U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number: 0-25097
SWIFTYNET.COM, INC.
(Exact Name of Small Business Issuer in Its Charter)
Florida 65-078-3722
(State or other jurisdiction of (I.R.S. Employer Identi-
incorporation or organization) fication No.)
761 Coral Drive, Tampa, Florida 33602
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (813) 926-1603
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Check whether the issuer:(1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
The number of shares of the registrant's common stock, par value $.0001 per
share, outstanding as of April 28, 2000 was 10,952,210.
<PAGE>
Index to Form 10QSB
Part I - Financial Information Page
Item 1. Financial Statements (unaudited)
Balance Sheet March 31, 2000........................................2
Statements of Operations - Three Months
Ended March 31, 1999 and March 31, 2000.............................3
Statements of Cash Flows - Three Months
Ended March 31, 1999 and March 31, 2000.............................4
Notes to Financial Statements.......................................5
Item 2. Management's Discussion and Analysis or Plan of Operation..........10
Part II - Other Information
Item 2. Changes in Securities and Use of Proceeds..........................11
Item 6. Exhibits and Reports on Form 8-K...................................12
Signatures..................................................................13
1
<PAGE>
Item 1. Financial Statements
SWIFTYNET.COM, INC.
FINANCIAL STATEMENTS
MARCH 31, 2000
<PAGE>
SWIFTYNET.COM, INC.
BALANCE SHEET
March 31, 2000
--------------
ASSETS (Unaudited)
Current assets
Cash and cash equivalents $ 2,929
Inventory 7,060
Prepaid expenses 25,500
-----------
Total current assets 35,489
-----------
Property and equipment
Land 312,500
Building 662,358
Equipment 351,173
Software 109,255
-----------
1,435,286
-----------
Less: Accumulated depreciation (83,088)
-----------
Total property and equipment 1,352,198
-----------
Other assets
Goodwill, net 1,469,285
Deposits 32,600
Other assets 13,183
----------
Total other assets 1,515,068
----------
Total Assets $ 2,902,755
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 79,265
Payable to stockholders 73,985
Current maturities of notes payable and long-term debt 59,983
----------
Total current liabilities 213,233
----------
Other liabilities
Notes payable and long-term debt, less current maturities 621,429
Accrued loss from discontinued operations 350,000
---------
Total other liabilities 971,429
---------
Stockholders' equity
Common stock; $.0001 par value; 50,000,000 shares
authorized; 11,069,100 shares issued and outstanding 1,107
Paid in capital 3,711,978
Accumulated deficit (1,994,992)
----------
Total stockholders' equity 1,718,093
----------
Total Liabilities and Stockholders' Equity $ 2,902,755
==========
The accompanying notes are an integral part of the financial statements.
2
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SWIFTYNET.COM, INC.
STATEMENTS OF OPERATIONS
Three Months Ended
March 31,
--------------------------
2000 1999
------- ----------
(unaudited) (unaudited)
Revenues
Operating revenues $ - $ -
Interest income 37 2,223
------- -------
Total revenues 37 2,223
------- -------
Expenses
Operational costs 6,183 -
Depreciation and amortization 86,350 -
Other general and administrative 107,782 38,845
-------- --------
200,315 38,845
Total expenses
-------- --------
Loss from continuing operations (200,278) (36,622)
--------- --------
Discontinued operations
Loss from discontinued carwash and
quick-lube operations (56,425) (75,699)
Provision for loss on disposal of
property, equipment
and related assets (350,000) -
--------- --------
Loss from discontinued operations (406,425) (75,699)
---------- ---------
Net loss $ (606,703) $ (112,321)
========= =========
Loss per common share
From continuing operations $ (.02) -
From discontinued operations (.04) (.01)
----------- ----------
Total loss per share $ (.06) $ (.01)
Weighted average common shares outstanding $ 11,011,489 $ 8,404,120
============ ==========
The accompanying notes are an integral part of the financial statements.
3
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SWIFTYNET.COM, INC.
STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
-----------------------
2000 1999
-------- -----------
(unaudited) (unaudited)
Cash flows from operating activities
Net loss $ (606,703) $ (112,321)
---------- -----------
Adjustments to reconcile net loss to
net cash used in operating activities:
Contributed services 15,000 -
Depreciation and amortization 101,722 54,115
Increase in interest receivable (1,952)
Decrease in prepaid expenses 19,504 -
Increase in inventory - (5,357)
Increase in accounts payable and
accrued expenses 20,437 28,556
Increase in accrued loss from
discontinued operations 350,000 -
--------- ---------
Total adjustments 506,663 75,362
--------- ---------
Net cash used in operating activities (100,040) (36,959)
--------- ---------
Cash flows from investing activities
Acquisition of property and equipment (4,040) (5,689)
Increase in deposits and other assets - (200)
--------- ---------
Net cash used in investing activities (4,040) (5,889)
--------- ---------
Cash flows from financing activities
Payments on notes payable (14,460) (34,030)
Net proceeds from issuance of stock 34,524 -
Net advances from stockholders 49,320 44,300
--------- -------
Net cash provided by financing activities 69,384 10,270
Net decrease in cash and cash equivalents (34,696) (32,578)
Cash and cash equivalents, beginning of period 37,625 70,686
-------- ------
Cash and cash equivalents, end of period $ 2,929 $ 38,108
The accompanying notes are an integral part of the financial statements.
4
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SWIFTYNET.COM, INC.
STATEMENTS OF CASH FLOWS
(Continued)
Supplemental disclosures of noncash investing and financing activities:
In March 1999, the Company issued 10,000 shares of common stock due under a
consulting contract executed in 1998.
In March 2000, the Company issued 125,000 shares of stock for capitalized
software valued at $98,750.
Supplemental disclosure of cash flow information:
The Company paid approximately $15,000 and $14,000 in interest for the three
months ended March 31, 2000 and 1999, respectively.
The accompanying notes are an integral part of the financial statements
5
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SWIFTYNET.COM, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
The information presented herein as of March 31, 2000 and for the three-months
ended March 31, 2000 and 1999 is unaudited.
(1) Basis of Presentation:
The accompanying financial statements of SwiftyNet.com, Inc. (the Company) have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB and item
310(b) of Regulation S-B. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal required adjustments) considered necessary for a fair
presentation have been included.
Operating results for the three month period ended March 31, 2000, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2000. For further information, refer to the financial statements
and footnotes included in the Company's annual report of Form 10-KSB for the
year ended December 31, 1999.
(2) Business Acquisition:
On December 17, 1999, the Company purchased all the outstanding stock of
Rankstreet.com, Inc., a development stage enterprise. The Company issued
2,000,000 shares of common stock. The 2,000,000 shares are subject to
cancellation if the Rankstreet.com web site is not functional and available for
interactive customer usage by November 17, 2000. In addition, the Company will
issue an additional 1,000,000 shares at which time the Rankstreet.com web site
is fully functional and available for interactive customer usage. The Company
will issue an additional 1,000,000 shares one year from the date the
Rankstreet.com web site is advertised for use by the general public. These
contingent shares will be recorded when the outcome of the event is determinable
beyond a reasonable doubt. On May 4, 2000, it was determined the website was
functional and the additional 1,000,000 shares are due. The March 31, 2000
financial statements do not reflect the issuance of these additional shares.
In addition, the selling Rankstreet.com shareholders were each issued an option
to purchase as a group 51% of Rankstreet's outstanding common stock for $75,000
as of a date 30 days following a successful initial public offering of
Rankstreet.com, Inc. securities.
In the transaction, accounted for as a purchase, the Company recorded the above
acquisition at $1,562,500, the current market value attributed to the 2,000,000
shares less a 50% discount because the shares are unregistered and are a
significant block of stock for the Company. The $1,562,500 has been classified
as goodwill and software and is being amortized over five years, its estimated
useful life. The Company recorded $78,125 of amortization expense for the
three-months ended March 31, 2000.
Rankstreet.com has no significant results of operations either prior or
subsequent to its acquisition.
The value of the additional 2,000,000 shares will be recorded when their
issuance is assured.
(3) Stock Offering:
---------------
On February 29, 2000 the Company's Board of Directors approved a private
placement pursuant to Regulation D 506 of the Securities Act of 1933 for the
sale of 5,000,000 units. Each unit consists of one share of stock and one
warrant with a price of $1.00 per unit. The warrants carry an exercise price of
$7.25 for an exercise period of two years. The Company sold 36,980 units as of
March 31, 2000.
6
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SWIFTYNET.COM, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(4) Commitments, Contingencies and Related Party Transactions:
----------------------------------------------------------
The President and Operations Manager performed services for the Company at no
cost. The Board of Directors valued these services at $15,000 and $8,750 for the
three-months ended March 31, 2000 and 1999, respectively and recorded this
amount as an expense and an increase in additional paid-in capital in the
accompanying financial statements. The Operations Manager has an employment
contract through March 2001, with a minimum salary of $25,000 per year.
In connection with the acquisition of Rankstreet.com, Inc. the Company entered
into employee agreements with two individuals for a period ending November 19,
2001. These agreements are automatically renewable for an additional two year
period unless canceled by written notice by either party. The terms of these
agreements call for the payment of a base salary to be determined by the Board
of Directors of Rankstreet.com, Inc. plus a percentage of pre-tax profit or
revenue. The Board of Directors has not determined the amount of base pay. In
the event that the Company terminates these employees, the Company shall pay an
amount equal to 100% of the employee's base salary for the remainder of the
agreement or a period of two years, whichever is less. No amounts were due at
March 31, 2000 under these agreements.
The shareholder advanced the Company funds and the Company owed the shareholder
$18,985 at December 31, 1999. During 2000, the shareholder advanced the Company
an additional $49,300. The Company owed the shareholder $68,285 at March 31,
2000.
On August 8, 1998, the Company entered into a consulting and contracting
agreement with a stockholder whereby the stockholder would explore, investigate,
and locate appropriate parcels of land and supplies of equipment on behalf of
the Company. In addition, the stockholder would provide certain construction
services to the Company. In exchange for these services, the Company would pay
the stockholder between three and five percent of the total costs of projects
which have been negotiated or performed by the stockholder. The Company paid the
stockholder $210,000 to be used on behalf of the Company in connection with this
agreement. In 1999, the stockholder returned 50,000 shares of common stock to
the Company in settlement of this deposit. These shares have been cancelled.
In November 1998, the company entered into a consulting contract with a
stockholder. The contract calls for annual compensation of $72,500 for a period
of three years. During 1999, this contract was amended to allow the consultant
to provide services on an as needed basis for a negotiated amount rather than a
stated amount. No fees have been paid under this contract.
The above related party agreements are not necessarily indicative of the
agreements that would have been entered into by independent parties.
During 1998, the Company entered into an agreement for use of a private suite at
the Raymond James Stadium for the 1998 through 2003 football seasons. Included
in deposits at March 31, 2000 is a $30,000 deposit in accordance with the terms
of this agreement; the Company incurred an expense of $7,530 and $7,500 for the
three-months ended March 31, 2000 and 1999, respectively. The Company is
committed under this agreement for an annual fee of $30,000 through 2003.
During 1998, the Company entered into a three-year advertising, promotion and
publicity agreement and recorded a prepaid expense of $270,400. Each year, the
Company reduces this prepaid asset in amounts equal to the greater of the actual
costs incurred under the agreement or an amount equal to the amortization of the
initial amount over the three year term using the straight line method. The
Company expensed $17,400 and $22,500 for the three-months ended March 31, 2000
and 1999, respectively.
7
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SWIFTYNET.COM, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(5) Warrants:
At March 31, 2000, the Company had outstanding exercisable warrants to purchase
355,220 shares of the Company's common stock at $7.25 per share. The warrants
expire in 2002.
Prior to expiration, the warrants may be redeemed by the Company at a price of
$.01. As of March 31, 2000 no warrants have been redeemed.
(6) Net Loss Per Common Share:
--------------------------
Net loss per common share is computed in accordance with the requirements of
Statement of Financial Accounting Standards No. 128 (SFAS 128). SFAS 128
requires net loss per share information to be computed using a simple weighted
average of common shares outstanding during the periods presented. In computing
diluted loss per share, warrants exercisable into 355,220 common shares were
excluded because the effect is antidilutive.
(7) Discontinued Operations:
------------------------
On April 19, 2000, the Company sold or disposed of 100% of the assets and
liabilities of its carwash and quick-lube segment. The sale price was $1,000,000
and the Company received approximately $223,000 after selling expenses and
payment of related mortgages. The results of operations for the periods
presented are reported as a component of discontinued operations in the
statements of operations. Additionally, the loss incurred on the sale of the
operations is also presented separately as a component of discontinued
operations. The estimated loss on the disposal of the discontinued operations of
$350,000 represents the estimated loss on sale of the segment assets and
operations through the disposal date.
Summarized results of carwash and quick-lube operations for the three-months
periods ended March 31, 2000 and 1999 are as follows:
Three-Months Ended
--------------------------
March 31, March 31,
2000 1999
------------ ---------
Net sales $ 67,574 $ 40,361
========= ==========
Operating loss $ (56,425) $ (75,699)
========= ==========
Loss from discontinued operations $ (56,425) $ (75,699)
========= ==========
8
<PAGE>
SWIFTYNET.COM, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(7) Discontinued Operations: (Continued)
------------------------
The assets and liabilities of the carwash segment that were disposed of or sold
consisted of the following in the March 31, 2000 balance sheet:
Assets
Property and equipment, net $ 1,241,653
Loan costs, net 13,183
Other assets 7,060
------------
1,261,896
------------
Liabilities
Note payable, equipment 155,747
Mortgage payable 507,744
Accrued property taxes 11,300
674,791
Net assets to be disposed of ------------
$ 587,105
============
9
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operations.
The following discussion and analysis should be read in conjunction with the
Condensed Financial Statements and the related Notes thereto included elsewhere
in this report. This report contains forward-looking statements that involve
risks and uncertainties. The Company's actual results may differ significantly
from the results discussed in the forward-looking statements. These and
additional risk factors are identified in our annual report to the Securities
and Exchange Commission filed on forms 10-KSB and in other SEC filings.
PLAN OF OPERATION
In April, 2000, the Company sold its car wash and quick lube shop (the Center)
to allow the Company to focus its efforts entirely on its internet business. The
Company plans to focus all its attentions for the next year on its subsidiary
Rankstreet.com, Inc. and other potential acquisitions of Internet related
companies. The sale of the Center resulted in net cash proceeds of approximately
$223,000 which will provide working capital to further the development of the
Company's internet business.
As of March 31, 2000, the Company had a negative working capital position,
before sale of the Center, and had accumulated losses since inception. The
Company's loss from continuing operations for the three months ended March 31,
2000 was $200,278. Of this amount, approximately half consisted of depreciation
and amortization or salaries contributed to the Company. Therefore the cash used
in continuing operations was approximately $100,000. The sale of the car wash
and quick lube shop generated approximately $223,000 in cash after the payoff of
both mortgages on the Center. These funds will be used to reduce accounts
payable and to fund working capital for the next year. After the sale of the
Center, the Company has one note payable totaling approximately $17,000 and
normal recurring accounts payable. Additionally, the Company has few fixed
general and administrative expenses. Since inception, two of the Company
employees have contributed their salaries to the Company, reducing cash
requirements. The other two Company employees are paid from profits only, again
limiting cash requirements. The Company believes that the cash generated from
the Center sale, and continuing stockholder loans as needed, will be sufficient
to meet normal operating requirements.
The Company is actively seeking to raise money to fund expansion plans. Early in
2000, the Company entered into a Regulation D limited offering of its stock, to
raise a maximum of $5,000,000. As of March 31, 2000, $36,980 has been raised
through this offering.
The Company's expansion plans include the launching and marketing of
Rankstreet.com. In December 1999, the Company acquired all the outstanding stock
of Rankstreet.com, Inc. in a stock for stock transaction that required no cash
outflow. Rankstreet.com launched its Web site in early May 2000. This all-in-one
Web site includes a directory, Web counter and business to business Internet
advertising agency. The primary function of the Web site is to provide
comparative statistical analysis of Internet advertising.
The Company is currently sending out e-mails to more than 2.3 million Web
publishers inviting them to list their site on Rankstreet.com. This form of
marketing will be on going. The Company also is running a promotion until
December 31, 2000 to attract more listing on Rankstreet.com. The $3 million
advertising sweepstakes will give three entrants $1 million each in advertising
space on Rankstreet.com. These marketing activities require minimal amounts of
cash.
The software development costs to launch the initial Rankstreet.com web site
have been expended as of March 31, 2000. These costs were funded through
operations and stock sales in December 1999 and the first quarter of 2000.
Additional enhancements to the Web site will take place, as funds are available.
The Company plans to generate revenues from its Web site in several ways.
Revenues will be generated through the sale of banner advertising, commissions
earned from selling advertising for participating web sites, and consulting
related to Internet marketing. The Company will also design banner ads for
advertisers for a fee.
The Company's expansion plans also include acquiring and developing other unique
Internet companies. No businesses have been selected or are under consideration
for acquisition.
The Company does not have any planned major purchases of property and equipment
and does not anticipate any additional debt financing in 2000. The Company is
currently seeking more office space for expanding operations. This includes the
hiring of ad sales professionals, Web designers, software engineers and
administrative personnel.
10
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The success and magnitude of the above described expansion plans are dependent
upon the Company's ability to raise funds. In March 2000, the Company entered
into a Regulation D private placement to raise $5,000,000 through the sale of
5,000,000 units. Each unit consists of one common share and one warrant to
purchase common shares at $7.25 through February 2002. If the Company is
successful in raising the $5,000,000, plans are to use the funds for Web
development ($500,000), advertising and marketing ($1,250,000), acquisitions
($2,250,000) and working capital ($1,000,000).
Part II - Other Information
Item 2. Changes in Securities and Use of Proceeds
On January 3, 2000, the Company authorized the issuance of 60,000 shares of
common shares to Marlene Trupiano and 40,000 common shares to John and Mildred
Martinez in consideration of their services in designing and constructing the
Company's World Wide Web site. The common shares were issued in a private
transaction pursuant to an exemption from registration pursuant to Section 4(2)
of the Securities Act.
11
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Item 6. Exhibits and Reports on Form 8-K
Exhibit Description Number
(2)Plan of Acquisition, Reorganization,
Arrangement, Liquidation or Succession......................................
(3)Articles of Incorporation and By-Laws.....................................
*(3.1)Articles of Incorporation.............................................
**(3.2)By-Laws.............................................. ................
(3.4) Name Change Amendment................................................
(4)Instruments Defining the Rights of Security Holders
*(4.1)Subscription Agreement................................................
*(4.2)Warrant Agreement.....................................................
(4.3)Warranty Agreement 2000
(10)Material Contracts.......................................................
*(10.1)Equipment Purchase Contract..........................................
*(10.2)Construction Contract................................................
*(10.3)Architect Contract...................................................
*(10.4)Consulting Contract-Donald Hughes....................................
*(10.5)Employment Contract-Stanley Rabushka.................. ..............
*(10.6)Promissory Note - Swifty.............................................
*(10.7)Promissory Note - Steele ............................................
*(10.8)Consulting Contract-John Oster ......................................
*(10.9)Raymond Lipsch Contract .............................................
*(10.10)Land Purchase Contract..............................................
**(10.11) Stanley Rabushka Employment and Stock Agreement...................
**(10.12) Tampa Bay Buccaneers Agreement....................................
***(10.13)Edgar Arvelo Consulting Contract...................................
***(10.14)Richard Kleinberg Employment Contract..............................
***(10.15)Vladimir Rafalovich...............................................
***(10.16)Martinez Consulting Contract.......................................
****(10.17)Purchase and Sale Contract between Jim Malak
and/or Assigns and SwiftyNet.com, Inc.
dated April 6, 2000.............................................
(11)Statement re: computation of per share earnings................Note 6 to
Financial
Statements
(15)Letter re: Unaduited Itnerim Financial Information..................None
(16)Letter regarding Changes in Certifying Accountant...................None
(18)Letter on change in accounting principles...........................None
(19)Report Furnished to Security Holders ...............................None
(22)Published report regarding matters submitted to vote................None
(23)Consents of Experts and Counsel.....................................None
(24)Power of Attorney...................................................None
****(27)Financial Data Schedule.................................................
(99)Additional Exhibits.................................................None
* Previously filed fir Form 10-SB on November 23, 1998.
**Previously filed with Form 10-SBA No. 1 on Februiary 2, 1999.
*** Previously filed with Form 10-KSB filed on March 30, 2000.
****Filed herewith.
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SWIFTYNET.COM, INC.
SIGNATURE TITLE DATE
/s/Rachel Steele
__________________ President, Secretary May 12, 2000
Rachel Steele
/s/Raymond Lipsch
________________ Chief Executive Officer, Treasurer May 12, 2000
Raymond Lipsch Chief Financial Officer
13
<PAGE>
PURCHASE AND SALE CONTRACT
1. PURCHASE AND SALE: JIM MALAK AND/OR ASSIGNS ("Buyer") agrees to buy and
SWIFTYNET.COM, INC. ("Seller") agrees to sell the property described as: Street
Address: 32663 U.S. Hwy. 19 N, Palm Harbor, FL 34684 (Swifty Carwash &
Quik-Lube) Legal Description: see attached Schedule A
And the following Personal Property: all property, equipment, tools, inventory
located on the property; all lists must be provided and agreed to, (all
collectively referred to as the "Property") on the terms and conditions set
forth below. The "Effective Date" of this Contract is the date on which the last
of the Parties signs the latest offer. Time is of the essence in this Contract.
Time periods of 5 days or less will be computed without including Saturday,
Sunday or national legal holidays and any time period ending on a Saturday,
Sunday, or national legal holiday will be extended until 5:00 p.m. of the next
business day.
2. PURCHASE PRICE: $1,000,000.00
(a) Deposit held in escrow by upon acceptance $ 25,000.00
(b) Additional deposit to be made within
__-___ days from Effective Date
(c) Total mortgages (as referenced in Paragraph 3) $ 350,000.00
(d) Other:
(e) Balance to close, subject to adjustments
and prorations, to be made with cash, locally
drawn certified or cashier's check or wire transfer. $625,000.00
3. THIRD PARTY FINANCING: Within 5 days from Effective Date ("Application
Period"), Buyer will, at Buyer's expense, apply for third party financing in the
amount of $350, 000.00 or -% of the purchase price to be amortized over a period
of _-_ years and due - - in no less than __-_ years and with a fixed interest
rate not to exceed _-_% per year or variable interest rate not to exceed _-_% at
- - - - origination with a lifetime cap not to exceed _-_ % from initial rate,
with additional terms as follows: __-_ to be determined.
Buyer will pay for the mortgagee title insurance policy and for all loan
expenses. Buyer will timely provide any and all credit, employment, financial
and other information reasonably required by any lender. Buyer will notify
Seller immediately upon obtaining financing or being rejected by a lender. If
Buyer, after diligent effort, fails to obtain a written commitment within 10
days from Effective Date ("Financing Period"), Buyer may cancel the Contract by
giving prompt notice to Seller and Buyer's deposit(s) will be returned to Buyer
in accordance with Paragraph 9.
<PAGE>
4. TITLE: Seller has the legal capacity to and will convey marketable title to
the Property by statutory warranty deed -X- other warranty deed, free of liens,
easements and encumbrances of record or known to Seller, but subject to property
taxes for the year of closing; covenants, restrictions and public utility
easements of record; and (list any other matters to which title will be
subject):
provided there exists at closing no violation of the foregoing and none of them
prevents Buyer's intended use of the Property as car wash and 10-minute oil
change.
(a) Evidence of Title: Seller will, at (check one) -X- Seller's Buyer's expense
and within 7 days from Effective Date -X- prior to Closing Date from date Buyer
meets or waives financing contingency in Paragraph 3, deliver to Buyer (check
one)-X- a title insurance commitment by a Florida licensed title insurer and,
upon Buyer recording the deed, an owner's policy in the amount of the purchase
price for fee simple title subject only to exceptions stated above.
an abstract of title, prepared or brought current by an existing abstract firm
or certified as correct by an existing firm. However, if such an abstract is not
available to Seller, then a prior owner's title policy acceptable to the
proposed insurer as a base for reissuance of coverage. The prior policy will
include copies of all policy exceptions and an update in a format acceptable to
Buyer from the policy effective date and certified to Buyer or Buyer's closing
agent together with copies of all documents recited in the prior policy and in
the update.
(b) Title Examination: Buyer will, within 15 days from receipt of the evidence
of title deliver written notice to Seller of title defects. Title will be deemed
acceptable to Buyer if (1) Buyer fails to deliver proper notice of defects or
(2) Buyer delivers proper written notice and Seller cures the defects within 3
days from receipt of the notice ("Curative Period"). If the defects are cured
within the Curative Period, closing will occur within 10 days from receipt by
Buyer of notice of such curing. Seller may elect not to cure defects if Seller
reasonably believes any defect cannot be cured within the Curative Period. If
the defects are not cured within the Curative Period, Buyer will have 10 days
from receipt of notice of Seller's inability to cure the defects to elect
whether to terminate this Contract or accept title subject to existing defects
and close the transaction without reduction in purchase price. The party who
pays for the evidence of title will also pay related title service fees
including title and abstract charges and title examination.
(c) Survey: (check applicable provisions below)
-X- Seller will, within 5 days from Effective Date, deliver to Buyer copies
of prior surveys, plans, specifications, and engineering documents, if any, and
the following documents relevant to this transaction: ____________-_______,
prepared for Seller or in Seller's possession, which show all currently existing
structures.
- -X- Buyer will, at Seller's -X- Buyer's expense and within the time period
allowed to deliver and examine title evidence, obtain a current certified survey
of the Property from a registered surveyor. If the survey reveals encroachments
on the Property or that the improvements encroach on the lands of another, Buyer
will accept the Property with existing encroachments -X- such encroachments will
constitute at title defect to be cured within the Curative Period.
(d) Ingress and Egress: Seller warrants that the Property presently has ingress
and egress.
(e) Possession: Seller will deliver possession and keys for all locks and alarms
to Buyer at closing.
5. CLOSING DATE AND PROCEDURE: This transaction will be closed in Pinellas
County, Florida on or before the - 19 or within 10 days from Effective Date
("Closing Date"), unless otherwise extended herein. Seller Buyer will designate
the closing agent. Buyer and Seller will, within 5 days from Effective Date,
deliver to Escrow Agent signed instructions which provide for closing procedure.
If an institutional lender is providing purchase funds, lender requirements as
to place, time of day, and closing procedures will control over any contrary
provisions in this Contract.
(a) Costs: Buyer will pay taxes and recording fees on notes, mortgages and
financing statements and recording fees for the deed. Seller will pay taxes on
the deed and recording fees for documents needed to cure title defects. If
Seller is obligated to discharge any encumbrance at or prior to closing and
fails to do so, Buyer may use purchase proceeds to satisfy the encumbrance.
(b) Documents: Seller will provide the deed, bill of sale, mechanic's lien
affidavit, assignments of leases, updated rent roll, tenant and lender estoppel
letters, assignments of permits and licenses, corrective instruments and letters
notifying tenants of the change in ownership/rental agent. If any tenant refuses
to execute an estoppel letter, Seller will certify that information regarding
the tenant's lease is correct. If Seller is a corporation, Seller will deliver a
resolution of its Board of Directors authorizing the sale and delivery of the
deed and certification by the corporate Secretary certifying the resolution and
setting forth facts showing the conveyance conforms with the requirements of
local law. Seller will transfer security deposits to Buyer. Buyer will provide
the closing statement, mortgages and notes, security agreements and financing
statements.
<PAGE>
(c) Taxes, Assessments, and Prorations: the following items will be made current
and prorated - as of Closing Date -X- as of closing date,: real estate taxes,
bond and assessment payments assumed by Buyer, interest, rents, association
dues, insurance premiums acceptable to Buyer, operational expenses and
________-________. If the amount of taxes and assessments for the current year
cannot be ascertained, rates for the previous year will be used with due
allowance being made for improvements and exemptions. Seller is aware of the
following assessments affecting or potentially affecting the Property:
____-______________ Buyer will be responsible for all assessments of any kind
which become due and owing on or after Effective Date, unless the improvement is
substantially completed as of Closing Date, in which case Seller will be
obligated to pay the entire assessment.
(d) FIRPTA Tax Withholding: The Foreign Investment in Real Property Act
("FIRPTA") requires Buyer to withhold at closing a portion of the purchase
proceeds for remission to the Internal Revenue Service ("I.R.S.") if Seller is a
"foreign person" as defined by the Internal Revenue Code. The parties agree to
comply with the provisions of FIRPTA and to provide, at or prior to closing,
appropriate documentation to establish any applicable exemption from the
withholding requirement. If withholding is required and Buyer does not have cash
sufficient at closing to meet the withholding requirement, Seller will provide
the necessary funds and Buyer will provide proof to Seller that such funds were
properly remitted to the I.R.S.
6. ESCROW: Buyer and Seller authorize John Martin, Esq. Telephone: 727-467-9471
Address: 401 S. Lincoln Ave. Clearwater, FL 33756 to act as "Escrow Agent" to
receive funds and other items and subject to clearance, disburse them in
accordance with the terms of this Contract. Escrow Agent will deposit all funds
received in a non-interest bearing escrow account an interest bearing escrow
account with interest accruing to -N/A- with interest disbursed (check one) at
closing at ____-__ Intervals. If Escrow Agent receives conflicting demands or
has a good faith doubt as to Escrow Agent's duties or liabilities under this
Contract, he/she may (a) hold the subject matter of the escrow until the parties
mutually agree to its disbursement or until issuance of a court order or
decision of arbitrator determining the parties rights regarding the escrow or
(b) deposit the subject matter of the escrow with the clerk of the circuit court
having jurisdiction over the dispute. Upon notifying the parties of such action,
Escrow Agent will be released from all liability except for the duty to account
for items previously delivered out of escrow. If a licensed real estate broker,
Escrow Agent will comply with applicable provisions of Chapter 475, Florida
Statutes. In any suit or arbitration in which Escrow Agent is made a party
because of acting as agent hereunder or interpleads the subject matter of the
escrow. Escrow Agent will recover reasonable attorneys' fees and costs at all
levels, with such fees and costs to be paid from the escrowed funds or
equivalent and charged and awarded as court or other costs in favor of the
prevailing party. The parties agree that Escrow Agent will not be liable to any
person for misdelivery to Buyer or Seller of escrowed items, unless the
misdelivery is due to Escrow Agent's willful breach of this Contract or gross
negligence.
7. PROPERTY; CONDITON: Seller will deliver the Property to Buyer at the time
agreed in its present "as is" condition, ordinary wear and tear excepted and
will maintain the landscaping and grounds in a comparable condition. Seller
makes no warranties other than marketability of title. By accepting the Property
"as is," Buyer waives all claims against Seller for any defects in the property,
(Check (a) or (b))
(a) As Is: Buyer has inspected the Property or waives any right to Inspect and
accepts the Property in its "as is" condition. -X- (b) Due Diligence Period:
Buyer will, at Buyer's expense and within five (5) days from Effective Date
("Due Diligence Period"), determine whether the Property is suitable, in Buyer's
sole and absolute discretion, for Buyer's intended use and development of the
Property as specified in Paragraph 4. During the Due Diligence Period, Buyer may
conduct any tests, analyses, surveys and investigations ("inspections") which
Buyer deems necessary to determine to Buyers satisfaction the properties
engineering, architectural, environmental properties: zoning and zoning
restrictions: flood zone designation and restrictions: subdivision regulations,
soil and grade; availability of access to public roads, water, and other
utilities; consistency with local, state and regional growth management and
comprehensive land use plans; availability of permits, government approvals and
licenses; compliance with American with Disabilities Act; absence of asbestos,
soil and ground water contamination; and other inspections that Buyer deems
appropriate to determine the suitability of the Property for Buyer's intended
use and development. Buyer shall deliver written notice to Seller prior to the
expiration of the Due Diligence Period of Buyer's determination of whether or
not the Property is acceptable. Buyer's failure to comply with this notice
requirement shall constitute acceptance of the Property in its present `as is"
condition. Seller grants to Buyer, its agents, contractors and assigns, the
right to enter the Property at any time during the Due Diligence Period for the
purpose of conducting inspections; provided, however, that Buyer, its agents,
contractors and assigns enter the Property and conduct inspections at their own
risk. Buyer shall indemnify and hold Seller harmless from losses, damages,
costs, claims and expenses of any nature, including attorneys' fees at all
levels, and from liability to any person, arising from the conduct of any and
all inspections or any work authorized by Buyer. Buyer will not engage in any
activity that could result in a mechanic's lien being filed against the Property
without Seller's prior written consent. In the event this transaction does not
close, (1) Buyer shall repair all damages to the Property resulting from the
Inspections and return the Property to the condition it was in prior to conduct
of the Inspections, and Buyer shall, at Buyers expense, release to Seller all
reports and other work generated as a result of the Inspections. Should Buyer
deliver timely notice that the Property is not acceptable, Seller agrees that
Buyer's deposit shall be immediately returned to Buyer and the Contract
terminated, without further obligation of either party.
<PAGE>
(c) Walk-through Inspection: Buyer may on the day prior to closing or any other
time mutually agreeable to the parties, conduct a final "walk-through"
inspection of the Property to determine compliance with this paragraph and to
ensure that all Property is on the premises.
(d) Disclosures:
(1) Radon Gas: Radon is a naturally occurring radioactive gas that, when it has
accumulated in a building in sufficient quantities, may present health risks to
persons who are exposed to it over time. Levels of radon that exceed federal and
state guidelines have been found in buildings in Florida. Additional information
regarding radon and radon testing may be obtained from your county public health
unit.
(2) Energy Efficiency: Buyer may have determined the energy efficiency rating of
the building, if any is located on the Real Property.
8. OPERATION OF PROPERTY DURING CONTRACT PERIOD; Seller will continue to operate
the Property and any business conducted on the Property in the manner operated
prior to Contract and will take no action that would adversely impact the
Property, tenants, lenders or business, if any. Any changes, such as renting
vacant space, that materially affect the Property of Buyer's intended use of the
Property will be permitted only with Buyers consent without Buyer's consent.
9. RETURN OF DEPOSIT: Unless otherwise specified in the Contract, in the event
any condition of this Contract is not met and Buyer has timely given any
required notice regarding the condition having not been met, Buyer's deposit
will be returned in accordance with applicable Florida laws and regulations.
10. DEFAULT:
(a) In the event the sale is not closed due to any default or failure on the
part of Seller other than failure to make the title marketable after diligent
effort, Buyer may either (1) receive a refund of Buyer's deposit(s) or (2) seek
specific performance. If Buyer elects a deposit refund, Seller will be liable to
Broker for the full amount of the brokerage fee.
(b) In the event the sale is not closed due to any default or failure on the
part of Buyer, Seller may either (1) retain all deposit(s) paid or agreed to be
paid by Buyer as agreed upon liquidated damages, consideration for the execution
of this Contract, and in full settlement of any claims, upon which this Contract
will terminate or (2) seek specific performance. If the Seller retains the
deposit, Seller will pay the Listing and Cooperating Brokers named in Paragraph
12 fifty percent of all forfeited deposits retained by Seller (to be split
equally among the Brokers) up to the full amount of the brokerage fee.
11. ATTORNEY'S FEES AND COSTS: In any claim or controversy arising out of
or relating to this Contract, the prevailing party, which for purposes of this
provision will include Buyer, Seller and Broker, will be awarded reasonable
attorney's fees, costs and expenses.
12. BROKERS: Neither Buyer nor Seller has utilized the services of, or for any
other reason owes compensation to, a licensed real estate Broker other than: (a)
Listing Broker. Murphy Business & Financial Services, Inc. who is an agent of
________-_________ a transaction broker a - nonrepresentative and who will be
compensated by -X- Seller Buyer both parties pursuant to -X- a listing agreement
other (specify) 50% of paid commission (total commission 7%)
(b) Cooperation Broker: Hospitality Realty International, Inc. who is an agent
of __________ -X-a transaction broker a nonrepresentative and who will be
compensated by Buyer -X- Seller both parties pursuant to an MLS or other offer
of compensation to a cooperating broker other (specify) 50% of paid commission
(total commission 7%) (collectively referred to as "Broker") in connection with
any act relating to the Property, including but not limited to inquiries,
introductions, consultations and negotiations resulting in this transaction.
Seller and Buyer agree to indemnify and hold Broker harmless from and against
losses, damages, costs and expenses of any kind, including reasonable attorneys'
fees at all levels, and from liability to any person, arising from (1)
compensation claimed which is inconsistent with the representation in this
Paragraph. (2) enforcement action to collect to brokerage fee pursuant to
Paragraph 10, (3) any duty accepted by Broker at the request of Buyer or Seller,
which duty is beyond the scope of services regulated by Chapter 475, F.S., as
amended, or (4) recommendations of or services provided and expenses incurred by
any third party whom Broker refers, recommends or retains for or on behalf of
Buyer or Seller.
13. ASSIGNABILITY; PERSONS BOUND: This Contract may be assigned to a related
entity, and otherwise is not assignable is assignable. The terms "Buyer,"
"Seller" and "Broker" may be singular or plural. This Contract is binding upon
Buyer, Seller and their heirs, personal representatives, successors and assigns
(if assignment is permitted).
<PAGE>
14. OPTIONAL CLAUSES: (Check if any of the following clauses are applicable and
are attached as an addendum to this Contract).
[ ] Arbitration [ x] Seller Warranty
[x] Section 1031 Exchange [ ] Coastal Construction Control Line
[ ] Property Inspection & Repair [ ] Existing Mortgage
[ ] Flood Area Hazard Zone [ ] Seller Financing
[x] Seller Representations
[ ] Existing Mortgage
[x] Other: Addendum No. 1 attached
15. MISCELLANEOUS: The terms of this Contract constitute the entire agreement
between Buyer and Seller. Modifications of this Contract will not be binding
unless in writing, signed and delivered by the party to be bound. Signatures,
initials, documents referenced in this Contract, counterparts and written
modifications communicated electronically or on paper will be acceptable for all
purposes, including delivery, and will be binding. Handwritten or typewritten
terms inserted in or attached to this Contract prevail over preprinted terms. If
any provision of this Contract is or becomes invalid or unenforceable, all
remaining provisions will continue to be fully effective. This Contract will be
construed under Florida law and will not be recorded in any public records.
Delivery of any written notice to any party's agent will be deemed delivery to
that party.
This is intended to be a legally binding contract, if not fully understood, seek
the advice of an attorney prior to signing. broker advises buyer and seller to
verify all facts and representations that are important to them and to consult
an appropriate professional for legal advice (for example, interpreting
contracts, determining the effect of laws on the property and transaction,
status of title, foreign investor reporting requirements, etc.) and for tax,
property; condition, environmental and other specialized advice. buyer
acknowledges that broker does not occupy the property and that all
representations (oral, written or otherwise) by broker are based on seller
representations or public records unless broker indicates personal verification
of the representation. buyer agrees to rely solely on seller, professional
inspectors and governmental agencies for verification of the property condition,
square footage and facts that materially affect property value.
Deposit Receipt: Deposit $____________by [ ] _____________check
[ ] other_______________ received on ______________, 200_____
by_____________________________________
Signature of Escrow Agent
OFFER; Buyer offers to purchase the Property on the above terms and conditions.
Unless acceptance is signed by Seller and a signed copy delivered to Buyer or
Buyer's agent no later than 5:00PM [ ]a.m. [ ]p.m. on April 8, 2000.
Buyer may revoke this offer and receive a refund of all deposits.
Date:.____________ Buyer:__________________ Tax ID NO:__________________
Title:__________________ Telephone:_________________
Facsimile:_______________
Address:___________________________________________
Date:_____________ Buyer: _______________ Tax ID NO:________________
Title:________________ Telephone:________________
Facsimile:_____________
Address:___________________________________________
ACCEPTANCE: Seller accepts Buyer's offer and agrees to sell the Property on the
above terms and conditions ([ ] subject to the attached counter offer).
Date: 4-6-00 Seller: SwiftyNet.com, Inc.:
/s/ Rachel Steele
-------------------------------
Rachel Steele, As President
Tax ID NO: 65-0783722 Title: President
Telephone: 813-926-1603 Facsimile: 813-926-1707
Address: 17521 Crawley Rd., Odessa FL 33556
<PAGE>
Addendum No 1
(1) The Commercial Contract between SwiftyNet.com, Inc.. ("Seller") and JIM
MALAK AND/OR ASSIGNS, ("Buyer") concerning the sale and purchase of the Property
described as: Swifty Carwash & Quick-Lube, 32663 U.S. Hwy 19, North, Palm
Harbor, FL 34684
The clauses below shall be incorporated into the Contract referenced above only
if initiated by all parties.
Section 1031 Exchange -X- Buyer Seller request a Section 1031 tax deferred
exchange in connection with this transaction. The parties agree to cooperate in
effecting the exchange in accordance with Section 1031 of the Internal Revenue
Code, including execution of any documents that may be reasonably necessary to
effect the exchange provided that (1) the party requesting the exchange shall
bear all additional costs incurred in connection with the exchange (2) the non
requesting party shall not be obligated to delay the closing or to execute any
note, contract, or other document providing for any personal liability which
would survive the exchange.
_______/______/: _____/_____ SELLER REPRESENTATIONS: Seller shall, within 10
days from Effective Date and at Seller's expenses, deliver to Buyer current
copies of the rent roll, leases, notes and mortgages existing like reports or
policies surveys, permits and certificates of occupancy, certified incoming and
expense statements for the period, January 1, 1999 through December 31, 1999 as
Evidence that the Property generated income of $_--________ against expenses of
$____--____ and agreements with third parties that will remain in effect after
closing. Buyer may terminate this Contract by written notice to Seller within 3
days after receipt of the above documents if the statements differ materially
from Seller's representations. If Buyer fails to provide timely written notice,
Buyer shall be deemed to waive this contingency.
________/_______ : ______/_______ SELLER WARRANTY: Seller warrants-that Seller
has no knowledge of (1) notice of city, county, state, federal, building zoning,
health codes, regulations or ordinances filed (1) issued against the Property,
(2) current pending lawsuits, investigation(s) inquiry (es) ,action(s), or other
proceedings(s) or the right to use and occupy the Property. (3) unsatisfied
construction liens, (4) incompatibility of property with land use plans, (5)
tenants in bankruptcy, or (6) special assessment, condemnation, eminent domain,
change in grade of public streets affecting the Property or similar proceedings
affecting the Property. If Seller is notified of any of the above matters prior
to closing, Seller shall notify Buyer in writing within 30 days. If Buyer
requires the matter to be corrected prior to closing, Buyer shall notify Seller
in writing within 10 days from receipt of Seller's notice. Buyer's failure to
provide timely notice shall be deemed acceptable of the Property with the matter
as it then exists. If Seller is unable or unwilling to correct the matter prior
to closing, Buyer may terminate this Contract. Seller warrants that, as of
Effective Date, execution of this Contract and delivery of title is not a
violation or breach of any agreement or judgment to which Seller is a party.
_____/______:______/________OTHER TERMS AND CONDITIONS;
1. This offer is contingent on Buyer's attorney having three days from effective
date to review contract.
2. Seller shall within three (3) business days of effective date take such
action as is reasonably necessary to secure director approval of the sale.
<PAGE>
EXHIBIT "A"
Legal Description for Lot 1, Champion Hills Commercial Center:
Commence at the Northwest corner of the Northeast 1/4 of Section 7, Township 28
South, Range 16 East, Pinellas County, Florida, run along the East-West Section
line S 88(degree)50'33" E, a distance of 101.01 feet to the East right-of-way
line of U.S. Highway 19 (S.R. 55); thence South along the said East right-of-way
line of U.S. Highway 19, S 00(degree)27'10" W, a distance of 66.58 feet to a
point of beginning, thence leaving said Easterly right-of-way line of U.S.
Highway 19, N 89(degree)13'19"E, a distance of 304.06 feet, thence run S
24(degree)47'57" E, a distance of 109.42 feet, thence run S 89(degree)13'19" W,
a distance of 125.75 feet, thence run S 65(degree)35'29" W, a distance of 62.46
feet, thence run S 89(degree)13'19" W, a distance of 168.32 feet to the Easterly
right-of-way line of said U.S. Highway 19, thence run N along the said Easterly
right of way line of U.S. Hwy 19 N 00(degree)27'10" E, a distance of 125.02 feet
to the point of beginning.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Financial
Statements for the three (3) months ended March 31, 2000, and is qualified in
its entirety by reference to such form 10-QSB for quarterly period ended March
31, 2000.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-END> Mar-31-2000
<CASH> 2,929
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 7,060
<CURRENT-ASSETS> 35,489
<PP&E> 1,435,286
<DEPRECIATION> 83,088
<TOTAL-ASSETS> 2,902,755
<CURRENT-LIABILITIES> 213,233
<BONDS> 0
<COMMON> 1,107
0
0
<OTHER-SE> 1,716,986
<TOTAL-LIABILITY-AND-EQUITY> 2,902,755
<SALES> 0
<TOTAL-REVENUES> 37
<CGS> 0
<TOTAL-COSTS> 200,315
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (200,278)
<INCOME-TAX> 0
<INCOME-CONTINUING> (200,278)
<DISCONTINUED> (406,425)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (606,703)
<EPS-BASIC> (.06)
<EPS-DILUTED> (.06)
</TABLE>
