U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarter ended May 31, 2000
Commission file no. 0-26329
BILLYWEB CORP.
----------------------------------------
(Name of Small Business Issuer in its Charter)
Florida 65-0867538
------------------------------------ -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 E. 42nd Street, Suite 6-R,
New York, N.Y. 10017
------------------------------------------ -----------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (212) 687-3629
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange
on which registered
None None
----------------------------------- -----------------------------
Securities to be registered under Section 12(g) of the Act:
EZTALK, INC.
222 Lakeview Avenue, Suite 160-217
West Palm Beach, FL 33401
---------------------------------------------------------------------------
(Former name or former address, if changes since last report)
Common Stock, $.0001 par value per share
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(Title of class)
Copies of Communications Sent to:
Donald F. Mintmire
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696 - Fax: (561) 659-5371
<PAGE>
Indicate by 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
--- ---
As of May 31, 2000, there are 42,166,000 shares of voting stock of the
registrant issued and outstanding.
PART I
Item 1. Financial Statements
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets...............................................F-2
Consolidated Statements of Operations.....................................F-3
Consolidated Statements of Stockholders' Equity...........................F-4
Consolidated Statements of Cash Flows.....................................F-5
Notes to Consolidated Financial Statements................................F-6
<PAGE>
<TABLE>
<CAPTION>
BILLYWEB CORP.
(f/k/a EZ Talk, Inc.)
(A Development Stage Enterprise)
Consolidated Balance Sheets
February 29, May 31,
2000 2000
-------------------- ------------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 51,841 $ 233,023
-------------------- ------------------
Total Current Assets 51,841 233,023
-------------------- ------------------
PROPERTY AND EQUIPMENT
Furniture and fixtures 0 5,687
Less: Accumulated depreciation 0 (34)
-------------------- ------------------
Total Property and Equipment 0 5,653
OTHER ASSETS
Prepaid expenses 0 946
Deposits 0 7,517
-------------------- ------------------
Total Other Assets 0 8,463
-------------------- ------------------
Total Assets $ 51,841 $ 247,139
==================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses $ 3,385 $ 8,000
Short-term loan 0 60,000
-------------------- ------------------
Total Current Liabilities 3,385 68,000
-------------------- ------------------
Total Liabilities 3,385 68,000
-------------------- ------------------
Minority Interest in Consolidated Subsidiary 0 42,659
-------------------- ------------------
STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value, authorized 10,000,000
shares; none issued 0 0
Common stock, $0.0001 par value, authorized 50,000,000 shares;
2,050,000 and 42,166,000 issued and outstanding, respectively 205 4,216
Additional paid in capital 59,895 441,603
Stock subscriptions receivable 0 (150,000)
Accumulated comprehensive income (loss) 0 (3,352)
Deficit accumulated during the development stage (11,644) (155,987)
-------------------- ------------------
Total Stockholders' Equity 48,456 136,480
-------------------- ------------------
Total Liabilities and Stockholders' Equity $ 51,841 $ 247,139
==================== ==================
</TABLE>
The accompanying notes are an integral part of the financial statements
F-2
<PAGE>
<TABLE>
<CAPTION>
BILLYWEB CORP.
(f/k/a EZ Talk, Inc.)
(A Development Stage Enterprise)
Consolidated Statements of Operations
Three Months Ended May 31,
(Unaudited)
Period from
June 10, 1998
(Inception)
through
2000 1999 May 31, 2000
---------------- --------------- ------------------
<S> <C> <C> <C>
Revenues $ 0 $ 0 $ 0
---------------- --------------- ------------------
Expenses
General and administrative 16,193 160 16,371
Consulting fees 190 0 190
Services - related parties 0 0 500
Depreciation 34 0 34
Professional fees 13,735 0 13,735
Web sit development 89,210 0 139,210
---------------- --------------- ------------------
Total expenses 119,362 160 170,040
---------------- --------------- ------------------
Net loss before minority interest (119,362) (160) (170,040)
Minority interest in consolidated subsidiary net (income) loss 14,053 0 14,053
---------------- --------------- ------------------
Net loss (105,309) (160) (155,987)
Other comprehensive income (loss)
Foreign currency translation gain (loss) (3,352) 0 (3,352)
---------------- --------------- ------------------
Comprehensive loss $ (108,661)$ (160)$ (159,339)
================ =============== ==================
Net loss per weighted average share, basic $ (0.01)$ (0.01)
================ ===============
Weighted average number of shares 41,800,000 1,955,513
================ ===============
</TABLE>
The accompanying notes are an integral part of the financial statements
F-3
<PAGE>
<TABLE>
<CAPTION>
BILLYWEB CORP.
(f/k/a EZ Talk, Inc.)
(A Development Stage Enterprise)
Consolidated Statements of Stockholders' Equity
Period from June 10, 1998 (Inception) through May 31, 2000
Deficit
Accumulated Accumulated
Number Additional Stock Comp. During the Total
of Preferred Common Paid-in Subs. Income Development Stockholders'
Shares Stock Stock Capital Receivable (Loss) Stage Equity
----------- -------- --------- --------- --------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BEGINNING BALANCE, June 10, 1998 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Year Ended February 28, 1999:
June 1998 - services 1,000,000 0 100 0 0 0 0 100
1st qtr. 1998 - cash 1,000,000 0 100 9,900 0 0 0 10,000
2nd qtr. 1998 - cash 50,000 0 5 49,995 0 50,000
Net loss 0 0 0 0 0 0 (8,743) (8,743)
----------- -------- --------- --------- --------- ----------- ------------ -------------
BALANCE, February 28, 1999 2,050,000 0 205 59,895 0 0 (8,743) 51,357
Year Ended February 29, 2000:
Net loss 0 0 0 0 0 0 (2,901) (2,901)
----------- -------- --------- --------- --------- ----------- ------------ -------------
BALANCE, February 29, 2000 2,050,000 0 205 59,895 0 0 (8,743) 51,357
Three Months Ended May 31, 2000:
(unaudited)
April 2000 - accrued expenses 13,500 0 1 3,384 0 0 0 3,385
May 2000 - common stock contributed (1,000,000) 0 (100) 100 0 0 0 0
May 2000 - 16 for 1 forward split 15,952,500 0 1,595 (1,595) 0 0 0 0
May 2000 - reverse merger 23,100,000 0 2,310 229,834 0 0 (39,034) 193,110
May 2000 - services 1,900,000 0 190 0 0 0 0 190
May 2000 - stock subscription receivable 150,000 0 15 149,985 (150,000) 0 0 0
Other comprehensive income (loss) 0 0 0 0 0 (3,352) 0 (3,352)
Net loss 0 0 0 0 0 0 (105,309) (105,309)
----------- -------- --------- --------- --------- ----------- ------------ -------------
ENDING BALANCE, May 31, 2000
(unaudited) 42,166,000 $ 0 $ 4,216 $ 441,603 $(150,000)$ (3,352)$ (153,086)$ 139,381
=========== ======== ========= ========= ========= =========== ============ =============
</TABLE>
The accompanying notes are an integral part of the financial statements
F-4
<PAGE>
<TABLE>
<CAPTION>
BILLYWEB CORP.
(f/k/a EZ Talk, Inc.)
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows
Three Months Ended May 31,
(Unaudited)
Period from
June 10, 1998
(Inception)
through
2000 1999 May 31, 2000
----------------- -------------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM DEVELOPMENT ACTIVITIES:
Net loss $ (105,309) $ (160)$ (155,987)
Adjustments to reconcile net loss to net cash used
for development activities:
Stock issued for services - related parties 0 0 500
Stock issued for services 190 0 190
Depreciation 34 0 34
Minority interest in consolidated subsidiary income (loss) (14,053) 0 (14,053)
Change in assets and liabilities:
(Increase) decrease in prepaid expenses (946) 0 (946)
(Increase) decrease in deposits (7,517) 0 (7,517)
Increase (decrease) in accrued expenses 8,000 0 8,000
----------------- -------------- -----------------
Net cash used by development activities (119,601) (160) (169,779)
----------------- -------------- -----------------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment (5,687) 0 (5,687)
----------------- -------------- -----------------
Net cash used by investing activities (5,687) 0 (5,687)
----------------- -------------- -----------------
CASH FLOW FROM FINANCING ACTIVITIES:
Cash acquired in reverse merger 51,841 0 51,841
Proceeds from short-term loan 0 0 60,000
Receipt of stock subscriptions by subsidiary 240,000 0 300,000
----------------- -------------- -----------------
Net cash provided by financing activities 291,841 0 411,841
----------------- -------------- -----------------
Effect of exchange rates on cash (3,352) 0 (3,352)
----------------- -------------- -----------------
Net increase (decrease) in cash 163,201 (160) 233,023
CASH, beginning of period 69,822 58,242 0
----------------- -------------- -----------------
CASH, end of period $ 233,023 $ 58,082 $ 233,023
================= ============== =================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Non-Cash Financing Activities:
Common stock issued to pay accrued expenses $ 3,385 $ 0 $ 3,385
================= ============== =================
</TABLE>
The accompanying notes are an integral part of the financial statements
F-5
<PAGE>
BILLYWEB CORP.
(f/k/a EZ Talk, Inc.)
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
(Information with respect to the three months ended
May 31, 2000 and 1999 is unaudited)
(1) Summary of Significant Accounting Principles
The Company BillyWeb Corp., f/k/a EZ Talk, Inc., is a Florida chartered
development stage corporation which conducts business from its
headquarters in West Palm Beach, Florida. The Company was incorporated
on June 10, 1998. On May 4, 2000, the Company changed its name to
BillyWeb Corp.
The Company has not yet engaged in its expected operations. The
Company's future operations will be to market various products via an
interactive web site. Current activities include raising additional
equity and negotiating with potential key personnel and facilities.
There is no assurance that any benefit will result from such
activities.
The financial statements have been prepared in conformity with
generally accepted accounting principles. In preparing the financial
statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the
date of the statements of financial condition and operations for the
period then ended. Actual results may differ significantly from those
estimates.
The following summarize the more significant accounting and reporting
policies and practices of the Company:
a) Use of estimates In preparing the consolidated financial
statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the
date of the statements of financial condition, and revenues and
expenses for the year then ended. Actual results may differ
significantly from those estimates.
b) Significant acquisition On May 15, 2000, the Company entered into
an agreement to acquire 77.3% of the issued and outstanding common
shares of BillyWeb Corp., (n/k/a Share Exchange Corp.), in exchange
for 23,100,000 shares of common stock of the Company, in a reverse
merger, which will be accounted for as a recapitalization of BillyWeb
Corp., (n/k/a Share Exchange Corp.).
c) Principles of consolidation The consolidated financial statements
include the accounts of BillyWeb Corp. and its wholly owned
subsidiary. Inter-company balances and transactions have been
eliminated. The historical financial statements of Share Exchange
Corp. have been presented for the period prior to the reverse merger.
d) Net loss per share Basic is computed by dividing the net loss by
the weighted average number of common shares outstanding during the
period.
e) Property and equipment All property and equipment are recorded at
cost and depreciated over their estimated useful lives, generally
three, five or seven years, using the straight-line method. Upon sale
or retirement, the costs and related accumulated depreciation are
eliminated from their respective accounts, and the resulting gain or
loss is included in the results of operations. Repairs and maintenance
charges which do not increase the useful lives of the assets are
charged to operations as incurred. Depreciation expense was $34 and $0
for the three months ended May 31, 2000 and 1999, respectively.
F-6
<PAGE>
BILLYWEB CORP.
(f/k/a EZ Talk, Inc.)
(A Development Stage Enterprise)
Notes to Financial Statements
(1) Summary of Significant Accounting Principles (Continued)
f) Foreign currency transaction and translation gains(losses) The
principal operations of the Company are located in France. On a
consolidated basis the Company's reporting currency is the US Dollar.
g) Research & development Research & development expenses are expensed
in the period incurred.
h) Interim financial information The financial statements for the
three months ended May 31, 2000 and 1999 are unaudited and include all
adjustments which in the opinion of management are necessary for fair
presentation, and such adjustments are of a normal and recurring
nature. The results for the three months are not indicative of a full
year results.
(2) Stockholders' Equity The Company has authorized 50,000,000 shares of
$0.0001 par value common stock and 10,000,000 shares of $0.0001 par
value preferred stock. Rights and privileges of the preferred stock are
to be determined by the Board of Directors prior to issuance. The
Company had 42,166,000 and no shares of common and preferred stock,
respectively, issued and outstanding at May 31, 2000. On June 10, 1998,
the Company issued 1,000,000 shares to its officers for the value of
services rendered in connection with the organization of the Company.
In the second quarter of 1998, the Company issued 1,000,000 shares of
common stock at $0.01 per share for $10,000 in cash. In the third
quarter of 1998, the Company issued 50,000 shares of common stock at
$1.00 per share for $50,000 in cash. In April 2000, the Company issued
13,500 shares of unrestricted common stock via an S-8 registration to
counsel in settlement of accrued legal fees amounting to $3,385. In May
2000, two stockholders and former officers contributed 1,000,000 shares
of common stock back to the Company upon their resignations. In May
2000, the Company completed a 16 for 1 forward split of its common
stock. In May 2000, the Company issued 23,100,000 shares to acquire
BillyWeb Corp., (n/k/a Share Exchange Corp.). In conjunction with this
acquisition, the Company issued 1,900,000 shares of common stock to its
investment banker for services rendered, valued at $190. In May 2000,
the Company issued 150,000 shares of common stock in exchange for a
subscription receivable of $150,000 in cash.
(3) Income Taxes Deferred income taxes (benefits) are provided for certain
income and expenses which are recognized in different periods for tax
and financial reporting purposes. The Company has net operating loss
carry- forwards for income tax purposes of approximately $156,000,
expiring $50,700 and $105,300 at February 28, 2020 and 2021,
respectively.
The amount recorded as deferred tax assets as of May 31, 2000 is
$23,000, which represents the amount of tax benefit of the loss
carryforward. The Company has established a valuation allowance against
this deferred tax asset, as the Company has no history of profitable
operations.
(4) Going Concern As shown in the accompanying financial statements, the
Company incurred a net loss of $156,000 for the period from June 10,
1998 (Inception) through May 31, 2000. The ability of the Company to
continue as a going concern is dependent upon commencing operations and
obtaining additional capital and financing. The financial statements do
not include any adjustments that might be necessary if the Company is
unable to continue as a going concern. The Company is currently seeking
financing to allow it to begin its planned operations.
F-7
<PAGE>
BILLYWEB CORP.
(f/k/a EZ Talk, Inc.)
(A Development Stage Enterprise)
Notes to Financial Statements
(5) Commitments and Contingencies On April 1, 2000, the Company's
subsidiary entered into a three-year lease for office space at
approximately $3,670 per month, or $44,000 annually. The lease contains
a provision for a three-year extension.
(6) Short-Term Note Payable In January and February 2000, the Company's
subsidiary received a $60,000 short-term demand loan from a third
party, as the Company had not received its stock subscription
receivable timely and had let a contract for the web site development.
This note carried no stated interest.
(7) Subsequent Events
(a) Short-Term Note Payable The entire note payable was repaid in June
2000.
(b) Stockholders' Equity In June 2000, the Company received $75,000 of
the stock subscription receivable.
(c) Material Contracts In May 2000, the Company entered into three
agreements with three French companies, which call for the Company to
place hyper-links and logos for each of these three companies in
strategic locations of the Company's web site. The counter-parties will
also be providing pages of content for the Company's web site. One
agreement is for a term of one year and calls for the counter-party to
pay the Company approximately $1,400 per month. The other two
agreements are for three months and call for the counter-parties to pay
the Company approximately $1,400 and $1,900 per month. All three
agreements automatically renew for terms matching the original life.
Payments are scheduled to begin in September 2000.
F-8
<PAGE>
Item 6. Management's Discussion and Analysis or Plan of Operation.
General
Since its inception, the Company has conducted minimal business operations
except for organizational and capital raising activities. The Company has not
realized any revenues since its inception due to the fact that it has been
primarily engaged in organizational and promotional activities. As a result,
from inception (June 10, 1998) through May 31, 2000 , the Company had $0 in
revenue. Total Company operating expenses as of May 31, 2000 were $155,987, on a
consolidated basis.
On May 3, 2000 the Company announced approval of the amendment of its
Articles of Incorporation in order to change the name of the Company from
EZTalk, Inc. to BillyWeb Corp.
On May 15, 2000, BillyWeb Corp., f/k/a EZTalk, Inc. (the "Company") and
Share Exchange Corp., f/k/a BillyWeb Corp. , a Florida corporation, and the
individual holders of outstanding capital stock of Share Exchange Corp. (the
"Holders") consummated a reverse acquisition (the "Reorganization") pursuant to
a certain Share Exchange Agreement ("Agreement") of such date. Pursuant to the
Agreement, the Holders tendered to the Company 77.3% of the issued and
outstanding shares of common stock of Share Exchange Corp. in exchange for
23,100,000 shares of common stock of the Company. The reorganization is being
accounted for as a reverse acquisition.
Prior to the reorganization the Company effected a forward split of its
common stock at the rate of 16 to 1, for holders of record on May 4, 2000, with
distribution effective May 10, 2000. Total issued and outstanding stock
following the forward split and after effecting the Share Exchange Agreement is
42,016,000. Subsequent to its reorganization the Company discontinued its
original business plan and decided to pursue a new direction which involves the
Interactive accessing of the internet in a new and unprecedented manner.
Simultaneously with the closing of the aforementioned Reorganization, the
then officers and directors of the Company tendered their resignations in
accordance with the terms of the Agreement. Frederic Richard and Alberto Afonso
were elected to serve on the Board of Directors of the Company (the "Board").
The Board subsequently appointed Frederic Richard as President of the Company
and Alberto Afonso as Secretary and Treasurer of the Company.
Plan of Operations
Subsequent to the reorganization by the Company the newly elected Board of
Directors and officers put into place a new Company Mission. The Company's new
mission is to establish permanent worldwide brand name recognition for the Billy
World, led by Billy, the prominent Disney star and Disney club host. The
Company's objective is to have Billy become the Billy World representative
around the globe. The brand name Billyweb will be continuously emphasized in all
TV, music, videogames, shows, magazines and periodicals, live shows, events etc.
On the WEB siteitself, the caption "Billyweb: Little Browser Is Helping You"
will be recurrent in numerous languages.
<PAGE>
The development process of the Company will involve several steps:
* Various local hosts are selected according to their sensitivity to the local
teenage market, present Billyweb TV and Radio Billyweb shows, which share the
characteristics of short, focused and area specific animation by a common
player: Billy, the "big wig" host and guide to the Internet world. The key
visual effect is obtained without any language reference, so that Billy can
perform anywhere without dubbing. In addition to the local host and Billy,
virtual video-composite characters appear in real time thanks to the technology
developed in partnership with City Media.
* A virtual "set" is created on-line, in which a family of various characters
derived from the real world play in motion. This "playground" is subject to
constant evolution and re design for endless surprise effects, and renewed
interest of the youngest. First, a totally animated and fully interactive
"shell" website developed on the common mold is provided for each market;
second, editorial content is provided locally to the shell version of the
original website, and enriched by a local team of specialized journalists.
* On-line co-branding, partnerships and Joint Ventures are actively negotiated
for the purpose to reach the best possible content, optimize traffic and
visibility and maximize profitability by reducing development costs. The various
agreements are negotiated with leading companies that specialize in the teen
market in Music, Video, Movies, Videogames, Toys, Fashion, Travel and Culture,
History and Literature.
* The final stage is to interconnect the different mirrored website platforms.
The creation of a "World" family where French, Anglo-American, Hispanic, German
and possibly Asian characters are joined, linked and mixed in order to create
the first multilingual worldwide access portal for pre- teens and teens.
The Company's has already initiated a stream of revenues. Revenues
optimization will occur as the geographical exposure of Billyweb reaches its
critical mass. Revenues will accrue from a natural extension of the Company's
current activities and will range from TV production, Live and Radio shows,
advertising, copyrights, endorsement and licensing, royalties on music
production and database sharing.
Financial Condition, Capital Resources and Liquidity
At May 31, 2000, the Company had assets totaling $247,139 and an
accumulated net loss of $155,987. The increase in the Company's accumulated
deficit is attributable to website development costs and professional fees.
Since the Company's inception, it has received $60,000 in cash as consideration
for the issuance of shares of Common Stock. The Company's subsidiary has
received $300,000 in cash as consideration for the issuance of shares of common
stock.
<PAGE>
Liquidity/Working Capital
BLWB's working capital is presently $165,000, however, there can be no
assurance that the Company's financial condition will improve. The Company is
expected to continue to have minimal working capital.
Net Operating Losses
The Company has net operating loss carry-forwards of $155,987 expiring
at February 28, 2020 and 2021. The company has a $23,000 deferred tax asset
resulting from the loss carry- forwards, for which it has established a 100%
valuation allowance. The Company may not be able to utilize such carry-forwards
as the Company has no history of profitable operations.
Year 2000 Compliance
The Company has not experienced a material impact to its operations or
financial condition as a result of Year 2000 compliance. The Company does not
expect to experience any future cost to be Year 2000 compliant. The Company does
not anticipate any material disruption in its operations as a result of any
failure by the Company to be in compliance.
Forward-Looking Statements
This Form 10-QSB includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts, included or incorporated by reference in
this Form 10-QSB which address activities, events or developments which the
Company expects or anticipates will or may occur in the future, including such
things as future capital expenditures (including the amount and nature thereof),
business strategy, expansion and growth of the Company's business and
operations, and other such matters are forward-looking statements. These
statements are based on certain assumptions and analyses made by the Company in
light of its experience and its perception of historical trends, current
conditions and expected future developments as well as other factors it believes
are appropriate in the circumstances. However, whether actual results or
developments will conform with the Company's expectations and predictions is
subject to a number of risks and uncertainties, general economic market and
business conditions; the business opportunities (or lack thereof) that may be
presented to and pursued by the Company; changes in laws or regulation; and
other factors, most of which are beyond the control of the Company.
Consequently, all of the forward-looking statements made in this Form 10-QSB are
qualified by these cautionary statements and there can be no assurance that the
actual results or developments anticipated by the Company will be realized or,
even if substantially realized, that they will have the expected consequence to
or effects on the Company or its business or operations. The Company assumes no
obligations to update any such forward-looking statements.
<PAGE>
PART II
Item 1. Legal Proceedings.
The Company knows of no legal proceedings to which it is a party or to
which any of its property is the subject which are pending, threatened or
contemplated or any unsatisfied judgments against the Company.
Item 2. Changes in Securities and Use of Proceeds
On May 15, 2000, BillyWeb Corp., f/k/a EZTalk, Inc. (the "Company"), a
Florida corporation, and Share Exchange Corp., f/k/a BillyWeb Corp. , a Florida
corporation, and the individual holders of outstanding capital stock of Share
Exchange Corp. (the "Holders") consummated a reverse acquisition (the
"Reorganization") pursuant to a certain Share Exchange Agreement ("Agreement")
of such date. Pursuant to the Agreement, the Holders tendered to the Company
77.3% of the issued and outstanding shares of common stock of Share Exchange
Corp. in exchange for 23,100,000 shares of common stock of the Company. The
reorganization is being accounted for as a reverse acquisition.
Simultaneously with the closing of the Reorganization, the then officers
and directors of the Company tendered their resignations in accordance with the
terms of the Agreement. The then officers and directors also contributed, on a
pre split basis, 1,000,000 shares of common stock back to the Company upon
tendering their resignations.
Prior to the reorganization the Company effected a forward split of its
common stock at the rate of 16 to 1, for holders of record on May 4, 2000, with
distribution effective May 10, 2000. Total issued and outstanding stock
following the forward split and after effecting the Share Exchange Agreement is
42,016,000.
On April 21, 2000, the Company file an S-8 with the Securities and Exchange
Commission regarding an Employee/Consultant Stock Compensation Plan wherein the
Company registered 100,000 shares of its common stock at a proposed maximum
offering price of .0238 to be made available as compensation to Employees and/or
Consultant's.
In May 2000, the Company issued 150,000 shares of common stock in exchange
for a subscription receivable of $150,000 in cash.
Item 3. Defaults in Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders.
On May 15, 2000, the major stockholders of the Company entered into an
agreement to exchange 77.3% of the issued and outstanding common shares of Share
Exchange Corp. (the "Holders") consummated a reverse acquisition (the
"Reorganization") pursuant to a certain Share
<PAGE>
Exchange Agreement ("Agreement") of such date. Pursuant to the Agreement, the
Holders tendered to the Company 77.3% of the issued and outstanding shares of
common stock of Share Exchange Corp. in exchange for 23,100,000 shares of common
stock of the Company.
Copies of the Agreement and the required financial data have been filed
as an Exhibit to the Company's 8 K which was filed with the Securities and
Exchange Commission on May 15, 2000, and is incorporated herein by reference.
The aforementioned 8-K was subsequently updated by an 8-K Amendment which was
filed with the Securities and Exchange Commission on July 10, 2000, and is
incorporated herein by reference. The foregoing descriptions are qualified in
their entirety by reference to the full text of such documents.
Item 5. Other Information
In June 2000, subsequent to the close of the quarter ending , May 31,
2000, the Company received $75,000 in cash relating to the stock subscription
receivable accounted for by the Company in the prior quarter.
NEW DESCRIPTION OF BUSINESS
BillyWeb Corp. is an entertainment creation that utilizes a multimedia
cluster organized around the central Internet Portal dedicated entirely to teen
and pre-teen entertainment and "fun" educational needs. BillyWeb was officially
launched in May 2000 at the International Cannes Film Festival. In this short
period since introduction, the Company has already initiated a revenue stream.
The Company believes it will develop substantial sources of recurring revenues
in the near future.
The majority of the business segments described below are in the planning stage.
Business prospects are scheduled from the very near to the longer term.
Television
TV Co-Production
The Company is currently negotiating with a TV production company, KM
Productions for the co-production of TV programs. Programming will be sold to
specialized TV channels dedicated to youth, from ages 4 to 14, such as Canal J.
In France, Canal J is comparable to Nickelodeon and FoxKids and is the leader in
its niche market, ahead of Disney Channel, TeleToon, Cartoon Network and FoxKids
France.
In all cases, Billyweb will provide the concept, the Billyweb universe, hosting
and animation and character support while the co-producer will provide editorial
research and content.
In all French speaking shows, Billy will be the sole host. In English speaking
countries, Linda Lacoste will be co-host and in Spanish speaking countries, a
local TV star will be co-host. In Spain, the contribution of Maria Bravo has
been pre-selected.
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Three types of TV entertainment features will be offered in short order: the
Daily BillyWeb Series, Billy Adventure and the BillyWeb Show. Other features,
such as "Coucou C'est Nous" and famille.e-net are only at the drawing board
stage.
The Daily BillyWeb Series
The daily TV production on the Internet, featuring Billy is owned by TF1, the
largest European channel. The show appears daily at peak time, just before the
8PM newscast. The show, which is viewed by 8 million viewers daily, has
contributed to making Billy a household name in France.
The show intends to familiarize the audience with the intricacies of the
Internet in a didactic, educational, unconventional, cool and fun way. A
different topic is chosen every day on any subject of interest to kids, for
instance Christmas shopping on the Web, or movie selections, etc. In all cases,
the viewer is held by the virtual hand and shown directly on his or her TV
screen how to go about navigating the Net by Billy. Billy is concomitantly the
jester, the guide, the comedian and the accomplice who leads his friends through
the maze of the Internet.
TF1 had the exclusive on the daily format, or HyperNet on French broadcast TV
since over a year. The current contract, financed by Lycos, the second largest
search engine in the world, is due for renewal in December. The cost of the
current six-month extension is approximately $4 million.
The format could be modified at little cost and sold to television channels in
other countries, as well as to cable TV in any country including France, and to
Internet channels. Advanced discussions are currently under way to expand the
concept to other French speaking countries; also advanced contact negotiations
are under way with Spain; lastly, a pilot for and English language production
has been prepared where Australian actors and American singers accompany Billy
through his Internet fantasy tour.
Since the format of the show will be minimally changed from its original version
on TF1, production costs will be contained. Additionally, BillyWeb Corp. will
encourage sponsors to complement the source of revenues from the show.
Billy Adventure
Billy Adventures is a new TV concept in which Billy is the kids' special
correspondent through the web, akin to the role that Tintin had in the adventure
world for the previous, pre-Internet generation. Subject requests will be
solicited from Internauts directly on TV and on the web site, e-mails, etc. The
selected subjects will be researched, investigated, played out and produced.
The subjects, which are potentially infinite, have recurring themes. Kids'
interests will almost always include how to become a firefighter, or an
astronaut, or a sheriff, or a jet pilot etc. Other subjects often include a
circus, or the backstage of a Broadway musical, music and movie production, etc.
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As an illustration of an episode borrowed from the firefighter example, Billy
will be the kids' special envoy to the fire brigade. He will participate in
training, jump aboard a blaze bound fire truck, participate in rescue
operations, etc. As usual, the tone and the pace will be fast and highly
entertaining.
A constant of the show is a connection to the web. In his travels, Billy will
always carry along his portable computer for help and assistance from the
BillyWeb cyber characters, as the action unfolds under the spectators' eyes. The
3D animated cyber characters Billyweb, Sharkee, Lindatoo, Buggy and others will
jump into the action and volunteer hints, tips and advice to Billy and to the
audience as to where and what to find on the web that is directly related to the
topic of the show. For instance, related topics could include a lead on the
sites covering the firefighters of the world, or the requirement of training and
enrollment, firefighter uniforms, the acts that save lives, etc.
Each Billy Adventure show will run for a week for five days with a daily airtime
of 10mn. Each day of the week will cover a different aspect of the topic. Monday
will be the topic's introduction. On Tuesday, Billy would jump straight into the
action. On Wednesday, Billy will interview the topic's heroes, Thursday will be
dedicated to educational issues on the topic and Friday will be the wrap-up.
Emphasis will always be placed on the interconnection between multiple media,
the strength and uniqueness of the Company. As the real action unfolds off-line,
Internauts will also receive the cyber version on-line. Magazine and newspaper
editorial will further amplify the multimedia coverage of the Billy Adventure
show.
The network will finance the production. Copyrights will be owned jointly by the
co-producers and the network. The series will be sold and re-run to other TV
networks in several countries, after undergoing area-specific modifications. In
addition to copyrights, the co-producers will solicit sponsorships from large
consumer product companies, such as cereal marketers, toy companies etc.
Billyweb Show
This daily show will also be broadcast on TV, with the active participation of
several kids who will be placed in a cyber universe animated by Billy and all
the cyber 3-D characters.
The format of the show is to organize a competition between two opposing schools
over the course of a week, on a daily basis of 15mn airtime.
Five kids will be the representatives and the champions of the class selected
for each school. These five kids have their own specialty that will match the
daily theme. Billy will host the game, with constant interplay from cyber
characters Billyweb and Sharkee, who will also ask questions, and in turn
attempt to destabilize or assist the contenders.
The Monday theme will be sports. One of the kids in each competing class will be
selected to be the captain of the class. Billy or any of the cyber characters
will offer a series of quizzes for the
<PAGE>
competition. Kids in each class, under the direction of their captain and the
input from Billy or the cyber characters will access the web for research on the
quizzes. On Tuesday, another kid will be selected for music with the same
scenario. On Wednesday, cinema, on Thursday, history and geography, and on
Friday the finale where the winning class is selected.
For outside support, the two opposing teams will rely on 2 cyber pal challengers
in each class who will remain at the school site and assist their respective
jousting teams via web cam connection. They will have at their disposal all
available research tools that the school has to offer in order to assist their
team.
Also, in the evening, each member of the competing teams will be encouraged to
access the BillyWeb site, not only to recount the events of the day, but also to
find additional clues
Radio
Radio Interviews
Billy will utilize his connections to the world of arts, entertainment and
sports to record audio interviews of movie, TV and sports stars. Each clip will
last only a couple of minutes and will target events related star interviews,
for instance at the occasion of the world cup, music and film festivals, such as
the Cannes or Venice festivals etc.
Billy will also chose presentation topics on any subject of interest to teen and
pre-teens, about music, cinema, travel etc.
The radio clips will be sold to a variety of radio stations, both large and
independent that in France alone total more than 50, with such names as TF1,
Europe, Energy, RTL 2, Voltage FM, Kiss, Europe 2 etc.
The first contract with Voltage Radio has recently been signed for the
production of---------- interview clips.
Radio Advertising
Billy will promote on radio sponsor-directed radio clips on subjects of interest
to teen or pre- teen, such as special travel promotions, a new line of sneakers,
upcoming performances etc.
The co-production and the promotion of these radio interviews and sponsored
programs will be managed by Eric Angioletti, formerly from Energy, the number
one music radio station in France.
Merchandising
Merchandising is the natural commercial development from the multimedia fame of
Billy and the BillyWeb characters. The Billy 3 D animated cartoon characters
have been introduced to the
<PAGE>
French and the International public at the occasion of the annual Christmas show
at the Elysee Palace and the Cannes International Film Festival 2000. The
BillyWeb shows, all the events, Billy Adventures etc. will promote to a very
large audience the full set of new characters to a level of brand awareness.
BillyWeb animated sets will be developed for major department stores and
hypermarkets.
The Company has already developed a set of stuffed dolls at the image of the 3-D
characters, a line of tank and tee shirts and is expanding its contacts with
license manufacturers of watches, toy manufacturers, etc.
Video games utilizing the Billy characters will also be developed.
Music
BillyWeb will augment its appeal to a young audience with an active music
production activity. The first music single, "Supersonic Fantasy" performed by
Chris Willis will be released in the fall.
Off-line Shows and Events
Billy will actively promote the BillyWeb concept and appeal with live show tours
that will include national events such as the annual Christmas Tree party at the
Elysee Palace and private events with municipalities and corporations. During
these tours, Billy will create the universe of 3-D animation on large
interactive projection screens intermingling with real life characters,
acrobats, clowns and dancers.
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits required to be filed herewith by Item 601 of Regulation
S-B, as described in the following index of exhibits, are incorporated
herein by reference, as follows:
Exhibit No. Description
----------- -----------------------------------------------------------
3(i).1 Articles of Incorporation of EZT effective June 10, 1998(1)
3(i).2 * Articles of Amendment to the Articles of Incorporation of EZT
changing its name to BILLYWEB CORP. filed May 3, 2000
3(ii).1 Bylaws of EZT(1)
10.1 EZ Talk, Inc. Employee/Consultant Stock Compensation Plan(2)
10.2 * Partnership Contract with ALIDOO RCS PARIS
<PAGE>
10.3 * Contract for Trading Content with EUREKAN MULTIMEDIA, SA
10.4 * Contract for Trading Content with QUELM
27.1 * Financial Data Schedule
----------------
(1) Incorporated herein by reference to the Company's Registration Statement on
Form 10- SB.
(2) Incorporated herein by reference to the Company's Registration Statement on
Form S-8 filed with the Securities and Exchange Commission on or about
April 21, 2000.
* Filed herewith
(b) The Company filed a Form 8-K with the Securities and Exchange
Commission (the "SEC") on May 16, 2000. The Company subsequently filed
an Amended 8- K with the SEC on July 10, 2000, incorporating the
Audited Financial Statements of Share Exchange Corp, a Florida
corporation, for the year ending February 29, 2000, as well as the
Company's Proforma Financial statements for the year ending February
29, 2000.
<PAGE>
SIGNATURES
----------
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
BILLYWEB CORP.
(Registrant)
Date: July 11, 2000 By: /s/ Frederic Richard
--------------------------------
Frederic Richard, President & Director
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Date Signature Title
---- --------- -----
July 11, 2000 By: /s/ Frederic Richard
---------------------
Frederic Richard President & Director
