UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ANYTHING INTERNET CORPORATION
---------------------------------------------
(Name OF Small Business Issuer in its Charter)
COLORADO 5961 84-1425882
---------------------- ---------------------- ----------------------
(State or jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industry Identification Number)
organization) Classification Code
Number)
3020 NORTH EL PASO, SUITE 103
COLORADO SPRINGS, CO 80907
719-227-1903
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(Address and Telephone Number of Principal Executive offices)
ROBERT C. SCHICK
3020 NORTH EL PASO, SUITE 103
COLORADO SPRINGS, CO 80907
719-227-1903
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(Name, Address and Telephone Number of Agent for Service)
Copies of all Communications to:
WILLIAM M. ZIERING, ESQ.
FOUR EMBARCADERO CENTER, SUITE 3400
SAN FRANCISCO, CA 94111-4187
TELEPHONE: 415-956-0161
FACSIMILE: 415-398-3249
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Approximate date of commencement of proposed sale to the public: As soon as
practical after this Registration Statement becomes effective and the Warrants
representing the Common Stock being registered herein are exercised.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act please
check the following box. [X]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------
Proposed Proposed
Title of Each Maximum Maximum
Class of Offering Aggregate Amount of
Securities to Amount to be Price per Offering Registration
be Registered Registered Share(1) Price(1) Fee
- ------------- ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Common Stock,
no par value,
underlying
Outstanding
Warrants 200,000 $ 3.00 $ 600,000 $ 166.80
- ------------- ------------- ----------- ----------- ------------
Total $ 166.80
<FN>
(1) The maximum offering price per share of the Common Stock has been
calculated pursuant to Rule 457(g).
</TABLE>
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATES AS MAY BE
NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER
AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES
ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS
THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION"), ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
EXPLANATORY NOTE
This Registration Statement covers the registration of the following
securities of Anything Internet Corporation, a Colorado corporation ("the
Company"): 200,000 shares of Common Stock, no par value, underlying warrants
issued in connection with a private placement of Units completed in December
1998 made in accordance with an exemption from registration under Regulation D,
Rule 504 of the Securities Act, which entitles the holder to purchase one share
of Common Stock exercisable at $3.00 per share.
PART I
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FRONT OF REGISTRATION STATEMENT AND OUTSIDE FRONT COVER PAGE OF PROSPECTUS.
Sales of the securities being registered will be made solely to existing
warrant holders voluntarily exercising their warrants. The Company is not
engaging in a general underwriting which would require a prospectus.
INSIDE FRONT AND OUTSIDE BACK COVER PAGES OF PROSPECTUS.
Sales of the securities being registered will be made solely to existing
warrant holders voluntarily exercising their warrants. The Company is not
engaging in a general underwriting which would require a prospectus.
SUMMARY INFORMATION AND RISK FACTORS.
An investment in shares of the Company is speculative and involves a high
degree of risk. In addition to the other information contained in this
Registration Statement, a potential investor should carefully consider the
following factors identified by the Company in evaluating the Company and its
business before purchasing shares of its Common Stock, no par value (the "Common
Stock").
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DEVELOPMENT-STAGE COMPANY; LIMITED OPERATING HISTORY.
The Company was incorporated under the laws of the state of Colorado on
August 15, 1997, and began selling computer hardware, software and peripheral
products through its Internet storefronts in December 1997. Accordingly, the
Company has a limited operating history on which to base an evaluation of its
business and prospects. Furthermore, the Company has no significant assets and
limited sales and earnings history. The Company's prospects must be considered
in light of the risks, expenses and difficulties frequently encountered by
companies in their early stages of development, particularly companies in new
and rapidly evolving markets such as online commerce. To address these risks,
the Company must, among other things, maintain and increase its customer base,
maintain and develop relationships with suppliers, distributors and
manufacturers, implement and successfully execute its business and marketing
strategies, continue to develop and upgrade its technology and
transaction-processing systems, continually improve its Internet storefronts,
provide superior customer service and order fulfillment, respond to competitive
developments, and attract, retain and motivate qualified personnel. There can
be no assurance that the Company will be successful in addressing such risks,
and the failure to do so could have a material adverse effect on the Company's
business, financial condition and results of operations.
LIMITED CAPITAL; NEED FOR ADDITIONAL FUNDING.
The Company presently has limited operating capital and will require
additional capital to continue the development of its Internet storefronts,
expansion of its operations, extend marketing efforts, and cover operating
losses until the Company is able to become profitable. Because of the
speculative and unproven nature of the Company's business, management is unable
to calculate the amount of additional capital the Company may have to raise,
though such amounts may be substantial. The extent and timing of such capital
requirements will depend on many factors, including continued growth and
acceptance of the Company's Internet storefronts, increasing brand awareness and
entering strategic relationships to expand the number of products the Company
may resell. The Company will need to raise additional funds through
collaborations with corporate partners or through private or public financings
in order to support its long-term viability and expansion plans. The ability of
the Company to raise capital will be dependant upon the perceived ability of the
Company to expand its Internet storefronts, generate new and repeat business
and, ultimately, to generate enough sales to yield a net operating profit. Any
additional equity financing may be dilutive to current shareholders. There is
therefore a risk that the needed capital to run the business will fall short of
the desired amount which could have a material adverse effect on the Company's
business, financial condition and results of operations.
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UNPREDICTABILITY OF FUTURE OPERATING RESULTS; SEASONALITY.
As a result of the Company's limited operating history and the emerging
nature of the markets in which it operates, the Company may not be able to
accurately predict its revenues. Furthermore, sales within the computer
industry are substantially affected by new product releases from manufacturers.
Historically, such releases tend to maintain or increase overall sales revenues.
Therefore, a lack of or delay in new product releases by manufacturers can
negatively impact the Company's revenues. The Company's current and future
expense levels are based largely on its investment plans and estimates of future
revenues. Sales and operating results generally depend on the volume of, timing
of, and ability to fulfill orders received, which are difficult to forecast.
The Company may be unable to adjust spending in a timely manner to compensate
for any unexpected revenue shortfall. Accordingly, any significant shortfall in
revenues in relation to the Company's planned expenditures would have an
immediate adverse effect on the Company's business, prospects, financial
condition, and results of operations. Furthermore, as a strategic response to
changes in the competitive environment, the Company may from time to time make
certain unforeseen pricing, service, or marketing decisions, the consequence of
which could have a material adverse effect on the Company's business, prospects,
financial condition and results of operations.
The Company may experience seasonality in its business, reflecting seasonal
fluctuations in the computer industry, Internet and commercial online service
usage, and traditional retail, government and corporate seasonal spending
patterns and advertising expenditures. In particular, the Internet and online
service usage and the rate of growth of such usage may decline in the summer.
Such seasonality may cause quarterly fluctuations in the Company's operating
results and could have a material adverse effect on the Company's business,
operating results and financial condition.
COMPETITION.
The online commerce market is new, rapidly evolving and intensely
competitive, and the Company expects competition to intensify in the future.
Barriers to entry are minimal, and current and new computers can launch new
Internet sites at a relatively low cost. In addition, the computer products
retail industry as a whole is intensely competitive. The Company currently
competes primarily with a variety of companies such as (i) traditional computer
retailers including CompUSA and Fry's Electronics; (ii) mail-order retailers
including CDW, MicroWarehouse, Insight, PC Connection and Creative Computers;
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(iii) Internet-only computer retailers including Egghead.com, Beyond.com,
Cyberian Outpost and BuyComp.com; (iv) manufacturers that sell directly over the
Internet including Dell, Gateway, and Apple; (v) a number of online service
providers including America Online and Microsoft Network that offer computer
products directly or in partnership(s) with other retailers; (vi) some
non-computer retailers such as Wal*Mart that sells a limited selection of
computer products via the Internet; and (vii) computer products distributors
that may develop direct channels to the consumer market. Increased competition
from these and other sources could require the Company to respond to competitive
pressures by establishing pricing, marketing and other programs, or seeking out
additional strategic alliances or acquisitions, that may be less favorable to
the Company than would otherwise be established or obtained, and thus could have
a material adverse effect on the business, prospects, financial condition and
results of operations.
The Company believes that the principal competitive factors in its market
are brand recognition, selection, convenience, price, speed and accessibility,
customer service, quality of site content, and reliability and speed of
fulfillment. In addition to the foregoing, the large enterprise market focuses
on compatibility of products, administration and reporting, single source
supply, security and cost-effective deployment. Many of the Company's current
and potential competitors have longer operating histories, larger customer
bases, greater brand recognition, and significantly greater financial, marketing
and other resources than the Company. In addition, larger, well-established and
well-financed entities may acquire, invest in, or form join ventures with online
competitors as the use of the Internet and other online services increases. The
Company is aware that certain of its competitors have and may continue to adopt
aggressive pricing or inventory availability policies and devote substantially
more resources to Internet site and systems development than the Company.
Increased competition may result in reduced operating margins, loss of market
share, and diminished brand recognition, any of which would have a material
adverse effect on the Company's business, prospects, financial condition and
results of operations. Moreover, companies that control access to Internet
commerce transactions through network access or Web browsers currently promote,
and will likely continue to promote competitors of the Company. In addition,
new technologies and the expansion of existing technologies may increase the
competitive pressures on the Company.
DEPENDENCE ON KEY PERSONNEL; NEED FOR ADDITIONAL PERSONNEL.
The Company's performance is substantially dependent on the continued
services and on the performance of its senior management and other key
personnel, particularly Robert C. Schick, President. The Company maintains a
key person insurance policy on Mr. Schick through The New England that will
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provide the Company with $10,000 a month for up to 24 months should Mr. Schick
become incapacitated in any way. The Company's performance depends on its
ability to retain and motivate its other officers and key employees. The loss
of the services of any of its executive officers or other key employees could
have a material adverse effect on the Company's business, prospects, financial
condition and results of operations. The Company's future success also depends
on its ability to identify, attract, hire, train, retain and motivate other
highly skilled technical, managerial, editorial, merchandising, marketing and
customer service personnel. Competition for such personnel is intense, and
there can be no assurance that the Company will be able to successfully attract,
integrate or retain sufficiently qualified personnel. The failure to attract
and retain the necessary technical, managerial, editorial, merchandising,
marketing and customer service personnel could have a material adverse effect on
the Company's business, prospects, financial condition and results of
operations.
RISK OF INADEQUATE INSURANCE COVERAGE AND DISASTER RECOVERY PLANS.
The Company's operations and computer and communications hardware systems
are vulnerable to damage or interruption from fire, flood, power loss,
telecommunications failure, break-ins, earthquake and other similar events. The
Company maintains mirrored communications sites in San Diego, California and
Colorado Springs, Colorado, but no assurances can be given that should one site
fail that the mirrored site would continue working properly until the damage was
repaired. Although the Company carries a $2 million general insurance policy,
there can be no assurances that such policy would adequately compensate the
Company for any potential losses that may occur, and its disaster recovery plans
relay heavily on having one mirrored site remaining up and running. Losses and
liabilities arising from uninsured or underinsured events could have a material
adverse effect on the Company's business, prospects, financial condition and
results of operations.
DEPENDENCE ON CONTINUED GROWTH OF ONLINE COMMERCE.
Since all of the Company's business is generated from its Internet
storefronts, the Company's future revenues and any future profits are dependent
upon the willingness of consumers to accept the Internet as an effective medium
of commerce. The Company is especially dependent upon the long-term acceptance
of online commerce. Rapid growth in the use of and interest in online services
is a recent phenomenon, and there can be no assurance that acceptance and use
will continue to develop or that a sufficiently broad base of consumers will
adopt and continue to use the Internet and other online services as a medium of
commerce. Demand and market acceptance for recently introduced services and
products over the Internet are subject to a high level of uncertainty and there
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exist few proven services and products. The Company relies on consumers who
have historically used traditional means of commerce to purchase merchandise.
For the Company to be successful, these consumers must accept and utilize novel
ways of conducting business and obtaining information.
The Internet may not be accepted by consumers as a viable marketplace for a
number of reasons, including potentially inadequate development of the necessary
network infrastructure or delayed development of enabling technologies and
performance improvements. To the extent that online services continue to
experience significant growth in the number of users, their frequency of use or
an increase in their bandwidth requirements, there can be no assurance that the
infrastructure of the Internet and other online services will be able to support
the demands placed upon them. In addition, Internet services could lose their
viability due to delays in the development or adoption of new standards and
protocols required to handle increased levels of online service activity or due
to increased governmental regulation. Changes in or insufficient availability
of telecommunications services to support Internet services also could result in
slower response times and adversely affect usage of the Internet and other
online services generally. If use of the Internet and other online services
does not continue to grow or grows more slowly than expected, if the
infrastructure for Internet services does not effectively support growth that
may occur, or if the Internet does not become a viable commercial marketplace,
the Company's business, prospects, financial condition and results of operations
would be materially adversely affected.
UNCERTAIN ACCEPTANCE OF THE COMPANY'S BRAND.
The Company believes that establishing, maintaining and enhancing the
Company's brand is a critical aspect of its efforts to attract and expand its
online traffic. The growing number of Internet sites that offer competing
products and services, many of which already have well-established brands in
online services or the computer industry in general, increase the importance of
establishing and maintaining brand recognition. Promotion of the Company's
brand will depend largely on the Company's success in providing a high quality
online experience supported by dedicated customer service which cannot be
assured. In addition, to attract and retain online users and to promote and
maintain the Company's brand in response to competitive pressures, the Company
may find it necessary to increase substantially its financial commitment to
creating and maintaining strong brand loyalty among customers. If the Company
is unable to provide high quality online services or customer support, or
otherwise fails to promote and maintain its brand, or if the Company incurs
excessive expenses in an attempt to promote and maintain its brand, the
Company's business, prospects, financial condition and results of operations
would be materially adversely affected.
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RAPID TECHNOLOGICAL CHANGE.
To remain competitive, the Company must continue to enhance and improve the
responsiveness, functionality and features of its Internet storefronts. The
Internet and the online commerce industry are characterized by rapid
technological change, changes in user and customer requirements and preferences,
frequent new product and service introductions embodying new technologies, and
the emergence of new industry standards and practices that could render the
Company's existing Internet storefronts and proprietary technology and systems
obsolete. If the Company is unable, for technical, legal, financial or other
reasons, to adapt in a timely manner in response to changing market conditions
or customer requirements, the Company's business, prospects, financial condition
and results of operations would be materially adversely affected.
RELIANCE ON CERTAIN VENDORS.
While the Company purchases its merchandise from many different vendors, it
currently relies substantially on two major distributors: Ingram Micro and Tech
Data. Failure to develop and maintain relationships with these and other
vendors that would allow the Company to source sufficient quantities of
merchandise on acceptable commercial terms could have a material adverse effect
on the Company's business, prospects, financial condition and results of
operations would be materially adversely affected.
TRADEMARKS AND PROPRIETARY RIGHTS.
The Company regards its service marks, trademarks, trade secrets and
similar intellectual property as instrumental to its success, and relies on
trademark and copyright law, trade secret protection, and confidentiality and/or
licensing agreements with its employees, customers, strategic partners and
others to protect its proprietary rights. The Company has licensed in the past,
and expects that it may license in the future, certain of its propriety rights,
such as trademarks or copyrighted material, to third parties. While the Company
attempts to ensure that the quality of its brand is maintained by such
licensees, there can be no assurance that such licensees will not take actions
that might materially adversely affect the value of the Company's business,
prospects, financial condition and results of operations. There can be no
assurance that the steps taken by the Company to protect its proprietary rights
will be adequate or that third parties will not infringe or misappropriate the
Company's service marks, trademarks, trade secrets and other intellectual
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property rights. In addition, there can be no assurance that others will not
independently develop substantially equivalent intellectual property. A failure
by the Company to protect its intellectual property in a meaningful manner could
have a material adverse effect on the Company's business, prospects, financial
condition and results of operations. Furthermore, litigation may be necessary
in the future to enforce the Company's intellectual property rights, to protect
the Company's trade secrets, or to determine the validity and scope of the
proprietary rights of others. Such litigation could result in substantial costs
and diversion of management and technical resources, either of which could have
a material adverse effect on the Company's business, prospects, financial
condition and results of operations.
In addition, there can be no assurance that other parties will not assert
infringement claims against the Company. The Company may receive notice of
claims of infringement of other parties' proprietary rights. There can be no
assurance that such claims will not be asserted or prosecuted against the
Company in the future or that any such assertion or prosecution will not
materially adversely affect the Company's business, prospects, financial
condition and results of operations. The defense of any such claims, whether
such claims are with or without merit, could be time-consuming, result in costly
litigation and diversion of management and technical personnel, cause product
shipment delays, or require the Company to develop non-infringing technology or
enter into royalty or licensing agreements. Such royalty or licensing
agreements, if required, may not be available on terms acceptable to the
Company, or at all. In the event of a successful claim of product infringement
against the Company and the failure or inability of the Company to develop
non-infringing technology or license the infringed or similar technology on a
timely basis, the Company's business, prospects, financial condition and results
of operations would be materially adversely affected.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES.
The Company is not currently subject to direct regulation by any domestic
or foreign government agency, other than regulations applicable to businesses
generally, export control laws, and laws or regulations directly applicable to
online commerce. However, due to the increasing popularity and use of the
Internet and other online services, it is possible that a number of laws and
regulations may be adopted with respect to the Internet or other online services
covering issues such as user privacy, pricing, content, copyrights, distribution
and characteristics and quality of products and services. Furthermore, the
growth and development of the market for online commerce may prompt calls for
more stringent consumer protection laws that may impose additional burdens on
those companies conducting business online. The adoption of certain additional
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laws or regulations may decrease the growth of the Internet or other online
services, which could, in turn, decrease the demand for the Company's products
and services and increase the Company's cost of doing business, or otherwise
have an adverse effect on the Company's business, prospects, financial condition
and results of operations.
Applicability to the Internet of existing laws governing issues such as
property ownership, copyrights and other intellectual property issues, taxation,
libel, obscenity and personal privacy is uncertain. The vast majority of such
laws were adopted prior to the advent of the Internet and related technologies
and, as a result, do not contemplate or address the unique issues of the
Internet and related technologies. Changes to such laws intended to address
these issues, including some recently proposed changes, could create uncertainty
in the Internet marketplace which could reduce demand for the services of the
Company or increase the cost of doing business as a result of costs of
litigation or increased service delivery costs, or could in some other manner
have a material adverse effect on the Company's business, prospects, financial
condition and results of operations.
In addition, as the Company's services are available over the Internet in
multiple states and foreign countries, such jurisdictions may claim that the
Company is required to qualify to do business as a foreign corporation in each
such state or foreign country. The Company is qualified to do business only in
Colorado, and failure by the Company to qualify as a foreign corporation in a
jurisdiction where it is required to do so could subject the Company to taxes
and penalties for failure to qualify and could result in the inability of the
Company to enforce contracts in such jurisdictions. Any such new legislation or
regulation, the application of laws and regulations from jurisdictions whos laws
do not currently apply to the Company's business, or the application of existing
laws and regulations to the Internet and other online services, could have a
material adverse effect on the Company's business, prospects, financial
condition and results of operations.
ONLINE COMMERCE SECURITY RISK; CREDIT CARD FRAUD.
A significant barrier to online commerce and communications is the secure
transmission of confidential information over public networks. The Company
relies on encryption and authentication technology licensed from third parties
to provide the security and authentication necessary to effect secure
transmission of confidential information such as customer credit card numbers.
There can be no assurance that advances in computer capabilities, new
discoveries in the field of cryptography, or other events or developments will
not result in a compromise or breach of the algorithms used by the Company to
protect customer transaction data. If any such compromise of the Company's
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security were to occur, it could have a material adverse effect on the Company's
business, prospects, financial condition and results of operations. A party who
is able to circumvent the Company's security measures could misappropriate
proprietary information or cause interruptions in the Company's operations. The
Company may be required to expend significant capital and other resources to
protect against such security breaches or to alleviate problems caused by such
breaches. Furthermore, even if the Company is able to continue to prevent the
compromise of its security systems, if the security systems of other retailers
in the online commerce industry were compromised or perceived to be ineffective,
the Company's business, prospects, financial condition and results of operations
would be materially adversely affected.
Concerns over the security of transactions conducted on the Internet and
the privacy of users may also inhibit the growth of online services in general,
especially as a means of conducting commercial transactions. To the extent that
activities of the Company or third-party contractors involve the storage and
transmission of proprietary information, such as credit card numbers, security
breaches could damage the Company's reputation and expose the Company to a risk
of loss or litigation and possible liability. There can be no assurance that
the Company's security measures will prevent security breaches or that failure
to prevent such security breaches will not have a material adverse effect on the
Company's business, prospects, financial condition and results of operations.
In addition, like other retailers who accept credit card information over the
telephone or Internet without a signature, the Company has incurred losses as a
result of orders placed with fraudulent credit card information, despite the
fact that the payment of such orders was approved by the applicable financial
institution. Under current commercial banking and credit card practices, a
retailer like the Company is liable for fraudulent credit card transactions,
where, as is the case with transactions processed by the Company over the
Internet, no cardholder signature is obtained. To date, losses due to credit
card fraud incurred by the Company have not been material. There can be no
assurance that the Company will not suffer significant losses as a result of
fraudulent use of credit card information in the future, which could have a
material adverse effect on the Company's business, prospects, financial
condition and results of operations.
LIABILITY FOR INTERNET CONTENT.
The Company believes that its future success will depend in part upon its
ability to deliver original and compelling descriptive content about the
computer hardware, software and peripheral products it sells on the Internet.
As a publisher of online content, the Company faces potential liability for
defamation, negligence, copyright, patent, trademark infringement, or other
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claims based on the nature and content of materials that the Company publishes
or distributes. Such claims have been brought, and sometimes successfully
litigated, against online services. In addition, in the event that the Company
implements a greater level of interconnectivity on its site, the Company will
not and cannot practically screen all of the content generated or accessed by
its users, and the Company could be exposed to liability with respect to such
content. Any imposition of liability, particularly liability that is not
covered by insurance or is in excess of insurance coverage, could have a
material adverse effect on the Company's business, prospects, financial
condition and results of operations.
SALES AND OTHER TAXES.
The Company does not currently collect sales and other similar taxes in
respect to shipments of goods into states other than Colorado, Massachusetts and
California. However, one or more local, state or foreign jurisdictions may seek
to impose sales tax collection obligations on out of state companies, such as
the Company, which engage in online commerce. In addition, any new operation in
states outside of Colorado could subject shipments into such states to state
sales taxes under current or future laws. A successful assertion by one or more
states or any foreign country that the Company should collect sales or other
taxes on the sale of merchandise could have a material adverse effect on the
Company's business, prospects, financial condition and results of operations.
NO DIVIDENDS AND NONE ANTICIPATED.
The Company anticipates using all future earnings to complete the
marketing, development and expansion of its business, for operating capital, and
for corporate development and expansion activities. The Company has not paid or
declared any dividends, nor, by reason of its present stage of growth and
anticipated financial requirements, does not anticipate paying any dividends in
the foreseeable future. The future payment of dividends by the Company on its
Common Stock, if any, rests within the sole discretion of the Company's Board of
Directors and will depend on, among other things, the Company's earnings,
capital requirements and overall financial condition.
ANTI-TAKEOVER; "POISON PILL" PROVISIONS.
Certain provisions of the Company's Certificate of Incorporation and may
make a change in the control of the Company more difficult to effect, even if a
change in control were in the shareholders' best interest. These provisions
include the ability of the Board of Directors, without further shareholder
approval, to issue Preferred Stock with all rights, powers and privileges of the
Common Stock. The issuance of Preferred Stock may have the effect of delaying,
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deferring or preventing a change in control of the Company without further
action by the stockholders and may adversely affect the voting and other rights
of the holders of Common Stock. The Company has no present plans to issue
shares of Preferred Stock. Furthermore, certain provisions of the Company's
Certificate of Incorporation and Bylaws and Colorado law could delay or make
more difficult a merger, tender offer or proxy contest involving the Company.
NO PRIOR PUBLIC MARKET.
There is no public market currently available for the Company's Common
Stock. Although the Company intends to apply for a listing of its Common Stock
on the OTC Bulletin Board under the anticipated trading symbol "ANYI", there can
be no assurance that an active trading market will develop or, if developed,
that it will be sustained. The market prices for securities of Internet
companies have historically been extremely volatile. Factors that could cause
the market price of the Company's Common Stock to fluctuate, should a market
develop, include, but are not limited to, future technological innovations, new
commercial products, changes in regulation, period-to-period fluctuations in
financial performance, and fluctuations in the securities market. Such price
changes have often been unrelated to the operating performance of the affected
companies. These broad market fluctuations may adversely affect the market
priced of the Company's Common Stock and, as a result, negatively impact the
Company's ability to expand its business and raise additional capital.
USE OF PROCEEDS
The Company will receive proceeds from the sale of the Common Stock being
registered herein if and only if any Warrants it underlies are exercised. The
Company expects to use such proceeds, if any, for working capital, short-term
debt reduction and expansion purposes.
DETERMINATION OF OFFERING PRICE.
The offering price of the Common Stock described herein, underlying the
outstanding Stock Purchase Warrants issued in connection with a private
placement of Units completed in December 1998 which entitles the holder to
purchase one share of Common Stock exercisable at $3.00 per share, was
arbitrarily decided upon by the Company's Board of Directors and bears no price
relationship to assets, book value, earnings or other criteria of value.
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DILUTION
As of January 25, 1999, there were 3,074,400 shares of the Company's Common
Stock issued and outstanding. The Company's Common Stock had a net tangible
book value per share of approximately $0.02 as of December 31, 1998, based upon
3,020,000 shares then issued and outstanding. Net tangible book value per share
represents the amount by which the Company's total tangible assets exceed its
total liabilities, divided by the number of shares of its Common Stock
outstanding.
After giving effect to the sale of the 200,000 shares of Common Stock being
offered herein and the application of the net proceeds therefrom there would be
a total of 3,274,400 shares of Common Stock issued and outstanding with a net
tangible book value per share of approximately $0.20. This would represent an
immediate increase in net tangible book value of $0.18 per share to existing
shareholders and an immediate dilution of $2.80, or 93.33%, of the offering
price per share to existing Warrant holders. Dilution is determined by
subtracting net tangible book value per share after the Warrants are exercised
from the amount paid by Warrant holders for the shares of Common Stock.
The following table illustrates the per share dilution:
Offering price per share $3.00
Net tangible book value per share prior
to any warrants being exercised $0.02
Increase attributable to exercising
warrant holders $0.18
---------
New tangible book value per share after the exercise $0.20
---------
Dilution per share to exercising warrant holders $2.80
=========
CAPITALIZATION
The following table sets forth as of December 31, 1998 (i) the actual
capitalization of the Company and (ii) the capitalization of the Company after
the exercise of Warrants into Common Stock, if all Warrants are exercised.
15
<PAGE>
<TABLE>
<CAPTION>
After Warrant
Amount Outstanding Exercising (1)
----------------------------- ---------------
<S> <C> <C>
Short-Term Debt $ 145,250 -
Common Stock, no par value;
50,000,000 shares authorized (2) (3) 3,020,000 3,274,400
Retained Earnings
(Accumulated Deficit) ($162,620) ($162,620)
- --------------------------------
<FN>
1. This table assumes all Warrants are exercised into Common Stock.
2. For detailed information regarding the terms and conditions of the
Company's Common Stock see "Description of Securities."
3. Figure represents shares of Common Stock issued and outstanding as of
December 31, 1998. As of January 25, 1999, prior to the filing of this
Registration Statement, there were 3,074,400 shares of Common Stock issued
and outstanding.
</TABLE>
SELLING SECURITIES HOLDERS
The Common Stock described herein is being offered solely by the Company to
holders of Warrants issued in connection with a private placement of Units
completed in December 1998, made in accordance with an exemption from
registration under Regulation D, Rule 504 of the Securities Act. No registered
shareholders will be selling shares of Common Stock.
PLAN OF DISTRIBUTION
Sales of the Common Stock described herein will be made solely to holders
of Warrants issued in connection with a private placement of Units completed in
December 1998, made in accordance with an exemption from registration under
Regulation D, Rule 504 of the Securities Act, in accordance with the Warrant
exercise instructions printed upon each Warrant Certificate as follows:
"This certifies that, FOR VALUE RECEIVED, _______________________ or
assigns (the "Registered Holder") is the owner of the number of Warrants
("Warrants") specified above. Each Warrant entitles the Registered Holder to
purchase, subject to the terms and conditions set forth in this Certificate, one
fully paid and non-assessable share of Common Stock, no par value ("Common
Stock"), of Anything Internet Corporation, a Colorado corporation (the
"Company") at any time prior to expiring at the close of business on the
anniversary of the issuance date, upon the presentation and surrender of this
Warrant Certificate, at the corporate office of the Company, accompanied by
payment of $3.00 per share (the "Purchase Price") in lawful money of the United
States of America in cash or by official bank or certified check made payable to
Anything Internet Corporation.
16
<PAGE>
The Company may redeem the Warrants, at a price of $0.01 per Warrant, at
any time within 12 months of the date of the closing of the issuance date upon
not less than 30 days, nor more than 60 days, prior written notice, provided
that the closing bid quotation for the Common Stock as reported by any quotation
medium on which the Common Stock is quoted is at least $4.00 for ten consecutive
trading sessions ending on the two days prior to the day on which notice of
redemption is given.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional shares of Common Stock will be issued. In
the case of exercise of less than all of the Warrants represented hereby, the
Company shall cancel this Warrant Certificate upon the surrender hereof and
shall execute and deliver a new Warrant Certificate or Warrant Certificates of
like tenor for the balance of such Warrants."
As of the date of this Registration Statement there has been no public
market for the Company's Common Stock. The exercise price of the Warrants into
shares of Common Stock was arbitrarily determined by the Board of Directors and
bears no price relationship to assets, book value, earnings, or other criteria
of value. No assurance can be given that a liquid and active public market will
ever develop for the Company's Common Stock and, if developed, that it will be
sustained. If a market does develop, the shares of Common Stock described
herein will be freely transferable and assignable by the holder thereof, except
shares held by affiliates, and may be sold in any secondary market that may
develop.
LEGAL PROCEEDINGS
The are no material legal proceedings pending or, to the Company knowledge,
threatened against the Company.
DIRECTORS, EXECUTIVE OFFICERS, AND KEY MANAGEMENT PERSONNEL
The directors, executive officers and key management personnel of the
Company, their ages as of January 25, 1999, and their positions with the Company
are as follows:
<TABLE>
<CAPTION>
Name Age Position
- ----------------- --- ----------------------------------
<S> <C> <C>
Robert C. Schick 35 President and Director
Robie Blair 31 Manager of Information Systems
Donald Horning 34 Sales and Customer Service Manager
Alfred W. Delisle 34 Business Development Manager,
Director
Cameron B. Yost 45 Secretary, Treasurer, Director
J. Scott Sitra 26 Director
</TABLE>
17
<PAGE>
The Board of Directors of the Company is comprised of only one class of
director. Each director is elected to hold office until the next annual meeting
of shareholders and until his successor has been elected and qualified.
Officers are elected annually by the Board of Directors and hold office until
successors are duly elected and qualified. The following is a brief account of
the business experience of each director and executive officer of the Company.
There is no family relationship between any Director or Executive Officer of the
Company.
The Company has a compensation committee which was established on September
28, 1998, and consists of Alfred W. Delisle and J. Scott Sitra.
ROBERT C. SCHICK, President and a Director, co-founded the Company in
August 1997. Mr. Schick has over 14 years experience with the computer industry
ranging from a computer operator in the U.S. Army to an Apple Products Manager
at Tech Data Corporation where he was responsible for over $50+ million dollars
a year in revenue; he was also responsible for marketing to Apple's internal
sales force as well their 35,000+ resellers. Prior to joining the Company, Mr.
Schick was the Southeast Accounts Manager for Bendata, Inc., a software company
offering help-desk solutions to corporate MIS departments at Fortune 1000
companies, manufacturers and educational and financial institutions. Before
joining Bendata in 1996, Mr. Schick worked at Tech Data, a wholesale electronics
distributor, where he was responsible for working with Fortune 1000 companies,
negotiating vendor contracts, and overseeing purchasing to maintain an efficient
inventory matrix. Throughout his tenure at Tech Data Mr. Schick continually
exceed all of his sales and performance quotas. Mr. Schick has held his
positions since August 1997.
ROBIE BLAIR, Manager of Information Systems, has over 10 years of
experience in the computer industry ranging from building integrated ceramic
capacitors with Kyocera Corporation, formerly AVX Corporation, to a Technical
Coordinator for Apple Computer Corporation. Prior to joining the Company, he
held the position of Customer Applications Support Engineer at MCI
Communications. Mr. Blair has held his position since November 1998.
ALFRED W. DELISLE, Business Development Manager and a Director, co-founded
the Company in August 1997. Mr. Delisle has over 14 years of experience in the
hardware and software industry and more than eight years of experience in
18
<PAGE>
wholesale distribution with Tech Data Corporation, the world's second largest
distributor of personal computers, peripherals, software and related components,
where he has held a variety of positions within their high-volume sales
division. Prior to working for Tech Data, Mr. Delisle was employed by Boston
Micro, a reseller specializing in establishing channel sales relationships
between U.S. manufacturers and distributors in Western Europe. Mr. Delisle left
his position at Tech Data in December 1998 to focus his full attentions to his
duties at the Company. Mr. Delisle has held his positions since August 1997.
CAMERON B. YOST, Secretary, Treasurer and a Director, is currently the
President and Chief Executive Officer of Banyan Corporation, a publicly traded
corporation. Banyan designs, manufactures and markets accessory products for
personal computers with a focus on notebook computers; Banyan also retains a
significant equity position in the Company. See "Principal Shareholders".
Prior to joining Banyan in 1995, Mr. Yost worked at Vornado Air Circulation
Systems as a co-founder and vice president where he helped generate $2.8 million
and $5.7 million in sales during the first and second years of operation,
respectively. Prior to Vornado, Mr. Yost materially participated as a principal
and executive officer in other successful start-up and turnaround ventures. Mr.
Yost has held his positions since October 1998.
J. SCOTT SITRA, Director, is currently the President and Chief Executive
Officer of Sitra Enterprises, Inc., a privately held international management
and financial consulting firm specializing in assisting emerging, high-growth
companies evolve from the developmental stage into profitable operating
entities. Sitra Enterprises has actively participated in the successful growth
and development of several private and public companies, and is currently
retained by the Company. Mr. Sitra has participated as a principal and
executive officer in several successful start-up and turn-around ventures, and
has extensive experience working directly with the investment community. In one
such venture he took over the offices of President and Chief Executive Officer
of Lucky "S" Oil Company, Inc., a privately held Texas oil and gas exploration
company, in 1992. Under his leadership, Lucky "S" successfully acquired 100%
working interest in 13 producing horizontal oil and gas wells in Frio County,
Texas through the United States Bankruptcy Court in San Antonio, Texas for
$310,000. The wells, which were drilled at an initial aggregate cost of $20
million, were producing in excess of 230 barrels of oil per day (BOPD) at the
time of acquisition, and generated in excess of $80,000 in gross revenue during
the first three weeks of production under Mr. Sitra's management. Mr. Sitra has
held his position since October 1998.
19
<PAGE>
DIRECTOR COMPENSATION
Directors are compensated $5,000 annually, which may be taken in the form
of cash or securities of the Company. Additionally, the Company reimburses its
Directors for reasonable out-of-pocket expenses incurred in attending meetings
of the Board of Directors.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid during the fiscal year
ending June 30, 1998 to the Company's Chief Executive Officer and each of the
Company's officers and directors. No executive officers received any
compensation in fiscal 1998, no person received compensation equal to or
exceeding $100,000 in fiscal 1998, no bonuses were awarded during fiscal 1998,
and no persons received compensation from the Company prior to fiscal 1998.
<TABLE>
<CAPTION>
Name and Principal Salary Options Granted (2)
Position (1)
- ------------------------------- ------ -------------------
<S> <C> <C>
Robert C. Schick (3) None 205,000
Alfred W. Delisle (4) None 110,000
Bernard Sandoval (5) None 60,000
<FN>
(1) Directors Cameron B. Yost and J. Scott Sitra were not elected to the Board
of Directors until August 22, 1998 and were compensated, along with
Directors Robert C. Schick and Alfred W. Delisle, 5,000 shares of Common
Stock with an aggregate value of $800 for services rendered through
December 31, 1998.
(2) Currently fully vested, exercisable into Common Stock at $1.00 a share, and
expire on February 29, 2000.
(3) Served as President and a Director since co-founding the Company in August
1997.
(4) Has served as the Business Development Manager and Director since
co-founding the Company in August 1997.
(5) Co-founded the Company in August 1997 and served as the Marketing Director
until September 1998.
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
regarding the beneficial ownership of Common Stock as of January 25, 1999 by (i)
each Director of the Company, (ii) each executive officer of the Company, (iii)
all directors and executive officers as a group, and (iv) each person known to
the Company to be the beneficial owner of more than 5% of its outstanding shares
of Common Stock.
20
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Owned
--------------------------------------------------
Percentage Owned(1)
-------------------------------
Before After
Directors and Executive Officers Shares Held Exercising Exercising
- ------------------------------------ ----------------- ----------------- ------------
<S> <C> <C> <C>
Robert C. Schick (2) 216,897 7.1% 6.6%
3020 North El Paso, Ste. 103
Colorado Springs, CO 80907
Alfred W. Delisle (3) 120,959 3.9% 3.7%
4525 S. Renellie Dr.
Tampa, FL 33611-2124
Cameron B. Yost 10,000 * *
4740 Forge Rd., Bldg. 112
Colorado Springs, CO 80907
J. Scott Sitra 10,000 * *
P. O. Box 50404
Austin, TX 78763
All current directors and executive
officers as a group (4 persons) (4) 357,856 11.6% 10.9%
Five Percent Shareholders
- ------------------------------------
Banyan Corporation
4740 Forge Rd., Bldg. 112
Colorado Springs, CO 80907 800,027 26.0% 24.4%
- ------------------------------
<FN>
* Less than 1%
(1) Percentage of ownership is based on 3,074,400 shares of Common Stock issued
and outstanding as of January 25, 1999 and 3,274,400 shares of Common Stock
issued and outstanding as a result of Warrant Holders exercising their
Warrants into Common Stock, assuming all outstanding Warrants are exercised
into Common Stock.
(2) Does not include an additional 205,000 shares of Common Stock subject to
options which are currently exercisable.
(3) Does not include an additional 110,000 shares of Common Stock subject to
options which are currently exercisable.
(4) Does not include an additional 315,000 shares of Common Stock subject to
options which are currently exercisable. See notes 2 and 3 above.
</TABLE>
21
<PAGE>
DESCRIPTION OF SECURITIES
GENERAL
The Company is authorized by its Articles of Incorporation, as amended, to
issue an aggregate of 50,000,000 shares of Class 'A' Common Stock, no par value,
("Common Stock"); 25,000,000 shares of Class 'B' Common Stock, no par value,
("Class B Common Stock"); 10,000,000 shares of Class 'A' Preferred Stock, no par
value, ("Class A Preferred Stock"); and 10,000,000 shares of Class 'B' Preferred
Stock, no par value, ("Class B Preferred Stock"). As of January 25, 1999 there
were 3,074,400 shares of Common Stock issued and outstanding, 3,976,000 on a
fully diluted basis, and no shares of Class 'B" Common Stock, Class 'A'
Preferred Stock or Class 'B' Preferred Stock. There were also 200,000 Stock
Purchase Warrants issued entitling the holder to purchase one share of Common
Stock for each Warrant tendered at a purchase price of $3 a share and
outstanding options to purchase 500,000 shares of Common Stock at $1.00, all of
which are held by early Company founders. The Company has also set aside a
reserve of 200,000 shares of Common Stock for an Employee Stock Ownership
Program.
COMMON STOCK
The Articles of Incorporation authorizes the Company to issue up to
50,000,000 shares of Common Stock, Class A, no par value. The holders of Common
Stock are entitled to one vote for each share held of record on all matters
submitted to a vote of the shareholders. Subject to the rights and preferences
of the holders of any outstanding Class 'A' Preferred Stock and/or Class 'B'
Preferred Stock, the holders of Common Stock are entitled to receive ratably
such dividends as are declared by the Board of Directors out of funds legally
available therefor. In the event of liquidation, dissolution or winding up of
the Company, holders of Common Stock have the right to a ratable portion of
assets remaining after the payment of all debts and liabilities of the Company,
subject to the liquidation preferences of the holders of any outstanding Class
'A' Preferred Stock and/or Class 'B' Preferred Stock. Holders of Common Stock
have neither preemptive rights nor rights to convert their Common Stock into any
other securities and are not subject to future calls or assessments by the
Company. There are no redemption or sinking fund provisions applicable to the
Common Stock. All outstanding shares of Common Stock are fully paid and
non-assessable. The rights, preferences and privileges of the holders of Common
Stock are subject to, and may be adversely affected by, the rights of the
holders of shares of Class 'A' Preferred Stock and/or Class 'B' Preferred Stock
that the Company may designate and issue in the future.
22
<PAGE>
CLASS 'B' COMMON STOCK
The Articles of Incorporation authorizes the Company to issue up to
25,000,000 shares of Common Stock, Class B, no par value. As of January 25,
1999 there were no shares of Common Stock, Class B issued or outstanding. The
Board of Directors is authorized, subject to certain limitations prescribed by
Colorado law, without further action by the shareholders, to issues shares of
Class 'B' Common Stock and to fix the rights, preferences, privileges and
restrictions thereof, including dividend rights, conversion rights, voting
rights, terms of redemption, liquidation preferences and sinking fund terms.
The Company believes that the Board of Directors' power to set the terms of, and
the Company's ability to issue, Class 'B' Common Stock will provide flexibility
in connection with possible financing transactions in the future. The issuance
of Class 'B' Common Stock, however, could adversely affect the voting power of
holders of Common Stock and decrease the amount of any liquidation distribution
to such holders. The presence of outstanding Class 'B' Common Stock could also
have the effect of delaying, deterring or preventing a change in control of the
Company. The Company has no present plans to issue any shares of Class 'B'
Common Stock.
CLASS 'A' PREFERRED STOCK AND CLASS 'B' PREFERRED STOCK
The Articles of Incorporation authorizes the Company to issue up to
10,000,000 shares of each: Class 'A' Preferred Stock, no par value, and Class
'B' Preferred Stock, no par value. As of January 25, 1999 there were no shares
of either Class 'A' Preferred Stock or Class 'B' Preferred Stock issued or
outstanding. The Board of Directors is authorized, subject to certain
limitations prescribed by Colorado law, without further action by the
shareholders, to issues shares of Class 'A' Preferred Stock and/or Class 'B'
Preferred Stock and to fix the rights, preferences, privileges and restrictions
thereof, including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences and sinking fund terms. The Company
believes that the Board of Directors' power to set the terms of, and the
Company's ability to issue, Class 'A' Preferred Stock and/or Class 'B' Preferred
Stock will provide flexibility in connection with possible financing
transactions in the future. The issuance of Class 'A' Preferred Stock and/or
Class 'B' Preferred Stock, however, could adversely affect the voting power of
holders of Common Stock and/or Class 'B' Common Stock and decrease the amount of
any liquidation distribution to such holders. The presence of outstanding Class
'A' Preferred Stock and/or Class 'B' Preferred Stock could also have the effect
of delaying, deterring, or preventing a change in control of the Company. The
Company has no present plans to issue any shares of Class 'A' Preferred Stock or
Class 'B' Preferred Stock.
23
<PAGE>
WARRANTS
As of January 25, 1999, the Company had 200,000 Stock Purchase Warrants
issued in conjunction with a private placement of Units completed in December
1998 made in accordance with an exemption from registration under Regulation D,
Rule 504 of the Securities Act. Each outstanding Warrant entitles the holder to
purchase one share of Common Stock at an exercise price of $3.00 per share
through January 15, 2000 at which time the Warrants expire. The Warrants
contain provisions that protect the holder against dilution by adjustment of the
exercise price in certain events, including, but not limited to, stock
dividends, stock splits (forward and reverse), reclassifications and/or mergers.
The holder of a Warrant does not possess any rights as a shareholder of the
Company. The shares of Common Stock, when issued upon the exercise of the
Warrants in accordance with the terms thereof, will be fully paid and
non-assessable.
The Company may redeem the Warrants, at a price of $0.01 per Warrant, at
any time through January 15, 2000 upon not less than 30 days, nor more than 60
days, prior written notice, provided that the closing bid quotation for the
Common Stock as reported by any quotation medium on which the Common Stock is
quoted is at least $4.00 for ten consecutive trading sessions ending on the two
days prior to the day on which notice of redemption is given.
TRANSFER AGENT AND REGISTRAR
The Company's transfer agent and registrar for the Common Stock is Oxford
Transfer Register. Oxford's address is 317 S.W. Alder, Ste. 1120, Portland,
Oregon 97205, and their telephone number and fax numbers are (503) 225-0375 and
(503) 273-9168, respectively.
INTEREST OF NAMED EXPERTS AND COUNSEL
The financial statements of the Company at June 30, 1998, included in this
Registration Statement, have been audited by J. Paul Keynote, CPA, P.C. as
indicated in their report with respect thereto and are included herein in
reliance upon authority of said firm as experts in giving said reports.
The Company retains William M. Ziering, Esq., of San Francisco, California
as its legal counsel in the advisement of securities related matters, including
the validity of the issuance of the securities offered hereby.
24
<PAGE>
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Pursuant to Colorado law, the Company's Board of Directors has the power to
indemnify officers and directors, present and former, for expenses incurred by
them in connection with any proceeding they are involved in by reason of their
being or having been an officer or director of the Company. The person being
indemnified must have acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Company. The
Company's By-Laws grant this indemnification to the Company's officers and
directors.
Insofar as indemnification for liability arising under the Securities Act
may be permitted to directors or officers of the Company pursuant to the
foregoing provisions, or otherwise, the Company has been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director or officer of
the Company in the successful defense of any action, suit or proceeding) is
asserted by such director or officer in connection with the securities being
registered, the Company will, unless in the opinion of its legal counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of 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.
DESCRIPTION OF BUSINESS
OVERVIEW
Anything Internet Corporation is a rapidly growing Internet based discount
retailer of over 171,000 computer hardware, software and peripheral products to
end consumers and businesses. Through its Internet storefronts -
www.anythingpc.com, www.anythingmac.com, and www.anythingunix.com - Anything
Internet offers one-stop shopping to its customers 24 hours a day, seven days a
week. In addition to its wide array of product offerings, Anything Internet's
storefronts feature competitively priced "best seller" products, an easy-to-use
graphical interface, a powerful search engine to locate any product desired, a
unique "quote monkey" for pricing assistance on hard-to-find products, and a
special "notify me" feature that automatically notifies customers when a
backordered product arrives in stock and keeps the customer appraised of the
estimated time of arrival.
25
<PAGE>
Since its incorporation on August 15, 1997, under the laws of the state of
Colorado, the Company has experienced tremendous growth in both monthly revenues
and visitors, or unique "hits", to its various Internet storefronts. Monthly
sales have since climbed to over $300,000 in December 1998. Over the same
period of time the number of unique monthly hits have grown to over 100,000. To
enhance the Company's brand awareness and monthly traffic to its Internet
storefronts, the Company has begun entering into strategic marketing alliances
with popular Internet content providers and sites of interest such as C|Net's
Shopper.com and technology enablers such as Digital River, Inc. (NASDAQ: DRIV).
The Company is currently in negotiations with several other popular content
providers and sites of interest to greatly expand the number of such strategic
alliances to further enhance its Internet storefronts' technology, expand brand
awareness, monthly traffic and subsequent revenues.
INDUSTRY OVERVIEW
Growth of the Internet and Online Commerce
The Internet has emerged as a significant global medium for communications,
information and commerce, enabling millions of people to share information and
conduct business electronically. The Company believes growth in Internet usage
and online commerce has been fueled by a number of factors including: (i) the
large and growing installed base of advanced personal computers in the home and
office; (ii) improvements in network infrastructure and bandwidth; (iii) easier
and cheaper access to the Internet; (iv) increased awareness of the Internet
among consumer and business users; and (v) the rapidly expanding availability of
online content and commerce which increases the value to users of being
connected to the Internet. According to International Data Corporation ("IDC"),
a market research firm, the number of Internet users worldwide will grow from
approximately 69 million at the end of 1997 to approximately 320 million by
2002. At the same time, IDC predicts that the value of goods and services
purchased over the Internet will grow from $12 billion in 1997 to approximately
$425 billion annually by 2002. In addition, IDC estimates that the percentage
of such Internet users buying goods and services on the Internet will increase
from 26% in 1997 to 40% in 2002. The largest segment of Internet sales is
expected to be from computer hardware, software and consumer electronics
purchases.
Traditional Computer Retailing
The traditional computer retail industry includes both store- and
catalog-based companies. The Company believes that these retailers face
inherent structural limitations that may not allow them to take full advantage
26
<PAGE>
of the growing worldwide market for computer hardware, software and peripheral
products. The computer retailing industry is characterized by a broad array of
products, rapid product obsolescence, and continuous new product introductions.
Store-based retailers have limited shelf space due to costly inventory,
store personnel and real estate considerations that limit the number of stock
keeping units (SKUs) they can offer to their customers. The Company believes
that large store-based retailers typically carry only about 4,000 SKUs. As a
result, hardware and software manufacturers compete for scarce retail shelf
space and access to the large distributors that supply the store-based
retailers. Thus, manufacturers incur a significant expense to gain this access
and retailers face the risk of carrying inventory that may quickly become
obsolete. In addition, the store-based retailers' merchandising process, which
requires that the retailer physically obtain, set up, and display product limits
the speed at which these retailers can change their merchandise mix and offer
new products. Furthermore, because store-based retailers must make significant
investments in inventory, real estate and on-site personnel, they are not able
to expand quickly into new geographic regions. Personnel costs also limit the
number of hours during which store-based retailers may operate, thereby limiting
customer access and convenience. Additionally, store-based retailers face
challenges in hiring, training and retaining knowledgeable sales staff
conversant and up-to-date on the broad array of hardware and software products.
Catalog retailers offer their customers the convenience of shopping from
home or the office and more flexible hours of operation, but they are still
constrained by catalog mailing, printing and associated expenses as to the
number of SKUs they can feature and the amount of product information they can
provide. The Company believes that a typical catalog retailer carries up to
40,000 SKUs, but typically only features 2,000 - 3,000 SKUs in any single
catalog. Furthermore, the entire catalog shopping experience is, in general,
neither interactive nor personalized, yet requires extensive personnel support
and manual intervention on behalf of the retailer to take and process orders.
The Company also believes that many catalog retailers focus primarily on the
corporate marketplace.
The Company believes that the business model of the traditional computer
retail industry results in inefficiencies that are exacerbated by, among other
things, the broad array of products and the rapid change that characterize the
computer industry. The Company believes that Internet-based computer retailers
are well positioned to solve and capitalize on these inefficiencies.
27
<PAGE>
ANYTHING INTERNET'S SOLUTION
The Company understands the key business challenges of the computer
retailing industry and has adapted to the unique environment of the Internet to
address those and anticipated future challenges. The Company believes that the
key operating advantages of its Internet storefronts are:
Attractive Economics of the Internet Storefront -- As an Internet-only retailer,
the Company is not constrained by the inherent limitations of store- and
catalog-based retailers. The Company enjoys structural economic advantages
relative to traditional retailers, including: (i) low-cost and essentially
unlimited shelf space; (ii) flexible advertising and affordable merchandising
opportunities; (iii) lower personnel requirements; (iv) scaleable technology and
systems that can serve a fast-growing customer base; and (v) the ability to
serve a worldwide customer base from a single, domestic location. The Company
intends to leverage its Internet storefronts, content provided, marketing and
technology over a growing global customer base resulting in substantial
economies of scale that the Company believes should enable it to achieve greater
operating margins and profitability compared to tradition retailers.
Customer Convenience -- The Company provides enhanced customer convenience by
enabling customers to purchase computer hardware, software and peripheral
products from either their home or office 24 hours a day, seven days a week.
The Company believes that customers may buy more items because they have more
hours to shop, can act immediately upon impulse, and can readily locate items
that are difficult to find in retail stores or catalogs.
Selection -- Because the Company's shelf space is low-cost and virtually
limitless, the Company offers one of the most comprehensive selections of
products available. To offer such a large selection would be economically and
physically impractical to stock in a retail store or publish in a mail-order
catalog. The Company currently offers more than 171,000 computer hardware,
software and peripheral products.
Low-Cost Distribution Channel for Manufacturers -- Unlike traditional store or
catalog retailers that often charge manufacturers for "shelf space", the Company
can offer the same manufacturers electronic "shelf space" with no up-front cost.
This benefits the Company in better margins on certain products, the
manufacturer gains additional retail presence with no up-front costs, and the
buyer gets access to desired products at extremely competitive price.
Customer Service -- The inherent nature of the Internet allows for improved pre-
and post-sales support via both e-mail and telephone. Customers may inquire
about the status and tracking of their orders via the Company's Internet
28
<PAGE>
storefronts. Also, customers can choose to be notified automatically when a
backordered product they desire has arrived in stock and is available for
shipment.
Worldwide Customer Base -- Because the Internet is worldwide in scope, the
Company can offer its entire product line to customers in domestic,
international, urban and rural locations where finding the product desired by
the customer is not always a simple task.
STRATEGY
The Company's objective is to become the leading global Internet-only
retailer of computer hardware, software and peripheral products to the consumer
and business marketplaces. The Company intends to capitalize on and extend its
market position as one of the first Internet-only retailers of computer
hardware, software and peripheral products through the following key strategies:
Building Brand Awareness -- The Company believes that building brand awareness
of its Internet storefronts is critical to attracting and expanding its customer
base. The Company intends to continue building brand awareness and expanding
its customer base through various marketing methods, including: (i) strategic
alliances with various Internet content providers and sites of interest; (ii)
Internet marketing campaigns, including both general and direct advertising;
(iii) creating many general and specific "links" to the Company's Internet
storefronts; (iv) targeted non-Internet marketing programs aimed at generating
sales from consumers and businesses; and (v) specialized programs directed
towards building repeat business from existing customers.
Promote Repeat Purchases -- The Company's strategy is to build customer loyalty
and thereby promote repeat buying by providing enhanced product information to
consumers, efficient site navigation and search capabilities, personalized
services and targeted communications and promotions, and a broad range of
immediately available products.
Leverage and Further Develop Strategic Relationships -- The Company intends to
continue to leverage its strategic marketing alliances with popular portals and
sites of interest such as C|Net's Shopper.com and technology enablers such as
Digital River, Inc. (NASDAQ: DRIV) to enhance its Internet storefronts'
technology, expand brand recognition and increase site traffic and subsequent
customer sales. The Company also intends to expand its online visibility and
may enter into relationships with additional Internet access providers, search
engines and other high-traffic Internet sites.
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Maintain Technology Focus and Expertise -- The Company intends to continue
maximizing the unique efficiencies of the Internet, such as the ability to make
changes in merchandising and content in real-time and at low cost, to (i)
increase merchandising effectiveness, (ii) personalize the customers'
experiences, and (iii) improve operating efficiencies. The Company is
developing systems to personalize visitors' shopping and post-shopping
experiences. By targeting content and promotions such as e-mails, newsletters
and store advertising, the Company can deliver more compelling promotional
programs. The Company also intends to use such technology to lower transaction
costs and improve the customer's online shopping experience through (i) the
automation of customer service functions such as automated e-mail responses and
online in-stock status; (ii) product management such as using automation to
update the product databases and create upsells and links to product reviews;
and (iii) communications with suppliers for purchasing and automated payment
methods for accounting.
Strengthen First-Mover Advantages -- The Company believes that significant
barriers exist that are making it increasingly difficult to enter the online
computer products marketplace in a cost-effective manner. These barriers
include: (i) the necessary up-front investment in technology and technical
infrastructure, such as that required for real-time processing of both payment
and order fulfillment; (ii) the time and expense required to build a brand that
effectively draws customers to an Internet site; (iii) the time, expense and
expertise necessary to develop publisher and distributor relationships; and (iv)
the need to develop strategic alliances with high-traffic, high-profile Internet
sites. The Company intends to extend its first-mover advantages in each of
these areas.
THE STOREFRONTS
Customers access the Company's Internet storefronts through
www.anythingpc.com, www.anythingmac.com or www.anythingunix.com and are
presented with a simple, intuitive and easy to use graphical interface. The
Company has learned that customers entering the storefronts generally fall into
one of two categories: (i) they are looking for specific product and wish to
purchase it quickly and at a competitive price; or (ii) they are browsing the
store and seeking an entertaining and informative shopping experience. The
Company's Internet storefronts are designed to satisfy both types of customers.
Just like a physical retail store, customers can browse the departments of the
store, search for specific needs, view promoted products, obtain product
information, order products, and ask for customer service. Unlike the
traditional retail store, this can all be accomplished from the comfort and
convenience of the customer's home or office.
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Shoppers purchase products by simply clicking on a button to add products
to their "virtual" shopping baskets. Customers can add and/or subtract products
from their shopping baskets as they browse, prior to making a final purchase
decision, just as in a physical retail store. To execute orders, customers
click on the buy button and are prompted to supply shipping and, in the case of
consumers, credit card details, either by e-mail or by telephone. The store
design enables purchasers to buy several products at once, rather than having to
repeat the same purchase process for each desired product. All customer
information is stored on the Company's secure server and is used to enhance
subsequent shopping experiences by the repeat customer and better enable the
Company to target special promotions. This process is highly automated, but the
Company does accept orders, questions and requests for product information via
the telephone for those customers who are concerned about sending credit card
information over the Internet.
MARKETING AND PROMOTION
The Company's marketing strategy is to promote, advertise and increase its
brand visibility to attract new customers through multiple channels, including:
(i) developing strategic alliances with major portal sites, (ii) advertising on
leading Internet sites and other media worldwide, (iii) expanding the Company's
affiliates network and linking programs, and (iv) direct marketing to existing
and potential customers. The Company believes that the use of multiple
marketing channels reduces reliance on any one source of customers, lowers
customer acquisition costs, and maximizes brand awareness.
Strategic Alliances -- The Company pursues strategic relationships to expand the
Company's online presence, increase its access to online customers, expand brand
recognition, and enhance the underlying technology of its Internet storefronts.
In pursuing these relationships, the Company seeks exclusive or semi-exclusive
positioning for the sales of computer related products on key screens of major
Internet sites. To date, the Company has established successful strategic
alliances with C|Net Shopper.com and Digital River, Inc. (NASDAQ: DRIV).
C|Net's Shopper.com is a leading Internet consumer price comparison "robot"
service that compares prices and availability on over 100,000 computer products,
including those sold by the Company. The Company's Internet storefronts receive
a substantial number of hits per day directly from C|Net's Shopper.com. The
leads generated as a result of C|Net's Shopper.com are typically consumers
looking for a specific product at a low price with immediate availability and
are ready to buy. For this service the Company pays C|Net's Shopper.com $500 a
month for the first 2,000 hits and $0.25 a hit afterwards. The Company is using
its success with Shopper.com as a model for entertaining other similar strategic
alliances.
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Digital River, Inc. offers the world's largest online databases of software
products. The company provides more than 2,000 software publishers and online
dealers with its proprietary technology for Internet delivery of more than
131,000 software and other digital products. As a result of its strategic
alliance with Digital River, the Company is now able to offer its customers
seamless, yet secure, on-demand downloading of any software title via the
Internet.
Online Advertising -- In addition to its primary strategic alliances, the
Company utilizes numerous online sales and marketing techniques to increase
brand recognition and drive traffic to the Company's Internet storefronts,
including banner advertising on various high-traffic Internet sites. Such
banner advertisements can be permanently displayed for designated periods of
time or displayed when a user searches for information relating to certain
keywords (ie. "printers" or "software").
Direct Marketing -- The Company believes that the demographics of Internet users
overlap one-to-one with the demographics of potential computer hardware,
software and peripheral purchasers and that the Internet provides additional
opportunities for direct marketing to the Company's customers through a variety
of mechanisms. The Company is exploring such direct marketing opportunities
targeting new and existing customers with customized offers such as an e-mail
newsletter, special product offers and preferred customer offers.
Linking -- The Company believes it is important to create as many Internet
"links" to its Internet storefronts as possible. The Company has begun an
aggressive program to increase the number of links from search engines,
manufacturers' Internet sites, community, affinity and basic home pages.
Customer Service -- The Company believes its ability to establish and maintain
long-term relationships with its customers and encourage repeat visits and
purchases depends, in part, on the strength of its customer support and service.
Customer support and service personnel are responsible for handling general
customer inquiries, answering customer questions about the ordering process, and
investigating the status of orders, shipments and payments. The Company has
automated certain of the tools used by its customer support and service staff,
including the tracking screens that enable its support staff to track a
transaction by any of a variety of information sources. At any point in the
purchasing process, customers can access the Company's support staff by e-mail,
fax or telephone. Customers who are reluctant to enter their credit card
numbers through the Internet site are also invited to call the Company directly
for purchases. The Company currently employees a growing staff of dedicated
customer support and service personnel.
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TECHNOLOGY AND SYSTEMS
The Company uses complex proprietary and commercially licensed technology
to make both the customer experience and the management reporting process as
seamless and simple as possible with minimal human intervention necessary. To
that end, the Company has developed technologies and systems to support
scaleable, flexible and seamless online reselling in a secure and easy to use
manner. By using a combination of proprietary and commercially available
technologies, the Company has deployed systems for online content dissemination,
online transaction processing, customer service, market analysis and electronic
data interchange.
Scaleability an Flexibility -- The architecture of the Company's hardware and
software is built upon a distributed transaction-processing model which allows
the process load to be distributed among multiple parallel servers. This
architecture allows the Company to scale by either adding new servers or
increasing the capacity of existing servers. The Company's hardware and
software configuration is designed to scale to support growth while maintaining
user performance and minimizing the cost per transaction. In the rapidly
changing Internet environment, the ability to update this system in order to
stay current with new technologies is important. The system's template
technology and modular database design allow the addition or replacement of
software components, page layout templates, and search and retrieval engines
with minimal effort and disruption. This architecture also enables low-cost,
rapid deployment of additional, co-branded Internet sites that integrate with
the Company's other Internet storefronts.
Seamlessness -- The Company's multiple hardware and software systems integrate
seamlessly to manage real-time transactions with limited human intervention.
Orders for products are routed to the appropriate contact person or distributor
while the customer's credit card is charged. Orders requiring human
intervention are automatically routed for processing by a customer service
representative.
Store Engine Architecture -- The Company's hardware and software systems are
based upon a distributed transaction-processing model that allows applications
and data to be distributed among multiple parallel servers. Many of the
software components, and the pages of the Company's Internet storefronts, are
developed in a manner that enables the separation of the page look and feel from
the individual data elements and their associated database lookups. This
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separation permits frequent changes to product pricing information, reduces
software and database updates for Internet site changes, and minimizes the
engineering required to maintain a growing number of items and content. The
Company utilizes technology that also enables Internet storefronts with
different formats to integrate various elements such as search, vendor and
product pages. This technology allows the Company to maintain several Internet
storefronts over a single order processing and customer service system.
Data Warehouse -- The Company utilizes a database management system to index,
retrieve and manipulate product information, content, product catalogs, orders
and transaction and customer information. This system allows for rapid
searching, sorting, viewing and distribution of a large volume of content. The
Company deploys a data warehouse that enables it to access detailed transaction
and customer interaction data and perform proprietary market analysis. The data
warehouse provides a unified platform for the store engine and other components.
This data warehouse system incorporates commercially available hardware and
software combined with proprietary software of the Company in a configuration
developed internally.
Customer Reassurance -- A critical issue to the success of online retailing is
maintaining the integrity of information, particularly the security of customer
information such as credit card numbers. The Company believes that its existing
security systems are at least as secure as those used for traditional retail
store transactions and that it has a comprehensive security strategy. The
Company's system automatically monitors each purchase and confirms each order by
e-mail to the customer within minutes after the order is placed.
Fault Tolerance and Scaleable Internet Access -- The company's systems are
designed for automatic transfer to "hot" spare systems in the event of failure
and are equipped with fully automated reporting tools. These tools provide
automated trouble notification and detailed event logging. A load distribution
system monitors traffic to each server. Should a system fail to respond to a
request, the automated distribution system will redistribute traffic among the
remaining machines with no loss of user functionality. In addition, the Company
maintains redundant servers in both California and Colorado to further minimize
the chance of loss or system disruption.
Notwithstanding these precautions, there can be no assurance that either
the security mechanisms of the Company's Internet provider, the Company, or the
Company's other suppliers will prevent security breaches or service breakdowns.
Despite the implementation of network security measures by the Company, its
servers may be vulnerable to computer viruses, physical or electronic break-ins,
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and other disruptions that could lead to interruptions, delays, loss of data, or
the inability to accept and fulfill customer orders and could have a material
adverse effect on the Company's finances, prospects, financial condition and
results of operation.
COMPETITION
The online commerce market is new, rapidly evolving, and intensely
competitive. Current and new competitors can launch new sites at a relatively
low cost. In addition, the computer products retail industry is intensely
competitive. The Company currently or potentially competes with a variety of
other companies. These competitors include (i) various traditional computer
retailers including CompUSA and MicroCenter, (ii) various mail-order retailers
including CDW, MircoWarehouse, Insight, PC Connection and Creative Computers,
(iii) various Internet-focused computer retailers including Egghead.com,
beyond.com, Cyberian Outpost and BuyComp.com, (iv) various manufacturers that
sell directly over the Internet including Dell, Gateway and Apple, (v) a number
of online service providers including America Online and the Microsoft Network
that offer computer products directly or in partnership with other retailers,
(vi) some non-computer retailers such as Wal*Mart that sell a limited selection
of computer products in their stores, and (vii) computer products distributors
which may develop direct channels to the consumer market. Increased competition
from these and other sources could require the Company to respond to competitive
pressures by establishing pricing, marketing and other programs or seeking out
additional strategic alliances or acquisitions, any of which could have a
material adverse affect on the business, prospects, financial condition and
results of operations of the Company.
The Company believes that the principal competitive factors in its market
are brand recognition, selection, price, variety of value-added services, ease
of use, site content, fulfillment, reliability, quality of search tools,
customer service and technical expertise. Many of the Company's current and
potential competitors have longer operating histories, larger customer bases,
greater brand recognition, and significantly greater financial, marketing and
other resources than the Company. In addition, online retailers may be acquired
by, receive investments from, or enter into other commercial relationships with
larger, well-established and well-financed companies as use of the Internet and
other online services increases. The Company is aware that certain of its
competitors have and may continue to adopt aggressive pricing or inventory
availability policies and devote substantially more resources to Internet site
and systems development than the Company. Increased competition may result in
reduced operating margins, loss of market share, and a diminished brand
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franchise, any of which would have a material adverse effect on the Company.
Moreover, companies that control access to transactions through network access
or Web browsers currently promote, and will likely continue to promote,
competitors of the Company. There can be no assurance that the Company will be
able to respond effectively to increasing competitive pressures or to compete
successfully with current and future competitors.
INTELLECTUAL PROPERTY
The Company claims common law trademark for its logo, corporate name, and
Internet storefronts - AnythingPC, AnythingMAC and AnythingUNIX. The Company
also has reserved the rights to hundreds of Internet domain names, including
www.anythinginternet.com, www.anythingpc.com, www.anything.mac.com,
www.anythingunix.com and www.anythingcellular.com.
EMPLOYEES
The Company believes its success depends to a significant extent on its
ability to attract, motivate and retain highly skilled management and employees.
To this end, the Company focuses on incentive programs such as employee stock
options and competitive compensation and benefits packages for its employees to
foster a corporate culture which is challenging and rewarding, yet fun. As of
January 25, 1999, the Company had seven employees: six full-time and one
part-time. Currently full-time employees receive health and dental plans after
90 days of employment. The Company also employs, from time to time, a limited
number of independent contractors and temporary employees on a periodic basis.
None of the Company's employees are represented by a labor union and the Company
considers its labor relations to be good.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS
Fiscal Year 1998 Ending June 30, 1998
The Company was incorporated under the laws of the State of Colorado on
August 15, 1997. June 30, 1998 marked the end of the Company's first fiscal
year, which, as a result of the ending day of the fiscal year, was a short year
for the Company.
Net sales for the fiscal year ending June 30, 1998 were $657,988. All of
these sales were a result of the Company establishing its first Internet
storefronts and generating initial customer traffic and orders through these
Internet storefronts.
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Gross profits for the fiscal year ending June 30, 1998 were $44,666, or
6.8% of sales. Gross profit margins for Internet retailers have historically
been significantly lower than traditional brick-and-mortar retailers as a result
of the deep price discounts typically offered to Internet customers.
Selling, general and administrative (SG&A) expenses for the fiscal year
ending June 30, 1998 were $69,428. The major components of these expenses for
the fiscal year were the acquisition costs of office and computer equipment and
software development costs.
The net loss for the fiscal year ending June 30, 1998 amounted to $24,762,
or $4.27 a share. There were 5,800 shares issued and outstanding as of June 30,
1998, on both a basic and fully diluted basis. The net loss was primarily
attributable to expensing initial start-up costs.
Six-Months Ending December 31, 1998 Compared to Six-Months Ending December 31,
1997
Net sales for the six-months ending December 31, 1998 were $1,650,464, an
increase of 27,453% over $5,990 for the same period a year ago. The increase in
net sales was driven primarily by increasing customer awareness of the Company's
Internet storefronts, building brand awareness, improving Internet storefront
content, and substantially increasing the number of products available through
its Internet storefronts to more than 171,000 different computer hardware,
software and peripheral products. In addition, as of December 31, 1998 the
Company had sold products to approximately 5,956 unique customers.
Gross profits for the six-months ending December 31, 1998 were $75,691, or
4.6% of sales, compared to ($776), or (13.0%) of sales, for the same period a
year ago. The increase in gross profit was due to increased product sales as
discussed above and improved product pricing practices.
Selling, general and administrative (SG&A) expenses for the six-months
ending December 31, 1998 were $182,368, an increase of 1,686% over $10,210 for
the same period a year ago. The dollar increase in SG&A over the prior same
period is the result of additional costs incurred in handling higher order
volumes, increased computer and technology acquisitions for handling increase
Internet storefront traffic, and increased staffing demands.
The net loss for the six-months ending December 31, 1998 was $137,857, or
$0.46 a share, an increase of 1,155% over $10,987, or $1.89 a share, for the
same period a year ago. The increase in net loss is attributable to increased
SG&A expenses and capital expenditures.
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The Company does not believe that inflation has had a material adverse
effect on sales or income since its inception on August 15, 1997. Increases in
product or other operating costs may adversely affect the Company's operations;
however, the Company believes it will be able to maintain its present gross
profit margins by monitoring and adjusting the prices of the products it sells
to offset increases in costs of goods sold or other operating costs.
Based on its experience to date, the Company believes that its future
operating results may be subject to quarterly variations based on a variety of
factors, including seasonal buying patterns in the computer industry. Such
effects may not be apparent in the Company's operating results during a period
of expansion. However, the Company can make no assurances that its business can
be significantly expanded under any circumstances.
Liquidity and Capital Resources
The Company's operations to date have concentrated on developing its
Internet storefronts, building brand recognition and a loyal customer following,
and securing the financing necessary to fund the development, operations and
expansion of its business.
As of December 31, 1998, the Company had $24,597 cash on hand, accounts
receivable of $57,681, and a receivable note of $18,023. The Company also had
bank credit lines aggregating $85,000 with $18,634 available for immediate
usage. In addition, the Company had several supplier lines of credit, including
Tech Data, $50,000; Ingram Micro, $75,000 (as of January 25, 1999, Ingram Micro
was in the process of increasing this credit line to $300,000); Merisel, $5,000;
and Pinacor, $5,000. Additionally, Reseller Credit Corporation finances
corporate purchase orders on behalf of the Company for products supplied by
Ingram Micro.
As of December 31, 1998, cash used by operating activities, since its
inception on August 15, 1997, totaled ($192,746). The majority of the cash flow
used in these operating activities was the result of SG&A expenses and initial
business start-up costs.
As of December 31, 1998, cash used by investing activities, since its
inception on August 15, 1997, totaled ($99,722). All of these investments were
in office equipment, technology and software development.
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As of December 31, 1998, cash provided by financing activities, since its
inception on August 15, 1997, totaled $297,866. The majority of this financing
was the result of borrowing activities, utilizing credit facilities, and
completing a successful private placement in December 1998 which yielded net
proceeds of $200,000.
The Company expects to continue making significant investments in the
future to support its overall growth. Currently, it is anticipated that ongoing
operations will be financed primarily from the net proceeds of the anticipated
exercise of the Warrants the Common Stock being registered herein underlie, the
various credit facilities available to the Company, and from internally
generated funds. However, as indicated in the Company's most recent financial
statements available herein, while operating activities provide some cash flow,
the Company is currently cash flow negative. There can be no assurances that
the Company's ongoing operations will begin to generate a positive cash flow or
that unforeseen events may not require more working capital than the Company
currently has at its disposal.
Year 2000 Compliance
Many currently installed computer systems and software products are coded
to accept only two digit entries in the date code field. These date code fields
will need to accept four digit entries to distinguish 21st century dates from
20th century dates. This could result in system failures or miscalculations
causing disruptions of operations, including, among other things, a temporary
inability to process transactions, send invoices or engage in similar normal
business activities. As a result, many companies' software and computer systems
may need to be upgraded or replaced in order to comply with such "Year 2000"
requirements. The Company utilizes third-party equipment and software that it
believes is Year 2000 compliant. The Company is in the early stages of
conducting an audit of its third-party suppliers as to the Year 2000 compliance
of their systems. The Company does not believe it will incur significant costs
in order to comply with Year 2000 requirements. However, failure of the
Company's internal computer systems or of such third-party equipment or
software, or of systems maintained by the Company's suppliers, to operate
properly with regard to the Year 2000 and thereafter could require the Company
to incur unanticipated expenses to remedy any problems, which could have a
material adverse effect on the Company's business, financial condition and
results of operations.
DESCRIPTION OF PROPERTY
The Company maintains offices in Colorado Springs, Colorado at 3020 North
El Paso in a 2,069 square foot office space through a one-year lease that
commenced on June 3, 1998. The Company pays $1,280 a month, utilities included,
for this leased office space.
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CERTAIN TRANSACTIONS
On August 22, 1998, the Company entered into a Share Exchange Agreement
with Banyan Corporation, a publicly traded company listed on the OTC Electronic
Bulletin Board under the trading symbol "BANY". Under the terms of the Share
Exchange Agreement, the Company caused the issuance of 1,000,000 shares of its
Common Stock to Banyan pursuant to exemptions under Section 4(2) of the
Securities Act and Regulation D thereunder in exchange for 200,000 shares of
Banyan Common Stock, issued pursuant to exemptions under Section 4(2) of the
Securities Act and Rule 144 thereunder. The then market price for Banyan's
Common Stock was $0.20 a share, resulting in an effective price of four cents a
share for the Company's Common Stock.
In addition to the shares of Banyan Common Stock received, the Company was
also granted options to purchase 300,000 additional shares of Banyan Common
Stock, vested immediately, as follows: 100,000 shares at 50 cents a share,
expiring February 28, 1999; 100,000 shares at $1.00 a share, expiring August 31,
1999; and 100,000 shares at $2.00 a share, expiring August 31, 2000.
As part of the Share Exchange Agreement, Banyan was empowered to appoint
two Directors to the Company's Board of Directors. Banyan appointed its
President and Chief Executive Officer, Cameron B. Yost, and its outside
management and financial consultant, J. Scott Sitra.
Subsequent to the Share Exchange Agreement, the Company elected to
reclassify itself from an Internal Revenue Service subchapter "S" corporate
classification to a subchapter "C" corporate classification and transition the
closing day of its fiscal year from December 31st to June 30th.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Prior to the filing of this Registration Statement there has been no market
for the Company's Common Stock, and there can be no assurance that a liquid and
active market will ever develop, or if developed, that it will be sustained.
Application is being made for the quotation of the Company's Common Stock on the
OTC Electronic Bulletin Board market under the proposed trading symbol "ANYI."
The initial trading price of the Company's Common Stock, once it is
approved for trading, will be determined by the negotiation between the Company
and the initial Market Maker posting bid and ask quotations for the Company's
Common Stock, and will not necessarily bear any direct relationship to the
Company's assets, earnings, book value or other generally accepted criteria of
value.
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As of January 25, 1999, the Company had approximately 176 shareholders of
record. This does not include shareholders who hold stock in their accounts at
broker-dealers.
DIVIDEND POLICY
The Company has never declared or paid any dividends on its capital stock.
The Company currently intends to retain all available funds and any future
earnings of its business for use in the operation of its business and does not
anticipate paying any cash or other dividends in the foreseeable future. The
declaration, payment and amount of future dividends, if any, will depend upon
the future earnings, results of operations, financial position and capital
requirements of the Company, among other factors, and will be at the sole
discretion of the Board of Directors.
SHARES ELIGIBLE FOR FUTURE SALE
The Company is authorized to issue up to 50,000,000 shares of its Common
Stock. If all warrants, stock options, and Employee Stock Ownership Program
reserves are exercised and released, the Company would have 3,976,000 shares
issued and outstanding (fully diluted basis). In such an event, the Company
would have approximately 46,024,000 shares of authorized, but unissued, Common
Stock available for issuance without further shareholder approval. Any issuance
of additional shares of Common Stock may cause current shareholders to suffer
significant dilution, which may adversely affect prevailing market prices,
should a market for the Company's Common Stock ever develop.
Additionally, in the event a market does develop for the Company's Common
Stock, future sales of substantial amounts of Common Stock into the public
market could adversely affect any prevailing market prices and the Company's
ability to raise equity capital in the future.
As of January 25,1999, the Company had 3,074,400 shares of Common Stock
issued and outstanding. Of these shares, 500,400 shares are currently
restricted from resale pursuant to Section 4(2) of the Securities Act and Rule
144 thereunder. Subject to the volume and other restrictions of Rule 144,
185,000 of these shares become eligible for sale on August 22, 1999; 400 of
these shares become eligible for sale on January 10, 2000; and 315,000 of these
shares become eligible for sale on August 22, 2000.
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As of January 25, 1999, the Company had outstanding 500,000 fully vested
options to purchase shares of the Company's Common Stock at an exercise price of
$1 a share. These options are held by early shareholders in the Company and
expire on February 29, 2000. The Company has not filed any registration
statements with the SEC to register any of the Common Stock underlying these
options. The Company anticipates filing a Form S-8 registration statement with
the SEC in the future to register the Common Stock underlying these options, but
until it files such a registration statement any shares of Common Stock issued
to exercising option holders will be subject to the resale restrictions of Rule
144.
On January 10, 1999, the Company set aside a reserve of 200,000 shares of
Common Stock to establish an Employee Stock Ownership Program (ESOP). As of
January 25, 1999, no shares had been issued or authorized for issue under the
Company's ESOP. While it is anticipated this reserve will be sufficient to
satisfy the needs of the Company's ESOP for the next several years, it is
possible the Company could use the entire reserve at any time. Common Stock
issued to employees through the Company's ESOP may or may not have any
restrictions attached thereunder.
In addition, because the 800,027 shares of Common Stock held by Banyan
Corporation equates to an ownership level exceeding 10% of the total issued and
outstanding shares of the Company's Common Stock, it is deemed a "control
person" as defined in the Securities Act. While the shares of Common Stock
owned by Banyan are not subject to any trading restrictions per se, control
persons are always subject to the volume restrictions on sales of their holdings
as defined in Rule 144 of the Securities Act. As such, Banyan may be limited to
the number of shares it may sell during any given future period of time.
In general, under Rule 144 as currently in effect, an affiliate of the
Company or person (or persons whose shares are aggregated) who has beneficially
owned restricted shares for at least one year (two years for insiders) will be
entitled to sell in any three-month period a number of shares that does not
exceed the greater of (i) one percent of the then outstanding shares of the
Company's Common Stock or (ii) the average weekly trading volume of the
Company's Common Stock during the four calendar weeks immediately preceding the
date on which notice of the sale is filed with the SEC. Sales made pursuant to
Rule 144 are subject to certain requirements relating to manner of sale, notice
and the availability of current public information about the Company. A person
(or persons whose shares are aggregate) who is not deemed to have been an
affiliate of the Company at any time during the 90 days immediately preceding
the sale and who has beneficially owned the shares for at least two years is
entitled to sell such shares under Rule 144(k) without regard to the limitations
described herein.
42
<PAGE>
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
On September 1, 1998, the Company engaged J. Paul Kenote, CPA, P.C. as its
independent public accountants. The Company had no prior independent auditor.
43
<PAGE>
FINANCIAL STATEMENTS
AUDITED FINANCIAL STATEMENTS AS OF JUNE 30, 1998 FOR THE FISCAL YEAR ENDING JUNE
30, 1998
CONTENTS
Independent Auditor's Report F-1
Balance Sheet F-2
Statement of Operations F-4
Statement of Changes in Stockholders' Equity F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Anything, Inc.
Colorado Springs, Colorado
We have audited the accompanying balance sheet of Anything, Inc. as of June 30,
1998 and the related statements of operations, changes in shareholders' equity
and cash flows for the period from August 15, 1997 to June 30, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, these financial statements referred to above present, in all
material respects, the financial position of Anything, Inc. at June 30, 1998 and
the results of their operations and their cash flows for the period beginning
August 15, 1997 to June 30, 1998 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 to the
financial statements, the Company is attempting to establish itself as a player
in a very competitive market. It also has a substantial need for cash to
finance its development stage and ongoing activities. These and other factors
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regard to these matters are also discussed in
Note 6. The accompanying financial statements do not include any adjustments
relating to the recover ability and classification of asset carrying amounts or
the amount and classification of liabilities that might result should the
Company be unable to continue as a going concern.
/s/ J. Paul Kenote
- ----------------------------------
J. PAUL KENOTE, CPA, P.C.
Portland, Oregon
December 21, 1998
F-1
<PAGE>
<TABLE>
<CAPTION>
ANYTHING, INC.
(A Development Stage Company)
BALANCE SHEET
June 30, 1998
ASSETS
<S> <C>
Current assets:
Cash $42,114
Accounts receivable, trade 14,591
-------
56,705
-------
Furniture and fixtures:
Office furniture and equipment 14,461
Less accumulated depreciation 2,892
-------
11,569
-------
Other assets:
Software development costs, net of
Accumulated amortization of $4,088 21,984
Deferred tax benefit, net of valuation
Allowance of $7,321 (Note 5) -
Deposits 1,380
-------
23,364
-------
$91,638
=======
</TABLE>
F-2
<PAGE>
<TABLE>
<CAPTION>
ANYTHING, INC.
(A Development Stage Company)
BALANCE SHEET
June 30, 1998
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C>
Current liabilities:
Notes payable (Note 2) $ 25,500
Note payable - line of credit (Note 3) 32,038
Accounts payable, trade 17,441
Accrued expenses 5,221
---------
80,200
---------
Commitment (Note 4)
Stockholders' equity:
Common stock, no par value, 1,000,000 shares
Authorized; 5,800 issued and outstanding 36,200
Deficit accumulated during development stage (Note 6) (24,762)
---------
11,438
---------
$ 91,638
=========
</TABLE>
F-3
<PAGE>
<TABLE>
<CAPTION>
ANYTHING, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Period From August 15, 1997 to June 30, 1998
<S> <C>
Sales $ 657,988
Cost of sales 613,322
----------
Gross margin 44,666
Selling, general and administrative expenses 69,428
----------
Excess of expenditures over revenues before
income tax benefit (24,762)
Income tax benefit (Note 5) -
----------
Net loss for the period ($24,762)
==========
</TABLE>
<TABLE>
<CAPTION>
ANYTHING, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period From August 15, 1997 to June 30, 1998
Common Stock Issued
--------------------- Retained Total
Number Amount Deficit Equity
--------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Balance at August 15, 1997 - $ - $ - $ -
Sales of common stock 5,800 36,200 - 36,200
Net loss for the period (24,762) (24,762)
--------- ---------- ----------- -----------
Balance at June 30, 1998 5,800 $ 36,200 ($24,762) $ 11,438
========= ========= =========== ===========
</TABLE>
F-4
<PAGE>
<TABLE>
<CAPTION>
ANYTHING, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Period From August 15, 1997 to June 30, 1998
<S> <C>
Cash flows from operating activities:
Net operating deficit ($24,762)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization expense 6,980
Net changes in operating assets and liabilities:
Accounts receivable (14,591)
Deposits (1,380)
Accounts payable and accrued expenses 22,662
----------
Net cash used by operations (11,091)
----------
Cash flows from investment activities:
Acquisition of office equipment (14,461)
Software development costs incurred (26,072)
----------
Net cash used by investment activities (40,533)
----------
Cash flows from financing activities:
Proceeds from borrowing 57,538
Sale of stock 36,200
----------
Net cash provided by financing activities 93,738
----------
Net cash increase 42,114
Cash at beginning of the period -
----------
Cash at end of the period $ 42,114
==========
Supplemental schedule of non-cash financing transactions:
Issuance of 830 shares of common stock for software
development services $ 16,600
==========
</TABLE>
F-5
<PAGE>
ANYTHING, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND LINE OF BUSINESS:
Line of business:
Anything, Inc. was organized on August 15, 1997 as a Colorado corporation to
market and distribute computers and related accessory products by using the
Internet as the exclusive distribution channel.
Use of estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
NOTE 2 - NOTES PAYABLE:
Notes payable consist of the following:
Note payable to a former shareholder of the Company
in exchange for the redemption of his stock. The note is
to be paid in four unequal installments, is non-interest
bearing and is personally guaranteed by the principal
shareholder of the Company. $15,000
Note payable to the parents of the principal shareholder of
the company, bearing interest at 8% per annum and due on
or before December 31, 1998. The note is unsecured. 10,500
-------
$25,500
=======
NOTE 3 - LINE OF CREDIT
To help finance the cost of inventory, Nations Credit Distribution Finance, Inc.
has extended the Company, a credit line not to exceed $35,000. The interest
rate applicable to each transaction will depending upon the vendor and the
timeliness of repayment and will range from 0% to 18%. The credit line is
unsecured.
F-6
<PAGE>
NOTE 4 - OBLIGATION UNDER LEASE COMMITMENT:
The company leases approximately 2,000 square feet of office space under a
non-cancelable lease agreement expiring May 31, 1999. The lease can be extended
based on terms and conditions to be established at that time. The lease payment
in comprised of a scheduled monthly base payment plus personal property taxes,
insurance and utilities.
Future minimum annual lease payments are as follows:
<TABLE>
<CAPTION>
Years Ending
June 30, Amount
- -------- ------
<S> <C>
1999 $ 14,080
-------
$ 14,080
=======
</TABLE>
Lease expense incurred for the period from August 15, 1997 to June 30, 1998 was
$4,244.
NOTE 5 - DEFERRED INCOME TAXES
The provision(benefit) for income taxes is based on transactions included in the
determination of pre-tax accounting income or loss, including appropriate
provision (benefit) for deferred income taxes. Deferred tax liabilities and
assets are recognized for the expected future tax consequences of events that
have been included in the financial statements or tax returns. Deferred income
tax assets and liabilities are computed annually for differences between the
financial statement and tax bases of assets and liabilities that will result in
taxable or deductible amounts in the future based on enacted tax laws and rates
applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized.
The net deferred tax assets in the accompanying financial statements at June 30,
1998 consist of the following:
F-7
<PAGE>
Deferred tax assets arising from:
<TABLE>
<CAPTION>
<S> <C>
Net operating loss carryforward $ 7,321
Valuation allowance for deferred tax assets (7,321)
-------
Net deferred tax assets $ -
The components of the benefit for income taxes for the period
from August 15, 1997 to June 30, 1998 are as follows:
Federal
Current $ -
Deferred 6,382
------
$ 6,382
======
State and local:
Current $ -
Deferred 939
------
$ 939
======
</TABLE>
As of June 30, 1998, the Company had net operating loss carryovers of $18,721
available to offset future taxable income, if any. The ownership changes that
have occurred to date do not operate to limit the utilization of these net
operating loss carryovers in future years. In the event of ownership changes
aggregating fifty percent or more in any three-year period, the amount of loss
carryover that becomes available for utilization in any year may be limited.
The tax loss carryovers, if not utilized against taxable income, will expire in
the year 2019.
NOTE 6 - CONTINUED OPERATIONS
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is a development stage
company as defined in Financial Accounting Standard No. 7, Accounting and
Reporting by Development Stage Enterprises (FAS-7). It is devoting
substantially all of its effort to raise capital, developing markets and
training personnel in order to generate significant operations. It is not
certain that the Company will be able to obtain the financing required to fund
the planned operations or retain sufficient management expertise to continue its
planned business operations. These factors raise substantial doubt about the
company's ability to continue as a going concern. The financial statements do
not include any adjustments relating to the recoverability and classification of
asset carrying amounts or the amount and classification of liabilities that
might result should the Company be unable to continue as a going concern.
F-8
<PAGE>
UNAUDITED 6-MONTHS INTERIM FINANCIAL STATEMENTS ENDING DECEMBER 31, 1998
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
(A Development Stage Company)
BALANCE SHEET
(unaudited)
December 31, 1998
ASSETS
<S> <C>
Current assets:
Cash $ 24,597
Accounts receivable, trade 57,681
Inventory 12,244
Prepaid expenses and other current assets 10,129
---------
104,651
---------
Furniture and fixtures:
Office furniture and equipment 45,996
Less accumulated depreciation 6,630
---------
39,366
---------
Other assets:
Software development costs, net of
Accumulated amortization of $10,372 43,354
Deferred tax benefit 7,321
Note receivable (Note 2) 18,023
Deposits 1,380
---------
70,078
---------
$214,095
=========
</TABLE>
F-9
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
(A Development Stage Company)
BALANCE SHEET
(unaudited)
December 31, 1998
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C>
Current liabilities:
Notes payable (Note 3) $ 66,366
Accounts payable, trade 42,525
Accrued expenses 19,373
Prepaid sales 10,130
---------
138,394
---------
Reserve for tax deferred benefit 7,321
---------
145,715
=========
Stockholders' equity:
Common stock, no par value, 50,000,000 shares
Authorized; 3,074,400 issued and outstanding 231,000
Deficit accumulated during development stage (162,620)
---------
68,380
---------
$ 214,095
=========
</TABLE>
F-10
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
(A Development Stage Company)
STATEMENT OF OPERATIONS
(unaudited)
For the Period From July 1, 1998 to December 31, 1998
- Six Months Ending - August 15,
December 31, December 31, 1997
1997 1998 (inception)
------------ ------------ to December
unaudited unaudited 31, 1998
------------ ------------ ------------
<S> <C> <C> <C>
Sales $ 5,990 $ 1,650,464 $ 2,308,452
Cost of sales 6,766 1,574,773 2,188,095
------------ ------------ ------------
Gross margin (776) 75,691 120,357
Selling, general and administrative expenses
10,210 213,548 282,976
Net loss for the period 10,986 137,857 162,619
Earnings per share (basic) (1) ($1.89) (2) ($0.46) (3) ($0.53)
Earnings per share (diluted) (1) ($1.89) (2) ($0.37) (3) ($0.41)
- ----------------------------
<FN>
(1) As of December 31, 1997, there were 5,800 shares of Common Stock issued and
outstanding and on a fully diluted basis.
(2) As of December 31, 1998, there were 3,020,000 shares of Common Stock issued
and outstanding and 3,720,000 on a fully diluted basis, including the
outstanding warrants underlying the Common Stock being registered in this
Registration Statement.
(3) As of January 26, 1999, there were 3,074,400 shares of Common Stock issued
and outstanding and 3,976,000 on a fully diluted basis, including the
outstanding warrants underlying the Common Stock being registered in this
Registration Statement.
</TABLE>
F-11
<PAGE>
<TABLE>
<CAPTION>
ANYTHING INTERNET CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(unaudited)
For the Period From July 1, 1998 to December 31, 1998
- Six Months Ending - August 15,
December 31, December 31, 1997
1997 1998 (inception)
------------ ------------ to December
unaudited unaudited 31, 1998
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating
activities:
Net operating deficit ($10,987) ($157,414) ($182,176)
Adjustments to
Reconcile net loss to
net cash provided:
Depreciation and
Mortgage expense - 10,021 17,001
Net changes in
operating assets
and liabilities:
Accounts receivable (4,323) (42,534) (57,125)
Deposits - - (1,380)
Other assets - (22,273) (22,273)
Notes receivable - (18,023) (18,023)
Accounts payable
and accrued
expenses 4,575 48,568 71,230
------------ ------------ ------------
Net cash used by
Operations (10,735) (181,655) (192,746)
------------ ------------ ------------
Cash flow from investment
activities:
Acquisition of office
equipment - (31,535) (45,996)
Software development
costs incurred - (27,654) (53,726)
------------ ------------ ------------
Net cash used by
investment activities - (59,189) (99,722)
F-12
<PAGE>
Cash flow from financing
activities:
Proceeds from borrowing - 34,328 91,866
Loan repayments - (25,000) (25,000)
Sale of stock 18,200 194,000 230,200
Stock issued for board
of directors
compensation - 800 800
Net cash used by ------------ ------------ ------------
Financing activities 18,200 204,128 297,866
Net increase (decrease)
in cash 7,465 (36,716) 5,398
Cash at beginning of the
period - 42,114 -
------------ ------------ ------------
Cash at end of the period $ 7,465 $ 5,398 $ 5,398
============ ============ ============
Supplemental schedule of
Non-cash financing
Transactions
Issuance of 20,000 common
shares for board of
directors compensation $ 800
Issuance of 125,000
common shares for note
repayment 10,500
</TABLE>
ANYTHING INTERNET CORPORATION
(A Development Stage Company)
NOTES TO SIX-MONTH UNAUDITED INTERIM FINANCIAL STATEMENTS
December 31, 1998
NOTE 1 - BASIS OF SIX-MONTH INTERIM FINANCIAL STATEMENT PREPARATION AND LINE OF
BUSINESS:
The information presented as of December 31, 1998, and for the six-month
periods ending December 31, 1997 and December 31, 1998, has been prepared in
accordance with generally accepted accounting principles for interim financial
statements and has not been audited. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. The results of operations for the
F-13
<PAGE>
interim periods shown in this report are not necessarily indicative of expected
results for any future interim period or for the entire fiscal year. In the
opinion of management, the unaudited interim financial statements includes all
adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the Company's financial position as of December 31, 1998, and
results of its operations and cash flows for the six-months ending December 31,
1997 and December 31, 1998, and the stockholders' equity for the six-months
ending December 31, 1998.
Line of business:
Anything, Inc. was organized on August 15, 1997 as a Colorado corporation
to market and distribute computers and related accessory products by using the
Internet as the exclusive distribution channel. On August 28, 1998, Anything,
Inc. changed its name to Anything Internet Corporation, which was made effective
through an amendment to its Articles of Incorporation filed with the Secretary
of State of Colorado on August 31, 1998.
NOTE 2 - NOTE RECEIVABLE
On December 31, 1998, the Company loaned Robert C. Schick, President,
$18,022.72 at a rate of 3% per annum. The note matures and is payable in full
on December 31, 1999.
NOTE 3 - LINE OF CREDIT
To help finance the cost of inventory, Nations Credit Distribution Finance,
Inc. has extended the Company, a credit line not to exceed $35,000. The
interest rate applicable to each transaction will depending upon the vendor and
the timeliness of repayment and will range from 0% to 18%. The credit line is
unsecured.
The Company has also established a $50,000 line of credit with US Bank of
Colorado Springs, Colorado. Payments are due on the 15th of each month and
interest accrues at a rate of 10.45% per annum.
F-14
<PAGE>
PART II
- -------
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's grant indemnification to the Company's officers and
directors, present and former, for expenses incurred by them in connection with
any proceeding that they are involved in by reason of their being or having been
an officer or director of the Company. The person being indemnified must have
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the Company.
Insofar as indemnification for liability arising under the Securities Act
may be permitted to directors or officers the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director or officer of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director or officer in connection with the securities being registered, the
Company will, unless in the opinion of its legal counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of 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.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Other expenses in connection for the issuance and distribution of the
securities being registered hereby are set in the following table:
<TABLE>
<CAPTION>
ITEM AMOUNT
- ---- ------
<S> <C>
SEC Registration Fee $ 167
Transfer Agent Fees. 350
State Securities Laws (Blue Sky) Fees 9,000
Accounting Fees 10,000
Legal Fees 5,000
Printing and Engraving Costs 150
Miscellaneous 2,000
Total $26,667
</TABLE>
<PAGE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
On August 22, 1998, the Company underwent a capital restructuring whereby
existing shareholders exchanged their original stock certificates for new stock
certificates aggregating 500,000 shares of Common Stock and were awarded options
to purchase an additional aggregate of 500,000 shares of Common Stock at $1.00 a
share; all options expire on February 29, 2000. The Common Shares and options
were distributed on a pro-rata basis; there were no changes in ownership
percentages. These transactions were exempt from registration under Section
4(2) of the Securities Act and Rule 144 thereunder. Stock issued under these
exemptions carries certain resale restrictions and the stock certificates bear
restrictive legends.
On August 22, 1998, the Company entered into a Share Exchange Agreement
with Banyan Corporation, a publicly traded company listed on the OTC Electronic
Bulletin Board under the trading symbol "BANY". Under the terms of the Share
Exchange Agreement, the Company caused the issuance of 1,000,000 shares of its
Common Stock to Banyan pursuant to exemptions under Section 4(2) of the
Securities Act and Regulation D thereunder in exchange for 200,000 shares of
Banyan Common Stock, issued pursuant to exemptions under Section 4(2) of the
Securities Act and Rule 144 thereunder. The then market price for Banyan's
Common Stock was $0.20 a share, resulting in an effective price of four cents a
share for the Company's Common Stock.
In addition to the shares of Banyan Common Stock received, the Company was also
granted options to purchase 300,000 additional shares of Banyan Common Stock,
vested immediately, as follows: 100,000 shares at 50 cents a share, expiring
February 28, 1999; 100,000 shares at $1.00 a share, expiring August 31, 1999;
and 100,000 shares at $2.00 a share, expiring August 31, 2000.
On August 22, 1998, the Company issued 1.3 million shares of its Common
Stock to consultants for services rendered in connection with the formation of
the Company, Internet market research and the preparation of the Company's
business and marketing plan. The aggregate value of these services was $52,000,
or $0.04 a share. These issuances were in transactions exempt from registration
under Section 4(2) of the Securities Act and Regulation D thereunder.
On September 28, 1998, the Company issued 20,000 shares of Common Stock to
the members of its Board of Directors (5,000 shares to each of the Company's
four directors) for their services as directors to the Company through December
31, 1998. Each share of Common Stock was issued at a price of $0.04 a share, or
valued at $200 per director for an aggregate issuance of $800. These issuances
were in transactions exempt from registration under Section 4(2) of the
Securities Act and Regulation D thereunder.
<PAGE>
In December 1998, the Company issued 200,000 "Units" at a price of $1.00
per Unit. Each Unit consisted of (i) one share of the Company's Common Stock
and (ii) one redeemable stock purchase warrant entitling the holder to purchase
one share of the Company's Common Stock at an exercise price of $3.00 a share.
The Company may redeem the Warrants upon not less than 30 days, nor more than 60
days, prior notice at any time prior to the Warrants' expiration on December 31,
1999 at a price of $0.01 a Warrant, provided that the closing bid quotation for
the Company's Common Stock as reported by any quotation medium on which the
Company's Common Stock is quoted is at least $4.00 for ten consecutive trading
sessions ending on the two days prior to the day on which notice of the
redemption is given. This transaction was exempt from registration under
Section 4(2) of the Securities Act and Regulation D thereunder as an issuance
not involving a public offering. This private placement was made by the
Company's officers, directors and employees without the use of an underwriter or
placement agent.
On January 10, 1999, the Company issued 200 shares of Common Stock to each
Donald Horning and Robie Blair, employees of the Company. Should their
employment continue at the Company, each will receive an additional 100 shares
each quarter for the next eight quarters for an aggregate of 1,000 shares of
Common Stock each. These transactions were and are anticipated to be exempt
from registration under Section 4(2) of the Securities Act and Rule 144
thereunder. Stock issued under these exemptions carries certain resale
restrictions and the stock certificates bear restrictive legends.
On January 10, 1999, the Company set aside a reserve of 200,000 shares of
Common Stock to establish an Employee Stock Ownership Program. This reserve,
and its subsequent issuances, is exempt from registration under Section 4(2) of
the Securities Act and Regulation D thereunder.
On January 21, 1999, the Company issued 20,000 shares of Common Stock to
the members of its Board of Directors (5,000 shares to each of the Company's
four directors) for their services as directors to the Company through December
31, 1999. Each share of Common Stock was issued at a price of $1.00 a share, or
valued at $5000 per director for an aggregate issuance of $20,000. These
issuances were in transactions exempt from registration under Section 4(2) of
the Securities Act and Regulation D thereunder.
<PAGE>
On January 25, 1999, the Company issued 34,000 shares of Common Stock in
exchange for $68,000, or $2.00 a share. This transaction was exempt from
registration under Section 4(2) of the Securities Act and Regulation D
thereunder.
ITEM 27. EXHIBITS
The following is a complete list of exhibits filed as part of this
Registration Statement, which are incorporated herein.
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<C> <S>
3.1 Articles of Incorporation
3.2 Amendment to Articles of Incorporation
3.3 Certificate of Incorporation
3.4 Bylaws
4.1 Specimen copy of stock certificate for Common Stock, no par value
4.2 Specimen copy of Stock Purchase Warrant Certificate underlying the
Common Shares being registered in this Registration Stat
5.1 Opinion and Consent of William M. Ziering, Esq.
10.1 Lease Agreement, dated June 2, 1998
23.1 Consent of J. Paul Kenote, CPA, P.C.
23.2 Consent of William M. Ziering, Esq. (included in Exhibit 5.1 herein)
27.1 Financial Data Schedule for fiscal year ending June 30, 1998
27.2 Interim Financial Data Schedule for six-months ending December 31,
1998.
</TABLE>
ITEM 28. UNDERTAKINGS
The undersigned Registrant hereby undertakes as follows:
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.
2. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described above in Item 24, or
otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Securities 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
<PAGE>
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 of 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.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Colorado Springs, State of Colorado on this 3rd day
of February, 1999.
Anything Internet Corporation
By: /s/ Robert C. Schick
----------------------------------
Robert C. Schick
President and Director
In accordance with 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 stated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Robert C. Schick President and Director
- ----------------------
Robert C. Schick February 3, 1999
/s/ Cameron B. Yost
- ---------------------- Secretary, Treasurer and Director
Cameron B. Yost February 3, 1999
/s/ Alfred W. Delisle
- ---------------------- Business Development Manager and Director
Alfred W. Delisle February 3, 1999
<PAGE>
/s/ J. Scott Sitra
- ----------------------
J. Scott Sitra Director February 3, 1999
</TABLE>
<PAGE>
MAIL TO: SECRETARY OF STATE
CORPORATIONS SECTION
PLEASE INCLUDE A TYPED 1560 BROADWAY, SUITE 200
SELF-ADDRESSED ENVELOPE DENVER, CO 80202
(303) 894-2251
MUST BE TYPED FAX (303) 894-2242
FILING FEE: $50.00
MUST SUBMIT TWO COPIES
ARTICLES OF INCORPORATION
Corporation Name Anything, Inc.
---------------
Principal Business Address 5028N. Academy Blvd., Colorado Springs, CO80918
-----------------------------------------------
(Include City, State, Zip)
Cumulative voting shares of stock is authorized. Yes ____ No XX
----
If duration is less than perpetual enter number of years ______________
Preemptive rights are granted to shareholders. Yes ____ No XX
----
STOCK INFORMATION: (if additional space is needed, continue on a separate sheet
of paper.)
Stock Class Common Authorized Shares- 1,000,000 Par Value NO
------ --------- --
Stock Class ______ Authorized Shares _________ Par Value __
The name of the initial registered agent and the address of the registered
office is: (If another corporation, use last name space)
Last Name Schick First & Middle Name Robert C.
------ ----------
Street Address 5028 N.Academy Blvd, Colorado Springs, CO80918
---------------------------------------------------
(include City, State, Zip)
The undersigned consents to the appointment as the initial registered agent.
Signature of Registered Agent ___________________________________
These articles are to have a delayed effective date of: August15, 1997
--------------
Incorporators: Names and addresses: (If more than two, continue on a separate
sheet of paper.
NAME ADDRESS
Robert C.Schick 5028 N.AcademyBlvd, ColoradoSprings, CO
- ------------------------------------ ------------------------------------------
80918
- ------------------------------------ ------------------------------------------
Incorporators who are natural persons must be 18 years or more. The undersigned,
acting as corporator(s) of a corporation under the Colorado Business
Corporation Act, adopt the above Articles of Incorporation.
Signature /s/ Robert C. Schick Signature ____________________________
-----------------------
Revised 7/95
<PAGE>
Mail to: Secretary of State FOR OFFICE USE ONLY 008
CORPORATIONS SECTION
PLEASE INCLUDE A TYPED 1560 BROADWAY, SUITE 200
SELF-ADDRESSED ENVELOPE DENVER, CO 80202
(303) 894-2251
MUST BE TYPED FAX (303) 894-2242
FILING FEE: $60.00
MUST SUBMIT TWO COPIES
RESTATED ARTICLES OF
INCORPORATION WITH AMENDMENTS
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following amended and restated Articles of
Incorporation. These articles correctly set forth the provisions of the Articles
of Incorporation, as amended, and supersede the original Articles of
Incorporation and all amendments thereto.
FIRST: The name of the corporation Is Anything, Inc.
---------------
SECOND: The following amended and restated Articles of Incorporation were
adopted in the manner marked with an "X" below:
______ The amended and restated Articles of Incorporation were adopted by the
board of directors where no shares have been issued, or no shareholder
action required.
X The amended and restated Articles of Incorporation were adopted by a
- ------ vote of the shareholders. The number of shares voted for the amended
and restated Articles of Incorporation was sufficient for approval.
______ The amended and restated Articles of Incorporation were adopted by the
Incorporators where no shares have been issued or directors elected,
or no shareholder action required.
THIRD: The name of the corporation as amended is Anything Internet Corporation
-----------------------------
ATTACH A COPY OF YOUR AMENDED AND RESTATED ARTICLES OF
INCORPORATION
-----------------------
Signature /S/ Robert C. Schick
-----------------------
Title President
-----------------------
REVISED 7/95
<PAGE>
CERTIFICATE OF RESOLUTIONS
OF THE ANNUAL SHAREHOLDERS MEETING OF
ANYTHING, INC.
--------------
The undersigned, being duly authorized, hereby certifies that the following
resolutions were duly adopted by the shareholders of Anything, Inc. by unanimous
consent on August 22, 1998:
Upon motion duly made, seconded and unanimously carried, it was:
RESOLVED, that the corporation shall amend and restated it's Articles of
Incorporation as follows;
a) The corporation shall authorize the following classes of shares:
Stock Class Authorized Shares Par Value
Class A Common 50,000,000 No
Class B Common 25,000,000 No
Class A Preferred 10,000,000 No
Class B Preferred 10,000,000 No
b) The Directors of the Corporation shall have the right to prescribe the
classes, series and the number of each class or series of authorized stock and
the voting powers, designations, preferences, limitations, restrictions and
relative rights of each class or series of authorized stock. The Directors of
the Corporation shall have the right to increase or decrease the number of
issued and outstanding shares of the same class and/or series held by each
stockholder of record at the effective date and time of the change, except as
otherwise provided in Colorado law, without obtaining the approval of the
stockholders.
c) The Directors of the Corporation shall have the right to alter, amend or
repel the By-Laws of the corporation.
d) The name of the company be changed from "Anything, Inc.", to "Anything
Internet Corporation".
WITNESS my signature as of the 28th day of August, 1998.
/s/ Robert C. Schick
-----------------------
Robert C. Schick, President
<PAGE>
[State of Colorado
1876
State Seal]
State of Colorado
DEPARTMENT OF
STATE
CERTIFICATE
I, VICTORIA BUCKLEY, SECRETARY OF STATE OF THE STATE OF
COLORADO HEREBY CERTIFY THAT
ACCORDING TO THE RECORDS OF THIS OFFICE
ANYTHING INTERNET CORPORATION
(COLORADO CORPORATION)
FILE # 19971130269 WAS FILED IN THIS OFFICE ON August 15, 1997
AND HAS COMPLIED WITH THE APPLICABLE PROVISIONS OF THE
LAWS OP THE STATE OF COLORADO AND ON THIS DATE IS IN GOOD
STANDING AND AUTHORIZED AND COMPETENT TO TRANSACT BUSINESS
OR TO CONDUCT ITS AFFAIRS WTTHIN THIS STATE.
Dated. November 18, 1998
/S/ VICTORIA BUCKLEY
---------------------
SECRETARY OF STATE
<PAGE>
OF ANYTHING INTERNET CORPORATION
ARTICLE I
OFFICES
SECTION 1 - PRINCIPAL OFFICE: The principal office for the transaction of the
business of the corporation is hereby located at 5208 North Academy Drive,
Colorado Springs, Colorado 80918.
SECTION 2 - REGISTERED OFFICE: The corporation, by resolution of its board of
directors, may change the location of its registered office as designated in the
Articles of Incorporation to any other place in Colorado. Buy like resolution
the resident agent at such registered office may be changed to any other person
or corporation, including itself. Upon adoption of such a resolution, a
certificate certifying the change shall be executed, acknowledged and filed with
the Secretary of State, and a certified copy thereof shall be recorded in the
office of the Register of Deeds for the county in which the new registered
office is located (and in the old county, if such registered office is moved
from one county to another).
SECTION 3 - OTHER OFFICES: Branch or subordinate offices may at any time be
established by the board of directors at any place or places where the
corporation is qualified to do business.
ARTICLE II
SHAREHOLDERS
SECTION 1 - PLACE OF MEETINGS: All annual meetings of shareholders and all
other meetings of shareholders shall be held at the principal office of the
corporation unless another place within or without the State of Colorado is
designated either by the board of directors pursuant to authority hereinafter
granted to said board, or by the written consent of all shareholders entitled to
vote thereat, given either before or after the meeting and filed with the
secretary of the corporation.
<PAGE>
SECTION 2 - ANNUAL MEETINGS: The annual meetings of the shareholders shall
be held not less than 120 days after the close of the fiscal year and will be
held at a time specified by the board of directors. At such meeting, directors
shall be elected, reports of the affairs of the corporation shall be considered,
and any other business may be transacted which is within the power of the
shareholders.
Written notice of each annual meeting shall be given to each shareholder
entitled to vote, except as provided by Colorado Statute, either personally or
by mail or other means of written communication, charges prepaid, addressed to
such shareholder at his address appearing on the books of the corporation or
given by him to the corporation for the purpose of notice. If a shareholder
gives no address, notice shall be deemed to have been given if sent by mail or
other means of written communication addressed to the place where the principal
office of corporation is situated, or if published at least once in some
newspaper of general circulation in the county in which said office is located.
All such notices shall be sent to each shareholder entitled thereto not less
then ten (10) days nor more than sixty (60) days before each annual meeting, and
shall specify the place, the day and the hour of such meeting, and shall state
such other matters, if any, as may be expressly required by statute.
SECTION 3 - SPECIAL MEETINGS: Special meetings of the shareholders, for any
purpose or purposes whatsoever, may be called at any time by the president or by
the board of directors, or by one or more shareholders holding not less than
one-fifth of the voting power of the corporation. Except in special cases where
other express provision is made by statute, notice of such special meetings
shall be given in the same manner as for annual meetings of shareholders.
Notices of any special meeting shall specify in addition to the place, day and
hour of such meeting, the general nature of the business to be transacted.
SECTION 4 - ADJOURNED MEETINGS AND NOTICE THEREOF: Any Shareholders'
meeting, annual or special, whether or not a quorum is present, may be adjourned
from time to time by vote of a majority of the shares, the holders of which are
either present in person or represented by proxy thereat, but in the absence of
a quorum, no other business may be transacted at such meeting.
When any shareholders' meeting, either annual or special, is adjourned for
thirty (30) days or more, notice of the adjourned meeting shall be given as in
the case of an original meeting. Except as aforesaid, it shall not be necessary
to give any notice of an adjournment or of the business to be transacted at an
adjourned meeting, if the time and place thereof are announced at the meeting at
which such adjournment is taken.
<PAGE>
SECTION 5 - VOTING: Unless the board of directors has fixed in advance
(pursuant to Article V, Section 1) a record date for purposes of determining
entitlement to vote at the meeting, the record date shall be as of the close of
business on the day next preceding the date on which the meeting shall be held.
If the Articles of Incorporation permit the election of directors without
written ballot, then such elections of directors shall be without written
ballot, unless requested by any shareholder, in which case the election of
directors shall be by written ballot. Every shareholder entitled to vote at any
election for directors shall not have the right to cumulate his votes.
SECTION 6 - QUORUM: The presence in person or by proxy of persons entitled
to vote a majority of the voting shares at any meeting shall constitute a quorum
for the transaction of business. The shareholders present at a duly called or
held meeting at which a quorum is present may continue to do business until
adjournment, notwithstanding the withdrawal of enough shareholders to leave less
than a quorum.
SECTION 7 - CONSENT OF ABSENTEES: The transaction of any meeting of
shareholders, either annual or special, however called and noticed, shall be as
valid as though had at a meeting duly held after regular call and notice, if a
quorum be present either in person or by proxy, and if, either before or after
the meeting, each of the shareholders entitled to vote, not present in person or
by proxy, signs a written waiver of notice, or a consent to the holding of such
meeting, or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.
SECTION 8 - ACTION WITHOUT MEETING: Any action which under any provision of
the Colorado Corporation Code, may be taken at a meeting of the shareholders,
except approval of an agreement for merger or consolidation of the corporation
with other corporations, or a sale of all or substantially all of the corporate
property, may be taken without a meeting if authorized by a writing signed by
all of the persons who would be entitled to vote upon such action at a meeting,
and filed with the secretary of the corporation, or such other procedure
followed as may be prescribed by statute.
SECTION 9 - PROXIES: Every person entitled to vote or execute consents
shall have the right to do so either in person or by one or more agents
authorized by a written proxy executed by such person or his duly authorized
agent and filed with the secretary of the corporation; provided that no such
proxy shall be valid after the expiration of three (3) years from the date of
its execution, unless the person executing it specified therein the length of
time for which such proxy is to continue in force.
<PAGE>
SECTION 10 - INSPECTION OF CORPORATE RECORDS: The stock ledger or duplicate
stock ledger, the books of account, and minutes of proceedings of the
shareholders, the board of directors and of executive committees of directors
shall be open to inspection upon the written demand of any shareholder or the
holder of a voting trust certificate within five (5) days of such demand during
ordinary business hours if for a purpose reasonably related to his interests as
a shareholder, or as the holder of such voting trust certificate. The list of
shareholders entitled to vote shall be prepared at least ten (10) days before
every meeting of shareholders by the officer in charge of the stock ledger,
which shall be the secretary, and shall be open to inspection by any
shareholder, for any purpose germane to the meeting, during ordinary business
hours for at least ten (10) days prior to such meeting. Such inspection may be
made in person or by an agent or attorney authorized in writing by a
shareholder, and shall include the right to make abstracts. Demand of inspection
other than at a shareholders' meeting shall be made in writing upon the
president, secretary, assistant secretary or general manager of the corporation.
SECTION 11 - INSPECTION OF BYLAWS: The corporation shall keep in its
principal office for the transaction of business the original or a copy of these
bylaws as amended or otherwise altered to date, certified by the secretary,
which shall be open to inspection by the shareholders at all reasonable times
during ordinary business hours.
ARTICLE III
DIRECTORS
SECTION I - POWERS: Subject to any limitations of the Articles of
Incorporation, of the bylaws, and of the Colorado Corporation Code as to action
which shall be authorized or approved by the shareholders, and subject to the
duties of directors as prescribed by the bylaws, all corporate powers shall be
exercised by or under the authority of, and the business and affairs of the
corporation shall be controlled by, the board of directors. Without prejudice to
such general powers, but subject to the same limitations, it is hereby expressly
declared that the directors shall have the following powers, to-wit:
FIRST - If allowed by the Articles of Incorporation, to alter, amend or
repeal the bylaws of the corporation.
SECOND - To select and remove all the other officers, agents and employees
of the corporation, prescribe such powers and duties for them as may not be
inconsistent with law, or with the Articles of Incorporation or the bylaws, fix
their compensation, and require from them security for faithful service.
<PAGE>
THIRD - To conduct, manage, and control the affairs and business of the
corporation, and to make such rules and regulations therefor not inconsistent
with the law, or with the Articles of Incorporation or the bylaws, as thy may
deem best.
FOURTH - To change the principal office and registered office for the
transaction of the business of the corporation from one location to another as
provided in Article I hereof; to fix and locate from time to time one or more
subsidiary offices of the corporation within or without the State of Colorado,
as provided in Article I, Section 3 hereof; to designate any place within or
without the State of Colorado for the holding of any shareholders, meeting or
meetings except annual meetings; to adopt, make and use a corporate seal, to
prescribe the forms of certificates of stock, and to alter the forms of such
seal and of such certificates from time to time, as in their judgment they may
deem best, provided such seal and such certificate shall at all times comply
with the provisions of law.
FIFTH - To authorize the issue of shares of stock of the corporation from
time to time, upon such terms as may be lawful, in consideration of money paid,
labor done or services actually rendered, debts or securities canceled, or
tangible or intangible property actually received, or in the case of shares
issued as a dividend, against amounts transferred from surplus to stated
capital.
SIXTH - To borrow money and incur indebtedness for purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecation or other evidences of debt and securities therefor.
SEVENTH - To appoint an executive committee and other committees, and to
delegate to such committees any of the powers and authority of the board in the
management of the business and affairs of the corporation, except as limited by
Colorado Statute. Any such committee shall be composed of two or more directors.
SECTION 2 - NUMBER AND QUALIFICATION OF DIRECTORS: The authorized number of
directors of the corporation shall be no less than Two (2) and no more than
Seven (7) until changed by amendment to this bylaw. Directors need not be
shareholder.
<PAGE>
SECTION 3 - ELECTION AND TERM OF OFFICE: The directors shall be elected at
each annual meeting of shareholders, but if any such annual meeting is not held,
or the directors are not elected thereat, the directors may be elected at a
special meeting of shareholders held for that purpose as soon thereafter as
conveniently may be. All directors shall hold office until their respective
successors are elected. A director may be removed from office at any time for
cause, however, by the shareholders or directors, and he may be removed without
cause by the shareholders or directors, without a hearing, unless the director
sought to be removed has sufficient shareholder support that by use of
cumulative voting, if required, he would otherwise be able to maintain his
position on the board in a regular election of board members.
SECTION 4 - VACANCIES: Vacancies on the board of directors may be filled by
a majority of the remaining directors, although less than a quorum, or by a sole
remaining director. If the Articles of Incorporation permit the election of
directors without written ballots, then the election of directors to fill
vacancies shall be without written ballots, unless requested by any director. If
at any time, by reason of death, resignation, or other cause, the corporation
should have no directors in office, then any officer or any stockholder or any
executor, administrator, trustee or guardian of a stockholder or other fiduciary
entrusted with the like responsibility for the person or estate of a stockholder
may call a special meeting of the stockholders in accordance with the provisions
of these bylaws, or may apply to the District Court for a decree summarily
ordering election as provided for by the Colorado Corporation Code. Each
director so elected shall hold office until his successor is elected at an
annual or a special meeting of the shareholders.
A vacancy or vacancies on the board of directors shall be deemed to exist
in a case of the death, resignation or removal of any director, or if the
authorized number of directors be increased, or if the shareholders fail at any
annual or special meeting of shareholders at which any director or directors are
elected to elect the full authorized number of directors to be voted for at the
meeting, of if any director or directors elected shall refuse to serve.
The shareholders holding at least ten percent (10% of the outstanding
voting stock may call a meeting at any time to fill any vacancy or vacancies not
filled by the directors in accordance with the above procedures. If the board of
directors accepts the resignation of a director tendered to take effect at a
future time, the board or the shareholders shall have power to elect a successor
to take office when the resignation is to become effective.
No reduction of the authorized number of directors shall have the effect of
removing any director prior to the expiration of his term of office.
<PAGE>
SECTION 5 - PLACE OF MEETING: Regular and special meetings of the board of
directors shall be held at any place within or without the State of Colorado
which has been designated from time to time by resolution of the board or by
written consent of all members of the board. In the absence of such designation,
all meetings shall be held at the principal office of the corporation.
SECTION 6 - ORGANIZATIONAL MEETING: Immediately following each annual
meeting of shareholders, the board of directors shall hold a regular meeting for
the purpose of organization, election of officers, and the transaction of other
business. Notice of such meeting is hereby waived.
SECTION 7 - OTHER REGULAR MEETINGS: Other regular meetings of the board of
directors shall be held without call at such time as the board of directors may
from time to time designate in advance of such meetings; provided, however,
should said day fall upon a legal holiday, then said meeting shall be held at
the same time on the next day thereafter ensuing which is not a legal holiday.
Notice of all such regular meetings of the board of directors is hereby waived.
SECTION 8 - SPECIAL MEETINGS: Special meetings of the board of directors
for any purposes shall be called at any time by the president or, if he is
absent or unable or refuses to act, by the secretary of by any other director.
Notice of such special meetings, unless waived by attendance thereat or by
written consent to the holding of the meeting, shall be given by written notice
mailed at least five (5) days before the date of such meeting or be hand
delivered or sent by telegram at least two (2) days before the date such meeting
is to be held. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail with postage thereon addressed to the
director at his residence or usual place of business. If notice be given by
telegraph, such notice shall be deemed to be delivered when the same is
delivered to the telegraph company.
SECTION 9 - NOTICE OF ADJOURNMENT: Notice of the time and place of holding
an adjourned meeting need not be given to absent directors if the time and place
be fixed at the meeting adjourned.
SECTION 10 - WAIVER OF NOTICE: The transactions of any meeting of the board
of directors, however called and noticed or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice, if a quorum be
present, and if, either before or after the meeting, each of the directors not
present signs a written waiver of notice, or a consent to holding such meeting,
or an approval of the minutes thereof. All such waivers, consents or approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.
<PAGE>
SECTION 11 - QUORUM: A majority of the total number of directors shall be
necessary to constitute a quorum for the transaction of business, except to
adjourn as hereinafter provided. Every act or decision done or made by a
majority of the directors present at a meeting duly held at which a quorum is
present shall be regarded as the act of the board of directors, unless a greater
number be required by law of by the Articles of Incorporation. The directors
present at a duly called or held meeting at which a quorum is present may
continue to do business until adjournment, notwithstanding the withdrawal of
enough directors to leave less than a quorum.
SECTION 12 - MEETINGS BY TELEPHONE: Members of the board of directors of
the corporation, or any committee designated by such board, may participate in a
meeting of the board of directors by means of conference telephone or similar
communications equipment, by means of which all persons participating in the
meeting can hear one another, and such participation in a meeting shall
constitute presence in person at the meeting.
SECTION 13 - ADJOURNMENT: A majority of the directors present may adjourn
any directors, meeting to meet again at a stated day and hour or until the time
fixed for the next regular meeting of the board.
SECTION 14 - ACTION WITHOUT MEETING: Any action which under any provision
of the Colorado Corporation Code, may be taken at a meeting of the board of
directors, may be taken without a meeting if authorized by a writing signed by
all for the persons who would be entitled to vote upon such action at a meeting,
and filed with the secretary of the corporation, or such other procedure
followed as may be prescribed by statute.
SECTION 15 - VOTES AND VOTING: All votes required of directors hereunder
may be by voice vote or show of hands, unless a written ballot is requested,
which request may be made by any one director. Each director shall have one
vote, unless the Articles of Incorporation provide that directors elected by the
holders of a class or series of stock shall have more or less than one vote per
director on any matter. Every reference to a majority or other proportion of
directors shall refer to a majority or other proportion of the votes of such
directors.
SECTION 16 - INSPECTION OF BOOKS AND RECORDS: Any director shall have the
right to examine the corporation's stock ledger, a list of its stockholders
entitled to vote and its other books and records for a purpose reasonably
related to such director's position as a director. When there is any doubt
concerning the inspection rights of a director, the parties may petition the
District Court, which may, in its discretion, determine whether an inspection
may be made and whether any limitations or conditions should be imposed upon the
same.
<PAGE>
SECTION 17 - FEES AND COMPENSATION: Directors shall not receive any stated
salary for their services as directors, but, by resolution of the board, adopted
in advance of , or after the meeting for which payment is to be made, a fixed
fee, with or without expenses of attendance, may be allowed on or more of the
directors for attendance at each meeting. Nothing herein contained shall be
construed to preclude any director from serving the corporation in any other
capacity as an officer, agent, employee, or otherwise, and receiving
compensation therefor.
ARTICLE IV
OFFICERS
SECTION 1 - OFFICERS: The officers of the corporation shall be a President,
a Secretary, and a Treasurer. The corporation may also have, at the discretion
of the board of directors, a Chairman of the Board, one or more
vice-president's, one or more assistant secretaries and one or more assistant
treasurers, and such other officers as may be appointed in accordance with the
provisions of Section 3 of this Article IV. Any number of offices may be held by
the same person as permitted by Kansas law.
SECTION 2 - ELECTION: The officers of the corporation, except such officers
as may be appointed in accordance with the provisions of Section 3 or Section 5
of this Article IV, shall be chosen annually by the board of directors, and each
shall hold his office until he shall resign or shall be removed or otherwise
disqualified to serve, or his successor shall be elected and qualified.
SECTION 3 - SUBORDINATE OFFICERS, ETC.: The board of directors may appoint
such other officers as the business of the corporation may require, each of whom
shall have authority and perform such duties as are provided in these bylaws or
as the board of directors may from time to time specify, and shall hold office
until he shall resign or shall be removed or otherwise disqualified to serve.
SECTION 4 - COMPENSATION OF OFFICERS: Officers and other employees of the
corporation shall receive such salaries or other compensation as shall be
determined by resolution of the board of directors, adopted in advance or after
the rendering of the services, or by employment contracts entered into by the
board of directors. The power to establish salaries of officers, other than the
president or chairman of the board, may be delegated to the president, chairman
of the board, or a committee.
<PAGE>
SECTION 5 - VACANCIES: A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these bylaws for regular appointments to such office.
SECTION 6 - REMOVAL AND RESIGNATION: Any officer may be removed, either
with or without cause, by a majority of the directors at the time in office, at
any regular or special meeting of the board. Any officer may resign at any time
upon written notice to the corporation.
SECTION 7 - CHAIRMAN OF THE BOARD: The chairman of the board, if there be
such an officer, shall, if present, preside at all meetings of the board of
directors, and exercise and perform such other powers and duties as may be from
time to time assigned to him by the board of directors or prescribed by these
bylaws.
SECTION 8 - PRESIDENT: Subject to such supervisory powers, if any, as may
be given by the board of directors to the chairman of the board, if there be
such an officer, the president shall be the chief executive officer of the
corporation and shall, subject to the control of the board of directors, have
general supervision, direction and control of the business and officers of the
corporation. He shall preside at all meetings of the shareholders and, in the
absence of the chairman of the board, at all meetings of the board of directors.
He shall be ex officio a member of all the standing committees, including the
executive committee, if any, and shall have the general powers and duties of
management usually vested in the office of president of a corporation, and shall
have such other powers and duties as may be prescribed by the board of directors
or these bylaws.
SECTION 9 - VICE-PRESIDENT: In the absence or disability of the president,
the vice-president or vice-presidents, if there be such an officer or officers,
in order of their rank as fixed by the board of directors, or if not ranked, the
vice-president designated by the board of directors, shall perform all the
duties of the president, and when so acting shall have all the powers of, and be
subject to all the restrictions upon, the president. The vice-president shall
have such other powers and perform such other duties as from time to time may be
prescribed for them respectively by the board of directors or these bylaws.
SECTION 10 - SECRETARY: The secretary shall keep, or cause to be kept, a
book of minutes at the principal of f ice or such other place as the board of
directors may order, of all meetings of directors and shareholders, with the
time and place of holding, whether regular or special, and if special, how
authorized, the notice thereof given, the names of those present at directors'
meetings, the number of shares present or represented at shareholders' meetings
and the proceedings thereof.
<PAGE>
The secretary shall keep, or cause to be kept, at the principal office or
at the office of the corporation's transfer agent, a stock ledger, or a
duplicate stock ledger, showing the names of the shareholders and their
addresses, the number and classes of shares held by each, the number and date of
certificates issued for the same, and the number and date of cancellation of
every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all the meetings
of the shareholders and of the board of directors required by these bylaws or by
law to be given, and he/she shall keep the seal of the corporation in safe
custody, and shall have such other powers and perform such other duties as may
be prescribed by the board of directors or these bylaws.
SECTION 11 - TREASURER: The treasurer shall keep and maintain or cause to
be kept and maintained, adequate and correct accounts of the properties and
business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, surplus and
shares. Any surplus, including earned surplus, paid in surplus and surplus
arising from a reduction of stated capital, shall be classified according to
source and shown in a separate account. The books of account shall at all
reasonable times be open to inspection by any director.
The treasurer shall deposit all monies and other valuables in the name and
to the credit of the corporation with such depositories as may be designated by
the board of directors. He shall disburse the funds of the corporation as may be
ordered by the board of directors, shall render to the president and directors,
whenever they request it, an account of all of his transactions as treasurer and
of the financial condition of the corporation, and shall have such other powers
and perform such other duties as may be prescribed by the board of directors or
these bylaws. He shall be bonded, if required by the board of directors.
ARTICLE V
MISCELLANEOUS
SECTION 1 - RECORD DATE AND CLOSING STOCK BOOKS:
(A) Record Date for Shareholders' Meetings: The board of directors may by
resolution fix a time in the future as a record date for the determination of
the shareholders entitled to notice of and to vote at any meeting of
shareholders or to execute a written consent to action in lieu of a
<PAGE>
shareholders' meeting. The record date so fixed shall be not less than ten (10)
days nor more than sixty (60) days prior to the date of the meeting or event for
purposes of which it is fixed, and in no event can the record date be a date
prior to the board of directors meeting at which the record date is fixed. When
a record date is so fixed, only shareholders who are such of record on that date
are entitled to notice of and to vote at the meeting, notwithstanding any
transfer of any shares on the books of the corporation after the record date.
(B) Record Date for Dividends or Distributions: The board of directors may
by resolution fix a time in the future as a record date for the determination of
the shareholders entitled to receive any dividend or distribution, or any
allotment of rights, or to exercise rights in respect to any change, conversion
or exchange of shares, or for the purpose of any other lawful action, which
record date shall not be more than sixty (60) days prior to the date of the
meeting or event for purposes of which it is fixed, and in no event can the
record date be a date prior to the board of directors meeting at which the
record date is fixed.
The board of directors may close the books of the corporation against
transfers of shares during the whole or any part of a period not more than sixty
(60) days prior to the date of a shareholders' meeting, the date when the right
to any dividend, distribution, or allotment of rights vest, or the effective
date of any change, conversion or exchange of shares.
SECTION 2 - INDEMNIFICATION OF DIRECTORS AND OFFICERS: When a person is
sued, either alone or with others, because he is or was a director or officer of
the corporation, or of another corporation serving at the request of this
corporation, in any proceeding arising out of his alleged misfeasance or
nonfeasance in the performance of his duties or out of any alleged wrongful act
against the corporation or by the corporation, he shall be indemnified for his
reasonable expenses, including attorneys' fees incurred in the defense of the
proceeding, if both of the following conditions exist:
(A) The person sued is successful in whole or in part, or the proceeding
against him is settled with the approval of the court.
(B) The court finds that his conduct fairly and equitably merits such
indemnity.
The amount of such indemnity which may be assessed against the corporation,
its receiver, or its trustee, by the court in the same or in a separate
proceeding shall be so much of the expenses, including attorneys' fees incurred
in the defense of the proceeding, as the court determines and finds to be
reasonable.
<PAGE>
Application for such indemnity may be made either by the person sued or by
the attorney or other person rendering services to him in connection with the
defense, and the court may order the fees and expenses to be paid directly to
the attorney or other person, although he is not a party to the proceeding.
Notice of the application for such indemnity shall be served upon the
corporation, its receiver, or its trustee, and upon the plaintiff and other
parties to the proceeding. The court may order notice to be given also to the
shareholders in the manner provided in Article II, Section 2, for giving notice
of shareholders' meetings, in such form as the court directs.
SECTION 3 - CHECKS, DRAFTS, ETC.: All checks, drafts or other orders for
payment of money, notes or other evidences of indebtedness, issued in the name
of or payable to the corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be determined by
resolution of the board of directors.
SECTION 4 - ANNUAL REPORT: No annual report to shareholders shall be
required, but the board of directors may cause to be sent to the shareholders
reports in such form and at such times as may be deemed appropriate by the board
of directors.
SECTION 5 - CONTRACTS, DEEDS, ETC., HOW EXECUTED: The board of directors,
except as in these bylaws otherwise provided, may authorize any officer or
officers, agent or agents, to enter into any contract or execute any instrument
in the name of and on behalf of the corporation, and such authority may be
general or confined to specific instances; and unless so authorized by the board
of directors, no officer, agent or employee shall have any power or authority to
bind the corporation by any contract or engagement or to pledge its credit or to
render it liable for any purpose in any amount; provided, however, that any
contracts, agreements, deeds or other instruments conveying lands or any
interest therein, and any other documents shall be executed on behalf of the
corporation by the president (or by a vice-president, it there be one, serving
in the absence of the president), or by any other specific officer or agent or
attorney so authorized under letter of attorney or other written power which was
executed on behalf of the corporation by the president (or vice-president
serving in the absence of the president).
SECTION 6 - CERTIFICATES OF STOCK: A certificate or certificates for shares
of the capital stock of the corporation shall be issued to each shareholder when
any such shares are fully paid up. All such certificates shall be signed by the
president or vice-president, if there be any, and the secretary, or an assistant
secretary, or be authenticated by facsimiles of the signatures of the president
<PAGE>
and secretary, or by a facsimile of the signature of the president and the
written signature of the secretary or an assistant secretary. Every certificate
authenticated by a facsimile of a signature must be countersigned by a transfer
agent or transfer clerk, and be registered by an incorporated bank or trust
company, either domestic or foreign, as registrar of transfers, before issuance.
Certificates for shares may be issued prior to full payment under such
restrictions and for such purposes as the board of directors or these bylaws may
provide; provided, however, that any such certificate so issued prior to full
payment shall state on its face or back the total amount of the consideration to
be paid, the amount paid thereon and the terms by which the amount remaining
unpaid is to be paid.
SECTION 7 - REPRESENTATION OF SECURITIES OF OTHER CORPORATIONS OR ENTITIES:
The president or any vice-president and the secretary or assistant secretary of
this corporation are authorized to vote, represent and exercise on behalf of
this corporation all rights incident to any and all securities of any other
corporation or entity standing in the name of this corporation. The authority
herein granted to said officers to vote or represent on behalf of this
corporation any and all securities held by the corporation in any other
corporation or entity may be exercised either by such officers in person or by
any person authorized to do so by proxy or power of attorney duly executed by
said officers.
SECTION 8 - FISCAL YEAR: The board of directors shall have the power to fix
and from time to time change the fiscal year of the corporation. In the absence
of action by the board of directors, however, the fiscal year of the corporation
shall end each year on the date which the corporation treated as the close of
its first fiscal year, until such time, if any, as the fiscal year shall be
changed by the board of directors.
SECTION 9 - CORPORATE AUTOMOBILES: In the event corporate automobiles are
purchased and made available for use by corporate employees, then any employee
utilizing such corporate automobile shall reimburse the corporation for personal
use of such corporate automobile at a rate to be determined from time to time by
the board of directors, unless the board decides otherwise. If personal use is
determined to exceed the amount reimbursed, then such additional personal use
shall be treated as additional compensation and reported on the employee's W-2.
SECTION 10 - CONFLICT WITH SHAREHOLDERS' AGREEMENT: In the event that any
shareholders' Buy-Sell Agreement or similar Agreement, executed by all
shareholders who own stock in the corporation at the date of such Agreement,
provides for a procedure which is in conflict with these bylaws, the provisions
<PAGE>
of such Agreement shall supersede these bylaws and these bylaws shall be deemed
to be amended by unanimous consent of the shareholders and directors by virtue
of the existence of such Agreement.
ARTICLE VI
AMENDMENTS
SECTION 1 - POWER OF SHAREHOLDERS OR DIRECTORS: The bylaws of the
corporation may from time to time be repealed, amended or altered, or new bylaws
may be adopted, by either of the following ways:
(i) By the stockholders, by unanimous written consent, or at any annual,
regular or special meeting thereof (except, however, that non-voting
stockholders may not vote on said adoption, repeal or amendment of the bylaws);
or
(ii) If allowed by the Articles of Incorporation, by resolution adopted by
the board of directors then in office; provided, however, that the power of the
directors to suspend, repeal, amend or otherwise alter the bylaws or any portion
thereof may be denied as to any bylaws or portion thereof enacted by the
stockholders, if at the time of such enactment the stockholders shall so
expressly provide.
<PAGE>
COMMON STOCK COMMON STOCK
------------ /----------
/ Number / / Share /
/ / / /
------------ -----------
AnythingINTERNET
C 0 R P 0 R A T I O N
SEE REVERSE FOR CERTAIN DEFINITIONS
INCORPORATED UNDER THE LAWS
OF THE STATE OF COLORADO
CUSIP
THIS CERTIFIES THAT
SPECIMEN
IS THE RECORD HOLDER OF
FULLY PAID AND NONASSESSABLE SHARES OF THE COMMON STOCK, NO PAR VALUE, OF
ANYTHING INTERNET CORPORATION
transferable on the books of the Corporation by the holder hereof in person or
by a duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid unless countersigned and registered by
the Transfer Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated:
[ANYTHING CORPORATION
CORPORATE
SEAL
COLORADO]
SPECIMEN SPECIMEN
/S/ /S/ Robert c. Schick
----------------------- -----------------------
SECRETARY PRESIDENT
<PAGE>
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, OR DESTROYED
THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE
OF A REPLACEMENT CERTIFICATE.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act
in common (State)
COM PROP - as community property TRF MIN ACT - Custodian (until age )
(Cust)
under Uniform Transfers
(Minor)
to Minors Act
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
For Value Received, hereby sell(s), assign(s) and transfer(s) unto
-------------
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
|--------------------------------------|
| |
|--------------------------------------|
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
shares
- -------------------------------------------------------------------------
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
attorney-in-fact
- ---------------------------------------------------------------
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated
------------------------------
THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
NOTICE: WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
Signature Guaranteed
- --------------------------------------------------------------------------------
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION,
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.
<PAGE>
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 UNDER ANY
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH LAWS OR AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
No. ____ SAMPLE ___ WARRANTS
STOCK PURCHASE WARRANT CERTIFICATE FOR PURCHASE
OF COMMON STOCK OF ANYTHING INTERNET CORPORATION
This certifies that, FOR VALUE RECEIVED, _____ SAMPLE ________ or assigns (the
"Registered Holder") is the owner of the number of Warrants ("Warrants")
specified above. Each Warrant entitles the Registered Holder to purchase,
subject to the terms and conditions set forth in this Certificate, one fully
paid and non-assessable share of Common Stock, no par value ("Common Stock"), of
Anything Internet Corporation., a Colorado corporation (the "Company") at any
time priorI
to expiring at the close of business on the anniversary of the issuance date,
upon the presentation and surrender of this Warrant Certificate, at the
corporate office of the Company, accompanied by payment of $3.00 per share (the
"Purchase Price") in lawful money of the United States of America in cash or by
official bank or certified check made payable to Anything Internet Corporation.
The Company may redeem the Warrants, at a price of $0.01 per Warrant, at any
time during within 12 months of the date of the closing of the issuance date
upon not less than 30 days, nor more than 60 days, prior written notice,
provided that the closing bid quotation for the Common Stock as report by any
quotation medium m which the Common Stock is quoted is at least $4.00 for ten
consecutive trading sessions ending on the two days prior to the day on which
notice of redemption is given.
Each Warrant represented hereby is exercisable at the option of the Registered
Holder, but no fractional shares of Common Stock will be issued. In the case of
exercise of less than all of the Warrants represented hereby, the Company shall
cancel this Warrant Certificate upon the surrender hereof and shall execute and
deliver a new Warrant Certificate or Warrant Certificates of like tenor for the
balance of such Warrants.
Prior to the exercise of any Warrant represented hereby, the Registered Holder
shall not be entitled to any rights of a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends or other
distributions, and shall not be entitled to receive any notice of any
proceedings of the Company. Prior to presentment for registration of transfer
hereof, the Company may deem and treat the Registered Holder as the absolute
owner hereof and of each Warrant represented hereby for all purposes and shall
not be affected by any notice to the contrary.
This Warrant Certificate shall be governed by and construed in accordance with
the laws of the State of Colorado.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly
executed, manually or in facsimile, by me of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.
ANYTHING INTERNET CORPORATION
SAMPLE SAMPLE
By:_____________
Dated as of __________________ Robert C. Schick
President and Chief Executive Officer
<PAGE>
OPINION AND CONSENT LETTER OF WILLIAM M. ZIERING, ESQ.
February 2, 1999
Anything Internet Corporation
3020 North El Paso, Suite 103
Colorado Springs, CO 80907
Re: Anything Internet Corporation
Registration Statement on Form SB-2
Ladies and Gentlemen:
Anything Internet Corporation, a Colorado corporation (the "Company"), proposes
to issue up to 200,000 shares of Common Stock, no par value, subject to the
underlying warrants issued in connection with a private placement of Units
completed in December 1998 made in accordance with an exemption from
registration under Regulation D, Rule 504 of the Securities Act, which entitles
the holder to purchaser one share of Common Stock exercisable at $3.00 per
share. The "Securities" are being registered by the Company pursuant to a
Registration Statement on Form SB-2, File No. ___________ (the "Registration
Statement"), under the Securities Act of 1933, as amended (the "Act"), filed
with the Securities and Exchange Commission (the "Commission") on _________,
1999.
<PAGE>
In rendering the following opinion, I have examined and relied upon the
documents, and the reports (verbal and written) and certificates of public
officials and directors of the Company as are specifically described below. In
my examination, I have assumed the genuineness of all signatures, the
authenticity, accuracy and completeness of the documents submitted to me as
originals, and the conformity with the original documents of all documents
submitted to us as copies. My examination was limited to the following:
1. Certificate of Incorporation of the Company, as amended to date;
2. of the Company, as amended to date;
3. Resolutions adopted on August 28, 1998, by the Shareholders of the Company
authorizing the issuance of the Securities, certified by the Secretary of
the Company;
4. The form of the Company's Common Stock Certificate in the form filed as an
Exhibit to the Registration Statement; and
5. The Registration Statement, together with all amendments thereto, and
exhibits filed in connection therewith.
I have not undertaken, nor do I intend to undertake, any independent
investigation beyond such documents and records, or to verify the adequacy or
accuracy of such documents and records.
Additionally, I have consulted with officers and directors of the Company and
have obtained such statements and representations with respect to matters of
fact as I considered necessary or appropriate in the circumstances to render the
opinions contained herein. I have not independently verified the content of the
factual statements, nor do I intend to do so.
Based upon and subject to the foregoing, it is my opinion that: The 200,000
shares of Common Stock to be sold (upon exercise of the warrants), subject to
the effectiveness of the Registration Statement and compliance with applicable
blue sky laws, when issued and delivered against payment therefore in accordance
with the Registration Statement, will constitute legally issued, fully paid and
nonassessable shares of Common Stock of the Company.
I consent to the filing of this opinion as an exhibit to any filing made with
the Securities and Exchange Commission or under any state or other
jurisdiction's securities act for the purpose of registering, qualifying or
establishing eligibility for an exemption from registration or qualification of
Securities described in the Registration Statement in connection with the
offering described therein. Other than as provided in the preceding sentence,
this opinion (i) is addressed solely to you, (ii) may not be relied upon by any
<PAGE>
other party, (iii) covers only matters of federal law and Colorado general
corporate law, as now in effect, and nothing in this opinion shall be deemed to
imply any opinion relating to the laws of any other jurisdiction, (iv) may not
be quoted or reproduced or delivered by you to any other person, and (v) may not
be relied upon for any other purposes whatsoever. Nothing herein shall be
deemed to relate to or constitute an opinion concerning any matters not
specifically set forth above.
By giving you this opinion and consent, I do not admit that I am an expert with
respect to any part of the Registration Statement with the meaning of the term
"expert" as used in Section 11 of the Securities Act of 1993, as amended, or
Rules and Regulations of the Securities and Exchange Commission promulgated
thereunder.
The information set forth herein is as of the date of this letter. I disclaim
any undertaking to advise you of changes which may be brought to my attention
after the effective date of the Registration Statement.
Very truly yours,
/s/ William M. Ziering
- -------------------------
William M. Ziering
<PAGE>
BUSINESS LEASE AGREEMENT
THIS LEASE AGREEMENT, dated for reference purposes only June 2, 1998, by and
between Lapham Enterprises, hereinafter called "LANDLORD", and Anything Inc. ,
hereinafter called "TENANT".
WITNESSETH:
The LANDLORD does hereby lease to the TENANT and the TENANT does hereby take and
hire from the LANDLORD, the following described real property situate in the
County of El Paso and State of Colorado, to wit:
that commercial office space, of approximately 2069 square feet, located at 3020
North El Paso, Colorado Springs, CO 80907,
(hereinafter referred to as the Leased Premises) upon the following expressed
terms and conditions, to wit:
<PAGE>
1. The term of this lease shall commence on June 3, 1998 and shall continue
for a period of one year thereafter, expiring on May 31, 1999
2 The TENANT agrees to pay the LANDLORD as rent for the Leased Premises the
total sum of eleven thousand nine hundred thirty-three and 00/100 ($11,933.00)
Dollars, which sum of money shall be payable in the following manner:
See attached special conditions, paragraph 1
3. The TENANT expressly covenants and agrees to use the Leased Premises for
the following purpose.
general office use
and for no other purpose whatsoever without the prior written consent of
the LANDLORD to such change in use of the Leased Premises.
4. This lease may not be assigned or the Leased Premises sublet during the
term of the lease without the prior written consent of the LANDLORD to such
assignment or subletting; provided, however, that consent to assignment of this
lease or subletting of the Leased Premises shall not be unreasonably withheld by
the LANDLORD if such assignment shall be to a financially responsible assignee,
and provided, further, that the assignee shall, in consideration of such
consent, become personally responsible for the performance of the lease and no
assignment hereof shall relieve the original TENANT of personal responsibility
herein.
5. The TENANT shall pay all personal property taxes accruing during the
term of this lease for personal property owned by the TENANT and kept on the
leased premises.
6. All utilities used on the Leased Premises during the term of this lease
shall be paid for by the Tenant. Utilities include, but are not limited to, gas,
electric, water, waste water and telephone. Tenant agrees to pay all utilities,
whether separately metered or prorated, billed directly or by Landlord. It is
agreed that utilities are estimated to be $280.00 per month, which amount is
included in the rental amounts due every month as outlined in Section 1 of the
Special Conditions. Landlord will reconcile the utilities at the end of each
lease year and either rebate to or collect from tenant any under- or
over-payment.
7. The TENANT agrees to carry and maintain public liability insurance for
the Leased Premises in the minimum amount of $1,000,000.00 and with such company
as the LANDLORD and TENANT may agree upon during the term of this lease, and
name Landlord as additional insured.
<PAGE>
8. The LANDLORD may enter upon and inspect the Leased Premises at all
reasonable times during the term hereof.
9. All improvements placed upon the Leased Premises of a permanent nature
by the TENANT shall be and become the property of the LANDLORD at the expiration
of this lease, and the LANDLORD shall be under no obligation to reimburse the
TENANT for any sums of money so expended in making permanent improvements on the
Leased Premises; provided, however, that at the expiration of the term of this
lease the TENANT shall be entitled to remove the following items installed or to
be installed on the premises by the TENANT, and the provision of this paragraph
shall not be construed to prevent the removal of said items, to wit:
none
10. Should the Leased Premises be destroyed or rendered uninhabitable
through no act or fault of the TENANT, either by fire, act of God, or otherwise,
then the Lease may be forthwith terminated by the TENANT, at his option, unless
the LANDLORD, at his own expense, shall reconstruct said premises and render it
suitable for the TENANTS business within a period of ninety days, it being
understood by the parties hereto that the rentals shall be suspended during the
period of time when said premises are rendered uninhabitable and unusable for
the TENANT'S business.
11. The TENANT promises and agrees that if default be made in the payment
of rents or in the performance of any other conditions of this lease, that this
lease may be forthwith terminated at the election of the LANDLORD and that the
TENANT will immediately surrender and deliver up possession of the Leased
Premises to the LANDLORD upon receiving written notice from the LANDLORD of the
breach of conditions of this lease and the election of the LANDLORD to so
terminate the lease. In the event of such default by the TENANT, then the
LANDLORD, besides other rights or remedies he may have, shall have the immediate
right of re-entry and the right to remove all persons and property from the
Leased Premises at the expense of the TENANT. Should the LANDLORD elect to
re-enter, as herein provided, or should he take possession pursuant to legal
proceedings or pursuant to any notice provided for by law, he may either
terminate this lease, or he may, from time to time, without terminating this
lease, re-let or re-lease the Leased Premises or any part thereof for such
amount of rental and upon such terms and conditions as the LANDLORD, in his sole
discretion and judgment, may deem advisable, and he may make such alterations,
improvements and repairs to the Leased Premises as he may deem advisable. No
<PAGE>
such re-letting or re-leasing of the Leased Premises by the LANDLORD, under the
circumstances set forth in this paragraph, shall be construed as an election on
the LANDLORD's part to terminate or cancel this lease, unless a written notice
of such termination or cancellation is mailed by the LANDLORD to the TENANT at
the address of the Leased Premises, nor shall such re-letting or re-leasing
relieve the TENANT from liability to the LANDLORD for any and all damages, of
whatsoever type or nature, which the LANDLORD may have or will suffer or incur
as a result of the TENANT's breach of any of the terms, covenants, provisions
and conditions herein contained. Notwithstanding any such re-letting or
re-leasing without termination of this lease by the LANDLORD, the LANDLORD may
at any time thereafter elect to terminate the lease for such previous breach of
the TENANT. In the event it should become necessary for the LANDLORD to employ
an attorney to enforce any of the provision hereof, or to enforce any of them in
legal proceedings, LANDLORD shall be entitled to recover of TENANT his costs in
such behalf expended, plus a reasonable attorney's fee.
12. In the event this lease is terminated by reason of the default of
TENANT, it is understood and agreed that the LANDLORD shall be entitled to
retain any advance rental deposit herein made, to partially compensate LANDLORD
for damage suffered by reason of such herein contained shall be construed,
however, as precluding the LANDLORD from recovering from TENANT any further or
additional damages which he may have suffered by reason of such default of the
TENANT as provided in paragraph 12 hereof.
13. Upon expiration of the term of this lease, or any extension thereof,
the TENANT agrees to surrender and deliver up possession of the Leased Premises
to the LANDLORD in as good condition and repairs as the same are at this time,
ordinary wear and tear excepted. In the event the Leased Premises shall be
damaged beyond reasonable wear and tear, the TENANT agrees to immediately pay
the LANDLORD such sum of money as shall be reasonably expended by the LANDLORD
in restoring the Leased Premises to its former condition.
14. Should the TENANT continue in possession of the Leased Premises after
the expiration of the lease, without a written extension or renewal hereof, such
possession shall be on a month to month basis only and then at a monthly rate
herein specified. Holdover rate shall be $1,500.00 per month.
15. The failure of LANDLORD to insist, in any one or more instances to
exercise any option, privilege or right herein contained, shall in no way be
construed to constitute a waiver, relinquishment or release of such obligations,
covenants or agreements, and no forbearance by the LANDLORD of any default
hereunder shall in any manner be construed as constituting a waiver of such
default.
<PAGE>
16. The LANDLORD shall keep the sidewalks in front of and around the Leased
Premises free and clear of ice and snow and free from litter, dirt, debris and
obstructions.
17. If the TENANT shall be declared insolvent or bankrupt, or if any
assignment of his property shall be made for the benefit of his creditors or
others, or the TENANT's leasehold interest herein shall be levied upon under
execution, or taken by virtue of any writ of any Court of Law, or if a Trustee
in Bankruptcy or a receiver is appointed for the property of the TENANT, then
and upon the happening of any one of these events, the LANDLORD may, at his
option, immediately, with or without notice, terminate and cancel this lease,
and immediately retake possession of the Leased Premises without thereby
occasioning any forfeiture of the obligations of the TENANT previously accrued
under this lease.
18. In the event all or any of the Leased Premises shall be taken by right
of eminent domain, or in the event the LANDLORD makes a conveyance of all or any
part of the Leased Premises in lieu of taking by right of eminent domain, then
this lease shall, at the option of the LANDLORD, cease and terminate. In such
event, the TENANT shall not be required to make any further rental payments to
the LANDLORD and the TENANT shall have the right to remove from the Leased
Premises any and all furniture, machinery and fixtures set forth in Paragraph 10
hereof. In such event of a taking of all or part of the Leased Premises by right
of eminent domain or a conveyance in lieu of such taking, the LANDLORD shall
receive the entire award or price which the condemning or taking governmental
authority will pay for the Leased Premises.
19. This lease agreement is further subject to any and all special
conditions which are contained on this lease in the appropriate space provided
therefor.
20. Wherever used herein, the singular shall include the plural, and the
use of any gender shall be applicable to all genders.
21. This lease shall bind and benefit alike the heirs, successors and
assigns of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have set their hands and affixed
their seals on the day and year first above written.
TE Anything Inc. LANDLORD Lapham Enterprises
Its ________________________________________
___________________________________________
<PAGE>
SSN Address: 3020 North El Paso
Address: Colorado Springs, CO 80907
Phone: 262-0880 Phone: 719-471-1342
SPECIAL CONDITIONS
See special conditions attached hereto and made part hereof
SPECIAL CONDITIONS
These special conditions will be attached to and become a part of that
certain lease by and between Anything Inc. , as TENANT and Lapham Enterprises,
LANDLORD, said lease dated for reference purposes June 2, 1998, pertaining to
commercial lease space located at 3020 North El Paso, Colorado Springs, CO
80907.
1 Rent: At the time of signing the lease, Tenant pays the sum of $2,474.67.
Of this sum, $1280.00 is the security deposit and the balance is the pro-rated
first month's rent and utilities. The balance of the rents due hereunder shall
be paid in equal monthly installments of $1,280.00 and shall be due on or before
the first day of each succeeding month of the lease.
2 For purposes of proration, Tenant is deemed to be leasing 50% percent of
the building.
3. Tenant pays over with the signing of this lease the sum of $1,280.00 as
a SECURITY DEPOSIT ensuring good and faithful compliance with the terms of this
lease.
4. Late Charge: There shall be a late charge of $15.00 per day from the
first of the month for all payments received after the 3rd of the month.
5. In addition to any late charge, there shall be a $50.00 fee for any
check submitted to the Landlord for any payment which is returned to Landlord's
or Landlord's Agent's financial institution due to insufficient funds or which
for any reason is not honored when submitted for payment
6 In addition to the default provisions contained in Paras. 12 and 13 of
the main body of the lease, Tenant understands and agrees that Interest shall
accrue on all unpaid balances at a rate of 18% per annum.
7. Tenant shall provide Landlord 45 days prior written notice of its intent
to vacate or remain in the leased premises at the expiration of the term. If no
notice is given, Landlord will assume Tenant intends to vacate at the expiration
of the lease term and Landlord may place appropriate signage on-site, show the
space and generally work to re-let same.
<PAGE>
8. Landlord agrees to provide space "as-is".
9. Tenant shall provide its own janitorial services and trash removal.
Landlord is to provide trash receptacle.
10. Improvements to lease space may only be done after Tenant receives
Landlord's prior written approval. All Tenant improvements must conform to
applicable building codes, and must be done in a good, workmanlike manner by a
contractor pre-approved by Landlord.
11. Any and all signage must be approved, in writing, by Landlord prior to
installation. All signage is at Tenant's expense.
12. Tenant must maintain a general Business Owner's Insurance Policy, to
include general liability insurance in the minimum amount of $1,000,000.00 at
all times during lease. The insurance must name Landlord as additional insured
on the policy. Tenant will provide Landlord a Certificate of Insurance
evidencing of said policy prior to occupancy.
13. No dispute between Landlord and Tenant as to Landlord or Tenant
obligations under this lease shall excuse the payment of rent or the faithful
performance of the conditions of said lease by either party.
14. Should Tenant default on any of the terms or conditions of this lease,
then at the time of default Landlord shall be given a first lien upon all
property of Tenant, which shall come in or be placed upon the leased premises,
whether acquired by Tenant before or after the date hereof, to secure the
payment of rent and the performance of each and every other covenant herein
contained to be performed by Tenant. Upon default by Tenant and failure to cure,
Landlord, without notice or demand, may take possession of and sell such
property without legal process of any kind, at public or private sale after one
publication of a notice thereof in a daily newspaper published in the county
where the lease premises are situated, not less than ten (10) days before such
sale or by giving minimum notices required by law. The proceeds of any such sale
shall be applied first to the payment of expenses thereof, second to the
discharge of the rent or other liability hereunder unpaid, and the balance, if
any, shall be held for the account of the Tenant. Tenant agrees to execute and
record any financing statements and other documents necessary to perfect of
record the lien herein granted.
<PAGE>
15. Tenant agrees that, in occupying and using the Leased Premises, Tenant
will not create, maintain, permit or allow to continue any public or private
nuisance, will not commit or allow waste, and will comply fully with every
applicable governmental and/or official law, statute, ordinance, rule and
regulation.
16. Pursuant to Colorado Real Estate Commission rules and regulations,
Tenant understands that Hoff & Leigh, Inc. and its agents are acting as agent of
the Landlord in this transaction with the duty to represent Landlord's best
interests. FURTHERMORE, TENANT IS HEREBY ADVISED TO SEEK APPROPRIATE LEGAL AND
OR FINANCIAL COUNSEL PRIOR TO SIGNING THIS LEASE.
17. THIS LEASE IS CONTINGENT UPON LANDLORD's APPROVAL OF TENANT LEASE
APPLICATION AND FINANCIAL STATEMENT AND IS SUBJECT TO THE FINAL APPROVAL OF THE
LANDLORD. SIGNING OF THIS LEASE BY THE TENANT DOES NOT CONSTITUTE APPROVAL. THE
REAL ESTATE AGENT DOES NOT HAVE THE AUTHORITY TO BIND THE LANDLORD.
18. IT IS TENANT's SOLE RESPONSIBILITY TO CONFIRM COMPLIANCE OF THE
PREMISES TO THE PROPOSED USE OF THE PREMISES INCLUDING BUT NOT LIMITED TO,
ZONING, FIRE, HEALTH DEPARTMENT REGULATIONS, BUILDING PERMITS, BUSINESS
LICENSES, PARKING REGULATIONS AND ALL OTHER APPLICABLE GOVERNMENTAL RULES AND
REGULATIONS. TENANT AGREES TO CONFIRM, TO ITS SATISFACTION, THE ACCEPTABILITY OF
THE PREMISES FOR ITS PROPOSED USE AS IT CONFORMS TO THE ABOVE.
FAILURE OF TENANT TO COMPLY WITH ALL APPLICABLE BUILDING AND FIRE CODES
SHALL BE CAUSE FOR LANDLORD, AT LANDLORD's SOLE DISCRETION, TO CANCEL THIS LEASE
AND RETAIN ALL DEPOSITS AND OTHER MONIES RECEIVED HEREOF.
TENANT DOES NOT RELY ON ANY REPRESENTATION OF HOFF & LEIGH, INC., ITS
AGENTS OR EMPLOYEES, IN REGARD TO ANY OF THE ABOVE ITEMS.
19. All parties to this lease understand that there may be additional
requirements placed on the Landlord or Tenant with regard to the Americans with
Disabilities Act (ADA). HOFF & LEIGH, INC. AND ITS AGENTS ARE NOT EXPERT WITH
THE ADA LAWS. It is Landlord's and Tenant's obligation to verify any
requirements and compliance with said act.
20. Due to prior or current uses of the property, the property may have
hazardous metals, minerals, chemicals, PCB's asbestos, hydrocarbons, biological
or radioactive items in soils, water, building components, above- or
below-ground containers or elsewhere in areas that may or may not be accessible
<PAGE>
or noticeable. Such items may leak or otherwise be released. These various
construction materials, and any other building components, etc., may contain
items that have been or may in the future, be determined to be hazardous, toxic
or undesirable and may need to be specially treated or removed.
REAL ESTATE AGENTS HAVE NO EXPERTISE IN THE DETECTION OR CORRECTION OF
HAZARDOUS OR UNDESIRABLE ITEMS. EXPERT INSPECTIONS ARE NECESSARY. Specifically,
Hoff & Leigh, Inc. and its agents assume no responsibility with regard to any of
these items and all parties are advised that current or future laws may require
clean-up by past, present and future owners or operators. It is the
responsibility of Owner or Tenant to retain qualified experts to detect and
correct such matters and to consult with the legal counsel of their choice to
determine what provisions, if any. they may wish to include in transaction
documents regarding the property.
TENANT AGREES THAT IT SHALL NOT MAINTAIN, USE OR DISPOSE OF ANY HAZARDOUS
MATERIALS ON THE PREMISES,
21. Special Waste: Tenant understands and acknowledges that pursuant to
applicable federal, state and local law, various forms of waste, rubbish and/or
refuse are required to be disposed of separately from other rubbish due to the
hazardous nature of such materials including, but no limited to, certain medical
waste from doctors' or dentists' offices, liquid waste from restaurants such as
grease and fruit rinds, and solvent waste for dry cleansers, together with
various other regulated waste ("Special Waste"). All of such Special Waste shall
be disposed of by Tenant (at Tenant's sole cost and expense) in accordance with
all applicable federal, state and local laws and/or regulations. In the event
Tenant is producing and/or disposing of any such Special Waste, Tenant shall
notify Landlord immediately in writing of the existence and disposal of such
Special Waste, including the name of any waste hauler transporting and/or
disposing of same.
22. All parties understand and acknowledge that Hoff & Leigh, Inc. has
prepared the transaction documents for the convenience of the parties hereto. By
preparing these standard forms, Hoff & Leigh, Inc. has not engaged in the
practice of law. All parties should seek competent legal or financial advice
prior to executing any legal documents surrounding this transaction.
23. There are no oral or side agreements, representations or warranties by
Landlord or Landlord's agent not set forth in this Lease or in the
modifications, amendments, supplements, renewals or assignments of this Lease.
<PAGE>
24. Estoppel Certificate: Upon the written request of the Landlord, Tenant
agrees to deliver to the Landlord, within 5 days of receipt of such request, a
signed Estoppel Certificate certifying to the following:
a) That the lease is in full force and effect and has not been modified in
any way;
b) The date on which rent was last paid and the amount thereof;
C) The amount of any security deposit;
d) That the Landlord is not in default of the lease or, if Tenant claims
Landlord to be in default, the nature of such default;
e) The commencement date and expiration date of the lease and if there is
any option to renew. If there is such an option, state the terms thereof. Should
Tenant fail to provide Estoppel within the allotted time, Tenant hereby consents
that the Landlord shall execute said document on Tenant's behalf
25. Tenant acknowledges that the other tenants in the building are entitled
to quiet enjoyment of their individual spaces. Tenant is asked to operate his
business in such a manner so as not to interfere with the other Tenants' right
to this quiet enjoyment.
26A. Tenant acknowledges that the restroom facilities are common use
facilities to be shared with other tenants.
26B. Tenant is advised that the building may contain asbestos-containing
materials.
26C. Tenant acknowledges that parking adjacent to 3020 N. El Paso is a
shared parking facility with approximately 7 spaces alloted for this lease.
Overflow parking shall use street parking only. Tenant acknowledges that parking
adjacent to 3022-3028 N. El Paso and 610-650 First Street is for the exclusive
use of the tenants and other guests occupying those buildings only.
26. Tenant acknowledges that the leased space is non-smoking in its
entirety.
28. PERSONAL GUARANTY:
By signature below, Raymond D. Schick personally guarantees compliance with
and fulfillment of all the terms and conditions of this lease, including but not
limited to the full payment of all rents due hereunder.
<PAGE>
CONSENT OF J. PAUL KENOTE, CPA, P.C.
February 2, 1999
Anything Internet Corporation
3020 North El Paso, Suite 103
Colorado Springs, CO 80907
Re: Anything Internet Corporation
Registration Statement on Form SB-2
Ladies and Gentlemen:
We hereby consent to the use in this Registration Statement on Form SB-2 of our
report dated June 30, 1998 (which contains an explanatory paragraph that
describes a condition that raises substantial doubt as to the ability of the
Company to continue as a going concern) relating to the financial statements of
Anything Internet Corporation appearing in such Statement. We also consent to
the references to use under the headings "Experts" in such Statement.
Sincerely,
J. PAUL KENOTE, CPA, P.C.
/s/ J. Paul Kenote
- ---------------------
J. Paul Kenote, CPA
<PAGE>
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