UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from To
Commission file number 0-27737
-------
eSportbike.com, Inc..
(Exact name of small business issuer as specified in its charter)
NEVADA 77-0454856
- ------------------------------------ ---------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
1500West Georgia, Suite 980, Vancouver, B.C., Canada V6G 2Z6
------------------------------------------------------------
(Address of principal executive offices)
(877) 834-0223
---------------
(Issuer's telephone number)
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 practical date: May 11, 2000 16,400,000
-----------------------------
Transitional Small Business Disclosure Format (check one). Yes ; No X
--- ---
<PAGE>
PART I
Item 1. Financial Statements
INDEPENDENT ACCOUNTANT'S REPORT
eSportbike.com, Inc.
(A Development Stage Company)
We have reviewed the accompanying balance sheets of eSportbike.com,
Inc. (a development stage company) as of March 31, 2000, and the related
statements of operations, and cash flows for the three month period then ended.
These financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statement taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
Respectfully submitted
/s/ Robison, Hill & Co.
Certified Public Accountants
Salt Lake City, Utah
May 11, 2000
<PAGE>
ESPORTBIKE.COM, INC.
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 2000 1999
------------------ ------------------
Current Assets:
<S> <C> <C>
Receivable from Shareholders $ - $ 6,677
------------------ ------------------
Fixed Assets:
Equipment 4,506 -
Less Accumulated Depreciation (250) -
------------------ ------------------
Total Fixed Assets 4,256 -
------------------ ------------------
Intangible and Other Assets - eSportbike.com
net of amortization of $3,328 116,465 -
------------------ ------------------
Total Assets $ 120,721 $ 6,677
================== ==================
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable & Accrued Expenses $ 120,188 $ 2,751
------------------ ------------------
Stockholders' Equity:
Common Stock, Par value $.001
Authorized 100,000,000 shares,
Issued 16,400,000 and 5,400,000
Shares at March 31, 2000 and December 31, 1999 16,400 5,400
Paid-In Capital 3,812 3,812
Currency Translation Adjustments 185 -
Retained Deficit (1,200) (1,200)
Deficit Accumulated During the
Development Stage (18,664) (4,086)
------------------ ------------------
Total Stockholders' Equity 533 3,926
------------------ ------------------
Total Liabilities and
Stockholders' Equity $ 120,721 $ 6,677
================== ==================
</TABLE>
See accompanying notes and accountants' report.
<PAGE>
ESPORTBIKE.COM, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Cumulative
since July 9,
1999
inception
For the three months ended of
March 31, development
-------------------------------------
2000 1999 stage
----------------- ------------------ ------------------
<S> <C> <C> <C>
Revenues: $ - $ - $ -
Expenses:
General & Administrative 14,578 - 18,664
----------------- ------------------ ------------------
Net Loss $ (14,578) $ $ (18,664)
================= ================== ==================
Basic & Diluted loss per share $ - $ -
================= ==================
</TABLE>
See accompanying notes and accountants' report.
<PAGE>
ESPORTBIKE.COM, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative
since July 9,
1999
inception
For the three months ended of
March 31, development
-------------------------------------
2000 1999 stage
----------------- ------------------ ------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
<S> <C> <C> <C>
Net Loss $ (14,578) $ - $ (18,664)
Adjustments to reconcile net loss to net cash
Provided by operating activities
Depreciation & Amortization 3,578 - 3,578
Currency Translation Adjustment 185 - 185
Stock issued for Employee Compensation 11,000 - 11,000
Liabilities acquired in merger (113,000) (113,000)
Increase (Decrease) in:
Receivable from Shareholders 6,677 8,212
Accounts Payable & Accrued Expenses 117,437 - 119,988
----------------- ------------------ ------------------
Net Cash Used in operating activities 11,299 - 11,299
----------------- ------------------ ------------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of Fixed Assets (4,506) (4,506)
Purchase of eSportike.com (6,793) - (6,793)
----------------- ------------------ ------------------
Net cash provided by
investing activities (11,299) - (11,299)
----------------- ------------------ ------------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Net Cash Provided by
Financing Activities - - -
----------------- ------------------ ------------------
Net (Decrease) Increase in
Cash and Cash Equivalents - - -
Cash and Cash Equivalents
at Beginning of Period - - -
----------------- ------------------ ------------------
Cash and Cash Equivalents
at End of Period $ - $ - $ -
================= ================== ==================
</TABLE>
<PAGE>
ESPORTBIKE.COM, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
------------------------
(Continued)
----------
<TABLE>
<CAPTION>
Cumulative
since July 9,
1999
inception
For the three months ended of
March 31, development
-------------------------------------
2000 1999 stage
----------------- ------------------ ------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
<S> <C> <C> <C>
Interest $ - $ - $ -
Franchise and income taxes $ - $ - $ 250
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
None
</TABLE>
See accompanying notes and accountants' report.
<PAGE>
ESPORTBIKE.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for ESportbike.com, Inc. is
presented to assist in understanding the Company's financial statements. The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.
The unaudited financial statements as of March 31, 2000 and for the
three months then ended reflect, in the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to fairly state the
financial position and results of operations for the three months. Operating
results for interim periods are not necessarily indicative of the results which
can be expected for full years.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Nevada on
April 7, 1997 under the name AlaskanGeodetic Survey, Inc.and later changed the
name to Morenci Corp. The Company ceased all operating activities during the
period from April 7, 1997 to July 9, 1999 and was considered dormant. On July 9,
1999, the Company obtained a Certificate of renewal from the State of Nevada. On
May 2, 2000, the company changed its name to eSportbike.com, Inc. Since July 9,
1999, the Company is in the development stage, and has not commenced planned
principal operations.
Nature of Business
On March 2, 2000, the Board of Directors approved the proposed Asset
Acquisition Agreement (the "Agreement") with Kent Douglas Courtice and Robert
Eire McLauchlan carrying on business as esportbike.com.
The Company intends to become an Internet destination providing
community, content and commerce for the sportbike and motorcycle enthusiast. The
eSportbike.com website is a location where individuals, can create their own
websites, publish pictures of their bikes, share information, communicate, shop
and discover meaningful, relevant content targeted to their specific interests.
The Company anticipates generating revenues from several sources,
including, sales of numerous product categories, sales of memberships to our
eSportbike.com "platinum Members Club", sales of advertising and sponsorships
and sales of third-party services.
<PAGE>
ESPORTBIKE.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Depreciation
Equipment is stated at cost. Depreciation is computed using the
straight-line method over the estimated economic useful lives of the related
assets as follows:
Equipment 3 - 5 years
Maintenance and repairs are charged to operations; betterments are
capitalized. The cost of property sold or otherwise disposed of and the
accumulated depreciation thereon are eliminated from the property and related
accumulated depreciation accounts, and any resulting gain or loss is credited or
charged to income.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Foreign Currency Translation
The functional currency of the Company is Canadian dollars. Balance
sheet accounts are translated to U.S. dollars at the current exchange rate as of
the balance sheet date. Income statement items are translated at average
exchange rates during the period. The resulting translation adjustment is
recorded as a separate component of stockholders' equity.
Reclassification
Certain reclassifications have been made in the 1999 and 1998 financial
statements to conform with the December 31, 1999 presentation.
<PAGE>
ESPORTBIKE.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Loss per Share
The reconciliations of the numerators and denominators of the basic
loss per share computations are as follows:
<TABLE>
<CAPTION>
Per-Share
Income Shares Amount
------ ------ ------
(Numerator) (Denominator)
For the three months ended March 31, 2000
-----------------------------------------
Basic Loss per Share
<S> <C> <C> <C>
Loss to common shareholders $ (11,250) 16,400,000 $ -
================== =================== ==================
For the three months ended March 31, 1999
-----------------------------------------
Basic Loss per Share
Loss to common shareholders $ - 5,400,000 $ -
================== =================== ==================
</TABLE>
The effect of outstanding common stock equivalents are anti-dilutive
for March 31, 2000 and 1999 and are thus not considered.
NOTE 2 - INCOME TAXES
As of March 31, 2000, the Company had a net operating loss carryforward
for income tax reporting purposes of approximately $16,000 that may be offset
against future taxable income through 2011. Current tax laws limit the amount of
loss available to be offset against future taxable income when a substantial
change in ownership occurs. Therefore, the amount available to offset future
taxable income may be limited. No tax benefit has been reported in the financial
statements, because the Company believes there is a 50% or greater chance the
carry-forwards will expire unused. Accordingly, the potential tax benefits of
the loss carry-forwards are offset by a valuation allowance of the same amount.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage.
<PAGE>
ESPORTBIKE.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(Continued)
NOTE 4 - COMMITMENTS
As of March 31, 2000 all activities of the Company have been conducted
by corporate officers from either their homes or business offices. Currently,
there are no outstanding debts owed by the company for the use of these
facilities and there are no commitments for future use of the facilities.
NOTE 5 - STOCK SPLIT
On May 6, 1999 the Board of Directors authorized 1,000 to 1 stock
split, changed the authorized number of shares to 100,000,000 shares and the par
value to $.001 for the Company's common stock. As a result of the split, 999,000
shares were issued.
On February 23, 2000 the Board of Directors authorized the acceptance
of 800,000 shares of restricted common stock returned to the Company by and on
behalf of Mr. Daniel L. Hodges, formerly the sole Officer and Director of the
Company. The 800,000 shares were canceled immediately upon receipt. Also on
February 23, 2000 the Board of Directors authorized a 27 to 1 stock split. As a
result of this split the Company issued 5,200,000 shares of common stock. All
references in the accompanying financial statements to the number of common
shares and per-share amounts for 1999 and 1998 have been restated to reflect the
stock split and cancellation of shares.
NOTE 6 - EMPLOYMENT CONTRACTS
The Company signed employment contracts with Messrs. McLauchlan, and
Courtice as follows:
Common
Name Stock issued Amount
- --------------------------------------- ------------------ ------------------
McLauchlan 5,000,000 $ 5,000
Courtice 5,000,000 $ 5,000
As a result of the employment contracts, compensation of $10,000 has
been recorded.
NOTE 6 - ASSET ACQUISITION
On March 2, 2000 the Company entered into an agreement whereby the
Company in a reverse merger, purchased the assets of, and changed its name to
eSportbike.com, Inc. The purchase
<PAGE>
ESPORTBIKE.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(Continued)
NOTE 6 - ASSET ACQUISITION (Continued)
price was $10,000 CDN ($6,793 US) and the assumption of liabilities in the
amount of $113,000 US. The Company has not yet performed a detailed evaluation
and appraisal of the fair market value of the net assets purchased in order to
allocate the purchase price among the assets purchased.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
General
Launched in November 1998 as Sportbike Online http://www.sportbikeonline.com the
company has enjoyed over 1 million unique visitors to date. The site is
currently exhibiting 15% growth per month. The Company plans to re-launch the
site as eSportbike.com http://www.esportbike.comin the first quarter of 2000. We
expect to enjoy significant growth after the re-launch as we execute on our plan
to be the webs largest community and e-commerce destination for the sport bike
and motorcycle enthusiast.
The Company was not in full operations during 1999 and 1998 and thus,
the revenues generated are not representative of those that will be generated
once the Company becomes fully operational. Revenues are not yet sufficient to
support the Company's operating expenses and are not expected to reach such
levels until the first or second quarter of 2001. Since the Company's formation,
it has funded its operations and capital expenditures primarily through private
placements of debt and equity securities. See "Recent Sales of Unregistered
Securities." The Company expects that it will be required to seek additional
financing in the future. There can be no assurance that such financing will be
available at all or available on terms acceptable to the Company.
.
Plan of Operation
The Company was organized for the purpose of creating a corporate
vehicle to seek, investigate and, if such investigation warrants, acquire an
interest in one or more business opportunities presented to it by persons or
firms who or which desire to seek perceived advantages of a publicly held
corporation.
The Company may incur significant post-merger or acquisition
registration costs in the event management wishes to register a portion of their
shares for subsequent sale. The Company will also incur significant legal and
accounting costs in connection with the acquisition including the costs of
preparing post- effective amendments, Forms 8-K, agreements and related reports
and documents.
The Company will not have sufficient funds (unless it is able to raise
funds in a private placement) to undertake any significant development,
marketing and manufacturing of the products acquired. Accordingly, following the
acquisition, the Company will, in all likelihood, be required to either seek
debt or equity financing or obtain funding from third parties, in exchange for
which the Company may be required to give up a substantial portion of its
interest in the acquired product. There is no assurance that the Company will be
able either to obtain additional financing or interest third parties in
providing funding for the further development, marketing and manufacturing of
any products acquired.
The e-commerce industry is an intensely competitive one, where brand
recognition, quality of site content, merchandise selection, convenience, price,
and service are critical factors. The Company has many established competitors,
ranging from similar local single unit operations to
<PAGE>
large multi-national operations. Some of these competitors have substantially
greater financial resources and may be established or indeed become established
in areas where the Company operates. The industry may be affected by changes in
customer tastes, economic, and demographic trends. Factors such as inflation,
increased supplies costs and the availability of suitable employees may
adversely affect the entertainment industry in general and the Company in
particular. In view of the Company's limited financial resources and management
availability, the Company will continue to be at a significant competitive
disadvantage vis-a-vis the Company's competitors.
Results of Operations
From April 7, 1997 to July 9, 1999 the Company was an inactive
corporation. From July 9, 1999 the Company was a development stage company and
had not begun principal operations. Accordingly, comparisons with prior periods
are not meaningful.
Liquidity and Capital Resources
The Company has met its capital requirements through the sale of its
Common Stock .
Since the Company's re-activation in July 9, 1999, the Company's
principal capital requirements have been the funding of the development of the
Company.
After the completion of its expansion plans, the Company expects future
development and expansion will be financed through cash flow from operations and
other forms of financing such as the sale of additional equity and debt
securities, capital leases and other credit facilities. There are no assurances
that such financing will be available on terms acceptable or favorable to the
Company.
Government Regulations
The Company is subject to all pertinent Federal, State, and Local laws
governing its business. The Company is subject to licensing and regulation by a
number of authorities in its Province (State) or municipality. These may include
health, safety, and fire regulations. The Company's operations are also subject
to Federal and State minimum wage laws governing such matters as working
conditions and overtime.
Competition
The Company faces competition from a wide variety of sport bike
specific web sites, many of which have substantially greater financial,
marketing and technological resources than the Company.
The marketplace for Sport Bike specific web sites is still in its
infancy. Many of the web sites are not commercial, and the biggest commercial
sites are almost all strictly relying on advertisers and not e-commerce sales.
Several sites compete in this market, but no one has emerged as an industry
leader. We have identified competition in terms of specific content and
e-commerce applications that are relevant to our industry.
<PAGE>
Employees
At March 31, 2000, the Company had 2 full-time employees.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not engaged in any legal proceedings other than the
ordinary routine litigation incidental to its business operations, which the
Company does not believe, in the aggregate, will have a material adverse effect
on the Company, or its operations.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information
On March 2, 2000 the Company entered into an agreement whereby the
Company in a reverse merger, purchased the assets of, and changed its name to
eSportbike.com, Inc. The purchase price was $10,000 CDN ($6,793 US) and the
assumption of liabilities in the amount of $113,000 US. The Company has not yet
performed a detailed evaluation and appraisal of the fair market value of the
net assets purchased in order to allocate the purchase price among the assets
purchased.
All required financial statements will be filed by amendment.
Item 6. Exhibits and Reports on Form 8-K
The following exhibits are included as part of this report:
Exhibit
Number Exhibit
<PAGE>
3.1 Articles of Incorporation (1)
3.2 Amended Articles of Incorporation (1)
3.3 Bylaws (1)
10.1 Asset Acquisition Agreement
10.2 Executive Employment Contract with Robert Eyre McLauchlan
10.3 Executive Employment Contract with Kent Douglas Courtice
27.1 Financial Data Schedule
(1) Incorporated by reference to the Registrant's registration statement on
Form 10-SB filed on October 20, 1999.
(b) The Company filed a report on Form 8-K on April 5, 2000 to
report a change in control of the company effective January
15, 2000.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereto duly
authorized.
ESPORTBIKE.COM, INC.
(Registrant)
Date: May 12, 2000 By: /s/ Robert Eyre McLauchan
Robert Eyre McLauchlan,
CEO, Secretary and Director
(Principal Executive Officer)
Date: May 12, 2000 By: /s/ Kent Douglas Courtice
Kent Douglas Courtice,
President and Director
(Principal Financial and
Accounting Officer)
<PAGE>
EX 10.1
MEMORANDUM OF AGREEMENT
THIS AGREEMENT MADE EFFECTIVE AND EXECUTED AS OF March 2nd 2000 (the "Effective
Date").
BETWEEN:
Morenci Corp.
Suite 980
1500 West Georgia Street
Vancouver, BC
Canada
(the "Purchaser")
AND:
Kent Douglas Courtice and Robert Eire McLauchlan
carrying on business as esportbike.com
1583 W. 65TH Avenue
Vancouver, British Columbia
Canada.
(collectively the "Vendor")
WHEREAS:
A. The Vendor carries on business comprised of the development and
operation of a website relating to sports bikes and known as esportbike.com (the
"Business");
B. The Vendor has agreed to sell and the Purchaser has agreed to
purchase all the property, assets, and undertakings of the Business as a going
concern on the terms and conditions herein provided;
C. Kent Douglas Courtice and Robert Eire McLauchlan, businessmen, of
Vancouver, British Columbia, are partners of the Vendor and have a proprietary
interest in the domain name and business of the Vendor; and
D. The Vendor owes $113,000.00 (US) to Asset Information Management
Inc. ("AIM");
NOW THEREFORE in consideration of the premises and the mutual covenants and
agreements herein contained, the parties hereto covenant and agree each with the
other as follows:
1. PURCHASE AND SALE
1.1 Subject to the terms and conditions of this Agreement, at the Closing
(hereinafter defined) the Vendor will sell, transfer and assign to the
Purchaser, free and clear of all liens, charges and encumbrances except
as may be otherwise specifically provided for herein, and the Purchaser
will purchase from the Vendor, the Business as a going concern and all
property and assets of the Business of every kind and description and
wherever situate (collectively, the "Business Assets"), including
without limiting the foregoing:
(a) ownership of the domain name and internet entity "esportbike.com"
including all code names, trade marks and copyrights thereto;
(b) all chattels, equipment, fixtures, furnishings, machinery, vehicles
and supplies used in connection with the Business as at the date hereof
(the "Equipment");
(c) all inventories of the Business (the "Inventory");
(d) all right, title, benefit and interests under all contracts,
engagements and commitments, whether oral or written,
including the benefit of all unfilled orders received by the
Vendor and forward commitments to purchase made by the Vendor,
which the Vendor is entitled to or possessed of in connection
with the Business (the "Material Contracts");
(e) all customer lists, brochures, samples, price lists,
accounting and other books and records and all other
information, correspondence, documents and material relating
to the Business;
(f) all right, title and interest of the Vendor in and to all
registered and unregistered trademarks, trade and brand names,
copyrights, designs, restrictive convenants and other
industrial or intellectual property respecting the Business
(the "Intangible Property");
(g) all permits, licences, consents, authorizations and approvals
pertaining to the Business; and
(h) the goodwill of the Business together with the exclusive right
to the Purchaser to represent itself as carrying on the
Business in continuation of and in succession to the Vendor
and the right to the name "esportbike.com" or any variation
thereof as part of or in connection with the Business (the
"Goodwill").
1.2 All quotations for the sale or purchase of inventory or supplies made
or received by the Vendor and not confirmed to contractual commitment
will be deemed to be assigned to the Purchaser at the Closing to be
accepted, confirmed or withdrawn or otherwise acted upon by the
Purchaser in its own name, for its own account and in accordance with
its own business judgement.
2. PURCHASE PRICE AND ALLOCATION
2.1 The purchase price payable by the Purchaser to the Vendor for the
Business Assets will be the sum of $10,000.00, payable at the Closing.
2.2 The Purchase Price will be allocated among the various items comprisin
the Business Assets as follows:
(a) to the domain name, the sum of $9,500.00;
(b) to the Equipment, the sum of $250.00;
(c) to the Goodwill, the sum of $249.00;
(d) to the remaining Business Assets, the sum of $1.00.00.
3. ELECTION
3.1 The parties hereto agree to elect jointly in accordance with the
provisions of Section 85(1) of the Income Tax Act of Canada, in
prescribed form and within the time stipulated inn Section 85(6) of the
said Act, that the Vendor's proceeds of disposition of the Assets and
the Purchaser's cost of the Assets be the sum of $10,000.00 (herein
called the "Elected Amount").
3.2 The parties hereby acknowledge that, to the best of their knowledge,
the Elected Amount represents the tax cost (as that term is defined inn
the Income Tax Act of Canada) to the Vendor of the Assets on the
Effective Date. However, if at any time hereafter, it is determined by
the parties hereto or if it is finally determined by the Department of
National Revenue, a tribunal or Court of competent jurisdiction or
otherwise, that the adjusted cost base to the Vendor of the Assets on
the Effective Date is greater or less than the Elected Amount herein
provided, the parties will amend this Agreement and change the Elected
Amount to ensure that the Elected Amount is equal to the adjusted cost
base to the Vendor of the Assets as determined pursuant to this
paragraph.
4. CLOSING, POSSESSION AND ADJUSTMENTS
4.1 The completion of the transactions contemplated hereby (the "Closing")
will take place at 10:00 A.m., local time on March 2nd 2000 (the
"Closing Date") at the offices of the Purchaser, or at such other
place, date and time as may be mutually agreed upon by the parties
hereto;
4.2 The Vendor will deliver possession of Business Assets, free of any
other claim to possession and any tenancies, to the Purchaser on the
Closing Date;
4.3 All revenues and expenses, including prepaid expenses, of the Business
will be adjusted (the "Adjustments") between the Vendor and the
Purchaser as at the commencement of business on the Closing Date, to
the effect that in respect of any period before that time, the Vendor
will bear all expenses and receive all revenue relating to the Business
and that from and after said time, the Purchaser will bear all expenses
and receive all revenue relating to the Business.
5. ASSUMPTION OF LIABILITY
5.1 It is understood and agreed that from and after the Closing the
Purchaser will assume and pay any and all indebtedness of the Vendor
(the "Assumed Indebtedness") which the Vendor owes to AIM and the
Purchaser covenants to assume and pay the Assumed Indebtedness and to
indemnify and save harmless the Vendor in respect thereof.
5.2 It is understood and agreed that from and after the Closing, the
Purchaser will assume, perform and discharge the Vendor's obligations
and liabilities in respect of any Material Contracts and that at the
Closing, the Vendor and the Purchaser will deliver and Assignment,
Assumption and Indemnity Agreement whereby:
(a) the Vendor confirms the representations and warranties made
herein which pertain to the Material Contracts;
(b) the Vendor assigns all right, title, benefit and interest under the
Material Contracts to the Purchaser;
and
(c) the Purchaser covenants to assume, perform and discharge said
obligations and liabilities and to indemnify and save harmless
the Vendor in respect thereof.
5.3 Both before and after the Closing, the Vendor and the Purchaser will
make their best efforts to obtain the release of the Vendor of their
obligations in respect of the Assumed Indebtedness and the Material
Contracts and the Vendor and the Purchaser will execute and deliver
such documents and instruments and so such acts and things as may be
required for said purposes.
6. REPRESENTATIONS OF THE VENDOR
6.1 The Vendor and Kent Douglas Courtice and Robert Eire McLauchlan jointly
and severally represent and warrant to the Purchaser, with the intent
that the Purchaser will rely thereon in entering into this Agreement
and in concluding the transactions contemplated hereby, that:
(a) each of the parties hereto has the power, authority and capacity
to carry on the Business as presently conducted and to enter into this
Agreement and carry out its terms;
(b) the execution and delivery of this Agreement and the
completion of the transaction contemplated hereby has been
duly and validly authorized by the necessary corporate action
on the part of the Vendor and this Agreement constitutes a
valid and binding obligation of the Vendor enforceable against
the Vendor in accordance with its terms;
(c) the Vendor owns and possesses and has good and marketable
title to the Business Assets, free and clear of all liens,
charges and encumbrances of every kind and nature whatsoever;
(d) the Business Assets comprise all property and assets used by the Vendor
in connection with the Business;
(e) there are:
(i) no actions, suits or proceedings before any court, pending or
threatened, by or against or affecting the Vendor, the Business or
any of the Business Assets; and
(ii) no proceedings, investigations,
complaints, order, directives or notices
of defect or non-compliance by or before
any governmental commission, department,
board, authority or administrative or
regulatory agency, body or officer issued,
pending or threatened against the Vendor
or in respect of the Business or any of
the Business Assets;
7. REPRESENTATIONS OF THE PURCHASER
7.1 The Purchaser represents and warrants to the Vendor as follows, with
the intent that the Vendor will rely thereon in entering into this
Agreement and in concluding the purchase and sale contemplated hereby,
that:
(a) the Purchaser is a publicly traded corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Nevada in the United States of America,
and has the power, right and capacity to enter into this
Agreement and to carry out its terms; and
(b) the execution and delivery of this Agreement and the
completion of the transactions contemplated hereby has been
duly and validly authorized by all necessary corporate action
on the part of the Purchaser and this agreement constitutes a
valid and binding obligation of the Purchaser in accordance
with its terms.
8. TRANSACTIONS OF THE VENDOR AT THE CLOSING
8.1 At the Closing, the Vendor will execute and deliver or cause to be
executed and delivered, all documents and instruments, including deeds,
conveyances, bills of sale, transfers, assignments, agreements and
certificates as are necessary to effectively vest good and marketable
title to the Business Assets in the Purchaser free and clear of any
liens, charges and encumbrances.
9. TAXES
9.1 All taxes payable pursuant to the Social Services Tax Act of British
Columbia arising out of the purchase of the Business Assets as
contemplated hereby will be paid by the Purchaser.
10. TIME OF THE ESSENCE
10.1 Time is of the essence.
11. FURTHER ASSURANCES
11.1 The parties will execute and deliver all such further documents and
instruments and do all such further acts and things as may be required
to carry out the full intent and meaning of this Agreement and to
effect the transactions contemplated hereby.
12. ASSIGNMENT
12.1 This Agreement may not be assigned by any party hereto without the
prior written consent of the other parties hereto.
13. ENTIRE AGREEMENT
13.1 This Agreement embodies the entire agreement and understanding between
the parties hereto and supercedes all prior agreements,
representations, warranties and understandings, whether oral or
written, relative to the subject matter hereof.
14. SUCCESSORS AND ASSIGNS
14.1 This Agreement will enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
15. COUNTERPARTS
15.1 This Agreement may be executed in several counterparts, each of which
will be deemed to be an original and all of which will together
constitute one and the same instrument.
16. SCHEDULES
16.1 The schedules attached hereto are hereby incorporated into this
Agreement and form a part hereof. All terms defined in the body of this
Agreement will have the same meaning in the Schedules attached hereto.
17. REFERENCES TO AGREEMENT
17.1 The terms "this Agreement", "hereof", "herein", "hereby", "hereto", and
similar terms refer to this Agreement and not to any particular clause,
paragraph or other part of this Agreement unless another document is
specified.
18. PROPER LAW
18.1 The proper law of this Agreement is the law of British Columbia.
IN WITNESS WHEREOF the parties have hereunto set their hands and seals
effective as of the Effective Date first above written.
SIGNATURE PAGE IMMEDIATELY FOLLOWING.
SIGNED, SEALED AND DELIVERED BY SIGNED, SEALED AND DELIVERED BY
KENT DOUGLAS COURTICE. MORENCI CORP.
/s/ Kent Courtice By: /s/ M. Gregg Marshall
- ------------------------------ -------------------------
Signature Authorized Signatory
_____Kent Courtice_____________________
Name Name of Signatory: M. Gregg Marshall
--------
1583 West 65th Avenue, Vancouver, BC Title of Signatory: President
- ---------------------------------------
Address
SIGNED, SEALED AND DELIVERED BY
ROBERT EIRE McLAUCHLAN.
/s/ Robert McLauchlan
Signature
______Robert McLauchlan_______________
Name
EX 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective the 17th day of March, 2000
BETWEEN:
ESPORTBIKE.COM.INC. (formerly known as Morenci Corp.)
c/o Suite 980 - 1500 West Georgia Street
Vancouver, BC
(hereinafter referred to as the "Company")
AND:
ROBERT EYRE McLAUCHLAN 106-995 Roche Point Drive North
Vancouver, B.C.
(hereinafter referred to as "McLauchlan")
WITNESS THAT WHEREAS
A. The Company is a publicly traded Nevada corporation that recently
acquired an internet business relating to sport bikes;
B. The Company believes that the value its shall increase substantially
as a result of its entering into an employment agreement with
McLauchlan; and
C. McLauchlan has agreed to enter into employment agreements with the
Company.
D. It is desirable to settle the terms between the Company and McLauchlan
by written agreement.
THE PARTIES HERETO for good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged), covenant and agree as
follows:
WITNESSETH:
1. The Company hereby appoints McLauchlan to be Chief Executive Officer of
the Company, effective April 1, 2000, in charge of establishing
business strategies to further develop the Company's internet business.
2. In consideration for McLauchlan agreeing to act as Chief Executive
Officer, the Company shall forthwith upon the execution of this
agreement, transfer 5,000,000 fully paid and assessable shares in the
Company's capital stock to McLauchlan at a deemed price of $.001 per
share.
3. This Agreement shall be for an indefinite term unless modified or
extended by mutual consent of the parties hereto in writing, giving
either party thirty (30) days notice.
4. McLauchlan shall act upon all lawful instructions given to him by the
Board of Directors of the Company.
5. Any notice required to be given to either party by the other hereunder
shall well and sufficiently given to if sent by registered mail,
postage prepaid, if to the Company addressed as follows:
ESPORTBIKE.COM.INC
Suite 980 - 1500 West Georgia Street
Vancouver, BC
<PAGE>
And if to McLauchlan, addressed as follows:
106-995 Roche Point Drive
North Vancouver, B.C.
6. This Agreement shall enure to the benefit of and be binding upon the
parties hereto, their respective heirs, executors administrators,
successors and assigns as the case may be.
7. This Agreement may be executed in several counterparts, each of which
will be deemed to be an original and all of which will together
constitute one and the same instrument.
IN WITNESS WHEREOF the parties have hereunto set their hands and seals effective
as of the date first above written.
SIGNED, SEALED AND DELIVERED BY
Gregg Marshall.
By: By:
/s/ M. Gregg Marshall /s/ Robert McLauchlan
__________________________ _______________________
Signature, Michael Gregg Marshall
Robert Eyre McLauchlan
President and Director
EX 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective the 17th day of March, 2000
BETWEEN:
ESPORTBIKE.COM.INC. (formerly known as Morenci Corp.)
c/o Suite 980 - 1500 West Georgia Street
Vancouver, BC
(hereinafter referred to as the "Company")
AND:
KENT DOUGLAS COURTICE 1583 West 65th Avenue Vancouver, B.C.
(hereinafter referred to as Courtice)
WITNESS THAT WHEREAS
A. The Company is a publicly traded Nevada corporation that recently
acquired an internet business relating to sport bikes;
B. The Company believes that the value its shall increase substantially
as a result of its entering into an employment agreement with Courtice
and
C. Courtice has agreed to enter into employment agreements with the
Company.
D. It is desirable to settle the terms between the Company and Courtice
by written agreement.
THE PARTIES HERETO for good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged), covenant and agree as
follows:
WITNESSETH:
1. The Company hereby appoints Courtice to be President of the Company,
effective April 1, 2000, in charge of administration of the Company's
daily affairs.
2. In consideration for Courtice agreeing to act as President, the Company
shall forthwith upon the execution of this agreement, transfer
5,000,000 fully paid and assessable shares in the Company's capital
stock to Courtice at a deemed price of $.001 per share.
3. This Agreement shall be for an indefinite term unless modified or
extended by mutual consent of the parties hereto in writing, giving
either party thirty (30) days notice.
4. Courtice shall act upon all lawful instructions given to him by the
Board of Directors of the Company.
5. Any notice required to be given to either party by the other hereunder
shall well and sufficiently given to if sent by registered mail,
postage prepaid, if to the Company addressed as follows:
ESPORTBIKE.COM.INC
Suite 980 - 1500 West Georgia Street
Vancouver, BC
And if to Courtice, addressed as follows:
1583 West 65th Avenue
Vancouver, B.C.
6. This Agreement shall enure to the benefit of and be binding upon the
parties hereto, their respective heirs, executors administrators,
successors and assigns as the case may be.
7. This Agreement may be executed in several counterparts, each of which
will be deemed to be an original and all of which will together
constitute one and the same instrument.
IN WITNESS WHEREOF the parties have hereunto set their hands and seals effective
as of the date first above written.
SIGNED, SEALED AND DELIVERED BY
Gregg Marshall.
By: By:
/s/ M. Gregg Marshall /s/ Kent Courtice
________________________ ________________________
Michael Gregg Marshall
Kent Douglas Courtice
President and Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET OF ESPORTBIKE.COM, INC. AS OF MARCH31, 2000 AND THE RELATED
STATEMENTS OF OPERATIONS AND CASH FLOWS FOR THE THREE MONTHS THEN ENDED AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4
<DEPRECIATION> 0
<TOTAL-ASSETS> 121
<CURRENT-LIABILITIES> 120
<BONDS> 0
0
0
<COMMON> 16
<OTHER-SE> (15)
<TOTAL-LIABILITY-AND-EQUITY> 121
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 15
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (15)
<INCOME-TAX> 0
<INCOME-CONTINUING> (15)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
