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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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iBIZ TECHNOLOGY CORP.
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(Exact name of registrant as specified in its charter)
Florida 86-0933890
- ------------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1919 West Lone Cactus Drive, Phoenix, Arizona 85021
- ------------------------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
iBIZ TECHNOLOGY CORP. STOCK OPTION PLAN
- --------------------------------------------------------------------------------
(Full title of plan)
Robert L. Lane COPIES TO:
LANE & EHRLICH, LTD Stephen R. Boatwright, Esq.
4001 North Third Street, Suite 400 GAMMAGE & BURNHAM, P.L.C.
Phoenix, Arizona 85012-2065 Two North Central Avenue, Suite 1800
- --------------------------------------- Phoenix, Arizona 85004
(Name and address of agent for service) (602) 256-0566
(602) 264-4442
- -------------------------------------------------------------
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================
PROPOSED
MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PRICE PER SHARE (1) PRICE (1) FEE
=============================================================================================================
<S> <C> <C> <C> <C>
Common Stock,
no par value 450,000 $1.21 $544,500 $143.75
=============================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and (g) of the Securities Act of 1933, as amended
(the "Securities Act"); based on the average ($1.21) of the bid ($1.16) and
asked ($1.25) price on the NASD OTC Bulletin Board on April 12, 2000.
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PART I
iBIZ TECHNOLOGY CORP.
1919 WEST LONE CACTUS DRIVE
PHOENIX, ARIZONA 85021
(623) 492-9200
www.ibizcorp.com
3,475,000 SHARES
COMMON STOCK
3,475,000 shares of common stock are being offered by our
securityholders. We will not receive any of the proceeds from the sale of common
stock by the securityholders. However, we will receive amounts upon exercise of
outstanding options.
We will be responsible for all of the expenses of this offering.
However, all securityholders will pay sales or brokerage commissions or
discounts with respect to sales of their shares.
The shares of common stock described in this prospectus are for resale.
The securityholders may elect to sell shares of common stock described in this
prospectus through brokers at the price prevailing at the time of sale or at
negotiated prices. The common stock may also be offered in block trades, private
transactions or otherwise at prices to be negotiated.
Our common stock is traded on the National Association of Securities
Dealers, Inc., OTC Bulletin Board under the symbol "iBIZ."
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS, SEE "RISK
FACTORS" ON PAGE 5.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
April 14, 2000
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TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUMMARY........................................................ 2
RISK FACTORS.............................................................. 5
SELLING SECURITYHOLDERS................................................... 12
USE OF PROCEEDS........................................................... 12
PLAN OF DISTRIBUTION...................................................... 13
MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.................. 14
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES............................ 15
EXPERTS................................................................... 15
LEGAL MATTERS............................................................. 15
ii
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WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the pubic
over the Internet at the SEC's website at http://www.sec.gov.
We have filed a registration statement with the SEC on Form S-8 to
register the shares being offered. This prospectus is part of that registration
statement and, as permitted by the SEC's rules, does not contain all the
information included in the registration statement. For further information with
respect to us and our common stock, you should refer to the registration
statement and to the exhibits and schedules filed as part of the registration
statement, as well as the documents discussed below.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update or supersede this information.
This prospectus may contain summaries of contracts or other documents.
Because they are summaries, they will not contain all of the information that
may be important to you. If you would like complete information about a contract
or other document, you should read the copy filed as an exhibit to the
registration statement or incorporated in the registration statement by
reference.
We incorporate by reference the documents listed below and any future
filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until all of the shares are sold:
- The description of our common stock contained in our Form
10-SB, filed October 13, 1999, File No. 027619, including the
amendments filed on December 1, 1999 and December 15, 1999.
- Annual Report on Form 10-KSB, filed on January 27, 2000, File
No. 027619.
- Quarterly Report on Form 10-QSB, filed on March 16, 2000, File
No. 027619.
You may request a copy of these filings at no cost. You may call us at
(623) 492-9200 or write to us at 1919 West Lone Cactus Drive, Phoenix, Arizona
85021, Attention: Terry S. Ratliff.
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You can review and copy the registration statement, its exhibits and
schedules at the public reference facilities maintained by the SEC as described
above. The registration statement, including its exhibits and schedules, are
also available on the SEC's website.
PROSPECTUS SUMMARY
THE FOLLOWING IS A SUMMARY OF OUR BUSINESS AND THE OFFERING CONTAINED
IN THIS PROSPECTUS. BEFORE EXERCISING YOUR OPTIONS, YOU SHOULD CAREFULLY READ
THIS ENTIRE PROSPECTUS, INCLUDING CERTAIN FACTORS LISTED ON PAGES 5 TO 12 UNDER
THE HEADING "RISK FACTORS." YOU SHOULD ALSO CAREFULLY READ THE INFORMATION
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
OUR COMPANY
OVERVIEW
Our Company is incorporated in Florida. Our executive offices are
located at 1919 West Lone Cactus Drive, Phoenix, Arizona 85021, and our
telephone number is (623) 492-9200. Our world wide web address is
http://www.ibizcorp.com. Information contained on our website is not part of
this prospectus.
Through our wholly-owned operating subsidiary, INVNSYS Technology
Corporation, we design, manufacture and distribute desktop computers, monitors,
transactional printers, financial application keyboards, numeric keypads and
related products. We also market a line of original equipment manufacturer
notebook computers and distribute transactional and color printers.
We recently expanded our business to include network integration
services and digital subscriber line high-speed Internet connection services. We
have also recently acquired assets from a company engaged in the
business-to-business sale of software and have incorporated software sales into
our business.
Founded in 1979, INVNSYS has evolved from a distributor of bank
automation computer systems to a provider of a variety of computer products
targeted at both the commercial and personal markets. Throughout its history,
INVNSYS has provided innovative products to satisfy its customers' demands.
PRODUCTS
Our product groups currently include:
- Business Application Small Footprint Computers. Designed for
limited space environments, we believe our iT-8000 has the
smallest base or footprint of any desktop in the personal
computer industry.
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- Personal Computers. We offer two small footprint personal
computers, the Sahara and the Tomato.
- Keyboards. We market a range of keyboards and numeric keypads
targeted at financial institutions. We recently introduced an
innovative keyboard called "KeySync," specifically designed
for use with hand-held personal organizers such as 3COM's Palm
Pilot.
- Displays and Monitors. We sell a line of space-saving,
zero-emission LCD flat panel displays. We believe our LCD
panels take up less than one-tenth of the space needed for an
equivalent cathode ray tube monitor and are some of the
thinnest available on the market. We also offer a line of
traditional monitors.
- Notebook Computers. We market a complete line of competitively
priced, build-to-order notebook computers. Currently, we sell
three models, the Roadrunner, the Apache and the Phoenix.
- Printers and Peripherals. We are an authorized distributor of
Epson printers and peripherals and currently offer two
transactional printers. We recently began offering Tektronix
color printers.
- Third-Party Hardware, Software, and Related Supplies. In an
effort to provide our customers a wider range of products, we
recently began reselling third-party hardware, software, and
related supplies.
SERVICES
We recently began offering the following services:
- Network Integration Services. We have hired a Chief Technology
Officer with significant industry contacts and now have
contracts with American Express and Motorola.
- Digital Subscriber Line Services. In December 1999, we started
offering high-speed Internet connection services marketed to
commercial customers.
MARKETING, SALES AND DISTRIBUTION
We market our products directly to end users through a direct sales
force, regional resellers, value-added providers in the banking and
point-of-sale markets and Internet commerce sites. We market our full range of
products directly to retail customers through our website at www.ibizcorp.com.
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MANUFACTURING
Our products are engineered and manufactured by various entities in
Taiwan or South Korea. Manufacturers build our products to our specifications
with non-proprietary components. We engage in final assembly, functional testing
and quality control in our Phoenix, Arizona facility.
SERVICE AND SUPPORT
We provide our customers with a comprehensive service and support
program. Technical support is provided to customers via a toll-free telephone
number, as well as through our website.
Our products have either a one or three year limited warranty covering
parts and service. In addition, we offer extended service agreements, which may
extend warranty coverage for up to two additional years.
THE OFFERING
Total shares registered in this prospectus....................... 3,475,000
Shares outstanding after the offering............................ 32,428,861(1)
OTC Bulletin Board symbol........................................ iBIZ
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(1) Assumes the exercise of all of the options, but excludes shares issuable
pursuant to convertible securities not registered in this prospectus.
RISK FACTORS
Investing in the common stock involves certain risks. You should review
these "Risk Factors" beginning on page 5.
PLAN OF DISTRIBUTION
Selling securityholders may sell common stock in the over-the-counter
market or on any exchange on which our common stock is listed. Shares may also
be sold in block transactions or private transactions or otherwise, through
brokers or dealers. Brokers or dealers may be paid commissions or receive sales
discounts. The selling securityholders must pay their own commissions and absorb
the discounts. Brokers or dealers used by the selling securityholders may be
deemed to be underwriters under the Securities Act. In addition, the selling
securityholders will be underwriters under the Securities Act with respect to
the common stock offered.
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This prospectus contains certain forward-looking statements which
involve substantial risks and uncertainties. These forward-looking statements
can generally be identified because the context of the statement includes words
such as "may," "will," "expect," "anticipate," "intend," "estimate," "continue,"
"believe," or other similar words. Similarly, statements that describe our
future plans, objectives and goals are also forward-looking statements. Our
factual results, performance or achievements could differ materially from those
expressed or implied in these forward-looking statements as a result of certain
factors, including those listed in "Risk Factors" and elsewhere in this
prospectus.
RISK FACTORS
INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU
SHOULD CONSIDER THE FOLLOWING DISCUSSION OF RISKS AS WELL AS OTHER INFORMATION
IN THIS PROSPECTUS BEFORE EXERCISING OPTIONS. THE RISKS AND UNCERTAINTIES
DESCRIBED BELOW ARE NOT THE ONLY ONES. ADDITIONAL RISKS AND UNCERTAINTIES NOT
PRESENTLY KNOWN TO US OR THAT WE CURRENTLY DEEM IMMATERIAL ALSO MAY IMPAIR OUR
BUSINESS OPERATIONS. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS
COULD BE HARMED. IN SUCH CASE, THE TRADING PRICE OF OUR COMMON STOCK COULD
DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT.
EXCEPT FOR HISTORICAL INFORMATION, THE INFORMATION CONTAINED IN THIS
PROSPECTUS AND IN OUR SEC REPORTS ARE "FORWARD LOOKING" STATEMENTS ABOUT OUR
EXPECTED FUTURE BUSINESS AND PERFORMANCE. OUR ACTUAL OPERATING RESULTS AND
FINANCIAL PERFORMANCE MAY PROVE TO BE VERY DIFFERENT FROM WHAT WE MIGHT HAVE
PREDICTED AS OF THE DATE OF THIS PROSPECTUS.
We Have A History Of Losses And Anticipate Future Losses
For the fiscal year ended October 31, 1999 and during the fiscal
quarter ended January 31, 2000, we sustained net losses of approximately
$1,053,563 and $710,000, respectively. Future losses may occur. Our success in
obtaining additional funding will determine our ability to continue operations
and expand our business. We have insufficient cash flow to sustain or grow
operations. We cannot assure you that we will be successful in reaching or
maintaining profitable operations.
We Will Require Additional Capital In the Future
We have spent, and will continue to spend, substantial funds on product
research and development and expansion of our sales and marketing efforts. As a
result, we will need to raise short-term capital to maintain our ongoing
business. We are actively seeking to obtain a significant capital infusion to
avoid continuing reliance on short-term capital sources. Between November 1999
and March 2000, we issued convertible debentures in an aggregate amount of
$3,200,000. In addition, sales of common stock and exercises of options and
warrants have generated approximately $642,000 during 2000. We currently
anticipate the proceeds will be sufficient to
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maintain our ongoing business through January 2001. However, we cannot assure
you that unforeseen events will not result in the need for additional capital
sooner than we currently anticipate.
If we do raise additional funds, your stock ownership may be diluted.
Further, new securities may have rights, preferences or privileges senior to
yours. Additionally, debt financing may include restrictive covenants, such as
restrictions on incurring additional debt. If we are unable to raise additional
funds when necessary, we may have to reduce planned expenditures, scale back our
product developments, sales or other operations, enter into financing
arrangements on terms that we would not otherwise accept.
The Market is Highly Competitive
The market for our products is intensely competitive. We expect to
experience significant and increasing levels of competition. We compete
principally in the following areas:
- Product Quality and Reliability
- Product Performance
- Level of Customer Service
- Ability to Meet Customer Requirements
- Brand Awareness
- Price
In many of our markets, traditional computer hardware manufacturing
companies provide the most significant competition. Our competitors include a
substantial number of large public companies, including IBM, Compaq Computer
Corporation, Dell Computer Corporation, Toshiba, Gateway 2000 and NEC. As a
reseller, we compete against well established companies such as Comp USA,
Computer Discount Warehouse and Insight Enterprises.
Most of our competitors are much larger, benefit from greater name
recognition and have significantly greater resources than we do. This subjects
us to numerous competitive disadvantages. For example, our current revenue
levels limit our ability to market and advertise on a national or international
level. This in turn makes it more difficult for us to increase brand awareness.
We could be forced to reduce prices and suffer reduced margins or market share
due to increased competition from manufacturers or distributors of products
similar to or competitive with our products.
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We Have Recently Added New Lines of Business
We recently began offering network integration services and digital
subscriber line or DSL high-speed Internet communications services. To aid in
the development of these services, we have hired a Chief Technology Officer with
significant experience and industry contacts. However, we cannot assure you that
we will develop and implement successful marketing strategies for these new
services. In addition, as DSL services are an emerging technology, we cannot
assure you that this technology will gain market acceptance.
Our Network Integration and DSL Services Face Intense Competition
We recently began offering network integration services and DSL
high-speed Internet communications services. The market for these products is
highly competitive. Our network integration services will compete against a wide
range of competitors from large established companies such as IBM and AT&T to
smaller private entities. Our DSL services will compete with companies such as
U.S. West Communications, COX Communications, Covad Communications and Rhythms
NetConnections. Although these companies are more established, we believe their
greater resources may increase market awareness and acceptance of DSL services.
This, in turn, may make it easier for us to sell DSL services. We cannot assure
you, however, that our new DSL services will enable us to expand our customer
base and generate greater revenues.
We Need to Expand our Product Range
To effectively compete, we need to continue to expand our business and
generate greater revenues so that we have the resources to timely develop new
products. We must continue to market our products and services through our
direct sales force and expand our e-commerce distribution channels. We cannot
assure you that we will be able to grow sufficiently to provide the range and
quality of products required to compete.
We Must Keep Pace with Rapid Technological Change to Remain Competitive
The computer industry is characterized by rapidly changing technology,
evolving industry standards, frequent new product introductions and enhancements
and changing customer demands. We must develop and introduce new products that
keep pace with technological developments. If we fail to introduce progressive
new products in a timely and cost-effective manner, our financial performance
may be negatively affected.
Some of Our Products Target Niche Markets
We sell a line of "small footprint" computers. (The footprint is the
amount of desk space a computer requires.) We also recently introduced a "thin
client"
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computer system designed to utilize thinly equipped terminals with limited
memory and no local storage capability connected to central servers.
We believe that the small footprint and thin client computer segments
of the industry present business opportunities because they are underdeveloped
markets. However, we also believe that the number of competitors offering these
products will grow over the next several years. For example, competitors such as
Gateway 2000 and NEC have recently introduced computers targeted to consumers
requiring less desk space. We compete in the thin client market segment with
well established companies such as Wyse Technology. We believe that Wyse may
hold over 45% of the world-wide general purpose terminal market. We cannot
guarantee you that small footprint products will gain or even sustain current
market share or that our thin client products will achieve market acceptance. In
addition, our products could be rendered obsolete and unmarketable if our
competitors introduce new technology or new industry standards emerge.
Recent Consolidations May Limit Our Markets
One of our primary markets is the banking and financial institution
industry. Recently, many banking and financial institutions have begun to
consolidate. Although the number of potential customers decrease during
consolidation, many banking and financial institutions upgrade their computer
networks. We cannot assure you that the demand for our products by banking and
financial institutions will not decrease as a result of the consolidation.
Our Products Must Be Compatible With Third-Party Software
Although we market computer hardware and peripherals, we currently do
not develop software. Consequently, we are dependent upon third parties to
develop software applications that operate on our hardware platforms. If
software providers do not continue to provide software acceptable to our
customers, our sales may suffer.
We cannot guarantee that all available software will be compatible with
our products or that we will have the technical personnel necessary to evaluate
and fix software compatibility problems that may arise. If we do not have
technical personnel available, our sales may decline.
We Are Dependent On Our Manufacturers And Suppliers
Our business depends upon obtaining adequate quantities of products
from our manufacturers and suppliers. Consequently, our results of operations
are dependent, in part, upon our manufacturers' and suppliers' ability to
produce reasonably priced products in adequate amounts to meet our demands.
Currently, our computers and peripherals are engineered and
manufactured by various entities in Taiwan and South Korea. Although we have not
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experienced significant problems with our manufacturers and suppliers in the
past, we may experience such problems in the future. We are also subject to
risks of fluctuations in our component prices. If prices charged by our vendors
increase, our costs of goods sold and net income would be adversely affected.
Currently, we believe there is a shortage of 12.1" liquid crystal
display monitors. To date, we have not experienced difficulty in obtaining these
monitors. In addition, we recently entered into an agreement with Harsper Co.,
Ltd. to act as the exclusive United States distributor for their liquid crystal
display monitors. If our business expands and monitor supplies remain low, we
may experience difficulty in meeting customer demand.
We cannot assure you that our positive relationships will continue or
that in the event of a termination of a relationship with a manufacturer or
supplier, we would be able to obtain alternative sources of manufacturing or
components without a material disruption in our ability to provide products to
our customers. A material disruption of our ability to supply computers and
peripherals to our customers would have a material adverse effect on our sales
and results of operations.
We Must Continue to be Authorized to Incorporate Manufacturer
Authorized Products
We are dependent on our continued authorization to provide manufacturer
authorized products, including certain software products. Currently, the Company
is authorized by industry-leading software developers, such as Citrix Systems
and Microsoft to incorporate their software in our products. Without such
authorization, we would be unable to provide the same range of products
currently offered. We cannot assure you that manufacturers will continue to
authorize use of their software in our computers and peripherals.
We Recently Began Offering Third-Party Hardware, Software, and Related
Supplies
In January 2000, we began reselling third-party hardware, software, and
related supplies in the highly competitive, business-to-business market.
Management anticipates a significant portion of revenues will be generated by
sales of hardware, software, and related supplies developed by third-parties.
Should third-party suppliers decide to sell their products through their own
direct sales forces or should competitors develop hardware, software, and
related supplies which replace that provided by our suppliers, the revenues
generated by these sales could materially decline.
We Have Few Proprietary Rights
We attempt to protect our limited proprietary property through
copyright, trademark, trade secret, nondisclosure and confidentiality measures.
Such protections, however, may not preclude competitors from developing similar
technologies.
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Currently, we hold no patents and most of the technology used in the
design and manufacturer of our computers and peripherals is known and available
to others. Although we are exploring patent protection for one of our keyboard
products, we believe that our competitive position is based on the ability to
successfully market innovative computers and peripherals rather than on patented
technologies.
Although we believe that our products do not infringe on any third
party's intellectual property rights, we cannot be certain that we will not
become involved in litigation involving proprietary rights. Intellectual
property rights litigation entails substantial legal and other costs. We do not
know if we will have the necessary financial resources to defend or prosecute
our rights in connection with any litigation.
There Is A Limited Market For Our Common Stock
Currently only a limited trading market exists for our common stock.
Our common stock trades on the OTC Bulletin Board under the symbol "iBIZ." The
Bulletin Board is a limited market and subject to substantial restrictions and
limitations in comparison to the NASDAQ system. Any broker/dealer that makes a
market in our stock or other person that buys or sells our stock could have a
significant influence over its price at any given time. We cannot assure you
that the market in our common stock will be sustained. As a result, holders of
our common stock may be unable to readily sell the stock they hold or may not be
able to sell it at all.
Our Stock Price has Been Volatile
The history relating to the prices of newly public companies indicates
that there may be significant volatility in the market price of our common
stock. More particularly, since trading began in July 1998, the market price of
our common stock has fluctuated between a low of $0.56 per share and a high of
$3.06 per share, a 545% variance. As a result, holders of our common stock may
be subject to wide fluctuations in the value of their investment.
We Are Dependent on Key Personnel
Our future success is dependent, in part, upon our six executive
officers and other key employees. A loss of one or more of our current officers
or key employees could negatively impact our operations. However, we have
entered into employment agreements with our executive officers and other key
employees. We currently do not carry key-person life insurance policies for our
executive officers. We cannot assure you that we will not suffer the loss of key
human resources.
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Our Officers and Directors Can Exercise Control Over All Matters
Submitted to a Vote of Shareholders
As of April 5, 2000, our executive officers and directors beneficially
owned an aggregate of approximately 54% of our outstanding common stock. These
officers, acting together, will be able to effectively control matters requiring
approval by our shareholders, including election of members to our board of
directors. As a practical matter, current management will continue to control
iBIZ for the foreseeable future.
Management Will Have Broad Discretion To Use Proceeds
We will not receive the proceeds from the sale of shares by the selling
securityholders. However, we will receive funds upon the exercise of options to
purchase our common stock. We intend to use the proceeds principally for working
capital and general corporate purposes, including marketing and product
development. Our management and board of directors have broad discretion with
respect to the application of the proceeds.
Sales of Common Stock Registered in this Offering Could Cause a Decline
in Our Stock Price
If all of the 3,475,000 shares registered in this offering are sold, we
will have 32,428,861 shares outstanding after this offering is completed. We
have also filed a registration statement to register an additional 7,144,252
shares (which amount includes 4,324,626 currently issuable shares and 2,819,626
shares which may be issuable pursuant to certain anti-dilution provisions of our
securities). As of the date of this prospectus 2,170,000 employee options are
exercisable. As a result, a total of 6,494,626 shares registered by iBIZ are
currently eligible for resale.
In addition to the shares to be sold under these offerings, we have
outstanding 14,712,400 shares of "restricted securities" held by our officers
and directors. The remaining 14,241,461 shares held by persons other than our
officers and directors are currently, or will be available in the future for
sale under Rule 144(k). Under Rule 144(k), restricted securities may be sold by
non-affiliates of iBIZ without restrictions on volume limits.
All shares registered in this offering will be freely tradable. If all
of the 2,170,000 shares issuable upon currently exercisable options are issued,
and the 4,324,626 shares registered in our other offering (which amount does not
include the shares registered pursuant to anti-dilution provisions) it will
increase the available free trading shares as of April 5, 2000 by approximately
61%. A significant amount of common stock coming on the market at any given time
could result in a decline in the price of such stock or increased volatility.
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We Have Not And Do Not Anticipate Paying Dividends.
To date, we have not paid dividends to our shareholders and we do not
contemplate paying dividends in the future. We anticipate retaining earnings, if
any, to finance and develop our business. As a result, the return on your
investment will depend upon any appreciation in the market price in the common
stock.
SELLING SECURITYHOLDERS
This prospectus covers, in part, 950,000 shares issuable upon exercise
of options granted to certain officers and directors. The following table lists
the officers and directors, the number of shares of common stock held by each
officer or director as of the commencement date of this offering, the number of
shares included in the offering and the shares of common stock held by each such
officer or director after the offering.
<TABLE>
<CAPTION>
Shares of Percentage of
Common Common
Stock Ownership Ownership Stock
Included in Before the After the Owned After
Name Prospectus(1) Offering(1) Offering(2) Offering
---- ------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Kenneth Schilling, President, Director 250,000 11,370,000 11,120,000 38.1%
Terry Ratliff, Vice President, Secretary, 350,000 2,121,200 1,771,200 6.0%
Comptroller, Director
Mark Perkins, Vice President of Operations, Director 350,000 2,121,200 1,771,200 6.0%
</TABLE>
(1) Consists of all shares owned by the selling securityholders as of April 14,
2000, plus the shares included in this prospectus.
(2) Assumes the sale of all shares registered in this offering.
In addition to the shares issuable to these officers and directors,
this prospectus covers an aggregate of 2,525,000 shares issuable upon exercise
of options granted to other employees.
USE OF PROCEEDS
iBIZ Technology Corp. ("iBIZ" or the "Company") will be responsible the
expenses of this Offering, except for fees of counsel for the selling
securityholders (if any) and any discounts or commissions payable with respect
to sales of the common stock. The Company will not receive any proceeds from the
sale of the common stock by the selling securityholders. iBIZ will, however,
receive up to $3,220,000 upon the exercise of the options. iBIZ intends to use
the net proceeds from exercise of options primarily for working capital needs
and general corporate purposes, including product research and development and
sales and marketing expansion. There can be no assurance that any options will
be exercised.
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PLAN OF DISTRIBUTION
iBIZ is registering the shares on behalf of the selling
securityholders. As used herein, "selling securityholders" includes donees and
pledgees selling shares received from a named selling securityholder after the
date of this prospectus. All costs, expenses and fees in connection with the
registration of the shares offered hereby will be borne by the Company.
Brokerage commissions and similar selling expenses, if any, attributable to the
sale of shares will be borne by the each selling securityholder.
Sales of shares may be effected by selling securityholders from time to
time in one or more types of transactions (which may include block transactions)
in the over-the-counter market, in negotiated transactions, through put or call
options transactions relating to the shares, through short sales of shares, or a
combination of such methods of sale, at market prices prevailing at the time of
sale, or at negotiated prices. Such transactions may or may not involve brokers
or dealers. The selling securityholders have advised iBIZ that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities, nor is
there an underwriter or coordinating broker acting in connection with the
proposed sale of shares by the selling securityholders.
The selling securityholders may effect such transactions by selling
shares directly to purchasers or to or through broker-dealers, which may act as
agents or principals. Such broker-dealers may receive compensation in the form
of discounts, concessions, or commissions from the selling securityholders or
the purchasers of shares for whom such broker-dealers may act as agents or to
whom they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).
The selling securityholders and any broker-dealers that act in
connection with the sale of shares might be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, and any commissions received
by such broker-dealers and any profit on the resale of the shares sold by them
while acting as principals might be deemed to be underwriting discounts or
commissions under the Securities Act. iBIZ has agreed to indemnify some of the
selling securityholders against certain liabilities, including liabilities
arising under the Securities Act. The selling securityholders may agree to
indemnify any agent, dealer or broker-dealer that participates in transactions
involving sales of the shares against certain liabilities, including liabilities
arising under the Securities Act.
Because selling shareholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the selling securityholders
will be subject to the prospectus delivery requirements of the Securities Act.
iBIZ has informed the selling securityholders that the anti-manipulative
provisions of Regulation M promulgated under the Exchange Act may apply to their
sales in the market.
13
<PAGE> 17
Upon the Company being notified by a selling securityholder that any
material arrangement has been entered into with a broker-dealer for the sale of
shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such selling shareholder and of
the participating broker-dealer(s); (ii) the number of shares involved; (iii)
the price at which such shares were sold; (iv) the commissions paid or discounts
or concessions allowed to such broker-dealer(s), where applicable; (v) that such
broker-dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus; and (vi) other facts
material to the transaction. In addition, upon iBIZ being notified by a selling
securityholder that a donee or pledgee intends to sell more than 500 shares, a
supplement to this prospectus will be filed.
MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The Company's common stock is currently traded on the OTC Bulletin
Board. The common stock was initially listed under the symbol "EVCV" on June 3,
1998, and trading began on July 16, 1998. On October 26, 1998, the Company
changed its trading symbol to "IBIZ." The following charts indicate the high and
low sales price for the Company's common stock for each quarter between
September 30, 1998 and December 1999.
[1998 - 2000 COMMON STOCK PRICES GRAPH]
<TABLE>
<CAPTION>
STOCK PRICE
HIGH LOW
<S> <C> <C>
QUARTER ENDED
Sept. 98 $3.06 $2.25
Dec. 98 $2.69 $1.88
Mar-99 $2.06 $0.94
Jun-99 $2.44 $0.56
Sep-99 $2.22 $0.94
Dec-99 $1.81 $0.94
Mar-00 $3.00 $1.00
</TABLE>
As of April 5, 2000, Management believes there to be 149 holders of
record of iBIZ's common stock. To date, iBIZ has not paid any dividends on its
common stock iBIZ does not currently intend to pay dividends in the future. iBIZ
is prohibited from declaring or paying dividends while certain debentures and
warrants are outstanding.
14
<PAGE> 18
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
iBIZ's Articles of Incorporation, as amended, provide to the fullest
extent permitted by Florida law, a director or officer of iBIZ shall not be
personally liable to iBIZ or its shareholders for damages for breach of such
director's or officer's fiduciary duty. The effect of this provision of iBIZ's
Articles of Incorporation, as amended, is to eliminate the right of iBIZ and its
shareholders (through shareholders' derivative suits on behalf of iBIZ) to
recover damages against a director or officer for breach of the fiduciary duty
of care as a director or officer (including breaches resulting from negligent or
grossly negligent behavior), except under certain situations defined by statute.
iBIZ believes that the indemnification provisions in its Articles of
Incorporation, as amended, are necessary to attract and retain qualified persons
as directors and officers.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to its directors, officers and controlling
persons pursuant to the foregoing provisions or otherwise, iBIZ has been advised
that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
EXPERTS
The financial statements appearing in iBIZ's annual report on
Form 10-KSB for the one year period ended October 31, 1999, and in its quarterly
report on Form 10-QSB for the three month period ended January 31, 2000, have
been incorporated herein and in the registration statement in reliance upon the
report of Moffitt & Company, P.C., independent public accountants upon the
authority of such firm as experts in accounting and auditing.
No dealer, salesman or other person has been authorized to
give any information or make any representation, other than those contained in
this prospectus, in connection with the offering hereby, and if given or made,
such information and representations must not be relied upon as having been
authorized by iBIZ or the selling securityholders. This prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, any
securities to any person in any State or jurisdiction in which such offer or
solicitation is unlawful. Neither the delivery of this prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that there
has been no change in the affairs of the Company or the facts herein set forth
since the date hereof.
LEGAL MATTERS
Certain legal matters with respect to the validity of the
common stock offered will be passed upon by iBIZ's legal counsel, Gammage &
Burnham, P.L.C., Phoenix, Arizona.
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<PAGE> 19
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
iBIZ Technology Corp. hereby files this Form S-8 to register an additional
450,000 shares of common stock, $0.001 par value. The contents of the Form S-8,
File No. 333-95475, filed with the Securities and Exchange Commission on January
27, 2000, are hereby incorporated by reference.
Item 8. Exhibits
Exhibit No. Description
----------- -----------
5.03(1) Opinion of Gammage & Burnham P.L.C.
10.05(2) iBIZ Technology Corp.
Stock Option Plan
10.06(2) Form of Stock Option
23.03 The consent of Gammage & Burnham P.L.C. is contained in
Exhibit 5.03.
23.03(3) Consent of Moffitt & Company, P.C.
24(3) Power of Attorney
1. Filed herewith.
2. Incorporated by reference from iBIZ's Form 10-SB, File No. 027619, filed
with the SEC on October 13, 1999.
3. Incorporated by reference from iBIZ's Form S-8, File No. 027619, filed
with the SEC on January 27, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
requirements for filing on Form S-8 and has duly caused this S-8 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized.
IBIZ TECHNOLOGY CORP., INC.
By: /s/Terry Ratliff
------------------------------------------
Terry Ratliff
Vice President, Secretary, Controller, and
Director
Dated: April 14, 2000
<PAGE> 1
EXHIBIT 5.03
[GAMMAGE & BURNHAM, P.L.C. LETTERHEAD]
April 14, 2000
Board of Directors
iBIZ Technology Corp.
1919 West Lone Cactus
Phoenix, Arizona 85027
Re: Registration Statement on Form S-8
Gentlemen:
In connection with the registration by iBIZ Technology Corp. (the
"Company"), on Form S-8 (the "Registration Statement") providing registration
under the Securities Act of 1933, as amended, of not to exceed 450,000 shares of
Common Stock issuable upon exercise of Options, we are furnishing the following
opinion as counsel to the Company.
We have examined such corporate records, certificates of public
officials and officers of the Company, and other documents and records as we
have considered necessary or proper for the purpose of this opinion.
Based upon the foregoing, and having regard to legal considerations
that we deem relevant, we are of the opinion that the shares of Common Stock of
the Company issuable upon exercise of the Options when issued and sold in
accordance with the transactions described in the Registration Statement, and in
accordance with the federal securities laws and the securities laws of the
various states in which the Common Stock may be issued, will be validly issued,
fully paid and nonassessable.
As counsel to the Company, we hereby consent to the reference to this
firm under the caption "Legal Matters" contained in the Prospectus which is part
of the Registration Statement and to the filing of this opinion as Exhibit 5.03
to the Registration Statement.
Very truly yours,
GAMMAGE & BURNHAM P.L.C.
by Stephen R. Boatwright
