<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period ________ from to ___________.
0-25757
Commission file number
VERIDA INTERNET CORP.
(Exact name of Small Business Issuer as Specified in its Charter)
State of Nevada 98-0164651
(State or other jurisdiction (I.R.S. Employer
of Incorporation or Organization) or Identification Number)
50 California Street
Suite 1500
San Francisco, California 94111
(Address of Principal Executive Offices)
(415) 464-8600
(Issuer's Telephone Number, including Area Code)
Check whether the Issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by court.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date: Common,
$.00001 par value per share: 9,150,571 outstanding as of September
30, 1999
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [ x ]
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VERIDA INTERNET CORP. (Formerly Austral Pacific Energy Corp.)
(A Development Stage Enterprise)
Balance Sheets
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
September 30, September 30,
1999 1998
<S> <C> <C>
ASSETS
Current
Cash and short-term deposits $ 1,246,764 $ 196,336
Prepaid expenses 7,224 -
Subscriptions receivable - 133,700
------------ -----------
1,253,988 330,036
Property and equipment, net 60,621 -
Deposit (Note 3) 150,000 -
Capitalized software development
costs, net (Note 6) 161,110 -
------------ -----------
TOTAL ASSETS $ 1,625,719 $ 330,036
============ ===========
LIABILITIES
Current
Accounts payable and accrued
liabilities $ 63,964 $ 2,078
Due to related party (Note 6) 46,323 -
Loan payable to shareholder (Note 6) 202,000 -
Loan payable to related party (Note 6) - 30,000
------------ -----------
TOTAL LIABILITIES 312,287 32,078
------------ -----------
STOCKHOLDERS' EQUITY
Common stock, $0.00001 par value;
100,000,000 shares authorized (Note 4)
(1999: 9,150,571 shares issued and
outstanding) (1998: 8,887,000 shares
issued and outstanding) 92 89
Additional paid-in capital 2,459,365 340,621
Deferred compensation (Note 4) (437,500) -
Deficit accumulated during the
development stage (708,525) (42,752)
------------ -----------
TOTAL STOCKHOLDERS' EQUITY 1,313,432 297,958
------------ -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 1,625,719 $ 330,036
============ ===========
</TABLE>
1
<PAGE> 3
VERIDA INTERNET CORP. (Formerly Austral Pacific Energy Corp.)
(A Development Stage Enterprise)
Statements of Operations
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
Nine Month Nine Month November 1, 1996
Period Ended Period Ended (inception) to
September 30, September 30, September 30,
1999 1998 1999
<C> <C> <C> <C>
REVENUE
Interest income $ 9,705 $ 3,233 $ 15,182
------------- ------------- --------------
OPERATING EXPENSES
Depreciation and
amortization 23,529 - 23,529
Product development 224,897 - 224,897
General and
administrative 331,366 19,655 382,323
Loss on sale of marketable
securities (Note 6) 92,958 - 92,958
------------- ------------- --------------
672,750 19,655 723,707
------------- ------------- --------------
NET LOSS FOR THE
PERIOD $ (663,045) $ (16,422) $ (708,525)
============== ============= ==============
BASIC AND DILUTED LOSS
PER SHARE (Note 5) $ (0.07) $ (0.00) $ (0.12)
============= ============= ==============
</TABLE>
2
<PAGE> 4
VERIDA INTERNET CORP. (Formerly Austral Pacific Energy Corp.)
(A Development Stage Enterprise)
Statements of Cash Flows
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
Nine Month Nine Month November 1, 1996
Period Ended Period Ended (inception) to
September 30, September 30, September 30,
1999 1998 1999
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss for the period $ (663,045) $ (16,422) $ (708,525)
Adjustments and changes in
non-cash working capital:
Depreciation and
amortization 23,529 - 23,529
Loss on sale of marketable
securities 92,958 - 92,958
Prepaid expenses (7,224) - (7,224)
Accounts payable and
accrued liabilities 59,386 78 63,964
Due to related party 46,323 - 46,323
------------ ------------- ------------
Net cash used in operating
activities (448,073) (16,344) (488,975)
------------ ------------- ------------
FINANCING ACTIVITIES
Common shares issued
for cash 1,683,697 59,010 1,900,707
Cost of common stock
offering - - (10,000)
Repayment of loan payable
to related party (30,000) - (30,000)
Loan payable to related party - - 30,000
Loan payable to shareholder 202,000 - 202,000
------------ ------------- ------------
Net cash provided by
financing activities 1,855,697 59,010 2,092,707
------------ ------------- ------------
INVESTING ACTIVITIES
Purchase of property and
equipment (64,010) - (64,010)
Payment of deposit towards
purchase of Triad
Creative, Inc. (150,000) - (150,000)
Purchase of software from
NetOpus Incorporated (50,000) - (50,000)
Proceeds from sale of
marketable securities 81,972 - 81,972
Purchase of marketable
securities - - (174,930)
------------ ------------- ------------
Net cash used in
investing activities (182,038) - (356,968)
------------ ------------- ------------
Net increase in cash 1,225,586 42,666 1,246,764
Cash position - Beginning
of period 21,178 153,670 -
------------- ------------- ------------
Cash position -
End of period $ 1,246,764 $ 196,336 $ 1,246,764
============= ============= ============
</TABLE>
3
<PAGE> 5
VERIDA INTERNET CORP. (Formerly Austral Pacific Energy Corp.)
(A Development Stage Enterprise)
Statements of Changes in Stockholders' Equity
(Unaudited - Prepared by Management)
For the Nine Month Periods Ended September 30, 1999 and 1998
<TABLE>
<CAPTION>
Additional
Common Stock Paid-in Deferred
Shares Amount Capital Compensation
<S> <C> <C> <C> <C>
Balance at
December 31, 1998 8,887,000 $ 89 $ 340,621 $ -
Common stock issued for
cash at $5.00 and $7.00
per share (Note 6) 238,571 3 1,549,994
Common stock issued to
NetOpus Incorporated at
$5.25 per share (Note 6) 25,000 - 131,250
Deferred compensation
related to stock options 437,500 (437,500)
Net loss during the period
Loss on sale of marketable
securities realized
--------- ----- ----------- ----------
Balance at
September 30, 1999 9,150,571 $ 92 $ 2,459,365 $ (437,500)
========= ===== =========== ==========
Balance at
December 31, 1997 3,600,000 $ 36 $ 147,964 $ -
Common stock issued for
cash at $0.001, $0.03
and $0.25 per share
(Note 4) 5,287,000 53 192,657
Net loss during the period
--------- ----- ----------- ----------
Balance at
September 30, 1998 8,887,000 $ 89 $ 340,621 $ -
========= ===== =========== ==========
4-a
<PAGE> 6
VERIDA INTERNET CORP. (Formerly Austral Pacific Energy Corp.)
(A Development Stage Enterprise)
Statements of Changes in Stockholders' Equity
(Unaudited - Prepared by Management)
For the Nine Month Periods Ended September 30, 1999 and 1998
Deficit
Accumulated
during the Cumulative Total
Development Comprehensive Stockholders'
Stage Adjustment Equity
<S> <C> <C> <C>
Balance at
December 31, 1998 $ (45,480) $ (94,574) $ 200,656
Common stock issued for
cash at $5.00 and $7.00
per share (Note 6) 1,549,997
Common stock issued to
NetOpus Incorporated at
$5.25 per share (Note 6) 131,250
Deferred compensation
related to stock options -
Net loss during the period (663,045) (663,045)
Loss on sale of marketable
securities realized 94,574 94,574
---------- --------- -----------
Balance at
September 30, 1999 $ (708,525) $ - $ 1,313,432
========== ========= ===========
Balance at
December 31, 1997 $ (26,330) $ - $ 121,670
Common stock issued for
cash at $0.001, $0.03 and
$0.25 per share (Note 4) 192,710
Net loss during the period (16,422) (16,422)
---------- --------- -----------
Balance at
September 30, 1998 $ (42,752) $ - $ 297,958
========== ========= ===========
</TABLE>
4-b
<PAGE> 7
VERIDA INTERNET CORP. (Formerly Austral Pacific Energy Corp.)
(A Development Stage Enterprise)
Notes to the Financial Statements
(Unaudited - Prepared by Management)
For the Nine Month Periods Ended September 30, 1999 and 1998
NOTE 1 - NATURE OF OPERATIONS
The Company was incorporated under the laws of the State of Nevada on
November 1, 1996 and is a development stage enterprise. The Company is
currently developing business-to-business electronic commerce solutions
for use on the Internet.
These financial statements have been prepared on the basis that the
Company will continue as a going concern. The Company has incurred
operating losses since its incorporation and significant acquisitions
in the future, if any, will likely require additional equity financing.
However, there can be no assurance that such acquisitions will occur,
or whether additional funds required, if any, would be available to the
Company when required or on terms acceptable to the Company. Such
limitations could have a material adverse effect on the Company's
business, financial condition or operations and these financial
statements do not include any adjustment that could result therefrom.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Accounting Principles and Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the fiscal periods. Actual results may differ from
those estimates.
b) Translation of Foreign Currencies
Revenues and expenses arising from foreign currency transactions are
translated into United States dollars at the average rate for the
period. Monetary assets and liabilities are translated into United
States dollars at the rates prevailing at the balance sheet date.
Other assets and liabilities are translated into United States dollars
at the rates prevailing on the transaction dates. Exchange gains and
losses are recorded as income or expense in the period in which they
occur.
5
<PAGE> 8
VERIDA INTERNET CORP. (Formerly Austral Pacific Energy Corp.)
(A Development Stage Enterprise)
Notes to the Financial Statements
(Unaudited - Prepared by Management)
For the Nine Month Periods Ended September 30, 1999 and 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
c) Financial Instruments and Financial Risk
The Company's financial instruments consist of current assets and
current liabilities. The fair values of the current assets and
liabilities approximate the carrying amounts due to the short-term
nature of these instruments.
d) Accounting Pronouncements Recently Issued
The Financial Accounting Standards Board ("FASB") issued Statement of
Financial Accounting Standards No. 128: Earnings per Share ("SFAS
128"), effective for fiscal periods ending after December 15, 1997 and
requiring restatement of all prior period earnings per share data.
SFAS 128 replaces the presentation of primary earnings per share
("EPS") with a presentation of both basic and diluted EPS for all
entities with complex capital structures. Basic EPS excludes dilutive
securities and is computed by dividing income available to common
shareholders by the weighted-average number of common shares
outstanding for the period. Diluted EPS reflects the potential
dilution that could occur if dilutive securities were converted into
common shares and is computed similarly to fully diluted EPS pursuant
to previous accounting pronouncements. SFAS 128 applies equally to
loss per share presentations.
The FASB issued Statement of Financial Accounting Standards No. 130:
Reporting Comprehensive Income ("SFAS 130"), effective for fiscal
periods beginning after December 15, 1997 and requiring restatement of
all comparative financial statements disclosed. SFAS 130 requires that
all items required to be recognized under accounting standards as
components of comprehensive income be reported as part of the basic
financial statements. The Company does not expect adoption of this new
standard to have a material effect on its financial reporting.
e) Cash and Short-term Deposits
Cash and short-term deposits include government treasury bills and
bankers' acceptances with initial maturities no longer than 90 days,
together with accrued interest.
6
<PAGE> 9
VERIDA INTERNET CORP. (Formerly Austral Pacific Energy Corp.)
(A Development Stage Enterprise)
Notes to the Financial Statements
(Unaudited - Prepared by Management)
For the Nine Month Periods Ended September 30, 1999 and 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
f) Property and Equipment
Property and equipment are stated at cost and are depreciated on a
straight-line basis over their estimated useful lives of three years.
Leasehold improvements are amortized on a straight-line basis over the
shorter of the lease term or the estimated useful life of the
improvements.
Property and equipment consist of the following:
September 30, September 30,
1999 1998
Computer equipment and software $ 55,997 $ -
Leasehold improvements 8,013 -
----------- ------
64,010 -
Accumulated depreciation and
amortization (3,389) -
----------- ------
$ 60,621 $ -
=========== ======
g) Capitalized Software Development Costs
Capitalized software development costs are amortized on a straight-line
basis over their estimated useful lives of three years.
h) Product Development Costs
Product development costs include expenses incurred by the Company to
develop, monitor and operate the Company's website. Product
development costs are expensed as incurred.
NOTE 3 - DEPOSIT
The Company entered into a letter of intent to purchase Triad Creative,
Inc., a private company owned by the President of the Company, in
consideration of $750,000 in cash and 150,000 common shares of the
Company, subject to resale restrictions. A non-refundable deposit of
$150,000 was paid to the President of the Company, which will be
credited towards the cash amount to be paid upon closing.
Refer to Notes 6 and 9
7
<PAGE> 10
VERIDA INTERNET CORP. (Formerly Austral Pacific Energy Corp.)
(A Development Stage Enterprise)
Notes to the Financial Statements
(Unaudited - Prepared by Management)
For the Nine Month Periods Ended September 30, 1999 and 1998
NOTE 4 - COMMON STOCK
a) Stock Options and Share Purchase Warrants
During the 1999 fiscal period, stock options to purchase common shares
of the Company were granted, as follows:
Number of Shares Price per Share Expiry Date
350,000 $ 4.00 June 14, 2004
680,000 $ 5.25 June 14, 2004
6,667 $ 7.20 August 13, 2004
100,000 $ 7.00 August 15, 2004
5,000 $ 9.12 September 15, 2004
5,067 $ 9.10 September 21, 2004
These stock options are subject to various vesting and resale
provisions with the exception of a stock option to purchase 300,000
common shares at a price of $5.25 per share.
During the 1999 fiscal period, share purchase warrants were issued to
purchased 178,571 common shares of the Company at a price of $10.00 per
share expiring on August 27, 2002.
Refer to Note 6
b) Deferred Compensation
During the 1999 fiscal period, the Company recorded aggregate deferred
compensation cost of $437,500 as a result of granting stock options.
This amount represents the difference between the exercise price and
the quoted market price of the Company's common stock at the date of
grant. Stock options to purchase a total of 350,000 common shares were
granted below the quoted market price at an exercise price of $4.00 per
share.
The amortization of deferred compensation is charged to operations over
the vesting period of the stock options. No amortization was
recognized during the 1999 fiscal period.
8
<PAGE> 11
VERIDA INTERNET CORP. (Formerly Austral Pacific Energy Corp.)
(A Development Stage Enterprise)
Notes to the Financial Statements
(Unaudited - Prepared by Management)
For the Nine Month Periods Ended September 30, 1999 and 1998
NOTE 4 - COMMON STOCK (continued)
c) Private Placements
During the 1999 fiscal period, the Company issued 3,320,000 shares
pursuant to private placements for total cash proceeds of $133,700 and
cancelled 3,000,000 shares previously issued pursuant to a private
placement for total cash proceeds of $30,000. Since these transactions
affect the Company's permanent capital, the financial statements for the
year ended December 31, 1998 were prepared giving retroactive effect to
these transactions.
Accordingly, the comparative figures for the 1998 fiscal period have
also been prepared giving retroactive effect to these transactions.
The 3,320,000 shares issued during the 1999 fiscal period are shown as
if they had been outstanding at the beginning of the 1998 fiscal
period. The 3,000,000 shares issued during the 1997 fiscal year and
cancelled during the 1999 fiscal period are not shown as being issued.
Refer to Note 6
NOTE 5 - LOSS PER SHARE
Net loss per common share is computed based on the weighted-average
number of common shares and common share equivalents outstanding.
For the 1999 fiscal period, stock options outstanding have not been
included in the computation of diluted loss per share as the inclusion
of these securities would be antidilutive. Consequently, no
differences existed between basic and diluted loss per share for the
periods presented. The weighted-average number of shares outstanding
after giving retroactive effect to subsequent share transactions are
8,947,215 for the 1999 fiscal period and 8,094,436 for the 1998 fiscal
period.
Refer to Note 4
9
<PAGE> 12
VERIDA INTERNET CORP. (Formerly Austral Pacific Energy Corp.)
(A Development Stage Enterprise)
Notes to the Financial Statements
(Unaudited - Prepared by Management)
For the Nine Month Periods Ended September 30, 1999 and 1998
NOTE 6 - RELATED PARTY TRANSACTIONS
a) Due to Related Party
During the 1999 fiscal period, the Company entered into various
agreements with Triad Creative, Inc. to design and produce the Company's
internet sites and other corporate materials for an estimated total
cost of $312,303 (1998 fiscal period - Nil), of which $275,486 was
incurred by the Company. Triad Creative, Inc. is a private company
owned by the President of the Company. At September 30, 1999, the
Company owed $46,323 (September 30, 1998 - Nil) to this private
company.
Refer to Note 3
b) Loan Payable to Shareholder
During the 1999 fiscal period, the Company obtained a loan from a
shareholder of the Company and issued a promissory note for $200,000.
The promissory note accrues interest at a rate of 8% per annum and is
due in full on or before August 16, 2000.
c) Loan Payable to Related Party
During the 1999 fiscal period, the Company repaid a $30,000 loan from
a private company wholly-owned by a former President of the Company.
This amount relates to the cancellation during the 1999 fiscal period
of 3,000,000 shares issued during the 1997 fiscal year for total cash
proceeds of $30,000.
Refer to Note 4
d) Transactions with Related Party
During the 1999 fiscal period, the Company sold 59,800 shares of Trans-
Orient Petroleum Ltd. ("Trans-Orient") for cash proceeds of $81,972,
net of commissions, resulting in a loss of $92,958. These available-
for-sale securities were originally acquired at a cost of $174,930 and
reported historically at market value, with unrealized gains and losses
included as a component of comprehensive income.
10
<PAGE> 13
VERIDA INTERNET CORP. (Formerly Austral Pacific Energy Corp.)
(A Development Stage Enterprise)
Notes to the Financial Statements
(Unaudited Prepared by Management)
For the Nine Month Periods Ended September 30, 1999 and 1998
NOTE 6 - RELATED PARTY TRANSACTIONS (continued)
During the 1999 fiscal period, the Company issued 178,571 units at a
price of $7.00 per share to Trans-Orient for cash proceeds of
$1,249,997 pursuant to a private placement. Each unit consists of one
common share and one share purchase warrant to purchase one additional
share at a price of $10.00 per share expiring on August 27, 2002.
Trans-Orient Petroleum Ltd. is a public company with directors,
officers and/or principal shareholders in common with the Company.
e) Employment Agreements and Stock Options
The Company entered into an employment agreement with the Company's
Executive Vice President at a rate of $7,500 per month. The employment
agreement also provides for a stock option granted during the 1999
fiscal period to purchase 200,000 shares of the Company exercisable at
a price of $4.00 per share, subject to vesting and resale provisions.
The Company entered into an employment agreement with the Company's
Chief Technology Officer at a rate of $9,167 per month. The employment
agreement also provides for a stock option granted during the 1999
fiscal period to purchase 150,000 shares of the Company exercisable at
a price of $4.00 per share, subject to vesting and resale provisions.
The Company entered into an employment agreement with the Company's Vice
President of Engineering at a rate of $9,167 per month. The employment
agreement also provides for a stock option granted during the 1999
fiscal period to purchase 100,000 shares of the Company exercisable at
a price of $7.00 per share, subject to vesting and resale provisions.
The Company entered into employment agreements with various other
employees at an aggregate rate of $22,750 per month. These employment
agreements also provide for stock options granted during the 1999
fiscal period to purchase an aggregate of 91,734 shares of the Company
exercisable at prices between $5.25 and $9.12 per share, subject to
vesting and resale provisions.
Refer to Note 9
f) Software Purchase Agreement
The Company entered into an agreement to purchase computer software
from NetOpus Incorporated in consideration of $181,250 consisting of
$50,000 in cash and 25,000 common shares of the Company at a deemed
price of $5.25 per share. The Company has the right to use, brand,
sell and market this computer software including the right to modify
and customize at the Company's expense as required. Additionally, the
Company has the right to share equally in any revenue generated from
any future sale or licensing of the modified computer software by
NetOpus Incorporated.
11
<PAGE> 14
VERIDA INTERNET CORP. (Formerly Austral Pacific Energy Corp.)
(A Development Stage Enterprise)
Notes to the Financial Statements
(Unaudited Prepared by Management)
For the Nine Month Periods Ended September 30, 1999 and 1998
NOTE 6 - RELATED PARTY TRANSACTIONS (continued)
The Chief Technology Officer of the Company is the president of NetOpus
Incorporated.
g) Consulting Agreement
During the 1998 fiscal period, the Company incurred $18,000 in
consulting fees to a private company wholly-owned by the former
President of the Company.
NOTE 7 - INCOME TAXES
There are no income taxes payable by the Company at September 30, 1999.
NOTE 8 - NAME CHANGE
On March 11, 1999, the name of the Company was changed from Austral
Pacific Energy Corp. to Verida Internet Corp.
NOTE 9 - SUBSEQUENT EVENTS
In October 1999, the Company entered into an employment agreement with
the Company's President and Chief Executive Officer at a rate of $15,000
per month.
In October 1999, the Company completed the purchase of Triad Creative,
Inc., a private company owned by the President of the Company.
Refer to Note 3
12
<PAGE> 15
ITEM 2. PLAN OF OPERATION
Verida Internet Corp. (the "Registrant") is incorporated under the
laws of the State of Nevada. The common shares of the Registrant trade
on the OTC Bulletin Board ("OTCBB") as operated by the National
Association of Securities Dealers Inc. under the symbol "VERY".
The head office of the Registrant is located at Suite 1500, 50
California Street, San Francisco, California 94111. The Registrant's
Internet web site address is www.verida.com.
The Registrant's plan of operations for the next 12 months contains
several overlapping sets of activities for the development, deployment,
marketing, sales, customer service and support of the Registrant's
products and services. The Registrant will develop or secure and
deploy appropriate software, hardware, and human resources to achieve
its business goals.
The Registrant will offer a product set of World Wide Web ("Web")
based services to allow clients in the business-to-business sector to
conduct commerce on the Internet. The set of services offered by the
Registrant to its clients will be located on servers controlled by the
Registrant, and accessed by clients through their own existing Internet
connections utilizing standard Internet browsers such as Netscape's
"Communicator" or Microsoft's "Internet Explorer". The client would not
require any specialized software or hardware to use the Registrant's
services. The Registrant's products will be provided as "web services"
that can be accessed on a cost-effective, as-needed basis at anytime
over the Internet.
The Registrant's offerings in support of business-to-business
e-commerce come under the following names:
1. VeriPlace
VeriPlace is the brand name for the Registrant's online markets for
business-to-business transactions in targeted industry and market
segments. The Registrant is developing this offering to provide
interactive marketplaces for businesses within a specific industry
segment to buy and sell products and services. The Registrant is
developing and licensing technology for these online markets that will
facilitate commercial transactions on the Internet in the setting of an
exchange, a catalogue, an auction or some combination of these
settings. All VeriPlace online markets will be based on a central
technology infrastructure developed by the Registrant, and may include
technology components which are licensed. The Registrant plans for each
VeriPlace online market to be customized to meet the transactional
needs of the particular industry and market segment it serves.
In addition to its commercial transaction functionality, the
Registrant is developing its VeriPlace offerings to include other
elements such as the distribution of news and information targeted to
the specific industry or market segment served by a particular
VeriPlace online market. The Registrant is working with a highly
regarded distributor of global and industry news and information on the
Internet for the news and information element of the VeriPlace online
markets. The Registrant is also developing and licensing systems for
the service and support of VeriPlace customers.
<PAGE> 16
The Registrant continues to investigate, research, and identify
various opportunities for potential VeriPlace offerings in the
agricultural, construction, financial services, environmental and
energy industries. The Registrant has also begun the process of
targeting, designing and building specific VeriPlace offerings that, in
its opinion and in the opinions of individuals and/or organizations who
are intimate with said industry and market segments, will serve
specific industry and market segments not adequately served by existing
Internet commerce offerings.
2. VeriSuite
VeriSuite is the brand name of the Registrant's e-commerce offering
for businesses which may choose to participate in a certain VeriPlace
online market, and are either uninterested in developing or are unable
to develop an e-commerce infrastructure for their own business. The
primary components of VeriSuite include VeriStore, providing e-commerce
transactional capabilities, VeriMark, a package of automated online
marketing tools, and VeriBase, providing data warehousing services.
(a) VeriStore
VeriStore will provide e-commerce transactional capabilities to
manage and process transactions between an individual client and its
customers. In addition to providing a client with the capability to
create and maintain an E-Store on the Web, VeriStore will also provide
a virtual back office infrastructure to enable clients to handle all
aspects of online transactions. The virtual back office services will
provide clients with the necessary tools to manage and process online
transactions that occur when the client's customer purchases goods from
their E-Store. The back office services will include: (1) processing of
the client's customers orders and sending confirmations (2) online
payment processing in real time (3) calculating applicable shipping
costs and taxes (4) running multiple reports detailing online sales
statistics for any given period and (5) managing customer queries.
(b) VeriMark
The Registrant is developing the VeriMark service as a package of
automated online marketing tools which will allow VeriStore marketers
to deploy, track and measure the cost effectiveness of online marketing
efforts. The service will also work as an automated electronic
marketing manager that will automate the tracking of the online
marketing process from the first customer contact through sales and
fulfillment.
(c) VeriBase
The VeriBase service will provide data warehousing services to
allow VeriStore operators to electronically store their customers'
contact and demographic information, track customer and prospect
activity from online sales and marketing activities and perform
analysis including demographic profiling and modeling.
The VeriStore, VeriMark and VeriBase services are intended to
operate in an integrated manner where a client may use one or more of
the services in conjunction with another or as stand-alone services
where the client has the need for only one of the services.
<PAGE> 17
The Registrant has also undertaken significant steps to develop
branding for the company and its offerings, to establish and implement
an integrated marketing plan, to develop an accurate and positive
public identity among the news media and industry experts, and to ally
with key business and technology leaders.
The Registrant continues to develop its human resources and
staffing plan and is hiring employees and contracting with specialists
to achieve its business goals in a cost-effective manner. During the
quarter ending September 30, 1999, the Registrant hired a Vice
President of Engineering, and three new employees to fulfill the roles
of development engineer, system engineer and technical lead (see Note
6(e) of ITEM 1. FINANCIAL STATEMENTS under PART 1 - FINANCIAL
INFORMATION). Additionally, the Registrant has recently secured the
services of a marketing counsel on a consulting basis to aid in
developing the marketing efforts of the Registrant. To accommodate its
growth, the Registrant has leased additional office space and is
developing a site plan to consolidate its employees in a central
location that provides its employees with a highly desirable and
productive working environment.
Given the Registrant's current level of working capital and
operations being conducted to develop its products, it is expected that
the Registrant can satisfy its cash requirements until March 2000
before additional capital will have to be raised. Additional sources of
financing will most likely be sought through future private placements
of the Registrant's common shares rather than seeking interest-bearing
loans. However, the Registrant recognizes that as a result of its
limited financial, managerial, or other resources, the number of
suitable financing options may be limited. Should these additional
sources of capital not be found the Registrant will modify its
operations to conserve working capital by concentrating on fewer
products and/or services being advanced.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Registrant is not a party to any legal proceedings.
ITEM 2. RECENT SALES OF UNREGISTERED SECURITIES
Placements of Securities
During the quarter ending September 30, 1999, the Registrant has
issued the following unregistered securities at the following prices.
There were no underwriters engaged and no underwriting discounts or
commissions paid. All common stock issues were made pursuant to
exemptions from registration contained in Regulation S, Rules 901-905
of the 1933 Securities Act.
Common Stock Issuance
Type of
Date Security Number Proceeds Exemption
09/02/99 Units 178,571 $1,249,997 Reg. S (901-905)[1]
<PAGE> 18
[1] Each Unit acquired was acquired at a price of $7.00 per unit and
is comprised of one common share and one warrant. Each warrant
entitles Trans-Orient Petroleum Ltd. to purchase an additional
common share at a price of $10 per share within a three year
period. Trans-Orient Petroleum Ltd. is a public company with
directors, officers and/or principal shareholders in common with
the Registrant.
See Item 2 "Common Stock Issuances" of the Registrant's Form 10-QSB
filed on August 13, 1999, which is hereby incorporated by reference,
for further information on earlier placements of the Registrant's Common
Stock.
See Item 5 (c)
Stock Options Granted
During the quarter ending September 30, 1999, the Registrant
issued options under its 1999 Stock Option Plan to newly hired officers
and key employees to acquire its common shares in the following
amounts:
Type of Exercise
Date Security Number Price Term
08/13/99 Stock Option 6,667 $7.20 5 years [1]
08/15/99 Stock Option 100,000 $7.00 5 years [2]
09/15/99 Stock Option 5,000 $9.12 5 years [1]
09/21/99 Stock Option 5,067 $9.10 5 years [1]
All of the above options were issued under Section 4(2) of the
1933 Securities Act. No options were exercised during the quarter
ending September 30, 1999.
[1] 12.%5 of Option may be exercised at 12 months and 12.5% every 6
months thereafter.
[2] 12.5% of Option may be exercised at 6 months and 12.5% every 6
months thereafter until month 42 at which time a final 25% may be
exercised.
See Item 2 "Stock Options Granted" of the Registrant's Form 10-QSB
filed on August 13, 1999, which is hereby incorporated by reference,
for further information on earlier placements of the Registrant's Common
Stock.
Use of Proceeds
During the nine months ending September 30, 1999, the Registrant
incurred $224,897 (see ITEM 5 (b)) in costs to design and produce the
Registrant's web site and to further design and produce the Registrant's
VeriPlace products. A further $331,366 in office and administrative
expenses were incurred during the nine month period ending September
30, 1999.
During the quarter ending September 30, 1999, the Registrant
purchased certain computer and hardware assets in support of its
business including $29,315 in computer server equipment, $26,682 in
office computer equipment and $8,013 in leasehold improvements.
Also see ITEM 5(c)
<PAGE> 19
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the quarter ended September 30, 1999, no matters were
submitted to the Registrant's security holders.
ITEM 5. OTHER INFORMATION
(a) On August 16, 1999, the Registrant obtained a $200,000 loan
from a non-affiliate shareholder of the Registrant and issued a
promissory note for such. The promissory note accrues interest at a
rate of 8% per annum and is due in full on or before August 16, 2000.
(b) During the nine months ending September 30, 1999, the
Registrant entered into various agreements with Triad Creative, Inc. to
design and produce the Registrant's internet sites and other corporate
materials for an estimated total cost of $312,303 (1998 fiscal period -
Nil), of which $275,486 was incurred by the Registrant. Of the
$275,486 incurred, $224,897 is directly related to product development
while the remainder was attributable to office and administrative
expenses. Triad Creative, Inc. is a private company owned by the
President of the Registrant which, in addition to providing its
services to the Registrant, has a broad spectrum of other clientele
which it provides marketing and communications services to. At
September 30, 1999, the Registrant owed $46,323 (September 30, 1998 -
Nil) to this private company.
(c) During the quarter ending September 30, 1999, the Registrant
entered into a letter of intent to purchase Triad Creative, Inc., a
private company owned by the President of the Registrant, in
consideration of $750,000 in cash and 150,000 common shares of the
Company, subject to resale restrictions. The total purchase price to be
paid by the Registrant, including both shares and cash, for the
purchase of Triad Creative Inc. is $1,800,000. Prior to determining the
price to be paid, the Registrant's board of directors received an
independent evaluation of the value of Triad Creative, Inc. The
evaluation determined that the fair market value of Triad Creative,
Inc. was between $1,700,000 to $2,100,000. A non-refundable deposit of
$150,000 was paid to the President of the Registrant on the signing of
the letter of intent, which will be credited towards the cash amount to
be paid upon closing. Subsequent to September 30, 1999, the Registrant
and its President have executed the purchase agreement whereby Triad
Creative, Inc. will become a wholly-owned operating subsidiary of the
Registrant. Triad Creative, Inc. will continue to operate its pre-
existing business as a subsidiary of the Registrant upon the closing of
the proposed transaction.
(d) During the quarter ending September 30, 1999, the Registrant
acquired Directors' and Officers' and Company Reimbursement Indemnity
Insurance ("D&O Insurance") with an upper of liability limit of
$2,000,000. The annual cost to the Registrant for the D&O Insurance is
$47,000.
<PAGE> 20
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
27.1 Financial Data Schedule
99.1 Employment Agreement for Vice President - Engineering
99.2 Promissory Note
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
VERIDA INTERNET CORP.
(Registrant)
Dated: November 12, 1999 By: /s/ Michael Hinshaw
Michael Hinshaw, President
Dated: November 12, 1999 By: /s/ Mark Katsumata
Mark Katsumata, Principal Financial
Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Balance Sheet at September 30, 1999 (Unaudited) and the Statement of
Operations for the nine months ended September 30, 1999 (Unaudited) and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,246,764
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,253,988
<PP&E> 64,010
<DEPRECIATION> 3,389
<TOTAL-ASSETS> 1,625,719
<CURRENT-LIABILITIES> 312,287
<BONDS> 0
0
0
<COMMON> 92
<OTHER-SE> 2,459,365
<TOTAL-LIABILITY-AND-EQUITY> 1,625,719
<SALES> 0
<TOTAL-REVENUES> 9,705
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 672,750
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (663,045)
<INCOME-TAX> (663,045)
<INCOME-CONTINUING> (663,045)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (663,045)
<EPS-BASIC> (0.07)
<EPS-DILUTED> (0.07)
</TABLE>
<PAGE> 21
EXHIBIT 99.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated for reference purposes only as of
August 2, 1999, is entered into by and between VERIDA INTERNET
CORP., a Nevada corporation ("Employer"), and DAVID ZIMMERMAN
("Employee"). Employer and Employee agree to the following terms
and conditions of employment.
1. Period of Employment. Employer shall employ Employee
commencing August 15, 1999, and continuing until the employment
is terminated in accordance with Section 4.
2. Position and Responsibilities.
(a) Position. Employee accepts employment with Employer
as Vice President, Engineering, and shall perform all services
appropriate to that position to the best of his ability, as well
as such other services as may be assigned by Employer. He shall
report to the Chief Technical Officer. Employee shall perform his
responsibilities on a variable-time basis but with an average
work week within a given month consisting of a minimum of forty
(40) hours.
(b) Other Activity. Except upon the prior written consent of
Employer, Employee (during his employment with Employer) shall
not engage, directly or indirectly, in any other business,
commercial, or professional activity (whether or not pursued for
pecuniary advantage) that puts the Employee in direct competition
with Employer, or that directly interferes with the business of
Employer. So that Employer may be aware of the extent of any
other demands upon Employee's time and attention, Employee shall
disclose in confidence to Employer the nature and scope of any
other business activity in which he is or becomes engaged during
his employment with Employer. Notwithstanding the foregoing,
Employer and Employee acknowledge. and understand that Employee
is a principal of NetOpus Incorporated, a California corporation
("NetOpus"), which is in the business of website development,
specializing in database integration and e-commerce. Accordingly,
that nothing in this paragraph shall be construed as restricting
Employee's and Net0pus's right to continue to provide website and
e-commerce development services so long as this work is not
knowingly performed for an individual or entity seeking to
provide the same general set of services that Employer provides.
<PAGE> 22
3. Compensation and Benefits.
(a) Compensation
(1) Employer shall pay Employee a salary at the rate of
Nine Thousand Six Hundred and Sixty-Seven Dollars ($9,167)
per month in accordance with Employer's regularly
established policies.
(2) Employee shall be granted an option to purchase
100,000 shares of Employee's common stock at a price of
seven (7) dollars per share. Employee's stock option shall
vest based on the following vesting schedule following the
date of this Agreement: 12.5% at six (6) months; 12.5% at
twelve (12) months; 12.5% at eighteen (18) months; 12.5% at
twenty-four (24) months; 12.5% at thirty (30) months; 12.5%
at thirty-six (36) months; and 25% at forty-two (42) months.
The foregoing notwithstanding, in the event that this
Agreement is terminated by Employer without cause pursuant
to Section 4(a) below, Employee's stock option shall vest on
a pro rata basis through the effective date of termination,
based upon 30-day months, provided further that if Employee
is terminated without cause within the first twelve (12)
months of the term of this Agreement, twenty-five thousand
(25,000) of shares covered by Employees stock option shall
be subject to vesting (provided that Employee duly exercises
his option and pays the applicable option price.) (provided
that Employee duly exercises his option and pays the
applicable option price.) Furthermore, Employee understands
and agrees that Employee's sale of any vested shares shall
be restricted as follows, which restriction shall survive
any termination of this Agreement: In any given month (or in
a 30-day period), unless otherwise agreed in writing by
Employer, Employee may sell no more than 10% of the total
vested shares held by Employee.
(b) Benefits. Employee shall be entitled to receive benefits
from all present and future benefit plans set forth in Employer's
policies and generally made available to similarly situated
employees (as these policies may be amended),
<PAGE> 23
(c) Expenses. Employer shall reimburse Employee for
reasonable travel and other business expenses incurred by
Employee in the performance of his duties, in accordance with
Employer's policies, as they may be amended in Employer's sole
discretion.
4. Termination Of Employment.
(a) By Employer Not-For Cause. At any time, Employer may
terminate Employee without Cause (as defined in Paragraph 4(b)
below) by providing Employee thirty (30) days' advance written
notice. Employer shall have the, option, in its complete
discretion, to terminate Employee at any time prior to the end of
such 30-day notice period, provided Employer pays Employee all
compensation due and owing through the last day actually worked,
plus an amount equal to the base salary Employee would have
earned through the balance of the above notice period;
thereafter, all of Employer's obligations under this Agreement
shall cease, except as otherwise expressly set forth in Paragraph
3(a)(1) above. Furthermore, in the event Employer terminates
Employee pursuant to this paragraph 4(a) (i.e., without cause)
within the first six (6) months of the term of this Agreement,
then Employer shall continue to pay Employee's salary pursuant to
Paragraph 2(a) above for the remainder of such six (6)-month
period.
(b) By Employer For Cause. At any time, and without prior
notice, Employer may terminate Employee for Cause. Employer shall
pay Employee all compensation then due and owing, and thereafter,
all of Employer's obligations under this Agreement shall cease.
Termination shall be for "Cause" if Employee: (i) acts in bad
faith and to the detriment of Employer; (ii) refuses or fails to
act in accordance with any specific reasonable direction or order
of Employer; (iii) exhibits in regard to his employment,
unfitness or unavailability for service, unsatisfactory
performance, misconduct, dishonesty, habitual neglect, or
incompetence; (iv) is convicted of a crime involving dishonesty,
breach of trust, or physical or emotional harm to any person; or
(v) breaches any material term of this Agreement.
<PAGE> 24
In the absence of one of the conditions listed above,
Employer may terminate Employee based on sub-satisfactory
performance if Employee has been informed in writing of: (i)
specific problems with performance; (ii) specific and reasonable
recommendations for improvement; (iii) a date when the situation
will be reviewed; (iv) the fact that termination will occur on
the review date if performance is remains sub-satisfactory. The
review date shall be a minimum of 30 days from Employee
acknowledgment of written sub-satisfactory performance
notification. If by the review date Employee's performance proves
acceptable by the terms of the notification, termination of
Employee shall not be considered for cause. If Employer wishes to
pursue for cause termination, a new sub-satisfactory performance
notification must be submitted to Employee according to the terms
above.
(c) By Employee. At any time, Employee may terminate his
employment for any reason, with or without cause, by providing
Employer thirty (30) days' advance written notice. Employer shall
have the option, in its complete discretion, to make Employee's
termination effective at any time prior to the end of such notice
period, provided Employer pays Employee all compensation due and
owing through the last day actually worked, plus an amount equal
to the base salary Employee would have earned through the balance
of the above notice period, not to exceed thirty (30) days;
thereafter, all of Employer's obligations under this Agreement
shall cease.
(d) Termination Obligations. Employee agrees that all
property, including, without limitation, all equipment, tangible
Proprietary Information (as defined below), documents, records,
notes, contracts, and computer-generated materials furnished to
or prepared by Employee incident to his employment belongs to
Employer and shall be returned promptly to Employer upon
termination of Employee's employment. Employee's obligations
under this subsection shall survive the termination of his
employment and the expiration of this Agreement.
5. Proprietary Information, "Proprietary Information" is all
information pertaining in any manner to the business of Employer
(or any Employer affiliate), its employees, clients, consultants,
or business associates, which was produced by any employee of
Employer in the course of his or her employment or otherwise
produced or acquired by or on behalf of Employer. Proprietary
<PAGE> 25
Information shall include, without limitation, trade secrets,
product ideas, inventions, processes, formulas, data, know-how,
software and other computer programs, copyrightable material,
marketing plans, strategies, sales, financial reports, forecasts,
and customer lists. All Proprietary Information not generally
known outside of Employer's organization, and all Proprietary
Information so known only through improper means, shall be deemed
"Confidential Information." During his employment by Employer,
Employee shall use Proprietary Information, and shall disclose
Confidential Information, only for the benefit of Employer and as
is necessary to perform his job responsibilities under this
Agreement. Following termination, Employee shall not use any
Proprietary Information and shall not disclose any Confidential
Information, except with the express written consent of Employer.
By way of illustration and not in limitation of the foregoing,
following termination, Employee shall not use any Confidential
Information to compete against Employer or employ any of its
employees. Employee further agrees that for one (1) year
following termination, he shall not knowingly solicit any
customer or employee of Employer. Employee's obligations under
this Section shall survive the termination of his employment and
the expiration of this Agreement. It is understood and agreed by
the parties that efficient website development requires the reuse
of small sections or snippets of code across multiple projects.
Such snippets of do not constitute full applications in and of
themselves, but they are components that can be accessed to
create applications in an efficient manner. Employee currently
has access to a wide range of such code snippets developed during
prior projects that will be used to expedite any programming that
he performs for Employer. At the same time, Employer acknowledges
that Employee has the right to use any such code snippets
developed while, working for Employer on other development
projects.
6. Arbitration,
(a) Arbitrable Claims. To the fullest extent permitted by
law, all disputes between Employee (and his attorneys,
successors, and assigns) and Employer (and its affiliates,
shareholders, directors, officers, employees, agents, successors,
attorneys, and assigns) of any kind whatsoever, including,
without limitation, all disputes relating in any manner to the
employment or termination of Employee, and all disputes arising
<PAGE> 26
under this Agreement, ("Arbitrable Claims") shall be resolved by
arbitration. All persons and entities specified in the preceding
sentence (other than Employer and Employee) shall be considered
third-party beneficiaries of the rights and obligations created
by this Section on Arbitration. Arbitrable Claims shall include,
but are not limited to, contract (express or implied) and tort
claims of all kinds, as well as all claims based on any federal,
state, or local law, statute, or regulation, excepting only
claims under applicable workers' compensation law and
unemployment insurance claims. By way of example and not in
limitation of the foregoing, Arbitrable Claims shall include (to
the fullest extent permitted by law) any claims arising under
Title VII of the Civil Rights Act of 1964, the Age Discrimination
in Employment Act, the Americans with Disabilities Act, and the
California Fair Employment and Housing Act, as well as any claims
asserting wrongful termination, harassment, breach of contract,
breach of the covenant of good faith and fair dealing, negligent
or intentional infliction of emotional distress, negligent or
intentional misrepresentation, negligent or intentional
interference with contract or prospective economic advantage,
defamation, invasion of privacy, and claims related to
disability.
(b) Procedure. Arbitration of Arbitrable Claims shall be in
accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association, as
amended, and as augmented in this Agreement. Arbitration shall be
final and binding upon the parties and shall be the exclusive
remedy for all Arbitrable Claims. Either party may bring an
action in court to compel arbitration under this Agreement and to
enforce an arbitration award. Otherwise, neither party shall
initiate or prosecute any lawsuit or administrative action in any
way related to any Arbitrable Claim. Notwithstanding the
foregoing, either party may, at its option, seek injunctive
relief pursuant to section 1281.8 of the California Code of Civil
Procedure. All arbitration hearings under this Agreement shall be
conducted in San Francisco, California. If the allocation of
responsibility for payment of the arbitrator's fees would render
the obligation to arbitrate unenforceable, the parties authorize
the arbitrator to modify the allocation as necessary to preserve
enforceability. THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE
<PAGE> 27
TO TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS, INCLUDING
WITHOUT LIMITATION ANY RIGHT TO TRIAL BY JURY AS TO THE MAKING,
EXISTENCE, VALIDITY, OR ENFORCEABILITY OF THE AGREEMENT TO
ARBITRATE.
(c) Confidentiality. All proceedings and all documents
prepared in connection with any Arbitrable Claim shall be
confidential and, unless otherwise required by law, the subject
matter thereof shall not be disclosed to any person other than
the parties to the proceedings, their counsel, witnesses and
experts, the arbitrator, and, if involved, the court and court
staff.
(d) Continuing Obligation. The rights and obligations of
Employee and Employer set forth in this Section on Arbitration
shall survive the termination of Employee's employment and the
expiration of this Agreement.
7. Notices. Any notice or other communication under this
Agreement must be in writing and shall be effective upon delivery
by hand, upon facsimile transmission to Employer (but only upon
receipt by Employee of a written confirmation of receipt), or
three (3) business days after deposit in the United States mail,
postage prepaid, certified or registered, and addressed to
Employer at the address or fax number below, or to Employee at
the last known address maintained in Employee's personnel file.
Employee shall be obligated to notify Employer in writing of any
change in his address.
Employer's Notice Address:
VERIDA INTERNET CORP.
Attention: President
50 California Street,
Suite 1500
San Francisco, CA 94111
8. Action by Employer. All actions required or permitted to
be taken under this Agreement by Employer, including, without
limitation, exercise of discretion, consents, waivers, and
amendments to this Agreement, shall be made and authorized only
by the President or by his or her representative specifically
authorized in writing to fulfill these obligations under this
Agreement.
<PAGE> 28
9. Integration. This Agreement is intended to be the final,
complete, and exclusive statement of the terms of Employee's
employment by Employer. This Agreement supersedes all other prior
and contemporaneous agreements and statements, whether written or
oral, express or implied, pertaining in any manner to the
employment of Employee, and it may not be contradicted by
evidence of any prior or contemporaneous statements or
agreements. To the extent that the practices, policies, or
procedures of Employer, now or in the future, apply to Employee
and are inconsistent with the terms of this Agreement, the
provisions of this Agreement shall control.
10. Amendments. This Agreement may not be amended except by
a writing signed by each of the parties. Failure to exercise any
right under this Agreement shall not constitute a waiver of such
right.
11. Assignment. Employee shall not assign any rights or
obligations under this Agreement. Employer may, upon prior
written notice to Employee, assign its rights and obligations
hereunder.
12. Severability . If a court or arbitrator holds any
provision of this Agreement to be invalid, unenforceable, or
void, the remainder of this Agreement shall remain in full force
and effect.
13. Attorneys' Fees. In any legal action, arbitration, or
other proceeding brought to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees and costs;
14, Governing Law. This Agreement shall be governed by and
construed in accordance with the. law of the State of California.
15. Interpretation. This Agreement shall be construed as a
whole, according to its fair meaning, and not in favor of or
against any party. By way of example and not in limitation, this
Agreement shall not be construed in favor of the party receiving
a benefit nor against the party responsible for any particular
language in this Agreement. Captions are used for reference
purposes only and should be ignored in the interpretation of the
Agreement.
<PAGE> 29
16, Employee Acknowledgement. Employee acknowledges that he
has had the opportunity to consult legal counsel in regard to
this Agreement, that he has read and understands this Agreement,
that he is fully aware of its legal effect, and that he has
entered into it freely and voluntarily and based on his own
judgment and not on any representations or promises other than
those contained in this Agreement.
WHEREFORE, the parties have duly executed this Agreement as
of the date first written above.
EMPLOYER EMPLOYEE:
VERIDA INTERNET CORP.,
A Nevada corporation
BY: /s/ Michael C. Hinshaw /s/ David A. Zimmeran
Michael C. Hinshaw DAVID A. ZIMMERMAN
<PAGE> 30
EXHIBIT 99.2
PROMISSORY NOTE
Amount: US$200,000.00 (the "Principal Sum")
FOR VALUE RECEIVED, Verida Internet Corp. (the "Promissor"), a
Nevada corporation with business offices located at 50 California
Street, Suite 1500, San Francisco, California, hereby promises to
pay in full on or before August 16, 2000 (the "Repayment Date")
the Principal Sum plus all accrued interest in lawful money of
the United States to McLellan Investments Ltd. (the "Promisee), a
British Columbia corporation with an address at 350-6165 Highway
17. Delta, British Columbia. The Principal Sum will bear an
effective interest rate of 8% per annum, the interest will accrue
from the effective date of this note to the Repayment Date,
inclusive, and will be payable on the Repayment Date. The
Promissor may repay the Principal Sum plus all accrued interest
early without penalty. Payment will be made to the Promissee at
the Promisee's address aforesaid.
The Promissor hereby waives presentment, notice of dishonour, and
notice of protest of this Promissory Note.
Dated, with effect, at the City of San Francisco, California.
this 16th day of August 1999.
VERIDA INTERNET CORP.
BY: /s/ Michael Hinshaw
Michael Hinshaw, President
