffer if labor problems or other causes prevented
these or any other major carriers from delivering our products for significant
time periods. We may not be able to maintain satisfactory relationships with any
of the above parties on acceptable commercial terms, and the quality of services
that they provide may not remain at the levels needed to enable us to conduct
our business effectively.
DEPENDENCE ON THE LODGING INDUSTRY AND CHANGES IN VIEWING HABITS FOR OUR
KIOSK BUSINESS COULD ADVERSELY EFFECT OUR PROFITS. Our kiosk business is closely
linked to the performance of the lodging industry. Declines in hotel occupancy
or changes in the mix of hotel guests as a result of general business, economic,
seasonal and other factors can have a significant impact on our kiosk revenues.
RELIANCE ON KIOSK PROVIDERS MAY DELAY DELIVERY AND SLOW REVENUES FROM OUR
KIOSK DIVISION. We currently rely upon two suppliers who developed and who
manufacturer our internet kiosks. The loss of either of these suppliers could
slow our ability to deliver kiosks in accordance with our hotel contracts and
consequently could hurt our relationships with those hotels and our revenues
would decrease. While we believe that we could find other suppliers who could
manufacture our kiosks, we may incur increased costs and require additional time
to deliver those kiosks.
WE MAY NOT BE ABLE TO ACCURATELY PROJECT THE RATE OR TIMING OF INCREASES,
IF ANY, IN THE USERS OF OUR SHOPGOONLINE WEBSITE SUFFICIENTLY TO TIMELY EXPAND
AND UPGRADE OUR SYSTEMS AND INFRASTRUCTURE TO ACCOMMODATE ANY INCREASES.
We intend to use internally developed systems to
operate our service and for transaction processing, including billing and
collections processing. We will be required continually to improve these systems
in order to accommodate the level of use of our auction website. In addition, we
may add new features and functionality to our services that would result in the
need to develop or license additional technologies. Our inability to add
additional software and hardware or to upgrade our technology, transaction
processing systems or network infrastructure to accommodate increased traffic or
transaction volume could cause unanticipated system disruptions, slower response
times, degradation in levels of customer support, impaired quality of the users'
experience on our service and delays in reporting accurate financial
information.
USE OF PROCEEDS
Go Online will not receive any of the proceeds from the sale of shares of common
stock by the Selling Shareholders.
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SELLING SHAREHOLDERS
The Shares of the Company to which this Reoffer Prospectus relates are being
registered for reoffers and resales by the Selling Shareholders, who acquired
the Shares pursuant to a compensatory benefit plan with Go Online for consulting
and legal services they provided to Go Online. The Selling Shareholders may
resell all, a portion or none of such Shares from time to time.
The table below sets forth with respect to the Selling Shareholders, based upon
information available to the Company as of May 17, 2000, the number of
Shares owned, the number of Shares registered by this Reoffer Prospectus and the
number and percent of outstanding Shares that will be owned after the sale of
the registered Shares assuming the sale of all of the registered Shares.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
% of Shares
Number of Number of Shares Owned by
Selling Shares Owned Registered by Number of Shares Shareholder
Shareholders Before Sale Prospectus Owned After Sale After Sale
- ------------ ------------- ---------------- ----------------- -------------
Harvey Turell 250,000 250,000 0 0.00%
Nathan Wolfstein 250,000 250,000 0 0.00%
M. Richard Cutler 60,000 60,000 0 0.00%
</TABLE>
PLAN OF DISTRIBUTION
The Selling Shareholders may sell the Shares for value from time to time under
this Reoffer Prospectus in one or more transactions on the Over-the-Counter
Bulletin Board maintained by Nasdaq, or other exchange, in a negotiated
transaction or in a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at prices otherwise negotiated. The Selling Shareholders may effect
such transactions by selling the Shares to or through brokers-dealers, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Shareholders and/or the purchasers
of the Shares for whom such broker-dealers may act as agent (which compensation
may be less than or in excess of customary commissions).
The Selling Shareholders and any broker-dealers that participate in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of Section 2(11) of the 1933 Act, and any commissions received by them and any
profit on the resale of the Shares sold by them may be deemed be underwriting
discounts and commissions under the 1933 Act. All selling and other expenses
incurred by the Selling Shareholders will be borne by the Selling Shareholders.
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In addition to any Shares sold hereunder, the Selling Shareholders may, at the
same time, sell any shares of common stock, including the Shares, owned by him
or her in compliance with all of the requirements of Rule 144, regardless of
whether such shares are covered by this Reoffer Prospectus.
There is no assurance that the Selling Shareholders will sell all or any portion
of the Shares offered.
The Company will pay all expenses in connection with this offering other than
the legal fees incurred in connection with the preparation of this registration
statement and will not receive any proceeds from sales of any Shares by the
Selling Shareholders.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by the Cutler Law Group, Newport Beach, California. M. Richard
Cutler, the President and sole shareholder of MRC Legal Services Corporation,
which does business as the Cutler Law Group, is the beneficial owner of 60,000
shares of the Company's common stock as offered hereby.
EXPERTS
The balance sheet as of December 31, 1998 and the statements of operations,
shareholders' equity and cash flows for the period then ended of Go Online
Networks Corporation, have been incorporated by reference in this Registration
Statement in reliance on the report of Schumacher & Associates, independent
accountants, given on the authority of that firm as experts in accounting
and auditing.
The balance sheet as of December 31, 1999 and the statements of operations,
shareholders' equity and cash flows for the period then ended of Go Online
Networks Corporation, have been incorporated by reference in this Registration
Statement in reliance on the report of Miller & McCollom, certified public
accountants, given on the authority of that firm as experts in accounting
and auditing.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference in this
Registration Statement:
(i) Registrant's Form 10-QSB for the quarter ended March 31, 2000.
(ii) Registrant's Form 10-KSB for the fiscal year ended December 31, 1999.
(iii) Registrant's Form 10-KSB (in the name of Westlake Capital Corp., the
Company's successor) for the fiscal year ended December 31, 1998.
(iv) Registrant's Registration Statement on Form S-8 filed with the
Commission on January 20, 2000.
(v) Registrant's Registration Statement on Form S-8 filed with the
Commission on February 17, 2000.
(vi) Registrant's Registration Statement on Form S-8 filed with the
Commission on April 20, 2000.
(vii) Registrant's Current Report on Form 8-K filed with the Commission on
January 11, 2000.
(viii) Registrant's Current Report on Form 8-K filed with the Commission on
March 27, 2000.
(ix) All other reports and documents subsequently filed by the Registrant
pursuant after the date of this Registration Statement pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 and prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference and to be a part hereof
from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain legal matters with respect to the Common Stock offered hereby will be
passed upon for the Company by Cutler Law Group, counsel to the Company.
M. Richard Cutler, the President and sole shareholder of MRC Legal Services
Corporation, which does business as the Cutler Law Group, is the beneficial
owner of 60,000 shares of the Company's common stock as offered hereby.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Corporation Laws of the State of Delaware 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. Furthermore, the
personal liability of the Directors is limited as provided in the Company's
Articles of Incorporation.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The Shares were issued for consulting and legal services rendered and to be
rendered. These sales were made in reliance of the exemption from the
registration requirements of the Securities Act of 1933, as amended, contained
in Section 4(2) thereof covering transactions not involving any public offering
or not involving any "offer" or "sale".
ITEM 8. EXHIBITS
*2.1 Agreement and Plan of Merger of Go Online Networks Corporation, a
Delaware corporation, and Jones Naughton Entertainment, Inc. a Colorado
corporation, dated September 8, 1999.
*2.2 Certificate of Merger of Jones Naughton Entertainment, Inc. into Go
Online Networks Corporation, dated August 12, 1999.
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*2.3 Articles of Merger of Jones Naughton Entertainment, Inc. with Go Online
Networks Corporation, dated September 8, 1999.
*3.1 Articles of Incorporation of Valencia Capital, Inc., filed October 20,
1987.
*3.2 Articles of Amendment to the Articles of Incorporation of Valencia
Capital, Inc., filed February 7, 1991.
*3.3 Articles of Amendment to the Articles of Incorporation of Jones
Naughton Entertainment, Inc., filed July 27, 1994.
*3.4 Articles of Amendment to the Articles of Incorporation of Jones
Naughton Entertainment, Inc., filed July 28, 1994.
*3.5 Certificate of Designation for Jones Naughton Entertainment, Inc.,
dated June 8, 1994.
*3.6 Bylaws of Jones Naughton Entertainment, Inc., as amended.
*3.7 Certificate of Incorporation of Go Online Networks Corporation, dated
August 11, 1999.
*3.8 Certificate of Designation for Go Online Networks Corporation, dated
August 13, 1999.
*3.9 Bylaws of Go Online Networks Corporation.
*3.10 Articles of Incorporation of AMS Acquisition Corp., filed June 29,
1998.
*3.11 Bylaws of AMS Acquisition Corp.
5 Opinion of Cutler Law Group
10.1 Consulting Agreement with Nathan Wolfstein dated May 10, 2000.
10.2 Consulting Agreement with Harvey Turell dated May 10, 2000.
23.1 Consent of Schumacher & Associates
23.2 Consent of Miller & McCollom
23.3 Consent of Cutler Law Group (included in Exhibit 5).
________________________
* Incorporated by reference to Go Online's SB-2 Registration Statement, as
amended by Amendment No. 1 filed on December 2, 1999.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any material
information with respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that is meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Buena Park, State of California, on May 17,
2000.
GO ONLINE NETWORKS CORPORATION
/s/ Joseph M. Naughton
-----------------------------
By: Joseph M. Naughton
Its: Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/ Joseph M. Naughton Chief Executive Officer and Director
- -----------------------------
Joseph M. Naughton
/s/ Scott Claverie Director; President of AMS Acquisition Corp.
- ------------------------
Scott Claverie
/s/ James Cannon Director; Secretary
- --------------------
James Cannon
/s/ Michael Abelson Director
- -------------------------
Michael Abelson
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[CUTLER LAW GROUP LETTERHEAD]
Securities and Exchange Commission
Division of Corporate Finance
Washington, D.C. 20549
Re: Go Online Networks Corporation
Ladies and Gentlemen:
This office represents Go Online Networks Corporation, a Delaware
corporation (the "Registrant") in connection with the Registrant's Registration
Statement on Form S-8 under the Securities Act of 1933 (the "Registration
Statement"), which relates to the resale of up to 560,000 shares by Harvey
Turell, Nathan Wolfstein, and M. Richard Cutler in accordance with Consulting
Agreements between the Registrant and each of Mr. Turell and Mr. Wolfstein, and
a legal services agreement with M. Richard Cutler (the "Registered Securities.")
In connection with our representation, we have examined such documents and
undertaken such further inquiry as we consider necessary for rendering the
opinion hereinafter set forth.
Based upon the foregoing, it is our opinion that the Registered Securities,
when issued as set forth in the Registration Statement, will be legally issued,
fully paid and nonassessable.
We acknowledge that we are referred to under the heading "Legal Matters" in
the Resale Prospectus which is a part of the Registrant's Form S-8 Registration
Statement relating to the Registered Securities, and we hereby consent to such
use of our name in such Registration Statement and to the filing of this opinion
as Exhibit 5 to the Registration Statement and with such state regulatory
agencies in such states as may require such filing in connection with the
registration of the Registered Securities for offer and sale in such states.
/s/ Cutler Law Group
CUTLER LAW GROUP
GO ONLINE NETWORKS CORPORATION
A DELAWARE CORPORATION
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement"), made and entered into as of
this 10th day of May, 2000 by and between Go Online Networks Corporation, a
Delaware corporation ("GONT" or the "Company") and Nathan Wolfstein, an
individual (the "Consultant").
RECITALS
WHEREAS, from June 10, 1999 to the date hereof, Consultant has been
rendering services to GONT without compensation;
WHEREAS, GONT desires to herein compensate Consultant for past services
rendered, as well as to engage the consulting services of Consultant for a
limited period of time into the future; and
WHEREAS, Consultant wishes to provide GONT with consulting services.
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto hereby agree as follows:
1. CONSULTING SERVICES
GONT hereby authorizes, appoints and engages the Consultant to perform the
following services in accordance with the terms and conditions set forth in this
Agreement:
Services related to the divestiture of Auctionomics, Inc. from GONT,
including but not limited to contacting and transferring relationships with
vendors, suppliers, and customers, and other services as mutually agreed upon
relating to GONT's ongoing auction-related business, if any.
2. TERM OF AGREEMENT
This Agreement shall be in full force and effect as of the date hereof and
shall remain in effect for a period of three months.
3. COMPENSATION TO CONSULTANT
As consideration for the past services rendered to the Company and for the
services described herein, the Company shall cause to be issued to Consultant an
aggregate of 250,000 shares of "restricted" common stock of GONT. Within ten
(10) days of the date hereof, GONT shall cause the shares to be registered on
Form S-8, and thus become free-trading, and shall deliver the shares to
Consultant.
<PAGE>
4. REPRESENTATIONS AND WARRANTIES OF CONSULTANT
Consultant represents and warrants to and agrees with GONT that:
a. This Agreement has been duly authorized, executed and delivered by
Consultant. This Agreement constitutes the valid, legal and binding obligation
of Consultant, enforceable in accordance with its terms, except as rights to
indemnity hereunder may be limited by applicable federal or state securities
laws, and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditor's rights
generally.
b. The consummation of the transactions contemplated hereby will not result
in any breach of the terms or conditions of, or constitute a default under, any
agreement or other instrument to which Consultant is a party, or violate any
order, applicable to Consultant, of any court or federal or state regulatory
body or administrative agency having jurisdiction over Consultant or over any of
its property, and will not conflict with or violate the terms of Consultants's
current employment.
c. The parties hereto acknowledge and agree that GONT shall have the right
to refuse any course of action proposed by Consultant and to refuse any customer
or sale identified by Consultant or any other source.
d. Consultant acknowledges that, prior to the filing by the Company of a
Form S-8, the GONT Shares will be "restricted securities" (as such term is
defined in Rule 144 promulgated under the Securities Act of 1933, as amended
("Rule 144")), that the shares will contain a restrictive legend, and, except as
otherwise set forth in this Agreement, that the shares cannot be sold for a
period of one year from the date of issuance unless registered with the SEC and
qualified by appropriate state securities regulators, or unless Consultant
obtains written consent from the Company and otherwise complies with an
exemption from such registration and qualification (including, without
limitation, compliance with Rule 144).
5. REPRESENTATIONS AND WARRANTIES OF GONT
GONT hereby represents, warrants, covenants to and agrees with Consultant
that:
a. This Agreement has been duly authorized, and executed by GONT. This
Agreement constitutes the valid, legal and binding obligation of GONT,
enforceable in accordance with its terms, except as rights to indemnity
hereunder may be limited by applicable federal or state securities laws, except
in each case as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditor's rights generally.
<PAGE>
b. There is not now pending or, to the knowledge of GONT, threatened, any
action, suit or proceeding to which GONT is a party before or by any court or
governmental agency or body which might result in a material adverse change in
the financial condition of GONT. The performance of this Agreement and the
consummation of the transactions contemplated hereby will not result in a breach
of the terms or conditions of, or constitute a default under, any statute,
indenture, mortgage or other material Agreement or instrument to which GONT is a
party, or violate any order, applicable to GONT, or governmental agency having
jurisdiction over GONT or over any of its property.
6. INDEPENDENT CONTRACTOR
Both GONT and the Consultant agree that the Consultant will act as an
independent contractor in the performance of his duties under this Agreement.
Nothing contained in this Agreement shall be construed to imply that Consultant,
or any employee, agent or other authorized representative of Consultant, is a
partner, joint venturer, agent, officer or employee of GONT. Neither party
hereto shall have any authority to bind the other in any respect vis a vis any
third party, it being intended that each shall remain an independent contractor
and responsible only for its own actions.
7. NOTICES
Any notice, request, demand, or other communication given pursuant to the
terms of this Agreement shall be deemed given upon delivery, if hand delivered
or sent via facsimile, or Forty-Eight (48) hours after deposit in the United
States mail, postage prepaid, and sent certified or registered mail, return
receipt requested, correctly addressed to the addresses of the parties indicated
below or at such other address as such party shall in writing have advised the
other party.
To GONT:
Go Online Networks Corporation
5681 Beach Boulevard, Suite 101
Buena Park, CA 90621
Attn: Joe Naughton
Facsimile (714) 994-3242
with a copy to:
Cutler Law Group
610 Newport Center Drive, Suite 800
Newport Beach, CA 92660
Attn: M. Richard Cutler, Esq.
Facsimile (949) 719-1988
<PAGE>
To Consultant:
Nathan Wolfstein
18226 Ventura Boulevard, Unit 103
Tarzana, CA 91356
Facsimile (818) 343-7119
8. ASSIGNMENT
This contract shall inure to the benefit of the parties hereto, their heirs,
administrators and successors in interest. This Agreement shall not be
assignable by either party hereto without the prior written consent of the
other.
9. CHOICE OF LAW AND VENUE
This Agreement and the rights of the parties hereunder shall be governed by
and construed in accordance with the laws of the State of California including
all matters of construction, validity, performance, and enforcement and without
giving effect to the principles of conflict of laws. Any action brought by any
party hereto shall be brought within the State of California, County of Orange.
10. NONDISCLOSURE
Each party hereto agrees to keep the terms of this Agreement and the
transactions contemplated hereby as confidential and shall not disclose such
information to any third party, other than professional advisors utilized to
negotiate and consummate the transactions contemplated hereby. The parties
hereto agree that in the event there is a breach of the foregoing
confidentiality provision, the damage to the parties hereto would be difficult
to estimate and as a result, in the event of such a breach, the non-breaching
party, in addition to any and all other remedies allowed by law, would be
entitled to injunctive relief enjoining the actions of the breaching party.
11. SEVERABILITY
If any provision of this Agreement is unenforceable, invalid, or violates
applicable law, such provision, or unenforceable portion of such provision,
shall be deemed stricken and shall not affect the enforceability of any other
provisions of this Agreement.
12. CAPTIONS
The captions in this Agreement are inserted only as a matter of convenience
and for reference and shall not be deemed to define, limit, enlarge, or describe
the scope of this Agreement or the relationship of the parties, and shall not
affect this Agreement or the construction of any provisions herein.
<PAGE>
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which shall together constitute one and
the same instrument.
14. MODIFICATION
No change, modification, addition, or amendment to this Agreement shall be
valid unless in writing and signed by all parties hereto.
15. ATTORNEYS FEES
Except as otherwise provided herein, if a dispute should arise between the
parties including, but not limited to arbitration, the prevailing party shall be
reimbursed by the non-prevailing party for all reasonable expenses incurred in
resolving such dispute, including reasonable attorneys' fees.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the Effective Date.
"GONT" "Consultant"
Go Online Networks Corporation
a Delaware corporation
/s/ Joe Naughton /s/ Nathan Wolfstein
________________________________ ____________________________
By: Joe Naughton By: Nathan Wolfstein
Its: Chief Executive Officer
GO ONLINE NETWORKS CORPORATION
A DELAWARE CORPORATION
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement"), made and entered into as of
this 10th day of May, 2000 by and between Go Online Networks Corporation, a
Delaware corporation ("GONT" or the "Company") and Harvey Turell, an individual
(the "Consultant").
RECITALS
WHEREAS, from June 10, 1999 to the date hereof, Consultant has been
rendering services to GONT without compensation;
WHEREAS, GONT desires to herein compensate Consultant for past services
rendered, as well as to engage the consulting services of Consultant for a
limited period of time into the future; and
WHEREAS, Consultant wishes to provide GONT with consulting services.
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto hereby agree as follows:
1. CONSULTING SERVICES
GONT hereby authorizes, appoints and engages the Consultant to perform the
following services in accordance with the terms and conditions set forth in this
Agreement:
Services related to the divestiture of Auctionomics, Inc. from GONT,
including but not limited to contacting and transferring relationships with
vendors, suppliers, and customers, and other services as mutually agreed upon
relating to GONT's ongoing auction-related business, if any.
2. TERM OF AGREEMENT
This Agreement shall be in full force and effect as of the date hereof and
shall remain in effect for a period of three months.
3. COMPENSATION TO CONSULTANT
As consideration for the past services rendered to the Company and for the
services described herein, the Company shall cause to be issued to Consultant an
aggregate of 250,000 shares of "restricted" common stock of GONT. Within ten
(10) days of the date hereof, GONT shall cause the shares to be registered on
Form S-8, and thus become free-trading, and shall deliver the shares to
Consultant.
<PAGE>
4. REPRESENTATIONS AND WARRANTIES OF CONSULTANT
Consultant represents and warrants to and agrees with GONT that:
a. This Agreement has been duly authorized, executed and delivered by
Consultant. This Agreement constitutes the valid, legal and binding obligation
of Consultant, enforceable in accordance with its terms, except as rights to
indemnity hereunder may be limited by applicable federal or state securities
laws, and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditor's rights
generally.
b. The consummation of the transactions contemplated hereby will not result
in any breach of the terms or conditions of, or constitute a default under, any
agreement or other instrument to which Consultant is a party, or violate any
order, applicable to Consultant, of any court or federal or state regulatory
body or administrative agency having jurisdiction over Consultant or over any of
its property, and will not conflict with or violate the terms of Consultants's
current employment.
c. The parties hereto acknowledge and agree that GONT shall have the right
to refuse any course of action proposed by Consultant and to refuse any customer
or sale identified by Consultant or any other source.
d. Consultant acknowledges that, prior to the filing by the Company of a
Form S-8, the GONT Shares will be "restricted securities" (as such term is
defined in Rule 144 promulgated under the Securities Act of 1933, as amended
("Rule 144")), that the shares will contain a restrictive legend, and, except as
otherwise set forth in this Agreement, that the shares cannot be sold for a
period of one year from the date of issuance unless registered with the SEC and
qualified by appropriate state securities regulators, or unless Consultant
obtains written consent from the Company and otherwise complies with an
exemption from such registration and qualification (including, without
limitation, compliance with Rule 144).
5. REPRESENTATIONS AND WARRANTIES OF GONT
GONT hereby represents, warrants, covenants to and agrees with Consultant
that:
a. This Agreement has been duly authorized, and executed by GONT. This
Agreement constitutes the valid, legal and binding obligation of GONT,
enforceable in accordance with its terms, except as rights to indemnity
hereunder may be limited by applicable federal or state securities laws, except
in each case as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditor's rights generally.
<PAGE>
b. There is not now pending or, to the knowledge of GONT, threatened, any
action, suit or proceeding to which GONT is a party before or by any court or
governmental agency or body which might result in a material adverse change in
the financial condition of GONT. The performance of this Agreement and the
consummation of the transactions contemplated hereby will not result in a breach
of the terms or conditions of, or constitute a default under, any statute,
indenture, mortgage or other material Agreement or instrument to which GONT is a
party, or violate any order, applicable to GONT, or governmental agency having
jurisdiction over GONT or over any of its property.
6. INDEPENDENT CONTRACTOR
Both GONT and the Consultant agree that the Consultant will act as an
independent contractor in the performance of his duties under this Agreement.
Nothing contained in this Agreement shall be construed to imply that Consultant,
or any employee, agent or other authorized representative of Consultant, is a
partner, joint venturer, agent, officer or employee of GONT. Neither party
hereto shall have any authority to bind the other in any respect vis a vis any
third party, it being intended that each shall remain an independent contractor
and responsible only for its own actions.
7. NOTICES
Any notice, request, demand, or other communication given pursuant to the
terms of this Agreement shall be deemed given upon delivery, if hand delivered
or sent via facsimile, or Forty-Eight (48) hours after deposit in the United
States mail, postage prepaid, and sent certified or registered mail, return
receipt requested, correctly addressed to the addresses of the parties indicated
below or at such other address as such party shall in writing have advised the
other party.
To GONT:
Go Online Networks Corporation
5681 Beach Boulevard, Suite 101
Buena Park, CA 90621
Attn: Joe Naughton
Facsimile (714) 994-3242
with a copy to:
Cutler Law Group
610 Newport Center Drive, Suite 800
Newport Beach, CA 92660
Attn: M. Richard Cutler, Esq.
Facsimile (949) 719-1988
<PAGE>
To Consultant:
Harvey A. Turell
18226 Ventura Boulevard, Unit 103
Tarzana, CA 91356
Facsimile (818) 343-7119
8. ASSIGNMENT
This contract shall inure to the benefit of the parties hereto, their heirs,
administrators and successors in interest. This Agreement shall not be
assignable by either party hereto without the prior written consent of the
other.
9. CHOICE OF LAW AND VENUE
This Agreement and the rights of the parties hereunder shall be governed by
and construed in accordance with the laws of the State of California including
all matters of construction, validity, performance, and enforcement and without
giving effect to the principles of conflict of laws. Any action brought by any
party hereto shall be brought within the State of California, County of Orange.
10. NONDISCLOSURE
Each party hereto agrees to keep the terms of this Agreement and the
transactions contemplated hereby as confidential and shall not disclose such
information to any third party, other than professional advisors utilized to
negotiate and consummate the transactions contemplated hereby. The parties
hereto agree that in the event there is a breach of the foregoing
confidentiality provision, the damage to the parties hereto would be difficult
to estimate and as a result, in the event of such a breach, the non-breaching
party, in addition to any and all other remedies allowed by law, would be
entitled to injunctive relief enjoining the actions of the breaching party.
11. SEVERABILITY
If any provision of this Agreement is unenforceable, invalid, or violates
applicable law, such provision, or unenforceable portion of such provision,
shall be deemed stricken and shall not affect the enforceability of any other
provisions of this Agreement.
12. CAPTIONS
The captions in this Agreement are inserted only as a matter of convenience
and for reference and shall not be deemed to define, limit, enlarge, or describe
the scope of this Agreement or the relationship of the parties, and shall not
affect this Agreement or the construction of any provisions herein.
<PAGE>
13. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which shall together constitute one and
the same instrument.
14. MODIFICATION
No change, modification, addition, or amendment to this Agreement shall be
valid unless in writing and signed by all parties hereto.
15. ATTORNEYS FEES
Except as otherwise provided herein, if a dispute should arise between the
parties including, but not limited to arbitration, the prevailing party shall be
reimbursed by the non-prevailing party for all reasonable expenses incurred in
resolving such dispute, including reasonable attorneys' fees.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the Effective Date.
"GONT" "Consultant"
Go Online Networks Corporation
a Delaware corporation
/s/ Joe Naughton /s/ Harvey A. Turell
________________________________ ____________________________
By: Joe Naughton By: Harvey A. Turell
Its: Chief Executive Officer
INDEPENDENT AUDITOR'S REPORT
To The Board of Directors of Go Online Networks Corporation
We hereby consent to the use incorporated by reference in this Form S-8 of our
report dated August 27, 1999 relating to the consolidated financial statements
of Go Online Networks Corporation (formerly Jones Naughton Entertainment, Inc.)
and consolidated subsidiaries.
/s/ Schumacher & Associates
SCHUMACHER & ASSOCIATES
Englewood, Colorado
May 17, 2000
INDEPENDENT AUDITOR'S REPORT
To The Board of Directors of Go Online Networks Corporation
We hereby consent to the use incorporated by reference in this Form S-8 of our
report dated February 25, 2000 relating to the consolidated financial statements
of Go Online Networks Corporation (formerly Jones Naughton Entertainment, Inc.)
and consolidated subsidiaries.
/s/ Miller & McCollom
MILLER & MCCOLLOM
Denver, Colorado
May 17, 2000
